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https://www.courtlistener.com/api/rest/v3/opinions/8486956/ | ORDER DENYING MOTION TO SUPPRESS EVIDENCE BASED ON FOUR-CORNER INSUFFICIENCY OF SEARCH WARRANT AFFIDAVIT
Background
On October 25,2004, based on what they had learned from a confidential informant, police obtained and then executed a search warrant pertaining *159to the residence of Defendant Savelio Maletino (“Maletino”). Upon execution of the warrant, officers found marijuana plants growing on Maletino’s land and arrested him for the unlawful possession of a controlled substance. On April 22, 2005, Maletino filed a motion to suppress, asserting that the search warrant was facially defective because it relied on testimony from a confidential informant, without adequately demonstrating that the informant’s testimony was trustworthy. The motion further requests a Franks hearing to determine whether police officers intentionally included material misstatements of fact in the search warrant.
Analysis
I. Informant’s Testimony
In Illinois v. Gates, 462 U.S. 213 (1983), the United States Supreme Court established a “totality of the circumstances” test to determine whether information provided by a confidential informant is trustworthy enough to establish probable cause in a search warrant.1 The Court provided that although the totality of the circumstances test should not have any rigid boundaries, a complete analysis of the informant’s information should include the two-prong test laid out in Aguilar v. Texas, 378 U.S. 108 (1964). The two-prong Aguilar test asks whether the warrant (1) establishes the veracity or reliability of the confidential informant’s testimony; and (2) includes the raw facts on which the informant based his or her knowledge and conclusions. See Am. Samoa Gov’t v. Samana, 8 A.S.R.2d 1, 6 (Trial Div. 1988); Am. Samoa Gov’t, 25 A.S.R.2d 103, 104 (Trial Div. 1993).
A. Confidential Informant’s Veracity
Here, the issue is whether the warrant adequately establishes the confidential informant’s reliability as a witness. The focus of this inquiry is on the informant’s past performance as a supplier of information. Many courts have held that evidence in the warrant that an informant’s tips have in the past lead to convictions is sufficient, but not necessary to establish his veracity. See Colorado v. Arnold, 527 P.2d 806, 809 (Colo. 1975) (“To impose the more stringent requirement that information led to convictions would impose an undue restriction on law enforcement *160officers”); 2 Wayne R. LaFave, Search and Seizure 106-07 (3d ed. 1996) (and cases cited therein). In fact, some courts have held that a reliable informant’s track record of assistance need not even have led to any arrests. Illinois v. Thomas, 321 N.E.2d 696, 698 (Ill. App. Ct. 1974) (“As a matter of fact, arrests are not necessary to verify past information of an informant. . .”). Furthermore, although helpful, the warrant need not necessarily provide detailed information about the precise criminal cases that the informant has assisted in. Rhode Island v. Joseph, 337 A.2d 523, 526-27 (R.I. 1975) (“While some detailing of an informant’s track record might be desirable, it is not a necessity.”).
In the present controversy, in support of the informant’s veracity, the warrant provided that the source had “provided information in the past that led to several arrests and prosecutions of marijuana activities.” This statement is sufficient to establish the veracity of the informant. When an informant has a track record of reliability, and such a track record is referenced on the face of the warrant, generally, the informant’s veracity is established. Here, the police officers provided adequate detail for the magistrate to determine that informant has a reliable track record and therefore we hold that confidential informant’s reliability has been established.
B. Confidential Informant’s Basis of Knowledge
Here, the issue is whether the face of the warrant provided adequate detail for the magistrate to determine that the informant based his conclusions on actual facts. Stanley v. Maryland, 313 A.2d 847, 858 (Md. Ct. Spec. App. 1974) (finding that the informant must “furnish the raw data of his senses, so that the reviewing judge could draw his own conclusion from the data”). In the present controversy, Defendant claims that the magistrate should not have relied on the informant’s conclusions because the informant did not provide a sufficient description of Defendant’s residence. We disagree.
We find that the informant has provided the magistrate with enough specific facts to conclude that probable cause was present to search the house. The informant’s general conclusion is that Maletino grows and sells marijuana at his residence. This conclusion is based on several facts. First, the informant stated that he personally knows Maletino, has been to Maletino’s house and that marijuana plants were growing inside banana patches behind the house. Although this detailed information is not definitive proof that the informant has been on the property and personally observed the plants, such information is specific enough to allow a magistrate to conclude he had. Second, during the controlled buy, the informant was sent to Maletino’s house with money and he returned with marijuana he claimed was purchased from Maletino. *161Defendant claims that this information cannot be relied upon because the police never actually witnessed the drug buy, and therefore cannot be sure that it actually occurred. However, at this stage, the police need not establish that the informant’s testimony is true. See United States v. Garofalo, 496 F.2d 510, 511 (8th Cir. 1974) (‘“Probable cause is not defeated because an informant is later proved to have lied, as long as the affiant accurately represented what was told him’”) (quoting United States v. Sultan, 463 F.2d 1066, 1070 (2nd Cir. 1972)). Therefore, the police may simply report to the magistrate what the informant told them. And, here, that is exactly what the police did. The informant told the police officers that during the controlled buy, he went to Maletino’s house and purchased marijuana. The police then corroborated this testimony by confirming that the substance the informant returned with was marijuana. At that point, the police need only report what the informant had told them to the magistrate, without confirming its truth.
In sum, the informant has given specific information about the location of hidden marijuana plants at the Defendant’s residence and has stated that he personally purchased marijuana from the Defendant, at his residence. Put together, these facts are sufficient to form a basis for the informant’s conclusion that Maletino was growing and selling marijuana at his home.
Thus, in conclusion, we hold that under the totality of the circumstances the informant’s information is adequately trustworthy to provide probable cause for the search of Maletino’s house.
II. Franks Hearing
Defendant asserts that he is entitled to a Franks2 evidentiary hearing to determine whether the police provided a material misstatement of fact in the search warrant. Maletino maintains that while the search warrant provides that the informant purchased marijuana from him on October 22, 2004, he did not have any visitors during that day and therefore the search warrant must contain a material misstatement of fact.
The Supreme Court has concluded that a defendant can challenge a facially valid warrant by showing that: (1) the affidavit contains information “that the affiant knew was false or would have known was false but for his reckless disregard for the truth,” United States v. Stanert, 762 F.2d 775, 780 (9th Cir. 1985); and (2) that, absent the false information, the affidavit would not support a showing of probable cause to issue the warrant. United States v. Leon, 468 U.S. 897, 923 (1984). Once the defendant makes this substantial preliminary showing, the court must hold an evidentiary hearing at the defendant’s request. Franks, 438 *162U.S. at 155-56; Am. Samoa Gov't. v. Samana, 30 A.S.R.2d 98, 103 (Trial Div. 1996). At that hearing, if the court concludes that the magistrate was misled by information in the affidavit that was intentionally or recklessly false, then the evidence gained under the warrant must be suppressed. Leon, 468 U.S. at 923.
However, the requirement of a substantial preliminary showing “is not lightly met.” United States v. Wajda, 810 F.2d 754, 759 (8th Cir. 1987). A mere allegation standing alone, without an offer of proof in the form of a sworn affidavit of a witness or some other reliable corroboration, is insufficient to make the difficult preliminary showing. Franks, 438 U.S. at 171. While Maletino identified what he said were specific falsehoods in the affidavit, he offered no proof that his version of the facts is the correct one. Furthermore, he offered no proof that the alleged falsehoods were deliberate or reckless. “When no proof is offered that an affiant deliberately lied or recklessly disregarded the truth, a Franks hearing is not required.” United States v. Moore, 129 F.3d 989, 992 (8th Cir.1997). Therefore, we deny Maletino’s motion in request of a Franks hearing.
Order
1. Defendant’s motion to suppress is denied.
2. Defendant’s motion for a Franks hearing is denied.
It is so ordered.
In inquiring into whether a warrant is based on probable cause, a reviewing court “may only address whether the evidence viewed as a whole provided a substantial basis” for the magistrate’s finding of probable cause as opposed to an after the fact de novo assessment of probable cause. Am. Samoa Gov’t v. Samana, 8 A.S.R.2d 1, 7 (Trial Div. 1988) (citing Massachusetts v. Upton, 466 U.S. 727, 733 (1984).
See Franks v. Delaware, 438 U.S. 154 (1978). | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486957/ | *165ORDER DENYING MOTIONS TO SUPPRESS EVIDENCE, REVEAL INFORMANT’S IDENTITY, AND OBTAIN EXCULPATORY EVIDENCE REGARDING THE INFORMANT
Introduction
Defendant Tanu Savea (“Savea”) is accused of unlawful possession of the controlled substance of methamphetamine and unlawful possession of the controlled substance of marijuana. Savea has now moved to suppress the seized evidence, reveal the identity of the confidential informant (“informant”) in this case, and obtain exculpatory evidence regarding the informant. At the hearing on the motions on May 31, 2005, Savea’s counsel waived an evidential hearing and submitted the motions for the Court’s decision solely in reliance on arguments on the legal issues. Counsel for Plaintiff American Samoa Government (“ASG”) concurred in this procedure. Accordingly, we find the underlying facts relevant to the legal issues from the written documents filed in the action.
On January 28, 2005, Police Officer Justin Fa'afiti (“Officer Fa'afiti”) received a call from the informant who had previously provided reliable information on two prior occasions resulting in seizures of controlled substances, stating that Savea would be driving eastbound in a blue Ford Ranger Pickup, license plate #4675, to deliver drugs to a buyer in the downtown area. The informant reported to have personally observed Savea driving the blue truck, but apparently acquired the knowledge about the purported drug delivery from the would-be buyer.
Based on the informant’s information, Officer Fa'afiti observed the blue truck in front of the Rainmaker Hotel heading east toward Fagatogo. Officer Fa'afiti followed the vehicle and pulled it over behind the Nia Marie building. He recognized the driver as Savea. He asked Savea to step out of the vehicle and then told Savea that he had stopped him based on information that he had received that he was in possession of drugs. Savea then admitted possessing marijuana and held out from his right pants pocket a small clear plastic bag containing eight and one-half hand rolled marijuana cigarettes. Officer Fa'afiti then informed Savea he was under arrest, handcuffed him, advised him of his Miranda rights, and transferred him to the central police station in Fagatogo to avoid the gathering crowd.
Upon arriving at the station, Officer Fa'afiti searched Savea and found a small plastic bag containing what appeared to contain methamphetamine. Savea consented to a vehicle search that failed to produce additional contraband. Police officers then provided Savea with a written form apprising him of his Miranda rights, but Savea chose not to provide a statement.
*166I. The Traffic Stop
Savea maintains that the evidence in this case was obtained as the result of an unlawful traffic stop and warrantless search. We disagree.
Under Terry v. Ohio, where a law enforcement officer lacks probable cause, but possesses a reasonable and articulable suspicion that a person has been involved in criminal activity, he may detain the suspect briefly to investigate the suspicious circumstances. 392 U.S. 1, 21 (1968). A traffic stop is an investigative detention that must be analyzed in accordance with the principles set forth in Terry. In order to conduct a lawful investigatory stop of a vehicle, the detaining officers must have, based on all the circumstances, “a particularized and objective basis for suspecting the particular person stopped of criminal activity.” United States v. Cortez, 449 U.S. 411, 417-18, (1981); see also United States v. Lambert, 46 F.3d 1064, 1069 (10th Cir. 1995) (an investigative detention must be supported by “articulable suspicion” that the person is engaged in criminal activity).
A confidential tip may justify an investigatory stop if, under the totality of the circumstances, the tip furnishes both sufficient indicia of reliability and sufficient information to provide reasonable suspicion that criminal conduct is occurring, has occurred, or is about to occur. Alabama v. White, 496 U.S. 325, 328-30 (1990); United States v. Elkins, 70 F.3d 81, 83 (10th Cir.1995). In determining whether, under the totality of the circumstances, the tip is sufficiently reliable to provide reasonable suspicion, a court shall consider the credibility or veracity of the informant, the basis of the informant’s knowledge, and the extent to which the police are able independently to verify the reliability of the tip. See Illinois v. Gates, 462 U.S. 213, 230 (1983).
In the present case, the informant’s tip, standing alone, was insufficient to suggest that criminal activity was afoot. Here, the informant told police that Savea was going to be involved in drug activity, and that Savea could be identified by the fact that he would be driving a particular vehicle in a particular direction. Were we to allow this alone to create “reasonable suspicion,” any anonymous informant, for malicious reasons or otherwise, would need only make an accusation and describe the everyday characteristics of a person, such as their vehicle or attire, to authorities in order to subject them to a Terry stop. See White, 496 U.S. at 330 (if a tip has a relatively low degree of reliability, more information will be required to establish the requisite quantum of suspicion than would be required if the tip were more reliable.).
*167Here, however, the informant was not anonymous, but had on several occasions provided accurate and reliable information leading to the successful discovery of contraband. Moreover, the informant’s basis of knowledge of Savea’s activities came not merely from a “hunch” or generalized suspicion, but was apparently obtained from direct communications with the would-be buyer of the drugs in transit. Given the source and nature of the information in this particular case, and Officer Fa'afiti’s subsequent observation of Savea confirming the informant’s description, we find that the officers had a particularized and objective basis to stop Savea for suspicion of engaging in criminal activity. See United States v. Bentley, 29 F.3d 1073, 1076 (6th Cir. 1994) (reasonable suspicion in part based on the informant’s accurate description of the vehicle, its passengers, and the direction in which it was going); United States v. Leos-Quijada, 107 F.3d 786, 792 (10th Cir. 1997) (tip from confidential informant, whose previous tips had resulted in successful apprehensions, was sufficiently reliable to be considered in determining whether a police officer had reasonable suspicion justifying investigatory stop of vehicle.).
The evidence acquired during the Terry stop and subsequent arrest was properly seized. ASG emphasizes that the officers did not conduct a patdown and no physical contact occurred between Savea and Officer Fa'afiti, but that Savea admitted to possessing drugs and volunteered a bag containing marijuana cigarettes after Officer Fa'afiti told Savea that he had stopped him based on information that he was in possession of illegal drugs. While Savea now denies this account, he offers no alternative account of events, and makes no suggestion that the police officers physically searched him. Because we can only conclude that Savea himself provided the police officers with the evidence of marijuana possession, the police seizure of the drugs and Savea’s arrest were not unlawful.
II. Obtaining the Identity of the Informant
The prosecuting government holds a limited privilege against disclosure of an informant’s identity, and it is the defendant’s burden to demonstrate that disclosure is warranted. Rovario v. United States, 353 U.S. 53, 60-61 (1957). In that regard, the defendant must show that disclosure “would be relevant and helpful” to his defense. United States v. Williams, 898 F.2d 1400, 1402 (9th Cir. 1990). Disclosure is not required where a defendant seeks the identify of the confidential informant, for purposes other than aiding in his defense. See, e.g., United States v. Fixen, 780 F.2d 1434, 1439 (1986).
*168In the present case, Savea maintains that disclosure of the informant’s identity is necessary because the informant may be unreliable in that he or she may be motivated by a desire to avoid prosecution, and similarly, that because Officer Fa'afiti is presently unavailable, only the informant would be available to testify as to the reliability of what he was told by the would-be buyer. This line of reasoning misses the mark. While the identity of the informant may be helpful to Savea in questioning the issue of the informant’s reliability, or the underlying reliability of the buyer, such questions relate only to the issue of whether the officers had reasonable suspicion to justify Savea’s Terry stop, but do not go towards aiding Savea in his defense. Savea is charged in this case with two counts of unlawful possession of controlled substances, methamphetamine and marijuana. Because Savea has not demonstrated how disclosure of the informant will serve to counter the possession charges, and has made only bald assertions, unsupported by the evidence, implying that the informant may himself or herself have planted the drugs, we hold that Savea has not met his burden in overcoming ASG’s limited privilege against disclosure of the informant’s identity.
Similarly, because the extent of the informant’s usefulness is limited to establishing reasonable suspicion for stopping Savea, Savea’s demand for evidence relating to the informant’s criminal history and suspected criminal activity, plea bargains, agreements, or financial arrangements between the informant and ASG, and information as to whether the informant was ever dependant on a controlled substance must be denied, because it is not “exculpatory” evidence material to the outcome of the trial within the meaning of Brady v. Maryland, 376 U.S. 83, 87 (1963).
III. Miranda Warnings
Savea further contends that he was in a custodial situation when first confronted by Officer Fa'afiti, and therefore entitled to a reading of his constitutional rights at that time. We disagree. In Miranda v. Arizona, the Supreme Court determined that when an individual is taken into custody, the Fifth and Fourteenth Amendments’ prohibition against compelled self-incrimination requires that an individual be properly notified of the right to remain silent, the right to the presence of an attorney, and warned that anything he says can be used against him in a court of law. 384 U.S. 436, 478-79 (1966). Unless and until such warnings are given, and a knowing and intelligent waiver of them are demonstrated by the prosecution, no evidence obtained as a result of interrogation can be used against him. Id. at 479.
*169In the present case, we do not find Savea to have been the subject of interrogation at the time of his alleged confession to warrant a recitation of Miranda rights. A suspect need not be subject to express questioning by police to be “interrogated” within the meaning of Miranda, but rather subject to any words or actions on the part of authorities that the police should know are reasonably likely to elicit an incriminating response. See Minnesota v. Murphy, 465 U.S. 420, 431 (1984). At the time of the traffic stop, Officer Fa'afiti identified himself to Savea, asked him to step out of the car, and stated, in Officer Fa'afiti’s words, “I told Tanu [Savea] I had stopped him because of the information I had received that he was in possession of illegal drugs.” The record then shows that Savea immediately reacted by admitting to being in possession of drugs. Absent more, we are not prepared to interpret Officer Fa'afiti’s recitation of his reasons for pulling over Savea as a statement reasonably likely to elicit an incriminating response. Were we to so hold, an officer would be required to provide Miranda warnings whenever he were to simply inform someone for the reason of a stop. In short, because the statement was of the type normally incident to stopping a motorist, it does not rise to the level of interrogation.
Likewise, we do not find Savea to have been in custody at the time of his alleged confession. In determining whether a suspect was in custody or otherwise deprived of his freedom in any significant way at the time of the alleged interrogation, a court need not find that the he was physically restrained, but rather, based on the totality of the circumstances, must analyze whether a reasonable person would have felt he or she was not at liberty to terminate the interrogation and leave. See Thompson v. Keohane, 516 U.S. 99 (1995). In this case, at the time of Officer Fa'afiti’s comments, Savea was not arrested. No force, commanding words, or a threatening tone of voice was used against him, and his freedom of movement was not restrained in any way. Although Officer Fa'afiti told Savea to step out of his vehicle, asking a suspect “to turn their motors off and step out of their vehicles upon arrival... [does] not render [him] in custody, for it is settled that such a minor intrusion on a citizen’s personal security is far outweighed by the government’s interest in ensuring officer safety.” United States v. Streifel, 781 F.2d 953, 959 (1st Cir. 1986); see also Michigan v. Long, 463 U.S. 1032, 1047-48 (1983).
Order
Because the traffic stop was supported by reasonable suspicion and Savea was neither in custody nor the subject of interrogation at the time of his apparent confession, Savea’s motion to suppress the evidence is denied. Likewise, because Savea has not shown that the confidential informant’s identity bears on his defense, we will not compel disclosure *170of the informant’s identity or similar related evidence. It is so ordered. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486959/ | ORDER DENYING MOTIONS TO SUPPRESS EVIDENCE AND REVEAL CONFIDENTIAL INFORMANT’S IDENTITY
Background
At approximately 10:00am on February 9, 2005, Detective Justin Fa'afiti (“Det. Fa'afiti”) received a phone call from a confidential informant (“Cl”) who told the detective that an adult female named Salome, driving in a black Jeep Cherokee SUV without a front bumper and with a California license plate in the rear, was headed eastbound towards the downtown area to deliver methamphetamine to a buyer. The Cl told the detective that the information originated from the Cl’s friend, who, according to the Cl, was the buyer of the methamphetamines. Shortly thereafter, the Cl again contacted Det. Fa'afiti and reported having personally observed the person whom they called Salome making a drug sale to the buyer. The Cl further reported that the person whom they called Salome stored the drugs in a small black zippered bag and that after the drug sale she left in the same black Jeep Cherokee, heading westbound in the direction of Fagatogo.
*178Upon receiving the second phone call, Detective Justin Fa'afiti (“Det. Fa'afiti”) and his partner Detective Norman Heather (“Det. Heather”) began driving their unmarked police vehicle eastbound towards Fagatogo in an attempt to intercept the suspect. When the detectives reached Pago Pago, they observed a black Jeep Cherokee headed westbound. The truck was missing its front bumper and had a California license plate in the rear. The detectives turned their vehicle around and silently followed the Jeep, which eventually pulled into the parking lot at the ANZAmerika Samoa Bank in Fagatogo. The detectives pulled their vehicle in right behind the truck, blocking the Jeep’s exit from its parking space. Det. Fa'afiti got out of his car and went to the driver’s side of the suspect’s Jeep, knocking on the truck’s heavily tinted window, while Det. Heather walked up to the passenger side window. The driver of the Jeep rolled the window down. Det. Fa'afiti then identified himself and asked the driver if her name was Salome. The driver confirmed that Salome was her name, providing her California identification card which indicated that her full name was Salome Fuailetolo Enoka (“Enoka”), the Defendant in this prosecution. Det. Fa'afiti then asked Enoka to exit the vehicle, informing her that he had information indicating that she was in possession of controlled substances. Enoka exited the vehicle, saying that she did not possess any such substances. Det. Fa'afiti then patted the suspect down for weapons and informed her that he intended to search the Jeep. Enoka responded by asking the detective if he had a warrant. Det. Fa'afiti said that he did not.
On the other side of the Jeep, at the same time that Enoka was exiting the vehicle, Det. Heather opened up the passenger side door of the truck and peered into the vehicle. Det. Heather testified that he opened the door because the heavily tinted windows were not allowing him to determine whether the truck contained any potentially dangerous passengers or weapons. Upon opening the door, he instantly spotted what looked like a marijuana cigarette placed in an ashtray and immediately informed Det. Fa'afiti of this find. Det. Fa'afiti then placed Enoka under arrest while Det. Heather finished searching the car. Between the two front seats, Det. Heather found a black zippered bag that appeared consistent with the bag the Cl informed the detectives would be carrying methamphetamine. Det. Heather opened the bag and inside he found a small plastic bag containing a substance he recognized to be a methamphetamine. The detectives then transported Enoka and her vehicle to the police station.
On February 18, 2004, Plaintiff American Samoa Government (“ASG”) filed an information with the Court, charging Enoka with two counts: the first of unlawful possession of the controlled substance of methamphetamine; the second of unlawful possession of the controlled substance of methamphetamine. On April 2, 2005, Enoka filed a motion *179to suppress the evidence seized during the search of her vehicle and a motion to reveal the Cl’s identity. In that motion, Enoka contends that the February 9 search of her vehicle was done so in violation of her constitutional rights. Enoka further maintains that ASG must reveal the Cl’s identity because such information is relevant to her defense.
Analysis
I. Motion to Suppress
The United States Supreme Court has held that police officers, with probable cause, may search an automobile without a warrant. See Cardwell v. Lewis, 417 U.S. 583, 592-94 (1974); Chambers v. Maroney, 399 U.S. 42, 48 (1970); Carroll v. United States, 267 U.S. 132, 149 (1925) (“On reason and authority the true rule is that if the search and seizure without a warrant are made upon probable cause, that is, upon a belief, reasonably arising out of circumstances known to the seizing officer, that an automobile or other vehicle contains that which by law is subject to seizure and destruction, the search and seizure are valid.”). This rule is premised on a suspect’s lesser expectation of privacy in his automobile and is not altered when the suspect’s vehicle loses its mobility. Michigan v. Thomas, 458 U.S. 259, 261 (1982) (“It is clear that the justification to conduct such a warrantless search does not vanish once the car has been immobilized; nor does it depend upon a reviewing court’s assessment of the likelihood in each particular case that the car would have been driven away ....”).
Probable cause exists where “the facts and circumstances within [the arresting officers’] knowledge and of which they had reasonably trustworthy information [are] sufficient in themselves to warrant á man of reasonable caution in the belief that” an offense has been or is being committed. Carroll, 267 U.S. at 162. Draper v. United States, 358 U.S. 307, 312 (1959).
When probable cause for a warrantless search of an automobile is premised upon information obtained from a confidential informant, a reviewing court should first ask whether the information is “reasonably trustworthy.” Then, secondly, if the information is deemed trustworthy, the court should ask whether the information is in itself sufficient “to warrant a man of reasonable caution in the belief that” an offense has been or is being committed. United States v. Zayas-Diaz, 95 F.3d 105, 115 (1st Cir. 1996).
*180A. Was the Informant’s Information Trustworthy?
To test the trustworthiness of a confidential informant’s tip, courts conduct a ‘totality of the circumstances’ analysis, focusing in on (1) the veracity or reliability of the informant; (2) the raw facts on which the informant based his or her knowledge and conclusions. See Illinois v. Gates, 462 U.S. 213, 229-31 (1983).
1. Confidential Informant’s Veracity
In examining an informant’s veracity, courts tend to focus on the informant’s past performance as a supplier of information. An informant who has provided accurate information in the past is seen as a reliable source, even if those previous tips did not lead to a conviction or arrest. See Colorado v. Arnold, 527 P.2d 806, 809 (Colo. 1975) (finding that a tip that led to an arrest is sufficient to establish veracity); Illinois v. Thomas, 321 N.E.2d 696, 698 (Ill. App. Ct. 1974) (finding that an accurate tip can establish veracity, even if it does not lead to an arrest); 2 Wayne R. LaFave, Search and Seizure 106-07 (3d ed. 1996) (and cases cited therein).
In the present controversy, the detectives’ alleged probable cause to search Enoka’s truck came from two phone calls that Det. Fa'afiti received from the CL Det. Fa'afiti alleges that he felt that the information was reliable because the Cl had given accurate information on three prior occasions.1 We find that this is sufficient to establish the veracity of the CI. An informant who has given three accurate tips in the past is generally seen as a reliable informant. And, this is true whether or not the police provide detailed information about those past tips. Rhode Island v. Joseph, 337 A.2d 523, 526-27 (R.I. 1975) (“While some detailing of an informant’s track record might be desirable, it is not a necessity.”). Therefore, we hold that the CI in this case is a reliable source.
2. Confidential Informant‘s Basis of Knowledge
Next, we will examine the raw facts provided by the CI to confirm whether the CI had an adequate basis for his or her knowledge and *181conclusions. Stanley v. Maryland, 313 A.2d 847, 858 (Md. Ct. Spec. App. 1974) (finding that the informant must “furnish the raw data of hi's senses, so that the reviewing judge could draw his own conclusion from the data”).
The Cl told Det. Fa'afiti that he personally witnessed a women named Salome sell methamphetamine to a buyer; take the methamphetamine out of a black, zippered bag; and drive away, heading westbound, in a black Jeep Cherokee with a missing front bumper and a rear California license plate. We find that these detailed and accurate facts are sufficient for the Cl to be justified in concluding that Enoka possessed controlled substances as she drove in the direction of Fagatogo. Although any person who happened to be standing on a street comer in Pago Pago on the morning in question could have known that a black Jeep Cherokee with a missing front bumper was heading in the direction of Fagatogo, only someone with inside information could have known that a black, zippered bag inside that vehicle contained methamphetamine.
Thus, in conclusion, we find that the Cl’s information is sufficiently trustworthy to be used as the basis for probable cause to search Enoka’s vehicle.
B. Was the Informant’s Information Sufficient to Create Probable Cause?
Having determined that the Cl’s tip was trustworthy enough to supply the basis for a finding of probable cause, the next step is to determine whether or not the detectives did, in fact, have probable cause to search the vehicle. As stated above, probable cause exists where “the facts and circumstances within [the arresting officers’] knowledge and of which they had reasonably trustworthy information [are] sufficient in themselves to warrant a man of reasonable caution in the belief that” an offense has been or is being committed. Carroll, 267 U.S. at 162; Draper v. United States, 358 U.S. 307, 312 (1959).
We hold that during the February 9 encounter, Det. Fa'afiti and Det. Heather had probable cause to search Enoka’s truck. Having received a phone call from the Cl — a known methamphetamine user and previous reliable informant — stating that Enoka had just, completed a drug sale and was driving away from the scene of the sale, the detectives could have reasonably concluded that Enoka was, at the time of search, in the unlawful possession of a controlled substance.
Therefore, in sum, we find that because the detectives had probable cause to believe that the vehicle contained contraband, they did not need a *182warrant to conduct a search of that vehicle.2
Furthermore, we note that when officers have the authority to search a vehicle for contraband, they can constitutionally search any container or compartment of that vehicle which might reasonably contain that contraband. See United States v. Ross, 456 U.S. 798, 820-21 (1982); Love v. Georgia, 334 S.E.2d 173, 175 (Ga. 1985) (“The detective having probable cause to believe that drugs were located somewhere within the defendant’s vehicle, the warrantless search of the entire vehicle was authorized, including the defendant’s companion’s purse.”).
Thus, we hold that the detectives’ search of the truck’s passenger compartment, the black, zippered bag and the glove compartment did not infringe on Enoka’s constitutional rights.3
1. Motion to Reveal the Confidential Informant’s Identity
Enoka moves this court to reveal the Cl’s identity, asserting that because such information is relevant to her defense, withholding it from her would be in violation of her constitutional rights.
In Roviaro v. United States, 353 U.S. 53, 59 (1957), the United States Supreme Court stated that the government holds a qualified privilege to keep secret the identity of its confidential informants. The *183purpose of the rule is to foster the interests of the criminal justice system by encouraging citizens to come forward with information to aid law enforcement without fear of public disclosure. Id.
In Roviaro, the Court stated that there were three limitations of the privilege: (1) “where the disclosure of the contents of a communication will not tend to reveal the identity of an informer”; (2) where “the identity of the informer has been disclosed to those who would have cause to resent the communication”; and, most importantly, (3) “[w]here the disclosure of an informer’s identity, or of the contents of his communication, is relevant and helpful to the defense of the accused, or is essential to a fair determination of a cause ....” Id. at 60.
The first limitation provides that where the informant’s communication will not reveal the informant’s identity, such communication may be divulged. This limitation applies where the government has concealed both the informant’s identity and the contents of that informant’s communication. In such a situation, if it is possible to release only the contents of the communication, without making obvious the informant’s identity, the government is often required to reveal such information. Carbajal v. Village of Homestead, 2003 WL 23138447 at *4 (E.D.N.Y. 2003) (holding that government should release contents of videotaped tip, where contents of the tape do not reveal identity of those involved). In the present case, however, ASG has already released the contents of the communication, so this limitation is not relevant to our discussion.
The second limitation provides that where the identity of the informer has already been disclosed to those who might resent it, other information about the informant may be released. This limitation applies, primarily, where the defendant already knows the informant’s identity, but now seeks to learn more about the informant’s background and personal information. See United States v. Fischel, 686 F.2d 1082, 1091 (5th Cir. 1982) (where defendant already knows informant’s identity, the government should reveal informant’s address). The rational behind this limitation is that if the defendant already knows who the informant’s identity, there is no need to try and keep hidden other relevant information about the informer. This limitation does not apply in the present case because the Enoka does not already know the identity of the informant and therefore revealing background information about the informant would defeat the privilege.
The third limitation provides that where the informant’s identity is relevant to the defense of the accused, such information should be released. This limitation has constitutional ramifications. United States v. Sanchez, 988 F.2d 1384, 1392 (5th Cir. 1993). “If the privilege *184interferes with the defendant’s due process right to prepare his defense or if disclosure of the informant or his communication is essential to a fair determination of the defendant’s guilt or innocence, the privilege must give way.” Id. Enoka asks this court to utilize this limitation in revealing the Cl’s identity and therefore it will be the focus of our discussion.
Enoka bears the burden of establishing that the informant’s identity will be helpful for her defense. See United States v. Warren, 42 F.3d 647, 654 (D.C. Cir. 1994). And, in doing so, she must present specific facts to back her allegation. See United States v. Valles, 41 F.3d 355, 358 (7th Cir. 1994). “The confidential informant privilege will not yield to permit a mere fishing expedition, nor upon bare speculation that the information may possibly prove useful.” Id. (internal quotations omitted).
In Roviaro, the Court listed three non-exclusive factors a court can look to in balancing the defendant’s need for the information: “the crime charged, the possible defenses and the possible significance of the informer’s testimony ...” Roviaro, 353 U.S. at 62. Of the three factors, the most important is the “possible significance of the informer’s testimony” — focusing primarily on the informant’s degree of participation in the charged crime. See Id. (disclosure less important for peripheral observers than those who played a major role in the charged crime); United States v. Lewis, 40 F.3d 1325, 1335 (1st Cir. 1994) (finding that “[wjhere the informant is a ‘mere tipster,’ as opposed to an active participant in the offense charged, disclosure is required only in the exceptional case where it is vital to a fair trial”); Devose v. Norris, 53 F.3d 201, 206 (8th Cir. 1995) (finding that if an informant is an active participant in the crime, disclosure is generally required).
In the present controversy, Enoka’s proffered defense to the crime is that her acquaintance, Rhine Haleck (“Haleck”), either planted the drugs in her truck or accidentally left them there. Enoka claims that the morning of her arrest, Haleck was in her vehicle smoking methamphetamine and that at one point he began to rustle around the car, looking under the seats and in the glove compartment, claiming that he was looking for money he had earlier lost in the truck. It was at this time, Enoka claims, that Haleck either planted the drugs in the truck or accidentally left them there. Enoka further claims that shortly after she and Haleck parted ways, the police received the very detailed and specific phone calls from the informant, leading her to believe that it was Haleck who made the phone calls. Therefore, Enoka alleges, confirming whether or not Haleck was the Cl is helpful to her defense because he may have been the same person who planted the drugs.
*185At the outset, we will note that because the Cl in this case was not an active participant in the charged crime, Enoka faces an up-hill battle in convincing us to release the Cl’s identity. The Cl merely informed the police that Enoka had been involved with an earlier uncharged drug transaction. The police used this information, not to build a case against Enoka for the crime she is currently charged with, but simply to supply themselves with probable cause to search her vehicle. See United States v. Fixen, 780 F.2d 1434, 1439 (9th Cir. 1986) (finding that it is “well-settled” that an informant’s identity need not be disclosed where the informant’s information was simply used to establish probable cause); United States v. Bender, 5 F.3d 267, 270 (7th Cir. 1993) (holding that informant’s identity should not be revealed where informant witnessed unrelated crime and reported it to the police, who then only used the information to create probable cause for a search warrant).
Furthermore, Enoka has not adequately explained how an asserted confirmation that Haleck is the informant would assist in her substantive defense. If she is correct, and Haleck is the informant, it is not clear how that information would be helpful. Enoka has not convinced us that if Haleck did turn out to be the informant, such information would make it more or less likely that the drugs found in Enoka’s truck belonged to Haleck. Additionally, even if we refuse to disclose the informant’s identity, this does not stop Enoka from being able to- question Haleck about his involvement in the charged crime. In short, we find that Enoka gains very little from learning the identity of the CL
Therefore, in sum, we hold that Enoka has not met her burden in establishing that it would be helpful for her defense to learn the true identity of the confidential informant.
Order
1. Enoka’s motion to suppress evidence is denied.
2. Enoka’s motion to reveal the Cl’s identity is denied.
It is so ordered.
Although the information in the first phone call to Det. Fa'afiti was hearsay originating from an unknown third-party, the Cl’s second phone call was premised on information that the CI had observed directly. Thus, because the information gained in that second phone call is sufficient, standing alone, to create probable cause, there is no need to consider whether the unknown third-party is a reliable source.
Both parties focused in on whether or not the detectives had “reasonable suspicion” to initially seize Enoka and her car, under the Jerry-stop doctrine. Having found that the detectives had probable cause to search the vehicle, there is no need to provide a detailed analysis under the much more lenient “reasonable suspicion” standard set forth in Terry v. Ohio, 393 U.S. 1, 27 (1968). Therefore, we simply hold, in summary fashion, that the detectives had reasonable suspicion to stop and detain Enoka during the February 9 encounter.
Enoka also very briefly argues that any statements made by her before she was put under arrest should be suppressed because they were in violation of her Miranda rights. It is well settled, however, that a defendant must be in custody before such a right can be violated. See Rhode Island v. Innis, 446 U.S. 291, 300-01 (1980). In Berkemer v. McCarty, 468 U.S. 420, 436-38 (1984), the United States Supreme Court held that for Miranda purposes, a motorist is not in custody when he or she is pulled over by the police. We find here that Enoka’s encounter with the detectives was akin to a routine traffic stop because she was stopped in her vehicle when the detectives initially confronted her. Therefore, we find that she was not in custody before being formally put under arrest and thus her Miranda rights were not violated. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486960/ | ORDER GRANTING IN PART AND DENYING IN PART, AMENDED MOTION TO COMPEL
Background
On September 30, 2004, Defendant/Counter-PlaintifF Longline Services Inc. ("Longline") served Plaintiff/Counter-Defendant John Briggs ("Briggs") with a set of interrogatories. On October 27, 2004, Briggs responded to those interrogatories. On December 2, 2004, Longline filed a motion to compel44, asserting that many of Briggs' responses were inadequate. On March 23, 2004, this Court denied that motion, stating that Longline did not adequately explain its objections to Briggs' responses. Then, on March 28, 2004, Longline filed an amended motion to compel, reasserting its earlier position, but presenting its argument with an increased amount of specificity.
Longline specifically cites 17 separate interrogatories where it alleges that Briggs has provided inadequate responses. Of those 17 interrogatories, Briggs responded to 15 by simply stating that the question was either vague45 or requested irrelevant information.46 Of the remaining two, Briggs totally failed to respond to one interrogatory and the other Longline claims was not answered fully.47 In addition to those specifically cited interrogatories, Longline also generally voices *188displeasure with 20 other instances48 where Briggs responded to an interrogatory by simply stating that the answer could be obtained by referencing files that are in the possession of Daniel King, an accountant who Briggs alleges is affiliated with Longline.
Analysis
I. Failure to respond due to alleged vagueness
In response to interrogatories #4 and #11, Briggs did not provide a substantive answer because he asserts that the question was vaguely worded. An interrogatory must provide the other party a reasonably clear indication of the information to be included in its answer. See Struthers Scientific and Int'l Corp. v. General Foods Corp., 45 F.R.D. 375, 379 (S.D. Tex. 1968); Banana Service Co. v. United Fruit Co., 15 F.R.D. 106, 109 (D.Mass 1953). See also 8A CHARLES A. WRIGHT, ARTHUR R. Miller & Richard L. Marcus, Federal Practice and Procedure, ' 2168 (2d. ed. 1994).
Interrogatory #04 asks Briggs to "provide what licenses [he] currently possesses]." On its face, this question is relatively imprecise and vague because Longline never specifies what type of licenses it wishes to learn about or whether it wants a copy of the licenses or simply a list of them. However, despite the sloppy and imprecise wording, when read in context with Longline's argument in its motion to compel, it is relatively clear that Longline simply wishes to know whether Briggs has held any engineering related licenses within the past five years. Therefore, we compel Briggs to provide Longline with a list of any relevant engineering licenses that he has possessed within the last five years.
Interrogatory #11 asks Briggs to "state [his] employment history for the [last] five years." We find this question to be clear enough to provide Briggs with a reasonably clear indication of the information to be included in its answer. Longline simply wishes to know to all of Briggs' different employers over the past five years. Therefore, we compel Briggs to provide an adequate response to interrogatory #11.
II. Failure to respond due to alleged irrelevancy
In response to interrogatories #13, #14, #85, #88 - #95, #103, and #104, Briggs failed to respond, claiming that the interrogatory asked for irrelevant information.
*189Relevancy "'is to be more loosely construed at the discovery stage than at trial.’" Kerr v. U.S. Dist. Court. for the Northern Dist. of Ca., 511 F.2d 192, 196 (N.D.Ca. 1975) (citing 8 CHARLES A. WRIGHT, ARTHUR R. Miller & Richard L. Marcus, Federal Practice and PROCEDURE, " 2008 (1970)). Any discovery request, including interrogatories, need only ask for information that is "relevant to the subject matter involved in the pending action." See T.C.R.C.P 26(b)(1). See also T.C.R.C.P 33(b) (providing that "[interrogatories may relate to any matters which can be inquired into under 26(b) ...").
Interrogatory #13 asks Briggs to provide Longline with a list of all vehicles owned by Briggs. Longline asserts that because it is seeking money damages, information as to Briggs' assets is relevant. However, whether Briggs owns any vehicles is of no relevance to the subject matter of this suit. This suit involves the parties' partnership to operate two fishing vessels. The subject matter of this suit is not whether Briggs has sufficient assets to cover an award of money damages. Thus, we hold that interrogatory #13 asks for irrelevant information and need not be responded to.
Interrogatory #14 asks Briggs to provide Longline with a list of all the "property" he owns. At first blush, this interrogatory appears to be somewhat vague. By using the broad term "property," Longline leaves this interrogatory open to several different interpretations, the most natural being that Longline wishes to receive a list of all property that Briggs owns, both real and personal. However, because the most reasonable interpretation of the interrogatory is that Longline desires to know what Brigg's real estate holdings are, we will assume that it was Longline's intent to illicit such a response. With that being settled, however, the next question is whether such a query is relevant to the subject matter of this case. Longline contends that because it is seeking money damages, such information is relevant. As with interrogatory #13, we hold that this information is not relevant because the subject matter of this suit is not whether Briggs has sufficient assets to cover an award of money damages.
Interrogatory #85 asks Briggs to provide "a list of all names, both past and present, who have access to Account No. 333906 USD 374000, along with the proper name of the bank." Because one of the central questions in this suit and cross-suit is whether Briggs breached the fiduciary duty he owed to his partner, we feel that information regarding a bank account Briggs may have control over is relevant to the suit. Thus, we order Briggs to provide the requested information.
Interrogatory #88 asks Briggs to "provide his whereabouts for the past year." Like interrogatoiy #85, because one of the central questions of this suit is whether Briggs has breached his fiduciary duty owed to Longline, Briggs' whereabouts during the past year is relevant to *190determine whether he was acting consistent with that duty. Therefore, we compel Briggs to respond to interrogatory #88.
Interrogatory #89 asks Briggs to reveal all of the "shipyard projects" that he has managed during the past five years. Because this dispute involves Briggs' performance within a partnership to operate several oceangoing vessels, we find that whether Briggs has, in the past, managed any "shipyard projects" to be related to subject matter of this suit, and thus, relevant information. Therefore, we compel Briggs to respond to interrogatory # 89.
Interrogatory #90 asks Briggs to divulge whether he has "ever managed a shipyard before." An important issue in this suit is whether Briggs failed in his responsibility to operate and maintain the partnership vessels. His background in the industry is therefore relevant to the subject matter of the present suit. Thus, we compel Briggs to respond to interrogatory #90.
Interrogatory #91 asks Briggs to reveal "the identity of Ms. Farida and [his] relationship to her." Longline claims that the requested information is relevant because the information might help it determine where Briggs placed certain partnership investments. In a dispute between two partners, information about the expenditure or investment of partnership funds is relevant. Thus, we compel Briggs to respond to interrogatory #91.
In interrogatories #92 through #95, Longline asks Brigg's to reveal his yearly income, and the sources of that income, for the years 2001 through 2004. Longline asserts that it "seeks to determine where the investments were spent, as well as who the recipients were, and what basis upon which they were paid." Longline further contends that "[if] Plaintiff had other sources of income, they could be in conflict with his duties towards the partnership." We find that Longline has demonstrated that Brigg's income — both its source and amount — is relevant to the subject matter of the case, but only dating back to the formation of the partnership. Therefore, we compel Briggs to provide such information.
Interrogatory #103 asks Briggs for a list of the "recreational boats" that he owns or has an interest in. Longline asserts that in the past, Briggs has spent time on his recreational boats rather than attending to his partnership duties. Because a central question in this case is whether Briggs failed the partnership by neglecting the partnership vessels, and because whether Briggs spent an excessive amount of time on his recreational vessels might help answer that question, we find that the requested information is relevant and the interrogatory to be answered. *191Interrogatory #104 asks Briggs to reveal the location and value of any recreational vessels present in Briggs' response to Interrogatory #103. Longline claims that because it is seeking money damages, such information is relevant. As was the case with interrogatories #13 and #14, we find that an interrogatory searches for irrelevant information if it seeks to illicit information about a party's assets, simply to gauge whether the party will be able to cover an award of money damages. We hold that Briggs can, therefore, ignore interrogatory #104.
III. Total failure to respond
Briggs totally failed to provide a response to interrogatory #106. In interrogatory #106, Longline asked Briggs to provide a "list of dates and reasons for the drydocking of 'AURO' since [Briggs] starting working toward the purchase and repair" of the vessel. Briggs provided neither a response to the question nor an objection to its form or content. A total failure to respond to an interrogatory may open a party up to sanctions. Petrosino v. Bell Atlantic, 385 F.2d 210, 232 (2nd Cir. 2004). However, rather than order sanctions, we will opt simply to compel Briggs to offer a satisfactory response to the interrogatory. The question is clearly stated and relevant and therefore Briggs cannot merely choose to ignore its query.
IV. Inadequate response
In interrogatory #86, Longline provides a list of seven names and asks Briggs to "provide a detailed accounting of who [the] individuals are" and what their relationship to Briggs is. Longline also asks for "full and correct spellings" of the listed peoples' names. Briggs responded by providing: "These are captains and Navigators in Pusan Korea." As is evident from his very brief answer, Briggs never attempted to confirm the spelling of the listed names, nor adequately explain their relationship to him. Therefore, we compel Briggs to provide a more detailed response to interrogatory #86, including a confirmation of the spelling of the listed names and his relationship to those persons.
V. Response references documents held by Daniel King
Lastly, in response to interrogatories #24, #25, #50, #52, #53, #54, #55, #56, #57, #58, #75, #77, #79, #80, #84, #102, #105, #107, #109 and #110, Briggs stated that an answer to the question could be found by referencing files in the possession of Daniel King, who Briggs asserts is Longline's accountant. Longline maintains that Briggs' response to those interrogatories is inadequate because even if such information were obtainable by referencing those files, Briggs should also have personal knowledge of the information asked for and should therefore provide his version and memory of those facts.
*192Briggs appears to be utilizing T.C.R.C.P. 33(c),49 which provides:
Where the answer to an interrogatory may be derived or ascertained from the business records of the party upon whom the interrogatory has been served or from an examination . . . of such records ..., and the burden of deriving or ascertaining the answer is substantially the same for the party serving the interrogatory as for the party served, it is a sufficient answer to such interrogatory to specify the records from which the answer may be derived .... A specification shall be in sufficient detail to permit the interrogating party to locate and to identify ... the records from which the answer may be ascertained.
Before the responding party may utilize Rule 33(c)'s business records provision, that party has the burden of establishing that its use of the rule is proper. See Sabel v. Mead Johnson and Co., 110 F.R.D. 553, 555 (D.Mass. 1986). One important limitation to the rule is that the responding party may only refer to business records that are its own, not that of somebody else. See Davis v. Fendler, 650 F.2d 1154, 1158 n.3 (9th Cir. 1981) (stating that appellant could not, under Rule 33(c), respond to an interrogatory my referencing business records that were not its own). See also 8A CHARLES A. WRIGHT, ARTHUR R. MILLER & Richard L. Marcus, Federal Practice and Procedure, ' 2178 (1994). In the present controversy, Briggs does not make clear exactly whose business records he is referring to. He states, generally, that certain relevant records are in the possession of Daniel King, who Briggs alleges is Longline's accountant. Briggs does not state the records are its own records. Therefore, Briggs has not established that he can use Rule 33(c) to avoid responding to the interrogatories.
Moreover, Briggs has failed to establish another one of Rule 33(c)'s important prerequisites. Rule 33(c) provides that the responding party should be specific enough in their response such that the interrogating party may locate the exact records from which the requested answer may be found. T.C.R.C.P. 33(c) ("A specification shall be in sufficient detail to permit the interrogation party to locate and to identify ... the records from which the answer may be ascertained."). Most of Brigg's responses simply provide that the required information is "on file" with Daniel King, without specifically naming the documents or giving any identifying information. Thus, Briggs has not provided sufficient detail for Longline to locate the exact document where the information can be found.
*193Therefore, Briggs has not fulfilled the requirements of Rule 33(c), and thus his responses to the interrogatories in question are inadequate. We compel Briggs to provide adequate responses to interrogatories #24, #25, #50, #52, #53, #54, #55, #56, #57, #58, #75, #77, #79, #80, #84, #102, #105, #107, #109 and #110. In those forthcoming responses, if Briggs can fully satisfy the requirements of Rule 33(c), he may answer by referencing relevant business records. Otherwise, he shall provide an answer which reflects the full extent of his personal recollection and knowledge.
Order
1. Longline's amended motion to compel is granted with respect to interrogatories #4, #11, #24, #25, #50, #52-#58, #75, #77, #79, #80, #84-#86, #88-#95, #102-#107, #109 and #110. Briggs shall provide adequate responses to those interrogatories no later than 30 days after entry of this order.
2. Longline's amended motion to compel is denied with respect to interrogatories #13, #14 and #104.
It is so ordered.
T.C.R.C.P 37(a)(2) authorizes this Court to compel a party to respond to an interrogatory, where that party has failed to previously answer such an interrogatoiy.
Interrogatories #4 and #11.
Interrogatories #13, #14, #85, #88-95, #103, and #104.
Interrogatories #106 and #86, respectively.
Interrogatories #24, #25, #50, #52, #53, #54, #55, #56, #57, #58, #75, #77, #79, #80, #84, #102, #105, #107, #109 and #110.
T.C.R.C.P. 33(c) was modeled after the identically worded Fed. R. Civ. P. 33(c). However, in 1993, Fed. R. Civ. P. 33(c) was redesignated Fed. R. Civ. P. 33(d). (Emphasis added). Thus, recent pertinent federal cases will cite to Fed. R. Civ. P. 33(d), rather than 33(c). | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486961/ | ORDER DENYING DEFENDANTS' MOTION TO STAY PROCEEDINGS AND GRANTING PLAINTIFFS' MOTION TO COMPEL DISCOVERY
Background
On January 28, 2003, Amerika Samoa Bank (ASB) filed suit against Dorothy Ali’ilua (“Dorothy”), Panini Ali’ilua (“Panini”) (together “the Ali'iluas”), and Sologa Vaiaga’e (“Vaiaga’e”) alleging, inter alia, fraud and breach of a loan agreement. In November 2003, ASB filed notices of depositions for each of the three defendants. Later that month, ASB deposed Vaiaga’e and started, but did not finish, deposing Dorothy. ASB was unable to depose Panini, a U.S. Army reservist, because he was temporarily training overseas. During the course of the next year ASB repeatedly attempted to arrange a deposition with Panini. However, each time Panini was on-island he returned to his overseas position before such a deposition could take place. In November 2004, ASB’s counsel contacted the Ali'iluas’ counsel in another attempt to schedule depositions for Dorothy and Panini. The Ali'iluas’ counsel informed ASB’s counsel that Panini was still overseas, but that ASB could depose Dorothy. The parties then scheduled a deposition for Dorothy, but on the eve of that scheduled deposition, she cancelled due to illness.
Then, on December 2, 2004, ASB served each of the three Defendants with written interrogatories and requests for the production of documents. ASB asserts that although Panini may have been on duty *196during that general time period, he was in American Samoa during the 2004 Christmas holidays and therefore should have been able to meet the discovery requests. However, no response to the December 2 discovery requests was prepared during that time. In early January 2005, the deadline for a response to those requests came and went, and ASB’s counsel reminded the Ali'iluas’ counsel of that missed deadline. The Ali'iluas responded to ASB’s request by stating that Panini had recently been called to active military duty and that, therefore, the action must be stayed. Likewise, at this point, Vaiaga'e had not responded to the December 2 discovery request.
Finally, on January 27, 2005, fed up with the Defendants’ repeated failures to respond to the requests for interrogatories and production of documents, ASB filed a motion to compel responses to the December 2, 2004 discovery requests. On March 23, 2005, the first hearing date for the motion to compel, Vaiaga'e finally submitted answers to the interrogatories and document requests. To date, however, she has not adequately explained why her response was several months late.
The Ali'iluas asserted in response to the motion to compel that The Soldiers’ and Sailors’ Civil Relief Act of 1940 (“SSCRA”) provides for a temporary suspension of all civil judicial action against any member of the armed forces who is currently on active status. They further asserted that the SSCRA additionally protects from civil proceedings the spouses of active service members. ASB countered those arguments by asserting that: (1) the SSCRA is no longer binding law because it has been superceded by the Service members Civil Relief Act (“SCRA”); and (2) Defendants should not be afforded the protections of the SCRA because they have not followed the specific procedures set forth in that law.
Analysis
In December 2003, Congress replaced the SSCRA with the SCRA. 50 U.S.C. app. §§ 501-96. The SCRA is binding upon all courts of the United States, including territorial courts. See 50 U.S.C. app. §§ 511(6)(A), 512(a)(2).
Section 522 of the SCRA, which governs a stay of civil proceedings where a service member has notice of those civil proceedings,1 provides that an application for a stay must include: (1) “A letter or other communication setting forth facts stating the manner in which current military duty requirements materially affect the service member's ability *197to appear and stating a date when the service member will be available to appear,” 50 U.S.C. app. § 522(b)(2)(A); and (2) “A letter or other communication from the service member's commanding officer stating that the service member's current military duty prevents appearance and that military leave is not authorized for the service member at the time of the letter.” 50 U.S.C. app. § 522(b)(2)(B). Upon proper application for a stay of judicial proceedings, the court may extend the protection to the service member's spouse. 50 U.S.C. app. § 513(a).
It is undisputed that Panini has not filed any of the above required paperwork. Until such paperwork is filed, the Ali'iluas cannot utilize the SCRA to stay the current civil proceedings. Therefore, the Ali’iluas’ application to stay these proceedings must be presently denied without prejudice. Likewise, the SCRA does not provide a justification for either Panini’s or Dorothy’s failure to respond to the December 2, 2004 discovery requests.
T.C.R.C.P. 37 authorizes this Court to issue a motion to compel if a party fails to adequately answer an interrogatory or fails to respond to a request for documents. Here, it is undisputed that both Dorothy and Panini have totally failed to respond to ASB’s December 4, 2004 interrogatories and requests for documents. And, it is further undisputed that Vaiaga’e was several months tardy in responding to the December 2 discovery request for discovery and only responded after ASB filed its motion to compel.
Where a party totally fails to respond to a discovery request, T.C.R.C.P 37(d) governs.2 In such situations, T.C.R.C.P. 37(d) provides that the failing party must pay the reasonable expenses and attorney’s fees of the opposing party unless “the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust.” T.C.R.C.P. 37(d).
*198We find that for sanction purposes, all three Defendants totally failed to respond to ASB’s interrogatories and request for documents and therefore must pay ASB’s reasonable expenses. A court may, however, “tailor the sanction to the severity of the misconduct.” Pago Petroleum Products, Inc. v. Ye Ahn Moolsoan, Ltd., 27 A.S.R. 94, 96 (Trial Div. 1995) (finding that sanctions which amount to less than the actual attorney’s fees are sometimes appropriate); Antico, 85 F.R.D. at 36 (finding that lesser sanctions are sometimes appropriate when a delinquent party has, in the interim, responded to the discovery requests). Therefore, after considering the circumstances, including Vaiaga’e’s tardy response and the Ali'iluas’ misguided reliance on the SSCRA, we hold that the Defendants should be sanctioned. ASB is awarded $400.00 towards its attorney’s fees and costs incurred by the necessity of filing the motion to compel--$100.00 payable by Vaiaga’e, and $150.00 each payable by Dorothy and Panini. Each of the Defendants must make payment of the sanctions no later than 30 days after entry of this order.
Additionally, we compel Dorothy and Panini to respectively provide adequate responses to ASB’s December 4, 2004 interrogatories and requests for documents propounded to each of them. Such responses are due no later than 30 days after entry of this order.3
Order
1. The Ali'iluas’ present motion to stay this action is denied without prejudice.
2. ASB’s motion to compel discovery is granted. Dorothy and Panini shall respectively provide complete responses to ASB’s December 2, 2004 interrogatories and requests for production of documents no later than 30 days after entry of this order.
3. As sanctions for their respective failures to respond to ASB’s December 2, 2004 discovery requests, in partial payment of ASB’s attorney’s fees and costs incurred by the need to move to compel the discovery, each Defendant shall pay ASB no later than 30 days after entry of this order: Vaiaga'e, $100.00; Dorothy, $150.00; and Panini, $150.00.
*199It is so ordered.
The Ali’iluas, having retained counsel and both answered ASB’s complaint and cross claimed against Vaiaga’e, clearly have notice of the current civil proceedings.
Although Vaiaga’e submitted her response to the discovery requests on the day of the hearing, such action does not mend the fact that she totally failed to respond before the motion to compel was filed. Under Rule 37(d), once the motion to compel is filed, the delinquent party is deemed to have totally failed to respond to the requests, regardless of whether that party later provides a response. See Antico v. Honda of Camden, 85 F.R.D. 34, 36 (E.D.Pen. 1979) (“‘Once a motion for sanctions under Rule 37(d) has been made, the delinquent party cannot avoid the sanctions by then making the response to discovery requests that should have been made earlier.’”) (citing 8 Wright & Miller, Federal PRACTICE and Procedure § 2291, at 190 (1978 Pocket Part)).
We understand that Panini may currently be on active military duty. And, obviously, an active duty soldier faces increased barriers in communicating with the outside world. However, we are talcing judicial notice of the fact that active duty soldiers have phone and email access while stationed overseas. Therefore, if Panini is in fact on active duty he is not without the ability to respond to the requested discovery. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486962/ | ORDER DENYING MOTION TO ENFORCE SETTLEMENT AGREEMENT
Introduction
This motion relates to a settlement agreement allegedly reached after plaintiff Miriama Fasavalu ("Fasavalu"), on her own behalf and on behalf of her daughter Keolani Lemyia Jenkins ("Jenkins"), now deceased, filed *200a tort action on October 15, 2003, for medical malpractice and failure to provide or enforce standards of care for medical treatment. In that complaint, Fasavalu asserted that Jenkins was erroneously diagnosed and denied treatment by staff of Defendant Lyndon B. Johnson Tropical Medical Center ("LBJ") on multiple occasions; that upon recognizing the seriousness of Jenkins condition, LBJ staff failed to act with sufficient urgency; and that upon treatment, Jenkins died during anaesthetization.
After filing this complaint, the parties began to negotiate a settlement. On June 8, 2004, counsel for defendants, then Assistant Attorney General Diane Roy, submitted a letter to plaintiffs' counsel indicating an offer of settlement from LBJ for Fasavalu totaling $100,000. On June 14, 2004, in a letter to counsel Roy, plaintiff authorized a counter-offer of a combined settlement totaling $350,000 for Fasavalu and an unrelated case. On July 7, 2004, counsel Roy submitted another letter indicating an amended offer of settlement from LBJ for Fasavalu totaling $150,000. Subsequent negotiations occurred in electronic correspondence between counsel detailing further settlement negotiations. According to these electronic submissions, counsel Roy on August 24, 2004, informed plaintiffs counsel:
I finally met with the hospital management regarding Fasavalu . . . They are not willing to pay $200K for the Fasavalu case, but have agreed to get very close. They will agree to malee a final offer to settle by paying $180K for a full release and settlement agreement . . . Please present these offers to your clients and let me know if they accept.
Plaintiffs counsel then responded:
I have talked with my client Miriama and she will accept the settlement of $180,000. I assume the AG's office has a standard settlement agreement for these kinds of cases. If you could e-mail me a draft I will review and if acceptable I will email it through to my office for Miriama's signature ...
In turn, on August 27, 2004, counsel Roy responded, "I'll get an agreement to you first of next week." Despite this exchange, it appears as if the parties did not in fact come to mutual agreement at that time regarding all the terms of settlement. On September 15th and September 16th, the parties again exchanged e-mails indicating their making certain revisions and asking the other if the changes were acceptable. Finally, on September 22, 2004 counsel Roy sent an e-mail to plaintiffs counsel stating that:
*201The draft you sent on 9-16 looks fine with the modifications. I had to run it by the AG to see if we could agree to the 'one week' submission language. He said OK. So, go for it and get it back as soon as you can.
In response, plaintiff on September 23 submitted to the Office of the Attorney General a document styled "Settlement and Release Agreement" containing the "one week" language and the $180,000 figure. The document was signed by both plaintiff and her counsel, but it has not been signed by anybody from the Attorney General's office, the American Samoa Government, or LBJ.
On May 27, 2005, plaintiff filed a motion to enforce the claimed settlement agreement, asking the court to compel defendants to comply with the terms of the September 23 document. On July 7, 2005, the motion came on duly for hearing and for reasons given below, we deny the motion at this time.
Discussion
We note, as does plaintiff, that settlement agreements are contracts that must be interpreted "according to general principles of contract law." Red Ball Interior Demolition Corp. v. Palmadessa, 173 F.3d 481, 484 (2d Cir.1999). In the current case, the September 23 settlement agreement submitted for enforcement only bears plaintiffs' signature, calling into question whether there was indeed the requisite acceptance and mutual assent to the agreement by the parties. Although we agree that the correspondence between the counsel of the parties tends to strongly suggest that the parties did reach agreement to the terms of the September 23 agreement, we further note that "[although an attorney is presumed to possess authority to act on behalf of the client, a judgment entered upon an agreement by the attorney may be set aside on affirmative proof that the attorney had no right to consent to its entry." Surety Ins. Co. of California v. Williams, 729 F.2d 581, 582-83 (8th Cir.1984).
Here, we have correspondence between the counsel of the parties, but no direct evidence of actual assent to the terms of the agreement by LBJ itself — the party with the actual authority to enter into the agreement. In its response, LBJ's current counsel, Assistant Attorney General David Cassetty, while not denying outright the conclusion of an agreement, seeks a brief spell to confer with his client to ensure that LBJ did in fact give authorization to counsel Roy to enter into the terms of the September 23 settlement agreement. According to counsel, a particular member of the LBJ who was in a position to enlighten on this issue was, at the time of hearing, off-island.
*202In the circumstances, we conclude that the lack of a signature by defendant or defense counsel casts sufficient doubt on the agreement's finality to preclude enforcement of the agreement until LBJ has been given the opportunity, without delay, to certify that it did in fact agree to the terms set forth within it.
This being said, however, upon confirmation of the September 23, 2004 settlement agreement by LBJ, then LBJ will off course be expected to comply promptly with the terms therein. In the event that LBJ in good faith asserts that no final settlement agreement was ever reached, then we will revisit this enforcement motion based on the facts before us, including LBJ's denial. It is so ordered. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486963/ | Background
During the early morning hours of December 25, 2004, Plaintiff Poutasi Taise (“Taise”) and another male were standing on a street corner in Fagatogo when the other male yelled at a passing police car. Defendant Officer Malia Leiato (“Officer Leiato”), an on-duty police officer, was driving the car. The two men fled towards Fagatogo village. Officer Leiato pursued the men into Fagatogo village, where Officer Leiato was joined by Defendant Officer Ray Noa (“Officer Noa”). Eventually, the two officers caught up to and apprehended the two suspects. Taise alleges that upon being apprehended, Officer Leiato handcuffed him and then forcefully banged his head against the hood of the police car. The officers then transported Taise to the police station. Once there, Taise alleges, Defendant Lieutenant Tulele Laolagi (“Lt. Laolagi”) punched the still handcuffed Taise in the face several times, breaking his jaw and causing him to fall to the ground. Taise further alleges that once on the ground, Officer Noa began to kick him in the chest and back. As a result of this alleged beating, Taise was rendered unconscious and taken to the hospital with a broken jaw. He remained in the hospital for three days.
On April 5, 2005, Taise filed suit against all three police officers, alleging assault, battery, false imprisonment, intentional infliction of emotional distress, violations of his federal constitutional rights under 42 U.S.C. § 1983, and violations of the local constitution under Article I, Sections 2, 5 and 6 of the Revised Constitution of American Samoa. Then, on May 16, 2005, Defendant Lt. Laolagi filed a motion to dismiss, contending that this Court lacks subject matter jurisdiction over counts one, four, seven, ten and nineteen of the complaint and that Plaintiff failed to state a claim under counts thirteen and sixteen.
Analysis
I. Subject Matter Jurisdiction Over Counts One, Four, Seven, Ten and Nineteen
Counts one, four, seven, ten and nineteen allege that Lt. Laolagi committed the intentional torts of assault, battery, false imprisonment and intentional infliction of emotional distress. Lt. Laolagi claims that the Government Tort Liability Act (“GTLA”)1 specifically shields the American Samoa Government (“ASG”) from civil suits on such causes of *205action. Lt. Laolagi cites A.S.C.A. § 43.1203(b)(5), which provides that ASG retains immunity on “any claim arising out of assault, battery [and] false imprisonment....” Lt. Laolagi further asserts that § 43.1203(b)(5) not only protects ASG against suits, but also extends immunity to ASG employees.
Lt. Laolagi, however, fails to mention A.S.C.A. § 43.1211, which provides,
The remedy by suit against the government... for damage ... caused by . . . any employee of the government while acting within the scope of his office or employment, shall hereafter be exclusive of any other civil action or proceeding by reason of the same subject matter against the employee whose act or omission gave rise to the claim....
The High Court has read this language to authorize suits against ASG employees if that employee was, when the alleged harm occurred, acting outside the scope of his or her employment. In Tevaseu v. American Samoa Gov’t, 5 A.S.R.2d 10 (Trial Div. 1987), the plaintiff filed suit against both ASG and the individual police officers involved in a harm-causing incident. The police officers argued that their names should be stricken from the complaint because the GTLA offers immunity to individual ASG employees. Id. at 12. The Court disagreed, citing § 43.1211 and finding that “such immunity is available only in the case where the employee is ‘acting within the scope of his office or employment.’” Id. In Lutu v. American Samoa Gov’t, 7 A.S.R.2d 61 (Trial Div. 1988), an ASG bus driver struck and harmed a child while driving an ASG bus. The child, through her family, filed suit against ASG and included the bus driver as an additional defendant. ASG moved to strike the bus driver from the suit, alleging that the GTLA prohibits suits against ASG employees in such circumstances. Id. at 68. The Court again disagreed, finding that § 43.1211 “merely prohibits a claimant from recovering twice, not from suing the employee in the first place.” Id. at 69. The Court further noted, “an individual government employee cannot remain a defendant once it is established that the wrongful conduct underlying the claim was committed within the scope of employment. Unless and until that is established, however, suit against the employee is fully available and nothing in § 43.1211(a) suggests otherwise.” Therefore, in sum, it is established in this jurisdiction that suits against individual ASG employees are sanctioned as long as the employee was acting outside the scope of his or her employment at time of the incident.
*206The principle issue for us to determine, then, is whether at the time of the alleged beating Lt. Laolagi was acting outside the scope of his employment. If he was, then the suit against him may stand. If he was not, then it should be dismissed for lack of subject matter jurisdiction.
When a police officer uses excessive force in making an arrest, that officer is acting outside the scope of his or her employment and can, therefore, be held personally liable for his or her actions under § 43.1211. See Cruz v. Town of North Providence, 833 A.2d 1237, 1240 (R.I. 2003) (“Acts of police brutality, however, whether committed by one or more police officers, do not generally fall within the scope of employment.”); Richards v. Town of Eliot, 780 A.2d 281, 292 (Me. 2001) (“If a police officer’s conduct exceeds the scope of his discretion, he may lose the immunity. If the officer uses excessive force in execution of an arrest, such action is beyond the scope of the officer’s discretion.”) (internal citation omitted); Bryant v Mullins, 347 F. Supp. 1282, 1284 (W.D. Va. 1972) (finding that municipal corporations are not held liable for acts of excessive force by their police force because, among other things, “excessive force by a police officer is not within the scope of his duty or employment”); Blackstone v. Quirino, 309 F. Supp. 117, 130 (D. Maine 2004) (finding that “immunity is unavailable to the defendant police officer because excessive force is beyond the scope of an officer’s discretion”) (internal quotations omitted). See also Blackman v. Cooper, 280 N.W.2d 620, 622 (Mich. Ct. App. 1979) (finding that police officer who used excessive force upon the plaintiff “enjoys no such common-law freedom or immunity from tort liability”).
Therefore, the ultimate question for us to decide is whether or not Lt. Laolagi was acting with excessive force2 on the morning of December 25. Although this issue may ultimately need to be decided at trial on the merits in this case, we may nonetheless act as arbitrator of facts in the limited context of a motion to dismiss based on sovereign immunity. See Gallagher v. Board of Trustees for the Univ. of Northern Colorado, 54 P.3d 386, 395 (Colo. 2002) (“We hold that it is procedurally proper for a trial court to decide the question of scope of employment on a... motion to dismiss”). And, on a motion to dismiss, a court is required to accept *207as true all allegations in the complaint and all reasonable inferences that can be drawn from that document, and to view them in the light most favorable to the non-moving party. Pinker v. Roche Holdings Ltd., 292 F.3d 374 N.7 (3rd Cir. 2002). The question is whether the claimant can prove any set of facts consistent with his or her allegations that will entitle him or her to relief, not whether that person will ultimately prevail. Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).
With the above principles in mind, we hold that if we are to accept as true all the allegations in Taise’s complaint, Lt. Laolagi was acting with excessive force3 and therefore, outside the scope of his employment. Black’s Law dictionary defines excessive force as “[ujnreasonable or unnecessary force under the circumstances.” Black’s Law DICTIONARY 604 (8th ed. 2004). Likewise, in the context of Fourth Amendment claims, excessive force is defined as a seizure that is “unreasonable under the circumstances.” Turner v. Mayor of Marion County, 94 F. Supp. 2d 966, 993 (S.D. Ind. 2000).
According to the complaint in the present case, when Taise arrived at the police station he was handcuffed and already injured. And, then, without apparent provocation, Lt. Leolagi punched Taise in the mouth, causing the suspect to sustain a compound fracture of the jaw. Taise further alleges that the incident took place in the presence of other police officers. These facts, if true, are sufficient to make a preliminary finding of excessive force, for the limited purposes of this motion. At the time of the injury, Taise was handcuffed, injured, inside the police station and surrounded by several police officers. Under these circumstances, punching Taise in the jaw was an unreasonable use of force because the Lt. Laolagi, as a trained police officer and in the presence of other officers, should have been able to use a less crude method of subduing the suspect if he even needed subduing in the first place. Taise was without the use of his hands and a group of trained police officers should be able to control a single suspect without punching him in the face. Therefore, considering the circumstances, we find that the amount of force that Lt. Laolagi used was both unreasonable and unnecessary for purposes of this motion to dismiss.
Thus, in sum, we hold that because Lt. Laolagi was acting with excessive force, he was not acting within the scope of his employment and therefore § 43.1211 does not strip this Court of subject matter jurisdiction.
*208II. Plaintiffs Alleged Failure to State a Claim Under Counts Thirteen and Sixteen
In count thirteen, Taise alleges that Lt. Laolagi violated 42 U.S.C § 1983 by violating Taise’s “substantive due process rights (with respect to liberty interests), and/or fundamental rights protected under the United States Constitution, Fourth Amendment, and/or Fifth Amendment and/or Eight Amendment.” Lt. Laologi contends that Taise failed to state a claim in this count because nowhere in the count does Taise “assert that these specific federal provisions [of the federal constitution] are applicable to American Samoa.”
We hold that under current liberal pleading standards, a plaintiff need not specifically assert in his complaint that a cited federal constitutional right is legally protected in American Samoa. At the pleading stage, the plaintiffs focus should be on making sufficient factual assertions, not a comprehensive and definitive outline of his legal theories. In fact, “a complaint need not [even] point to the appropriate statute or law in order to raise a claim for relief. . . .” Tolle v. Carroll Touch Inc., 977 F.2d 1129, 1134 (7th Cir. 1992). And, additionally, “a complaint sufficiently raises a claim even if it points to no legal theory or even if it points to the wrong legal theory as a basis for the claim, as long as ‘relief is possible under any set of facts that could be established consistent with the allegations.’” Id. (citing Bartholet v. Reishauer A.G., 953 F.2d 1073, 1078 (7th Cir. 1992)). Therefore, we hold that Taise’s failure to specifically allege that cited provisions of the United States Constitution apply in American Samoa is not fatal to his claim.
In count sixteen, Taise asserts that “Lt. Laologi’s actions were a breach of his duties to uphold the [sic] Article I Section (2) and/or Section (5) and/or Section (6) of the Revised Constitution of American Samoa ....” Lt. Laolagi asserts that to accept count sixteen, the Court would have to imply a constitutional right of action against him, something that is not expressly provided for in the text of the constitution.
In Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), the United States Supreme Court held that a federal cause of action exists under the Fourth Amendment of the federal constitution, regardless of the fact that the text never specially provided for such. Id. at 394. “Bivens established that the victims of a constitutional violation by a federal agent have a right to recover damages against the official . . . despite the absence of any statute conferring such a right.” Carlson v. Green, 446 U.S. 14, 18 (1980). And, although Bivens itself applies directly to only the federal constitution, many state courts have held that the Bivens rationale also authorizes causes of action for rights protected under their respective *209state constitutions. See Albertson’s Inc. v. Ortiz, 856 S.W.2d 836, 839 n.6 (Tex. Ct. App. 1993) (citing eight different states which have permitted Bivens causes of action under state constitutions). See also Binette v. Sabo, 710 A.2d 688 (Conn. 1988); Brown v. New York, 874 N.E.2d 1129 (N.Y. 1996); Bott v. Deland, 922 P.2d 732 (Utah 1996); Walanski v. Morrison & Morrison, 377 N.E.2d 242 (Ill. App. Ct. 1978); Moresi v. State, 567 So.2d 1081 (La. 1990); Phillips v. Youth Dev. Program, 459 N.E.2d 435 (Mass. 1983); Corum v. Univ. of North Carolina, 413 S.E.2d 276 (N.C. 1992); Widgeon v. E. Shore Hosp. Ctr, 479 A.2d 921 (Md. 1984); Woodruff v. Bd. Of Trustees, 319 S.E.2d 372 (W.Va. 1984).
In federal courts, a defendant can successfully argue that a Bivens action does not exist only by showing that (1) “special factors counseling hesitation” exist or (2) Congress has provided an alternative remedy which it explicitly declared to be a substitute for recovery directly under the Constitution and viewed as equally effective.” Carlson, 446 U.S. at 18. Lt. Laolagi has failed to demonstrate that either one of these factors is present in the current situation.
We see no reason to break course with the voluminous and settled precedent that stands before us. The United States Supreme Court and most state courts have found that the so-called ‘constitutional-tort’ is a valid cause of action. Lt. Laolagi has not convinced us to conclude otherwise. Thus, we hold that count sixteen, which alleges that Lt. Laolagi violated Taise’s rights as protected by Revised Constitution of American Samoa, states a valid legal claim.
Order
Lt. Laolagi’s motion to dismiss is denied. It is so ordered.
A.S.C.A. §§ 43.1202-12.
Taise implies that a showing that Lt. Laolagi acted willfully or maliciously would be, by itself, sufficient for us to conclude that he was acting outside the scope of his employment. While many states have a provision in their local tort liability act allowing for such a conclusion, see e.g., Martin v. Brady, 802 A.2d 814, 818 (Conn. 2002), the GTLA lacks such a provision. Therefore, a simple finding that Lt. Laolagi was acting willfully and maliciously would not automatically strip him of immunity.
We stress, again, that this finding is simply a preliminary finding for the limited purposes of this motion to dismiss. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486965/ | ORDER DENYING MOTION TO DISMISS CREDITOR’S CLAIM
Background
Shantilal Brothers Ltd. (“Creditor”) is a corporation with its principal place of business located in Suva, Fiji. In December 1996, Creditor obtained a judgment against Fritz Reed (“Deceased”) in the amount of $10,976.00, plus interest at the rate of 8% per annum, court costs of $115.00, and attorney fees of $350.00, for a total judgment of $11,441.00 plus interest. Creditor alleges that to date, neither Deceased nor Deceased’s estate (the “Estate”) has made any payments toward satisfaction of the judgment debt.
On January 7, 2005, the Court entered an order appointing Ginny Mae Reed as Administrator of the Estate (“Administrator”). On January 28, 2005, in accordance with A.S.C.A. § 40.0320, Administrator published a *215notice to creditors requiring creditors to present their claims within 60 days of publication . . or forever have your claims barred.” Creditor filed its claim on March 31, 2005, two days after the published cutoff date. Administrator now moves to dismiss Creditor’s claim against the Estate as untimely filed.
Discussion
I. Does ASCA § 40.0320 Forever Bar Creditor Claims that Are Submitted After the 60 Day Filing Period?
A.S.C.A. § 40.0320 provides:
Notice to creditors.
Every executor, administrator and administrator with will annexed shall, within 20 days after the granting of his letters, notify all persons having claims against the estate to exhibit them within 60 days from the date of the first publication of such notice. Notice shall be published once in some newspaper published in American Samoa if any, and shall be posted at the government offices (emphasis added).
In contrast, Uniform Probate Code (“UPC”) § 3-803 provides in relevant part:
(a) All claims against a decedent's estate which arose before the death of the decedent, including claims of the state and any subdivision thereof, whether due or to become due, absolute or contingent, liquidated or unliquidated, founded on contract, tort, or other legal basis, if not barred earlier by other statute of limitations or non-claim statute, are barred against the estate, the personal representative, the heirs and devisees, and non-probate transferees of the decedent, unless presented as follows:
(1) within four months after the date of the first publication of notice to creditors (emphasis added).
Almost all jurisdictions have adopted “nonclaim statutes” substantially similar to UPC § 3-803,1 which require creditors to file claims against an estate within a specified time period, and generally bar *216untimely claims. However, A.S.C.A. § 40.0320 is silent as to whether claims filed after the statutorily prescribed time limit are barred. This is significant because absent any explicit statutory authorization, a court in a jurisdiction with a nonclaim statute may not extend the statutorily fixed time for filing a claim. See e.g., In re Estate of Hall, 948 P.2d 539, 541 (Colo. 1997); Estate of Staples, 672 A.2d 99, 101-02 (Maine 1996); In re Estate of Sterling, 537 N.W.2d 554, 558 (N.D. 1995). In other words, a nonclaim statute is not subject to equitable exceptions. See Estate of Decker v. Farm Credit Servs. of Mid-America, 684 N.E.2d 1137, 1138 (Ind. 1997).
Administrator asks the Court to read § 40.0320 as forever barring claims filed subsequent to 60 days from the first publication of notice to creditors. Administrator contends that the purpose behind § 40.0320’s 60 day filing period, like that of the four month period in UPC § 3-803, is the expeditious administration of the estate. See e.g., Estate of Staples, 672 A.2d at 101 (purpose of the Maine Probate Code is to promote the speedy and efficient liquidation and distribution of the estate). According to Administrator, the purpose of A.S.C.A. § 40.0320 will be frustrated if the Court allows Creditor’s untimely claim. Thus, Administrator argues that Creditor’s claim be barred and dismissed.
Implicit in Administrator’s reasoning is that the Legislature intended to craft a statute consistent with UPC § 3-803 and other nonclaim statutes. Yet there are significant differences between the two statutes. First, A.S.C.A. § 40.0320 allows only 60 days within which to file a claim, not the four months permitted by UPC § 3-803.
Second, other jurisdictions have enacted nonclaim statutes that explicitly state, in plain, mandatory and unambiguous language, that claims will be “barred” if not filed within the mandatory time period. Section 40.0320, on the other hand, is equivocal on the matter. A plain word reading of § 40.0320 leaves open the possibility that untimely claims may still be permitted by equitable exception.
Of course, within the jurisdictions that have adopted nonclaim statutes, some have seen fit to carve out explicit statutory exceptions to the complete bar against untimely claims. See e.g., CALIFORNIA Prob. CODE §9103 (providing exceptions to the filing deadline imposed by previous code section § 9100). However, there is no reason to believe that the Legislature’s non-inclusion of such language in § 40.0320 reflects a conscious decision on their part to proscribe exceptions to the 60 day filing deadline. Rather, given the open-ended language of § 40.0320, explicit exceptions are unnecessary.
*217Thus, we cannot agree with Administrator that like UPC § 3-803 and other nonclaim statutes, § 40.0320 should be read to forever bar and remove the Court’s authority to consider late claims.
II. Reasons for Allowing Creditor’s Claim
Having concluded that § 40.0320 permits the Court to consider late filed claims, we now discuss why allowing Creditor’s untimely claim is appropriate.
First, we find nothing to suggest that the speedy and efficient liquidation and distribution of the Estate will be frustrated by allowing Creditor’s claim. Creditor’s claim was filed only two days after the statutory deadline. Therefore, allowing Creditor’s claim should not unduly prejudice or delay the administration and distribution of the Estate.
Second, due process considerations weigh in favor of allowing Creditor’s claim. The Supreme Court has held that due process requires actual notice to known or reasonably ascertainable creditors of a probate estate.2 Tulsa Prof’l Collection Serv., Inc. v. Pope, 485 U.S. 478, 491 (1988). Notice solely by publication is insufficient in situations where the creditor’s identity as a creditor was known or “reasonably ascertainable.” Id. at 489-90. In these situations, due process requires that the creditor be given “notice by mail or other means as certain to ensure actual notice.” Id. at 491 (quoting Mennonite Bd. of Admissions v. Adams, 462 U.S. 791, 800 (1983)).
Creditor argues that its identity was reasonably ascertainable by Administrator, and thus Creditor was entitled to actual notice. To support this claim, Creditor points to the following: (1) the judgment entered by the Court against Deceased in 1996; (2) Creditor’s efforts to collect the judgment in 1997, including writs of garnishment and execution; and (3) Creditor’s letter to Illaisa Elizabeth Reed in 2003, daughter and one of the heirs of Deceased, providing her with a copy of the judgment and invited her to engage in settlement negotiations on behalf of Deceased. Creditor contends that its claim was reasonably ascertainable from a review of Deceased’s business records or through communications with Deceased’s heirs regarding his affairs.
Although we need not rule on this issue, we do find Creditor’s argument compelling. All Administrator was required to do was to make “reasonably diligent” efforts to uncover the identities of creditors. See *218id. at 490. Reasonably diligent efforts by Administrator to uncover the identities of creditors, such as conducting a review of Deceased’s business records or speaking with other heirs, should have revealed Creditor’s identity.
Thus, Administrator’s notice by publication was likely insufficient. Moreover, given the relatively short time period (60 days) within which to file a claim, dismissing Creditors claim for being two days late is a harsh and inequitable result. Consequently, even if we construe § 40.0320 as barring untimely claims, Creditor’s claim might still be allowed as a matter of due process.
Because allowing Creditor’s claim will not disrupt the expeditious administration of the Estate, and because Administrator’s notice by publication was likely inadequate on due process grounds, we feel comfortable permitting Creditor’s claim.
Order
Administrator’s motion to dismiss Creditor’s claim is denied. It is so ordered.
See e.g., Colorado, COLO. Rev. Stat. § 15-12-803 (2004); Maine, Me. Rev. Stat. Ann. tit. 18-A, § 3-806(a) (2005); Missouri, Mo. REV. STAT § 473.360 (2005); Montana, Mont. CODE ANN. §72-3-801(1) (2004); North Dakota, N.D. CENT. CODE § 30.1-19-03(1) (2005); Texas, TEX. Prob. Code § 298 (2005).
Certain state probate statutes incorporate such language into their nonclaim statute. See, e.g., CAL. PROB. CODE §9050 (Deering 2005). | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486967/ | ORDER ON PLAINTIFF'S MOTION FOR ATTORNEY'S FEES
Introduction
Plaintiff Bank of Hawaii was awarded reasonable attorneys fees and costs and pursuant to judgment plaintiffs counsel submitted an affidavit for fees and costs in this matter for $4,524.25, along with an invoice detailing the hours and services billed. Defendant Asofíafia Letuvae filed his opposition to the fee request.
After carefully considering the parties' arguments and submissions, we fix reasonable attorney's fee in the amount of $3,027.25.
Discussion
We recently observed in Const. Services in Samoa Inc. v. Am. Samoa Gov’t, 9 A.S.R.3d 93, (Trial Div. 2004) (Order Awarding Fees & Costs) that in fashioning an award of attorney's fees, a court should not merely “rubber stamp” a fees request submitted by counsel, but instead must scrutinize the figure to insure it is reasonable. In turn, we begin by noting that the starting point for calculating a “reasonable” attorney fee request is to examine the “number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); see also Murphy v. Housing Auth. and Urban Redevelopment Agency of the City of Atlantic City; 158 F.Supp.2d 438 (D.N.J. 2001). In undertaking such an analysis, we note that an applicant for a fee award bears the burden of first “submitting meticulous, contemporaneous time records that reveal, for each lawyer for whom fees are sought, all hours for which compensation is requested and how those hours were allotted to specific tasks.” Case v. Unified School Dist., 157 F.3d 1243, 1250 (10th Cir. 1995); see also ACLU of Georgia v. Barnes, 168 F.3d 423, 427 (11th Cir. 1999). Upon such submission, a court will look to see if the applicant exercised billing judgment in its calculation, and where necessary, the court will “exclude hours not ‘reasonably *225expended’ from the calculation.” Hensley, 461 U.S. at 434; see also Goss v. Killian Oaks House of Learning, 248 F.Supp.2d 1162, (S.D.Fla. 2003) (stating that a court is obligated to exclude from billing charges that “are excessive, redundant, or otherwise unnecessary.”). In reducing the overall award, a court need not identify and justify every hour allowed or disallowed, but rather can make a general reduction of hours so long as it states a “concise but clear” reason for the reduction. Hensley, 461 U.S. at 437; see also Mares v. Credit Bureau of Raton, 801 F.2d 1197, 1203 (10th Cir. 1986).
In the present case, we find that plaintiff has met its initial burden of stating with specificity the number of hours billed and the utilization of time spent by attorneys during those billed hours. The billing sheets give the initials of the attorney who was involved on the work, and state with some particularity the nature of the work done. Nevertheless, while we are not concerned that plaintiff has adequately set forth its billing statements, we question whether those statements bill for appropriate legal work.
First, we agree with defendant that we should deduct any fees sought by plaintiff related to plaintiffs Rule 11 motion. We note that T.C.R.C.P 11(c)(1)(A), like its federal counterpart, states that “[i]f warranted, the court may award to the party prevailing on the motion the reasonable expenses and attorney's fees incurred in presenting or opposing the motion.” (emphasis added). Although plaintiff filed a Rule 11 motion, this court denied plaintiffs motion on December 2, 2004, and as the non-prevailing party, plaintiff is not entitled to any fees related to the motion.
In this case, plaintiff seeks $324.00 to “draft motion and rule 11 points and authorities;” $126.00 to “draft notice of motion and finalize other pleadings for Rule 11 sanctions;” $9.50 to prepare affidavit of service to attorney Mark Ude for “Plaintiff Bank of Hawaii's Memo of Points & Authorities in Support of Motion for Sanctions, Motion for Sanctions and Notice of Hearing;” $4.75 to prepare a letter to Kalele White conveying “Plaintiffs Memo of Points & Authorities in Support of Motion for Sanctions, Motion for Sanctions and Notice of Hearing;” $14.25 to prepare “affidavit of service for Notice of Hearing on Sanctions;” $342.00 to “prepare for and attend hearing on motion for sanctions” and to “review opposition to motion;” and $4.75 to prepare “letter faxing copy of Order Denying Motion [for] Rule 11 Sanctions to Kalele White.” In addition, plaintiff has several billing entries which contain both work on the Rule-11 motion, and other work unrelated to the motion. For example, plaintiff seeks $306.00 to both “review answer to complaint” and also to “draft rule 11(b) letter;” and $54.00 to “review opinion and order denying rule 11 motion” as well as “draft motion to set trial and notice of hearing.” After considering both the direct hours billed, and the *226combined billing entries, we accept plaintiffs affidavit that the total amount billed for the Rule 11 motion was $1,098.00.
Accordingly, given that plaintiff was not the prevailing party in the Rule 11 motion, we find that the $1,098.00 in attorney's fees sought in relation to the motion are not reasonable and must be deducted from the $4,524.25 total, reducing the fee sought to $3,426.25.
We further find that plaintiff unreasonably seeks attorney's fees with regard to its preparation and submission of its April 5, 2005 response to interrogatories, request for admissions, and production. Plaintiff seeks $228.00 to “draft answer to defendant's discovery” on March 15, 2005, and $57.00 to “review and respond to email from Kalele White re draft answers to discovery.” In addition, plaintiff has a March 8, 2005, billing entry which combines work on the discovery request and unrelated work, namely a $228.00 fee for “review discovery request and motion to continue trial; draft fax to client re same; outline objections to both.” While such entries are not unreasonable on their face, we observe that the trial on this matter ended on March 21, 2005, but that the completed discovery was dated March 23, 2005, and was not filed with the court until April 5, 2005, nearly two weeks after trial. Given this delay, and apparent lack of availability for defendant's use at trial, we see no reason to compensate plaintiff for such discovery related fees. We accordingly reduce an additional $399.00, an amount reflecting the value of attorney services as billed, as well as the likely proportion of services involved in discovery after considering the relative complexity of the combined billed services — reducing the total fee award to $3,027.25.
Lastly, we note in passing that after a court examines such factors as the time and labor required for the work billed, the novelty and difficulty of the legal questions, and the skills needed to the legal work effectively, in order to determine if the hours billed were reasonable, a court must next consider whether the rate at which those reasonable hours were billed is also reasonable. See Johnson v. Georgia Highway Express, Inc., 488 F.2d 714, 718 (1974); see also Water Technologies Corp. v. Calco, Ltd., 658 F.Supp. 980, 984 (N.D.Ill. 1987) (“the issues and complexity of the case will be considered.”). While we do not here intend to place a market value on plaintiffs services, we do observe that in deciding a “reasonable rate” for attorney's fees, “it is the fee applicant that has the burden of producing satisfactory evidence, in addition to the affidavits of its counsel, that the requested rates are in line with those prevailing in the community for similar services of lawyers of reasonably comparable skill and reputation.” S.E.C. v. Gemstar-TV Guide Intern., Inc.; 401 F.3d 1031, 1057 (9th Cir. 2005); see also Geier v. Sundquist, 372 F.3d 784 (6th Cir. 2004); Bjorklund v. Philadelphia Housing Authority, 118 Fed.Appx. 624 (3rd Cir. 2004). In this case, a significant *227number of hours were billed at $180.00 and $190.00 per hour without regard to the nature and complexity of the work involved. While plaintiff may have been willing to pay this rate for the services received, we are not without some reservations about the practice of billing for essentially clerical work at the same rate as work of a legal nature.
Order
Having considered plaintiffs application for attorney's fees and costs in this matter, and reducing those fees we find unreasonable, we fix, and accordingly award, reasonable attorney's fees by defendant to plaintiff in the total amount of $3,027.25. It is so ordered. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486968/ | ORDER TO DEPOSIT FUNDS INTO COURT REGISTRY
Introduction
This action arises out of a vehicle accident that occurred on Friday, January 25, 2002, in Fagasa. Allegations pertaining to the incident follow. The accident involved two vehicles, a leased 1996 Chevrolet Astro van, owned by Pago Rental Service Company (“Pago Rental”) and insured by Plaintiff Progressive Insurance Company (Pago Pago) Limited (“Progressive”), and an American Samoa Telecommunications Authority (“ASTCA”) maintenance truck. At around 10:30 a.m., the van was out of control and collided with the truck, which was parked on the side of the road servicing telephone lines.
Two ASTCA employees, Defendants Tamaliileupuia Tagoa'i, who was inside the truck at the time of the collision, and Nio Sánele Filo, who was thrown from the track’s boom bucket at impact, sustained injuries and were hospitalized and later released. Defendant Rocky Safiti was a passenger in the van. He was taken to the LBJ Hospital and treated for injuries sustained in the accident. Other van occupants, Defendant Fa'alogoa'e Tagaloa and her two sons, Defendant Jeffrey Tagaloa and Jonathan Tagaloa, also sustained injuries and were hospitalized. Jonathan never recovered and later died. Fa'atuputala Iona, the van’s driver, was trapped inside the van after the impact. After being freed, she *229was transported to LBJ Hospital where she was pronounced dead on arrival.
Pursuant to T.C.R.C.P. 22 and 57, Progressive filed a complaint for interpleader and declaratory judgment, seeking to interplead the named Defendants and have the Court determine what insurance benefits should be paid to whom. On that same date, Progressive also filed a motion to deposit $20,000 in the Court’s Registry and obtain an order discharging it from further liability after making the deposit.
The deposit motion was heard on August 29,2005. Defendants Estate of Fa'atuputala and Mr. Iona (together ‘the Defendants”) partially opposed Progressive’s motion. They argued that Progressive is statutorily subject to liability, under A.S.C.A § 22.2003(3), up to $50,000 and should be required to deposit that amount in the Court’s registry. Defendant National Pacific Insurance did not oppose the motion as presented by Progressive. The remaining Defendants, having yet to appear in this action, presented no position on the motion.
Discussion
Resolution of the above issue turns on the Court’s interpretation of A.S.C.A. § 22.2003. Section 22.2003 governs compulsory liability insurance in the territory and provides that a vehicle owner:
(2) shall insure the person named therein and any other person who uses the vehicle or vehicles with the express or implied permission of the named insured against loss from liability imposed by law for damages arising out of the ownership, maintenance or use of the vehicle or vehicles, subject to limits exclusive of interest and costs, with respect to each such vehicle, as follows:
(A) $10,000 for bodily injury to or death of one person in any one accident;
(B) subject to said limit for one person, $20,000 for bodily injury to or death of 2 or more persons in any one accident;
(C) $5,000 for injury to or destruction of property of others in any one accident;
(3) shall, if the vehicle is being used in the transportation of passengers for hire, including taxicabs, insure the driver and all fare-paying passengers therein against loss from the liability imposed by law for damages arising out of the ownership, maintenance or use of the vehicle or vehicles, subject to limits exclusive of interest and costs, with respect to each vehicle as follows:
(A) $10,000 for bodily injury to or death of 1 person;
*230(B) $50,000 for bodily injury to or death of 2 or more persons in any one accident;
(C) $10,000 for injury to or destruction of property of others in any one accident (emphasis added).
Section 22.2003(2) holds a named insured liable for injuries caused by the named insured or any other person who uses the vehicle with the named insured’s “express or implied permission.” Progressive argues that § 22.2003(2) applies to the present case because all Pago Rental did was expressly permit the renter to use the van. Therefore, Progressive maintains that under subsection (2)(B), it is only required to deposit $20,000 in order to be exonerated of further liability arising out of the accident.
On the other hand, A.S.C.A § 22.2003(3) applies to vehicles “used in the transportation of passengers for hire, including taxicabs.” The Defendants argue that section 22.2003(3) applies because the rental agency is a “commercial” enterprise — like the taxicab expressly mentioned in the statute — and should be interpreted to apply in all situations where a business enterprise derives a profit from the use of their vehicles. Defendants therefore maintain Progressive is required, pursuant to subsection (3)(B), to deposit $50,000 in the Court’s registry before being dismissed from the action.
Both parties agree that the amount Progressive is required to deposit turns on the Court’s assessment of whether A.S.C.A § 22.2003(3) applies to vehicle rental agencies. For the reasons set forth below, we hold that it does.
I. Progressive’s Arguments and Authorities.
Progressive reads A.S.C.A. § 22.2003 narrowly, arguing that under no hypothesis could a rental car be considered a vehicle used to transport “passengers for hire.” Therefore, according to Progressive, its exposure is limited by subsection 2(B) to $20,000.
In support of this claim, Progressive cites Dymon Cab Co. v. Branson, 131 P.2d 1008 (Okla. 1942). Dymon Cab rented one of its taxicabs to a University of Oklahoma student who collided into the taxicab with another vehicle, injuring its driver. The injured driver sued Dymon, alleging liability was fixed by an Oklahoma statute that specifically regulated taxicabs. The statute required, among many other provisions, that “taxicabs, automobiles and other vehicles carrying passengers and baggage for hire” provide evidence of insurance or bond before a permit or a license for the taxi could be issued. Id. at 1008. The statute further stated that the insurance policy was in play following a collision, *231“regardless of whether the taxicab was being driven by the owner, his servant, agent or lessee.” After the trial judge instructed the jury that the student was a “lessee” of the cab, a jury awarded damages to the injured party. Id. Dymon and its insurer appealed.
The sole issue before the Oklahoma Supreme Court was whether the transaction between the student and Dymon was within the stated purpose of a statute regulating “the use of taxicabs, automobiles and other vehicles carrying passengers and baggage for hire.” Id. at 1009. In other words, the issue was whether a statute that specifically applied to taxicabs used in the transportation of passengers for hire should apply with equal force to a taxi that had been rented to a third party.
The Oklahoma Court held that it did not. In doing so, the court looked to other state courts who had interpreted similar statutes requiring compulsory insurance or payment of special taxes for taxicabs. Those states held that under these “taxicab statutes,” rental cars were not taxicabs at all because they did not “carry passengers for hire.” Therefore, vehicle rental companies were not required to post the required insurance or meet the other licensure requirements listed in these taxicab specific statutes. See, e.g., State v. Dabney, 5 S.W.2d 304 (Ark. 1928); Armstrong v. Denver Saunders System Co., 268 P. 976 (Colo. 1928). Citing these authorities, and also specifically noting that none of the statute’s 21 subsections evidenced a clear intent to regulate anything other than the use of taxicabs, the Oklahoma Supreme Court reversed. Id. at 1010.
Progressive reads Dymon and the authorities cited therein as standing for the rule that a rental car is not a vehicle “carrying passengers for hire.” Therefore, it urges us not to read A.S.C.A. § 22.2003(3) as applicable in the instant case. However, all Dymon says is that, at least in Oklahoma, a rental vehicle was not subject to the requirements of a comprehensive statute designed to regulate taxicabs.
Here, it cannot be reasonably argued that § 22.2003 was designed to specifically regulate taxicabs. Rather, our compulsory insurance statute only mentions taxicabs as an example of one type of vehicle that carries “passengers for hire.” Therefore, Dymon and its reasoning are less than instructive in the current case.1
*232II. Authorities Holding that Rental Cars are Vehicles Carrying “Passengers for Hire”
Contrary to Dymon, other jurisdictions hold that rental car companies are subject to statutes that, like A.S.C.A. § 22.2003(3), regulate vehicles engaged in the “transportation of passengers for hire.” For example, a New York statute provides that “corporations engaged in the business of carrying passengers for hire in motor vehicles (e.g., buses and taxis) must demonstrate their financial responsibility by filing either a corporate surety bond or a policy of insurance with the Commissioner of Motor Vehicles.” Allstate Ins. Co. v. Shaw, 52 N.Y.2d 818, 821 (1980). Section 370 of New York’s Vehicle and Traffic Law further provides that vehicle rental corporations “shall be subject to the provisions of this section in the same manner and to the same extent as corporations engaged in transporting passengers for hire.” Id. (emphasis in original). In other words, rental car agencies, like taxis and buses, are all treated as engaged in the “transportation of passengers for hire,” and are subject to the same compulsory insurance or surety regulations.
Similarly, in interpreting its vehicle statutes, a Kentucky court held that rental and leasing agencies were vehicle owners “engaged in the transportation of persons or property.” Louisville Taxicab & Transfer Co. v. Blanton, 202 S.W.2d 433 (Kentucky 1947). There, a collection of rental car agencies, including Hertz, initiated a declaratory judgment action asking the court to determine if rental agencies were subject to the requirements of a statute regulating vehicles for hire. Id. at 434.
The Kentucky statute required those vehicle operators “engaged in the transportation of persons or property for compensation on public highways” comport with certain regulations and pay an excise tax. The rental agencies argued, inter alia, that the statute could not apply because they did not drive the vehicles themselves and thus, they did not actually “transport passengers for hire.” Id. at 180. In holding that rental agencies were nevertheless subject to the regulations, the court noted that the companies: 1) owned the rental vehicles, 2) engaged in the business of renting those vehicles, 3) obtained compensation, for the *233transportation of persons or property, and 4) in doing so, used state highways and public roads. Id. Refusing to engage in a semantics debate (i.e., that the rental agency didn’t literally “transport passengers”), the court held that these facts were more than sufficient to find that rental agencies engaged in the transportation of passengers for hire. Id. at 184.
Central to both the New York and Kentucky court’s holdings that rental agencies transported passengers for hire was that rental agencies, like bus and taxi companies, are commercial enterprises. See, e.g., Morris v. Snappy Car Rental, Inc., 595 N.Y.S.2d 577, 583 (1993) (holding that “in light of the large numbers of vehicles car rental agencies rent daily to the general public for profit, those companies are not in the same position as the private car owner who loans his car to a friend or relative for a limited purpose” and should not be governed by the same standards). In both states, the courts agreed that the fact that the rental agency derives a profit by putting rental vehicles on public highways makes them more analogous to a taxicab or bus company than to a friend who lends their vehicle to another.
On the whole, New York and Kentucky’s positions on the issue are persuasive. There, as here, the focus should be on the similarities between the taxicab company, the bus company and the vehicle rental company (all are engaged in business of transportation for profit), and not the alleged differences that two literally transport passengers, while the other merely rents an instrument and then allows the patron to transports him or herself.
In arguing that A.S.C.A § 22.2003(2) applies, Progressive essentially posits that all Pago Rental did was expressly authorize the vehicle’s use. In other words, Progressive likens Pago Rental to a friend who let another friend use their car. This argument is disingenuous at best. A rental vehicle company whose sole goal is to put as many vehicles as possible into the hands of strangers — thereby maximizing profits— should not be adjudged by the same standard of liability as a friend or family member lending a vehicle to the like with their “express or implied permission.” Like the taxicab expressly mentioned in A.S.C.A 22.2003(3) (and, presumably a bus company), the rental vehicle business is a commercial enterprise. Markedly unlike the friend who expressly or impliedly lends his or her car to another, the rental vehicle agency, and taxicab and bus operators, all derive a profit from a patron’s use of their vehicles.
When seen through this lens, Progressive’s ancillary — and purely semantic — argument that subsection (3) cannot apply because renters are not literally “passengers” loses any thrust. This is trae because the profit that flows to the bus, taxi or vehicle rental companies does so regardless *234of what seat the patron is in. Whether he is in the passenger seat of a taxicab, the back seat of a bus, or the driver’s seat of a rental vehicle, the respective company still gets paid.
III. Public Policy Favors a Liberal Construction
A statute’s sections and subsections should be read in context of the entire statute, and the legislative intent in creating the statute should always be considered. Furthermore, statutes that are enacted to provide for the safety of the general public should be liberally construed. Tung v. Ah Sam, 4 A.S.R. 764, 769 (1971).
The Legislature designed the compulsory insurance statute to justly and fairly compensate victims of negligent vehicular operations who may otherwise have little or no recourse against an at-fault driver. See Pu'u v. Lepule, 8 A.S.R.2d 68, 71 (1988) (holding that the “obvious design” of the compulsory insurance statute is to “facilitate] compensation to the hapless highway victim who is injured or has sustained damage” because of another’s negligence while operating a motor vehicle. And holding further that “[t]he Act ensures some measure of economic solvency or financial responsibility of operators upon the highways to whom such innocent victims may look to for compensation. The public is thus afforded a realistic remedy against the inevitable tortious use of automobiles.”)
Because of the strong public policy concerns behind the compulsory insurance scheme, interpreting § 22.2003 should not be a narrow or technical exercise. Rather, the subsections must be interpreted as a whole, giving the words “a meaning which serves rather than defeats the overall legislative goals” of justly compensating innocent victims of vehicular negligence. See, e.g., Allstate, 52 N.Y.2d at 822.
In this vein, it seems anomalous to hold that a vehicle rental agency is more akin to a friend or family member than it is to a bus or taxicab company. Holding that subsection (2)(B) applies to Progressive, and that Progressive is therefore only liable for $20,000, defeats rather than serves the Legislature’s goal of justly and fairly compensating victims of vehicular negligence. Such a holding treats the rental agency, who puts automobiles into the hands of strangers for profit, the same as a brother who lets his sister borrow his vehicle. In the latter instance, a vehicle is lent to another out of a sense of friendship, or family duty, to someone who is, presumably, known and trusted by the other party. In the first instance, a stranger walks into a place of business, money changes hands, a vehicle is rented, and the stranger then “transports” him or herself to a desired destination. To treat these transactions as analogous, while holding the taxicab company and the bus company to a higher standard, *235makes little sense. Further, such a statutory interpretation insulates vehicle rental agencies from the higher level of financial exposure faced by taxicab and buss owners, when all three commercial entities engage in what amounts to the same enterprise; to wit “the transportation of passengers for hire.”
Order
Justice and fairness to injured parties — the Legislature’s intent in authoring A.S.C.A. § 22.2003 — is best served by holding that commercial enterprises deriving profits from the use of their automobiles, whether taxicabs, busses or vehicle rental agencies, are all subject to the same levels of financial exposure. Progressive is required and is directed to deposit $50,000 in the Court’s registry pursuant to A.S.C.A. § 22.003(3)(B). It is so ordered.
Progressive also argues that in referring to vehicles being used in the transportation of “passengers for hire,” A.S.C.A. § 22.2003(3) specifically mentions taxicabs. Progressive argues that since the statute’s express language does not mention rental vehicles, then subsection (3) does not apply. In other words, because the Legislature did not expressly mention rental vehicles in subsection (3), that section must not apply to *232rental vehicles.
On this note, it is clear from the statute that the Legislature mentioned taxicabs in subsection (3) as an example of one type of commercial business the subsection applied to. It is equally clear that subsection does not apply exclusively to taxicabs simply because that enterprise is the only one listed. Indeed, the express language of the statute says “including taxicabs.” It is hard to imagine a scenario where the Legislature intended this language to apply exclusively to taxicabs. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486969/ | OPINION AND ORDER
Introduction
Plaintiff Seong Lim Heo ("Heo"), a resident alien of American Samoa and Korean national, first arrived in American Samoa while serving as an engineer on a refrigeration cargo ship in 1999. Heo subsequently returned to the Territory in December 2002, with the purpose of establishing a refrigeration business. He sought out the defendant Heung Man Lim ("Lim"), manager/owner of defendant Samoa Enterprises, Inc. ("Samoa Enterprises"), as Heo had somehow learned that Lim, with the reputation of being the local "godfather" amongst the Korean community in American Samoa, was the person with influence to talk to about setting up business in the Territory.
Lim offered Heo his assistance, but he in turn requested Heo to modify the "ice system" of three fishing vessels, Pago 1, Pago 2, and Pago 3, which were owned and operated by Samoa Enterprises. Moreover, Lim told Heo to do the modification work within a budget of approximately $15,000.00 to $20,000.00 per vessel. Even though Lim's budget ceiling was grossly inadequate for the requisite modification work, Heo nonetheless accepted Lim's instructions and undertook the work accordingly. According to Heo, he felt compelled to do as he was told, since he was relying on Lim's knowledge of the licensing and administrative procedures in the territory; his ability to assist him with his immigration status; as well as his apparent political and economic influence in both the Korean and Samoan communities. As the *237newcomer, Heo said he felt intimidated by Lim, and, regarding Lim as an authority figure, did not feel it appropriate to ask Lim to formalize any terms of their business arrangements in a written document.
Subsequent to these discussions, Lim, apparently true to his perceived reputation, managed to handily navigate regulatory red tape placing restrictions on an alien setting up business in the Territory and quickly secured Heo not only a P5 immigration status, but a business license as well to facilitate Heo's intended business activities. Lim accomplished all this with the aid of Toa Krone, an American Samoan resident who essentially testified that she used her name, at Lim's behest, to front a business under the name of "Ocean Industries Enterprises," that she had nothing further to do with subsequently. Moreover, Heo was told that Lim had also arranged an immigration sponsor for him, the wife of the then Attorney General.
Between March 2003 through May 2003, Heo performed labor and repairs to convert the ice system on the defendants' three fishing vessels into a refrigeration system. Between February 2003 through September 2003 Heo additionally performed freezer repair services on equipment at Nu'uuli Mart, another business owned by Samoa Enterprises, at Lim's direction.
On November 4, 2003, plaintiffs Heo, H&H Inc., a new corporate structure under which Heo now does business, and plaintiff William M. Steffany, described in the complaint as Vice-President of H&H, filed suit against the defendants, which at the outset named the Attorney General as well as a senior immigration officer who have since been dropped from the suit. The complaint alleges non-payment for parts and services rendered on the fishing vessels and at Nu'uuli Mart. Plaintiffs seek damages of $53,303.20, being the amount invoiced for the parts and labor provided, together with interest.
On November 18, 2003, defendants answered the complaint and asserted a counterclaim. While admitting that Lim had authorized Heo to perform labor and repairs on the vessels and at the store, defendants allege that Heo’s work was not performed in a workmanlike manner, resulting in damages to the vessels leading to losses of catch. Defendants similarly maintain that Heo's repairs at Nu'uuli Mart caused damage to shop freezers and ice machines, and that as a result of such damage, defendants were compelled to order further repairs. Defendants claim that as a result of Heo's said failures, no compensation is due him, but that they are entitled to $100,000 being the costs and repair of freezer equipment, as well as actual and consequential damages arising from rejected fish catch.
*238Having considered the parties' submissions, and evidence presented at trial, we conclude that Heo has made a sufficient claim in equity and that he is entitled to quantum meruit relief. On the other hand, we find and conclude that defendants' counterclaim is entirely without merit.
Discussion
We note at the outset that we view and treat plaintiffs cause as one in quantum meruit, as opposed to one in contract. Defendants emphasize that plaintiffs cannot assert a cause of action in contract because H & H, Inc. is not a properly incorporated business and that Heo has no individual or personal contract with Samoa Enterprises.
We first observe that defendants' assertion takes a narrow reading of the complaint. In detailing the work completed by Heo, plaintiffs request damages equaling the value of the work he performed, but do not specifically limit their theory of recovery to contract, equity, or otherwise. In turn, neither do we limit our review to theories of contractual recovery.
Additionally, we agree with defendants that we are unsure whether plaintiff H&H has performed the necessary formalities to obtain recognized status as a corporate entity, whether a contract was actually formed between defendants or plaintiffs, or if formed, what the true meeting of the minds between the parties may have been. Nevertheless, we feel confident that given the informal business arrangements and the relationship between the parties, we may in the alternative consider whether plaintiffs are entitled to relief under equitable principles of quantum meruit in the absence of such a contract, asking us to determine whether there has been "performance of services by the plaintiff, the receipt of the benefit of those services by the defendant, and the unjustness of the defendant's retention of that benefit without compensating the plaintiff." Midcoast Aviation, Inc. v. General Elec. Credit Corp., 907 F.2d 732, 737 (7th Cir. 1990)(internal citations omitted).
Therefore, by recognizing that a "claim in quasi-contract is established when the defendant has unjustly retained a benefit to the plaintiffs detriment, and defendant's retention of the benefit violates the fundamental principles of justice, equity, and good conscience," we reason that in the absence of firm evidence of a contractual relationship, we may appropriately review plaintiffs' complaint under principles of equity. Id.
*239I. The Fishing Vessels
We begin by addressing the contention raised in defendants' counterclaim that Heo did not provide a service. Defendants do not dispute that between March 20, 2003, through April 30, 2003, Heo installed compressor units and evaporators for the Pago 1, Pago 2, and Pago 3 fishing vessels, and that in May of that year Heo further performed repairs on the compressor units for each vessel. Defendants, assert, however, that Heo failed to install and repair the equipment in a workmanlike manner, and that as a result of such alleged failure defendants suffered economic losses from increased rejection of fish catches and associated maintenance costs.
First, we are not convinced that defendants' catch had suffered increased losses as a result of Heo's services. Neither plaintiffs nor defendants disputed the testimony of Starkist's Fish Coordination Department head, Bruce Leiataua ("Leiataua"), nor Starkist's business records relating to Pago 1, 2, and 3 fish catch information about which Leiataua testified. Leiataua noted that Starkist records both the total amount of a catch offered for sale, as well as the proportion of that catch that is rejected by Starkist. Further, he described that Starkist may reject fish for numerous reasons including high histamine levels and "sour gill," caused by exposure to high temperature; discoloration, caused by mishandling or lack of ice; "honeycomb," caused by mishandling or high temperature; or bruising.
Turning to the data of fishing Vessel Pago 1, found in Exhibit 1, the figures do not clearly substantiate defendant's claim that a greater increase in rejection of catch occurred after Heo's installation. The data, listing the total amount of fish caught, as well as the percentage of fish rejected in each catch, shows that between June 6, 2001, up until the installation of equipment, there were 44 fish catches in which sales were made to Starkist. Of those 44 trips, 17 trips reported no rejected fish. Two trips, one on November 2, 2002, and the other on January 29, 2003, reported 100% rejected fish. Overall, prior to the installation of the new refrigeration equipment, 8.97 tons of fish were rejected out of a total of 159.81 tons, a 5.61% rejection rate.
After installation, we note a record of 17 fish catches in which sales were made to Starkist following Heo's services. Of those 17 trips, 6 trips reported no rejected fish. We have a discrepancy in Starkist data, however, involving the November 12, 2003 catch. Starkist summary records indicate that no fish were rejected in this catch and that the net value of the fish was $12,268.17. The individual record of this trip indicates, however, that the entire load of fish was rejected for "honeycomb." This leaves us with two possible measures. If the catch *240was rejected, we find that subsequent to Heo's installation, 7.68 tons of fish were rejected out of a total of 70.73 tons, a 10.8% rejection rate. If, however, we follow the summary records, only 1.78 tons of fish were rejected out of 70.73 tons, a 2.5% rate of rejection B a rate less than that prior to installation.
As fishing vessel Pago 2 sunk on first trip out, the fishing data for the Pago 2 vessel ends in January 2003, leaving us with no effective comparison. Nevertheless, for the Pago 3 fishing vessel, we find only minor differences in catch. The data, listing the total amount of fish caught, as well as the percentage of fish rejected in each catch, shows that between August 7, 2001, up until the installation of equipment, there were 44 fish catches in which sales were made to Starkist. Of those 44 trips, 19 trips reported no rejected fish. Three trips, on November 4, 2001, December 8, 2001, and December 19, 2001, reported 100% rejected fish. Overall, prior to the installation of the new refrigeration equipment, 19 tons of fish were rejected out of a total of 138.87 tons, a 1.36% rejection rate.
After Heo's services, we have a record of 17 fish catches in which sales were made to Starkist. Of those 17 trips, 4 trips reported no rejected fish, and no trips were 100% rejected. Overall, after Heo installed the equipment, 2.39 tons of fish were rejected out of a total of 66.23 tons, a 3.6% rejection rate. While we observe that a 3.6% rejection rate is indeed higher than the rate prior to installation, we note that it is also lower than that of the Pago 1 vessel prior to installation, and that when asked, Leiataua testified that although the Pago vessels had rejects after March 2003, these rates of rejection were not high.
Even were we to find that the Starkist data indicates a negative pattern with regard to defendant's catch levels, we are not convinced that this is entirely attributable to Heo's workmanship. For example, accepting for the moment that the November 12, 2003, catch on Pago 1 was fully rejected, we note that the rejection was based on "honeycomb," which is apparently caused by mishandling and high temperature. Although defendants suggest that any problems with high ■ temperatures are necessarily linked to Heo's allegedly faulty refrigeration system, other factors are at play here. Seung Jai Lim ("Jai"), the son of defendant Lim, testified that out of concern for the condition of the catch on arrival, he and others would unload the catch into a van in Pago Pago, transport the fish to Nu'u'uli, a drive of approximately 30 minutes, place the fish in a refrigerated shipping container, and then return the fish, once frozen, to Pago Pago for sale at the tuna canneries. We think it fair to reason that if any temperature related injury existed in the fish at the time of the arrival, efforts to subsequently freeze the fish would not erase that preexisting damage. In turn, we hold, that given the practice of transporting *241the fish post-arrival, any damages to the fish resulting from mishandling and high temperature could just as well be explained by Jai's conduct as Heo's installation. Given that the overall fish catch was substantially similar both before and after Heo's installation, we conclude that defendants have not experienced a significant variation in catch rejection to constitute a cognizable injury.
Having concluded that the vessels could capably catch fish after Heo's installation, we further explore whether Heo conferred a benefit on defendants that warrants compensation. In other words, whether defendants would be unjustly enriched if we choose not to award Heo compensatory damages. First, neither parties dispute, and we acknowledge, that Heo did not install a premium refrigeration system. Heo testified that when approached by Lim to convert the ice systems into a refrigeration system, he estimated that such conversion would require approximately $30,000 per vessel. Lim, however, rejected this figure offering instead a lower budget in the range of $15,000 per vessel, an amount which is reflected by Heo's eventual installation price of $14,624.40 per vessel.
In addition, Heo testified that while in his professional opinion, he felt that certain refrigeration equipment should be installed in the engine rooms and on the lower side of the vessels, Lim insisted that it be put in different locations, notwithstanding Heo's insistence that this might eventually cause technical problems. Finally, Heo maintained, that after making his installations, he left necessary instructions regarding the proper management and maintenance of the equipment, in light of its unusual installation, but that subsequent to installation, crewmen and others did not follow his directions.
Defendants offer the testimony of Terry Conden, a marine consultant, who stated that in his opinion, the refrigeration system was not installed with good marine practice and that the coiling system was not spaced close enough. Yet, while we accept Conden's testimony that the spacing of the coils may have been greater than that which he was accustomed to, Conden clearly stated that he was unaware of the industry standard for spacing and that he could only "guess" that the spacing should be uniform.
In light of the record, then, we have no hesitation in concluding that the refrigeration system on the vessels was not first-class, but, after noting that defendants were able to sell over 126 tons of fish to Starkist after Heo's services, neither are we willing to hold that it was substandard. To the extent that defendants assert that Heo installed an "improper" refrigeration system, and criticizes Heo's installation methods, we reason, quite simply, that defendants are largely to blame. Had defendants been *242willing to provide Heo with a larger budget and given Heo the full liberty to install the equipment in the professional manner which he deemed appropriate, defendants would no doubt have had fewer refrigeration problems. Yet, where a person pays for a Chevrolet, they have no right to expect a Cadillac, and neither should Heo be held to a higher standard than that of which he was capable under the circumstances.
Likewise, that defendants had to replace the equipment is not wholly attributable to Heo's installation. To the extent that the parties had an agreement that Heo install the equipment, Heo had notified others on how to manage and maintain it. That defendants have not credibly countered Heo's testimony that the equipment was not properly maintained after installation, we conclude that any eventual repairs or replacement were exacerbated in part by defendants' day-to-day management of it.
Therefore, although Heo's service may not have been trouble-free, it was nevertheless a benefit obtained and deserves quantum meruit relief. In fashioning such a remedy in this case, defendants confuse the measure of damages in quantum meruit and restitution claiming they are identical theories of recovery. We note, as did the Ninth Circuit in CDM Mfg. Co., Inc. v. Complete Sales Representation, Inc., that "in unjust enrichment, damages are conferred in the amount the defendant benefited; in quantum meruit, damages are the measure of the value of the plaintiff’s services." 50 Fed.Appx. 348, 350 (9th Cir. 2002). Were we to award solely restitutionary damages, we would have to refuse Heo any compensation for work done on Pago 2, because after it sunk, defendants could not reap any benefits from the vessel, and therefore not be "unjustly enriched" by failing to pay Heo for his work. Because, here, we are attempting to compensate a person who has rendered services in a quasi-contractual relationship, the appropriate measure of damages is the reasonable value of those services. See Zuguin v. M/V Captain M.J. Souza, 23 A.S.R.2d 7, 10 (Trial Div. 1992) (a seaman who prepared a vessel for an upcoming voyage was entitled to quantum meruit compensation at the reasonable market rate for his services); see also Chodos v. West Publishing Co., Inc., 92 Fed.Appx. 471, 473 (9th Cir. 2004)("the measure of recovery in quantum meruit is the reasonable value of the services rendered, provided they were of direct benefit to the defendant."); see also BLACK'S LAW DICTIONARY 1276 (8th ed. 2004). Consequently, with regard to the fishing vessels Pago I, Pago 2, and Pago 3, then, we find it appropriate to award Heo $14,624.40 for labor and installation of the compressor and evaporator on each fishing vessel, $2,180.00 for labor on the compressor unit of Pago 1, $2,180.00 for labor on Pago 2, and $1,580.00 for labor on Pago 3 B a total of $49,813.20 as reflected in Heo's billing statements.
*243II. Nu'uuliMart
After reviewing the record and testimony, we likewise find and conclude with regard to Heo’s services at Nu'uuli Mart. Heo's invoices show that on February 11 and 19, 2003, April 17 and April 20, 2003, May 7, 12, and 21, 2003, June 10, 2003, and September 21, 2003, Heo performed repair work for defendants on the walk-in freezer, open freezer and ice machine located at Nu'u uli Mart; and that subsequent to Heo's work, defendants hired a third-party or parties for continued repairs.
Defendants contends that the fact that Heo had to repeatedly repair the equipment, and that someone else had to be hired after Heo to continue with repairs, suggests that Heo's work was of little value. We disagree. We reason, as plaintiffs argue, that if defendants had found Heo's work unsatisfactory, they would not have welcomed him nine times to engage in repairs. Indeed, that defendants maintain that they paid Heo "on the spot" for all work performed on the freezers lends support to the view that they repeatedly believed they were being benefited by Heo's labor. We do not read much into the fact that defendants hired someone else to repair the freezers after Heo. While defendants imply that we should read into this the view that the new repairperson was necessary to make up for any repair flaws caused by Heo, we find it more likely that, given defendants' repeated hiring of Heo, the freezers were in frequent need of ongoing repairs, and that defendants would have had to seek labor no matter who the source. We therefore conclude, as with the fishing vessels, that by repeatedly conferring a service on defendants, Heo is entitled to receive reasonable compensation for his services.
In deciding the value of such compensation, we again observe that Jai testified, contradicting Heo's testimony, that such compensation was already given to Heo in the form of cash payments. In resolving this contradiction in testimony, we find Heo's account of events more credible. Jai stated that he paid Heo in cash on the spot from the register. At the same time, however, Jai insisted that records of all payments were appropriately kept for tax reporting purposes and to ensure that no employees stole money from the register. Yet, given Jai's insistence that all records were kept, but that in this case there are no payment records available, we find Heo's assertion more believable that no such payments were ever made.
Because Heo performed a beneficial service which defendants have retained, we award Heo $3,490.00, the reasonable value of parts, material, and labor for his work at Nu'u'uli Mart, as reflected in his invoice.
*244Order
Upon the foregoing, judgment will accordingly enter in favor plaintiff Heo against the defendants in the sum of $53,303.20. It is so ordered. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486970/ | ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR PARTIAL SUMMARY JUDGMENT
Introduction
We will once again assume the reader is familiar with the facts of this case. On May 10, 2005, Plaintiff Progressive Insurance Company (“Progressive”) filed a motion for partial summary judgment against Defendant Department of Public Safety Fire Bureau of the American Samoa Government (“ASG”) contending that there is no genuine issue as to any material fact that ASG owed a duty, and breached a duty, when it responded to the April 20, 2002 fire at the Laufou Shopping Center. On June 10, 2005, we tentatively agreed to bifurcate Progressive’s motion to first address the legal issue of “duty.” On July 11, 2005 we issued an order rejoining the issues of duty, breach of duty, and liability so that we could evaluate the full record within the context of the Government Tort Liability Act (“GTLA”). Having conducted a further hearing on July 19, 2005, on the remaining partial summary judgment motion, and having considered the extensive record and legal arguments, we now grant in part and deny in part Progressive’s motion.
*248Discussion
I. Governmental Duty under Common Law
The parties first discuss whether, under common law, ASG owed a duty to Progressive to put out the fire in a nonnegligent manner. We note at the outset that although the parties describe various common law doctrines, such as the “governmental function” doctrine and the “discretionaiy function” doctrine, these theories pertain to liability once a duty and breach of duty have been found. They do not relate to the limited issue of duty itself. Thus, we save for later the common law and statutory doctrines applicable to liability, addressing them only after a breach of duty, i.e., negligence, is established.
We now focus on the issue of ASG’s duty, examining the “public duty” doctrine and “special duty” exception that relate to the issue of whether a governmental entity owes a duty to Progressive at all. If a court adheres to the “public duty” doctrine, it will find that the governmental entity owes a duty to the public as a whole, but, recognizing that the governmental entity operates with limited resources and capabilities, does not owe an actionable duty to every single individual for injuries which arise from its failure to furnish adequate protection. See, e.g., Myers v. McGrady, 613 S.E.2d 334 (N.C. App. 2005). Only where an individual can show that he was singled out from the public such that a “special relationship” existed between him and the governmental entity may the government be found to owe him a duty. Clarke v. City of New York, 18 A.D.3d 796 (N.Y. App. 2005) (a municipality may not be held liable for its failure to provide adequate fire protection absent a special relationship between the municipality and the injured party).
Such a special relationship may be formed where the governmental entity voluntarily assumes a protective duty towards a certain member of the public, undertakes actions on behalf of that member, and in turn induces reliance. See Williams v. State, 664 P.2d 137 (Cal. 1983) (noting further that a duty may be formed by an affirmative state act which places a person in peril or increases the risk of harm). This assumption of duty is like that of the “good Samaritan” rule noted by the parties in Edwards v. Honeywell, Inc. — that “a rescuer is required to act nonnegligently even if he was not obliged to attempt the rescue in the first place.” 50 F.3d 484, 487 (7th Cir. 1995). But it is also true that governmental inaction may create a special duty of care “where it would be apparent to the public officer that his failure to act would be likely to subject an identifiable person to imminent harm.” Romano v. City of Derby, 681 A.2d 387, 389 (Conn. App. 1996); see also Babcock v. Mason County Fire Dist. No. 6, 30 P.3d 1261, 1268 (Wash. 2001).
*249Although no single bright line rule exists for determining whether a special duty has been created, courts have fashioned various formulas for dealing with this issue. One such formula includes the following four factors:
(1) the municipality had actual knowledge of a dangerous condition;
(2) the injured party reasonably relied on representations and conduct of the municipality or its agents so as to forego other ways of protecting himself;
(3) the duty of care was created by an ordinance or statute setting forth mandatoiy acts for protections of a particular class; and
(4) the municipality did not exercise due care to avoid increasing the risk of harm.
Miskovich v. Independent School Dist. 318, 226 F. Supp. 2d 990, 1034 (2002) (applying Minnesota law); see also Hernandez v. Village of Cicero, 502 N.E.2d 1226, 1228 (Ill. App. 1986); Platt v. District of Columbia, 467 A.2d 149, 151 (D.C. 1983) (finding special duty where there has been “(1) a direct contact or continuing contact between the victim and the governmental agency or official; and (2) a justifiable reliance on the part of the victim.”).
However, despite acceptance by some courts, this judicial distinction between “special” and “general” duty has not been uniformly embraced. Other jurisdictions reason that the public duty doctrine is no longer viable in the face of statutory abrogation of a sovereign’s immunity from liability. These courts leave it to the province of the legislature to determine whether the duly owed by the governmental entity to the injured party should depart from the common law principles that apply to private individuals. In Adams v. State, for example, the court explained that:
[T]he ‘duty to all, duty to no-one’ doctrine is in reality a form of sovereign immunity, which is a matter dealt with by statute in Alaska, and not to be amplified by court-created doctrine .. . . Why should the establishment of duty become more difficult when the state is the defendant? Where there is no immunity, the state is to be treated like a private litigant. To allow the public duty doctrine to disturb this equality would create immunity where the legislature has not.
555 P.2d 235, 241-42 (Alaska 1976) (superseded by statute on other grounds); Beaudrie v. Henderson, 631 N.W.2d 308, 314 (Mich. 2001) (criticizing the public duty doctrine as merely a reformulation of *250common-law governmental immunity, an area already dealt with by statute); Ryan v. State, 656 P.2d 597 (Ariz. 1982); Brennen v. City of Eugene, 591 P.2d 719 (Or. 1979).
Under this view, where a legislature has in part abandoned sovereign immunity and exposed the sovereign to liability for tortious acts, the sovereign may no longer hide behind the alternative common law position that it held no duty to the plaintiff in the first place for which it could be held liable. See Martinez v. Lakewood, 655 P.2d 1388, 1390 (Colo. App. 1982) (noting that the state’s governmental immunity statute, although not directly applicable to the issue of public duty, addressed the issue of sovereign immunity and stated that the intention of the legislature was to treat the public entity as if it were a private person); but c.f Lovelace v. City of Shelby, 526 S.E.2d 652, 654 (N.C. 2000) (retaining the public duty doctrine under North Carolina law and extending it to both state and municipal agencies, but limiting its application to the law enforcement context and not fire protection). Therefore, a court adopting this view should abandon the “public duty”/”special duty” distinction and look instead to a more traditional standard of duty, such as whether “the defendant’s exercise of care foreseeably created an unreasonable risk to others.” Coffey v. City of Milwaukee, 247 N.W.2d 132, 139 (Wis. 1976) (holding that “[a]ny duty owed to the public generally is a duty owed to individual members of the public”).
II. Governmental Duty and the GTLA
Given this backdrop, we now examine ASG’s duty to Progressive, if any, in accordance with the provisions of the GTLA. Under A.S.C.A § 43.1203(a), “[t]he government is liable, except as otherwise provided in this chapter, in the same manner and to the same extent as a private individual under like circumstances....” The Federal Tort Claims Act, upon which the GTLA is modeled, likewise holds that “[t]he United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances.” 28 U.S.C. § 2674. In examining whether the governmental entity should be found liable, the court must define liability “in accordance with the law of the place where the act or omission occurred.” 28 U.S.C. § 1346(b)(1); see Richards v. United States, 369 U.S. 1, 11 (1962) (“the [FTCA],. . requires application of the whole law of the State where the act or omission occurred.”).
Progressive contends that the “public duty” doctrine, if previously accepted in the territory, is no longer applicable because it is inherently inconsistent with the language and meaning of the GTLA and FTCA. This contention is not as clear as Progressive maintains.
*251In Rayonier Inc. v. United States, railroad sparks set federal lands on fire in the State of Washington and the U.S. Forest Service took exclusive control and direction of all fire suppression activities. 352 U.S. 315, 316 (1957). Over a month later, strong winds revived the fire, which then spread over 20 miles and destroyed the plaintiffs’ property. Id. at 316-17. The appellate court held that the United States was immune from liability for any negligence by the Forest Service in fighting the fire because Washington law would preclude similar liability against local firefighters for the negligent conduct. Id. The Supreme Court disagreed, holding “that the courts below erred in deciding that the United States was immune from liability for any negligence by the Forest Service in fighting the fire.” Id. at 317-18. Interpreting the FTCA, the Court reasoned that the test was not if Washington law would impose liability on its own local government for negligent conduct, but if Washington law would impose liability on private parties for acting negligently. Id. at 318. In turn the Court concluded that the United States could be held accountable for the negligence of its firefighters. Id. at 319; see also Anderson v. United States, 55 F.3d 1379 (9th Cir. 1995) (holding that because private landowners under California law can be held liable for the negligent setting of or failing to control fires on their property, so too can the United States government).
However, although Rayonier and Anderson address the question of governmental liability once negligence is established, the “public duty” doctrine serves to identify the existence of the underlying duty itself; that is, whether a cause of action for negligence can be asserted against the government in the first place. Thus, while Rayonier may reasonably imply, as Progressive holds, that the FTCA subjects the government to the same duty as a private individual under like circumstances, other cases suggest that where a governmental entity still adheres to the public duty doctrine, and holds that the governmental entity did not form a special relationship with the plaintiff, a plaintiff may be unable to establish the requisite negligence to initiate a claim under the FTCA.
For example, in Louie v. United States, an off-duty soldier in the State of Washington was arrested for DWI and was not monitored by military police. 776 F.2d 819, 821 (9th Cir. 1985). Early the next morning, the soldier drove his car onto the highway and caused a head-on collision, killing the driver of the other vehicle. Id. The victim’s family brought suit against the United States Army under the FTCA seeking damages for wrongful death. Id. The court noted that in actions arising under the FTCA the government is liable for the negligence of its employees “in the same manner and to the same extent as a private individual under like circumstances.” Id. at 824 (citing 28 U.S.C. § 2674). The court held that the circumstances of the case involved government employees acting *252in a law enforcement function. Id. at 825. It determined that because the power and authority to arrest, to maintain custody, and to lawfully restrict a person’s liberty are unique to the law enforcement function, the inquiry into the government’s liability must include an examination of the liability of state and municipal entities under like circumstances. Id.
Recognizing that Washington adhered to the “public duty” doctrine, the court observed that under Washington law the “doctrine applies to a preliminary determination whether a duty exists and does not alter the underlying liability imposed on political subdivisions and municipalities.” Id. The court reasoned that because the plaintiff could not establish the formation of a special relationship between her and the government, under Washington law “the government owed no duty to [plaintiff] to control the actions of an intoxicated but orderly serviceman, and that the government is, therefore, not subject to liability under the Federal Tort Claims Act.” Id. at 827; J & B Development Co., Inc. v. King County, 669 P.2d 468 (Wash. 1983) (concluding that the “public duty” doctrine is not another form of sovereign immunity abrogated by statute; although municipal corporations shall be liable for damages to the same extent as if they were a private person, the concepts of duty and liability exist independently).
In a similar case, Stratmeyer v. United States, cattle lessees brought an action against the government under the FTCA, alleging negligence by a United States Department of Agriculture veterinarian for failing to quarantine cattle owned by a cattle supplier. 67 F.3d 1340, 1342-43 (7th Cir. 1995). Recognizing that to succeed under the FTCA plaintiffs must be able to “state a claim that is actionable under the substantive law of Indiana,” it noted that Indiana law recognized the “public duty” doctrine. Id. at 1344. Because, the court reasoned, no special relationship was formed between the veterinarian and plaintiffs, “[w]e hold that the plaintiffs have failed to establish, under Indiana law, the existence of a duty owed to them by the USD A veterinarian, and therefore that they have no claim against the United States under the FTCA.” Id. at 1348; see also Ochran v. United States, 273 F.3d 1315 (11th Cir. 2001) (holding that witness did not allege facts which supported violation of a duty under Florida law, a prerequisite to liability under the FTCA); Bergquist v. U.S. Nat. Weather Service, 849 F.Supp. 1221, 1224 (N.D. Ill. 1994) (plaintiff precluded under Illinois “public duty” doctrine from asserting FTCA claim against National Weather Service for damages and losses for failure to issue tornado storm warnings). Therefore, despite the holding in Rayonier, we recognize that many courts distinguishing between “duty” and “liability” have found the “public duty” doctrine to be wholly consistent with the statutory waivers of governmental immunity.
*253With the above cases in mind, we must decide whether, under the GTLA, ASG should be subject to the same standard of duty as a private person, or alternatively if a plaintiff must set forth a special relationship he or she has with ASG before a duty may lie. Following the philosophy of Adams v. State, we now hold that even if the public duty doctrine once garnered judicial acceptance prior to the enactment of the GTLA, the doctrine is no longer valid in the territory to the extent that it holds the government to a different standard of duty than a private individual. See Adams v. State, 555 P.2d at 241-42. Although we concede that the GTLA speaks only to ASG’s liability, and does not expressly address the issue of duty, we believe that the spirit and intent of the GTLA, unless expressly stated otherwise in the statute, was to place ASG on par with a private individual during all phases of a court’s review of alleged tortious conduct. Given this intent, we will treat ASG as we would a private person when considering not just liability, but also duty and breach of duty, and disregard any potential common law differentiation with regard to the analysis of the latter two.
Having reasoned that as a matter of law, ASG may be subject to the same standard of duty as a private person, we must now analyze whether such duty actually arose in this case. Interpreting the facts in a light most favorable to the non-moving party, we hold that there is no triable issue as to whether ASG, acting through its Fire Bureau, had a duty to put out the fire non-negligently. Progressive, therefore, is entitled to summary judgment on this issue.
The common law rule, of course, is that generally there is no duty to intervene in order to prevent the misconduct of a third person or protect another. Cracraft v. City of St. Louis Park, 279 N.W.2d 801, 804 (Minn. 1979); see also RESTATEMENT (SECOND) OF TORTS § 315 (1965). On the other hand, once a duty to act for the protection of others is voluntarily assumed, due care must be exercised even though there was no duty to act in the first instance. Id. at 806 (observing that the “special duty” exception to the public duty doctrine is no different than the common law concept of “assumed” duty).
Here, we do not face a situation where a party chose not to intervene. Rather, the Fire Bureau firefighters arrived on the scene within 30 minutes after the blaze began and remained there for nearly 15 hours to suppress the fire. Clearly then, on April 20, 2002, the Fire Bureau firefighters volunteered their services to take control of the firefighting operations and had knowledge of the hazardous conditions. Consequently, we hold that the firefighters’ actions sufficiently induced reliance by the building owner to forgo alternative methods of fire protection. In turn, we conclude that the firefighters’ conduct imposed *254upon it a duty to act in a non-negligent manner in putting out the fire, and a duty to avoid increasing the risk of harm.
III. Breach of Duty
We next turn to the issue of whether ASG breached its duty. ASG suggests that that we may not make any conclusions of law as to whether there was a breach of duty in this case. ASG notes that in Utu v. National Pacific Ins. Co, we reasoned that “even where there are undisputed facts, because negligence actions revolve around the reasonableness of a parly’s conduct, they cannot ordinarily be disposed of by summary judgment.” 9 A.S.R.2d 88, 94 (Trial Div. 1988) (internal citations omitted). ASG interprets this to mean that even where facts are certain, issues of “reasonableness” are based on the community’s own standard of what is or is not appropriate conduct, and therefore require a review by the fact finder, as opposed to a court determination of reasonableness as a matter of law. While we agree that the conduct of laypersons may be defined according to the general standards of reasonableness of the community, where the defendant is an expert accused of breaching his duty of care in his given area of expertise, we hold that the standard of reasonableness is that of the professional acting in accordance with the standards of his industry. Therefore, the court may ascertain reasonableness as a matter of law if sufficient uncontroverted evidence of the standard is available.
Indeed, under RESTATEMENT (SECOND) OF TORTS § 299A (1965), “one who undertakes to render services in the practice of a profession or trade is required to exercise the skill and knowledge normally possessed by members of that profession or trade in good standing in similar communities.” Comment G to § 299A further elaborates, noting that the appropriate standard of care is “that of persons engaged in similar practice in similar localities, considering geographical location, size, and the character of the community in general.” Based on this logic, we conclude that our analysis of breach of duty turns not on whether a reasonable layperson in the territorial community would have tried to put out the fire in a similar manner, but whether skilled public firefighters acting in accordance with the norms of professional conduct in a similarly situated community would have so acted.
ASG contends that if we hold the firefighters to süch a professional standard of care, internal Fire Bureau policies should not be the benchmark upon which duty is defined. We agree. ASG notes, for example, that much of the fire equipment received in the territory comes from outside donations. If internal Fire Bureau policies were to state that a certain article of equipment is standard issue, but in reality such equipment exceeds the norm for firefighters in similar communities as *255American Samoa, we would not find the Fire Bureau to have violated its standard of care for failure to obtain such equipment; the standard of care is that of the similarly situated professional community, and not the higher threshold set forth by internal procedure. See Wanzer v. District of Columbia, 580 A.2d 127, 132 (D.C. 1990) (protocols and procedures do not have the force of statute, but rather provide officials with guidance on how they should perform their duties); Titchnell v. United States, 681 F.2d 165 (3d Cir. 1982) (noting that allowing one’s internal policy to set the standard of care would unfairly penalize those who choose to exceed the recognized standard of care of the profession).
At the same time, however, we agree with Progressive that internal Fire Bureau policy should not be ignored. The Fire Bureau’s enumerated policies are likely a strong evidentiary indicator as to what the prevailing community standards of firefighting are in the territory. Reed v. Granbury Hosp. Corp., 117 S.W.3d 404, 413 (Tex. App. 2003) (internal policies and procedures do not, alone, determine the standard of care, but may be considered in determining that standard); Lugtu v. California Highway Patrol, 28 P.3d 249 (Cal. 2001) (officer safety manual did not establish the applicable standard of care, but could be considered by the trier of fact to determine whether or not an officer was negligent). Given that we are asked to ascertain the professional community standard, and not evaluate deviation from internal policies of the Fire Bureau alone, we conclude, as we did in Meredith & Assocs. v. Blue Pacific Mgmt. Corp., that the standard of care should ordinarily be provided by expert witnesses who testify to the customs or prevailing standards of the profession. 28 A.S.R.2d 60 (Trial Div. 1995).
Even so, we need not explore every alleged instance of the Fire Bureau failing to adhere to its standard of care. We note that even if we were to find that the Fire Bureau did not meet such professional standards, this does “not answer the question of to whom the duty to act according to that standard of care extends.” Owens v. Unified Investigations & Sciences, Inc., 166 S.W.3d 89, 93 (Mo. App. E.D. 2005). For example, assume we were able to find, hypothetically, that the Fire Bureau breached its standard of care by not providing its firefighters with protective equipment that met professional community standards. If the lack of such protective equipment could affect only the personal safety of the firefighters themselves, with no impact on their ability to put out the fire, the failure to meet this standard of care may relate to a breach of duty as to the firefighters themselves, but not to the holder of the property. In order to find that the failure to adhere to the standard of care translates into a breach of duty to the parties in this case, we agree with the court in Owens that such a breach exists only where a person would be foreseeably harmed by the failure to adhere to a standard of care. Id.
*256We recognize the long held rule that foreseeability of risk or harm is a question to be determined by the fact finder, and not in pretrial proceedings. However, we also realize “where reasonable minds could arrive at only one conclusion, the trial court may determine the question of foreseeability as a matter of law.” See Kurtz v. Unified School Dist. No. 308, 65 Fed. Appx. 257, 261 (10th Cir. 2003). In this case, we are prepared to say that, as a matter of law, a failure to reasonably inspect the fire hoses according to professional standards of care would pose foreseeable harm to Progressive. It is undisputed that a hose with a leak will have less water pressure to fight a fire than a fully operational one, and will therefore impact the property owner.
Similarly, protective fire equipment also affects the property owner. By the very nature of protective equipment, the failure of the Fire Bureau to meet its standard of care in providing its employees with such equipment as helmets, protective jackets, pants and boots, breathing apparatuses, and flashlights, would result in a breach of duty to the firefighters themselves, for they suffer an increased risk or harm in combating the fire. It should not require a great stretch of imagination to see that this same failure to meet its standard of care would also foreseeably pose greater harm to the property holder. As Chief Moana has observed, where a firefighter lacks protective gear, he is unable to effectively enter into a burning building. Likewise, he observes that without a flashlight a firefighter will be unable to fully see the premises when fighting a fire at nighttime. As a matter of logic, it cannot be reasonably disputed that the lack of protective gear will deter a firefighter from fully engaging the force of a fire. Thus, where this lack of equipment is the result of a failure to meet its standard of care, ASG, by its Fire Bureau, may also be regarded as having breached its duty to Progressive in this case.
For similar reasons, we conclude as a matter of law that it is foreseeable that failure to exercise the proper standard of care regarding communications on the scene, and failure to exercise the proper standard of care in informing proper authorities of any faulty fire hydrants prior to the fire, would cause harm to a property holder and thus amount to a breach of duty.
Nevertheless, while we conclude that a breach of duty to Progressive may exist if the Fire Bureau failed to exercise its standard of care in the above circumstances, we have yet to address the issue of whether the standard of care was violated, or more fundamentally, what that standard is. With regard to disputes over fire equipment, ASG disagrees with Progressive’s assertion that there was insufficient fire equipment available to fight the fire. ASG contends that the Fire Bureau cannot be faulted for sending *257responders to the scene without full protective equipment, because such equipment, including functional protective coats, gloves, and pants, were unavailable. Even if true, however, the question remains whether failure to own such equipment itself would amount to a violation of the Fire Bureau’s standard of care, and in turn amount to a breach of duty to Progressive as a matter of law.
While we presume that there is a certain minimum standard of fire fighting capability and training that must exist in all jurisdictions, regardless of locality, we recognize that American Samoa, by its geographical isolation, economy, and infrastructure, should not be held to the same standard as fire agencies on the U.S. mainland. We are therefore unprepared, absent clear testimony comparing the firefighting capabilities used in this case with those used in similarly situated municipalities, to state as a matter of law what this threshold would be. Although Chief Moana, as Progressive indicates, has testified that the use of protective equipment and knowledge of the location of fire hydrants is “fundamental” to effective firefighting, we do not yet have sufficient evidence indicating whether such knowledge or access to such equipment is the norm in communities such as our own. Because we anticipate that different experts will no doubt have different conclusions as to the Fire Bureau’s appropriate standard of care, we find it best to reserve judgment on the issue of breach of duty and leave such determination to the trier of fact. Stated in short, although we hold that ASG had a duty to the property owner to put out the fire in a non-negligent manner, the testimony before us has not yet borne out what the standard of negligence may be.
In concluding that expert testimony is necessary to define the appropriate standard of care, however, we do not require the parties to begin from scratch. Progressive has provided an exhibit containing 125 “undisputed facts.” These facts include assertions made in deposition testimony by Chief Moana, firefighter Juliano Tavale, as well as other exhibits and affidavits. To the extent that these facts are indeed undisputed by the parties at the time of this order, such facts will be deemed admitted, and may be considered, where admissible, by the trier of fact in determining the Fire Bureau’s standard of care in the territory and whether a violation of that standard, and subsequent breach of duty, has taken place.
IV. Common Law and Statutory Liability
Although we leave the question of negligence to the trier of fact, it is a question of law whether ASG should be found liable if the trier of fact declares the Fire Bureau negligent. While the “special duty” doctrine addresses whether the governmental entity has any duty at all to a specific individual, it does not speak to the separate issue of whether the *258governmental agency should be subjected to liability under the common law.
Under the “governmental function” liability theory, an elaboration on sovereign immunity, “there can be no recovery against a municipal corporation for injuries resulting from its negligence or nonfeasance in the exercise of functions essentially governmental in character.” Valevais v. City of New Bern, 178 S.E.2d 109, 112 (N.C. App. 1970). Adhering to this view, a governmental entity is immune from liability in performing what may be regarded as “unique” or “essential” governmental functions, but remains liable for negligence in undertaking traditionally “non-governmental” or “proprietary” actions — the rationale being that “in launching a profitmaking enterprise, a [governmental entity] leaves the sphere that is exclusively its own” and waives its sovereign immunity. See Edelman v. Jordan, 415 U.S. 651, 695 (1974).
The first problem, as many courts note, is that “[w]hether a function is governmental or proprietary in nature is not always easy to ascertain.” Webb v. Jackson, 583 So.2d 946, 952 (Miss. 1991); see also Indian Towing Co. v. United States, 350 U.S. 61, 65 (1955) (noting that a comparative study of cases reveals a “quagmire that has long plagued the law of municipal corporations.”). In addition to the categorization problem, the Supreme Court in Garcia v. San Antonio Metro. Transit Auth, analyzing the doctrine as it relates to state government immunity, observed that as a policy matter the problem with a doctrine which seeks to examine and delineate historically “traditional” governmental functions “is that it prevents a court from accommodating changes in the historical functions of States, changes that have resulted in a number of once-private functions like education being assumed by the States and their subdivisions.” 469 U.S. at 543-44. Nevertheless, absent statutory waivers of sovereign immunity, such as the GTLA, the doctrine is often preserved. See Texas River Barges v. City of San Antonio, 21 S.W.3d 347, 356 (Tex. App. 2000) (noting that cities retain immunity for governmental functions unless the legislature has expressly waived that immunity).'
A second qualified immunity doctrine under common law, the “discretionary function” doctrine, limits governmental liability on principles of deference. Based on “the principle that certain decisions of the executive or legislative branches of government should not be reviewed by judge or jury,” the doctrine holds that if the governmental entity’s tortious act originates from a “discretionary” act of policymaking or planning, as opposed to a “ministerial” act of policy execution or failure to execute, the governmental entity will not be held liable. See Rieser v. District of Columbia, 563 F.2d 462 (1977) (noting that this doctrine is now favored over the “governmental-proprietary” test because *259of its more workable distinction); Biloon’s Elec. Service, Inc. v. City of Wilmington, 401 A.2d 636, 641 (Del. Super. 1979) (noting that the doctrine is based on the view that “it is not a tort for government to govern.”). Although there is no bright line test to determine whether an act is “discretionary” or “ministerial,” a court will generally consider discretionary decisions as governmental actions requiring “personal deliberation, decision and judgment” and “ministerial acts [as those which] require little or no judgment, and generally constitute mere obedience to orders or performance of a duty in which the municipal employee has little or no choice.” See Nealon v. District of Columbia, 669 A.2d 685, 690 (D.C. 1995).
Thus, in Chandler v. District of Columbia, where the district made a decision to close a number of its fire stations on a rotating basis because of budgetary concerns, the court found the district immune from liability in a negligence action for failure to reach a fire that led to the death of two children. 404 A.2d 964, 965 (D.C. 1979). It reasoned that because the decision to close the station was the result of policy considerations in managing the budget, it was a discretionary decision which released the city from liability. Id. at 966; see Nealon, 669 A.2d at 691 (finding that the city’s decision to temporarily decrease water pressure in its fire hydrants was likewise a discretionary decision relating to city resource allocation and fire protection); see also Biloon, 401 A.2d at 639 (discretionary action where fire officials delayed entry to fight fire until police backup arrived to control angry mob).
On the other hand, in Harry Stoller and Co., Inc. v. City of Lowell, where, in contrast to generally accepted firefighting practices, firefighters chose not to fight a fire with building sprinkler systems, and instead used only hoses, the court found the city liable for the resulting fire damage. 587 N.E.2d 780, 785 (Mass. 1992). Because the decision not to use sprinklers “was not founded on planning or policy considerations,” the court found it to be ministerial in nature. Id. (discussing statutory preservation of the common law discretionary function doctrine); see also Courson ex rel. Courson v. Danville School Dist. No. 118, 704 N.E.2d 447, 450 (Ill. App. 1998) (noting that despite codification of discretionary immunity, cases continue to employ common law definitions of discretionary and ministerial functions).
As the common law has been supplanted by the GTLA, we must now examine to what extent ASG may be held liable if it is found to have negligently breached its duty under the statutory language. Although the GTLA generally subjects ASG to liability in the same manner and to the same extent as a private individual under like circumstances, GTLA § 43.1203(b)(2), which is similar to 28 § U.S.C. 2680(a) of its federal counterpart, holds that such liability does not lie for “any claim based *260upon the exercise or performance of, or the failure to exercise or perform, a discretionary function or duty on the part of an officer or employee, whether or not the discretion involved is abused.” In other words, the GTLA, like the FTCA, has codified and retained the common law “discretionary function” doctrine.
Turning again to the record before us, examined in a light most favorable to the non-moving party, we conclude that ASG’s decisions, like Harry Stoller above, were ministerial in nature, thus rendering the “discretionary function” inapplicable in determining ASG’s liability. In this case, although Chief Moana testified that Fire Bureau standards require the use of personal protective clothing, responders on the scene were not wearing full protective gear and were forced to retreat from the interior of the building. ASG fails to assert any articulated policy reason to explain the failure to depart from such guidelines.
Similarly, Fire Bureau procedures hold that the officer in charge shall constitute the field command through which all communications are channeled. Deposition testimony, such as that of Afoa Ne'emia, indicates that when the Fagatogo fire crew arrived to assist the Tafuna crew, it decided to fight the fire on the back side of the building without any consultation with the Tafuna crew already in place. We are aware of no articulated policy reason to explain the failure to depart from such guidelines. Additionally, firefighters Tipote and Tavale repeatedly drove the Unit 447 water tanker to the hydrant in front of Steven & Sons for refilling despite the fact that there was a closer fire hydrant available behind Tedi of Samoa. Again, we are aware of no policy reason to explain the reason for traveling the longer distance for tanker refills. While we pass no judgment as to whether the above actions and departures from policy themselves constitute negligence, we are comfortable in our conclusion that the reasons guiding such actions were the result of execution, or failure to execute policy, and not guided by principles geared toward the formulation of public policy in the territory. Therefore, as ministerial decisions, where negligence is found by the trier of fact, liability may lie.
V. Causation and Damages
As the parties have not addressed the issue of causation and damages, we leave such determinations to the ultimate trier of fact. It is well settled that, in order for a person to be entitled to recover any damages for a claimed negligent injury, the act complained of must be the direct and proximate cause of the injury, and the damages recoverable are limited to those injuries or losses which are the natural, proximate and probable consequences of the wrong complained of. See Brothers v. Youngstown, 685 N.E.2d 822 (Ohio App. 1996). We *261recognize that even if the Fire Bureau acted in a swift and competent manner, there exists the possibility that the fire would still have consumed the building with similar ferocity. The inability to extinguish a fire does not presuppose negligence. Thus, if Progressive successfully establishes breach of duty at trial, it must still show that such breach led to the overall extent of fire damage that occurred in this case.
Moreover, if Progressive does establish causation, it will be entitled only to those damages which arose as a result of the negligent conduct. Progressive must therefore provide expert testimony to establish what the damages would have been had the Fire Bureau acted competently. Such damages should then be subtracted from the total damages, with the result being the damages that were proximately caused by the negligent management of the fire. Id. (damages recoverable by the plaintiffs would be those damages which occurred as a result of the negligent-reduced water flow in the fire suppression lines).
Order
By rejecting the “public duty” doctrine, we conclude that the GTLA subjects ASG, acting through its agencies, to the same standard of duty as a private person acting under similar circumstances. Given the undisputed facts in this case, the Fire Bureau firefighters’ efforts to take control of the fire in turn established a duty to put out the fire in a non-negligent manner.
Whether the Fire Bureau breached this duty is a more difficult question. Although we have testimony indicating that the firefighters’ conduct deviated from internal policy guidelines, the applicable standard of care does not rest on these guidelines. Instead, it turns on the firefighting conduct of similar professionals in similar geographic and economic communities. Accordingly, because to date we do not have sufficient testimony surrounding the community standard, we find the issue of breach is best left to the trier of fact. On the other hand, because the testimony relating to deviation of policy guidelines demonstrates that such departure was made for ministerial reasons, and not discretionary policy reasons, in the event that the trier of fact finds negligence, the GTLA discretionary function exception to liability will not apply, and ASG will be liable in the same manner as a private person under like circumstances.
It is so ordered. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486994/ | ORDER ON DEFENDANT’S MOTION FOR JUDGMENT ON THE PLEADINGS
Motion for judgment on the pleadings is granted. First, this is not a “disputed [matai] claim” within the meaning of A.S.C.A. § 1.0409, nor a controversy over [a] matai title[]” within the meaning of A.S.C.A. § 43.0302 — the defendant Territorial Registrar is not a counter-claimant to the disputed matai title. Second, plaintiff’s petition for declaratory relief does not come within the parameters of A.S.C.A. § 43.1101 — “a declaration of... rights or duties with respect to another....” Third, the net effect of plaintiff’s petition is a dismissal/cancellation of Isameli A. Anae’s succession claim to the Faleafaga/Aofaga matai title1 through collateral action. Accordingly, elementary due process would therefore demand that Isameli A. Anae be first given an opportunity to notice and the opportunity to be heard. In other words, he is a necessary party.2
It is so ordered.
We take judicial notice of the file inMTNo. 03-03.
Given plaintiff’s offer to register and Anae’s counterclaim thereto, there is presumably a matai title dispute in the pipeline. Until such time as the Secretary of Samoan Affairs certifies an irreconcilable dispute under § 43.0302, the matter is not ripe for judicial determination. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486996/ | OPINION AND ORDER
On December 1, 2003, Plaintiffs filed this action to evict Defendant Afa Tofele (“Afa”) from approximately 0.71 acres of land called “Tuapa” in the village of Seetaga, American Samoa (“the land”). Plaintiffs Taloalemaagao A. Leo (“Talo”) and Muaau M. Leo (“Muaau”) claim individual ownership of the land; they are children of their deceased mother, Lafa'aua Leo, and the March 20, 2003 land registration with the Territorial Registrar lists the land as the individually owned land of “Lafa'aua Leo & Children.” Afa, on the other hand, asserts that the land is the Taloalemaagao family’s communal land and the registration should be voided.1
The eviction prayer is further predicated on a lengthy history of mutual confrontations, mostly verbal but some physical, between the original parties. These incidents principally involved on one side Afa, and on the other side Talo, the Taloalemaagao family’s current sa'o [head chief], Muaau, Talo’s older brother, and more recently Plaintiff Maselina L. Semaia, Muaau’s son. At the application hearing on January 23, 2004, we readily agreed to the parties’ stipulated preliminary injunction mutually enjoining each party from verbally and physically harassing the other. In a written preliminary injunction entered on February 18, 2004, *421the injunction was confirmed, and by further stipulation expanded to prevent other confrontational activities.
An early trial on February 24, 2004 was initially anticipated, but the Secretary of Samoan Affairs’ jurisdictional certificate of irreconcilable dispute was still lacking. In fact, the certificate was not issued until May 24,2004 and was not filed until September 17,2004.
Other pretrial proceedings also intervened, including: an extensive evidentiary hearing on October 6, 2004 on Afa’s application to hold Muaaau in contempt for violations of the preliminary injunction; the October 21, 2004 amended complaint filing to include as defendants other members of Afa’s family who also dispute the registered individual ownership, reside on the land and, after this action was commenced, began to instigate trouble against Plaintiffs; another extensive evidentiary hearing held on November 4, 2004 on Plaintiffs application for further preliminary injunctive relief to enjoin Defendants from an alleged increase in confrontational acts against Plaintiffs; the April 8, 2005 filing of an answer to the amended complaint and counterclaim adding other party counterclaimants;2 and several continuances of the trial. The three-day trial finally began on April 8, 2005, and concluded on May 19 and 20, 2005. Talo, Afa, and their respective counsel were present throughout the trial.
Having heard the testimony and considered the evidence, we hold that the land is the Taloalemaagao family’s communal land and that Afa, as a blood member of the family, and his immediate family members, related by blood or marriage, are entitled to occupy and use the portion of the land customarily assigned to Afa by a former sa'o. Furthermore, in light of the historical antagonism and continuing confrontations between the Plaintiffs and Defendants, we permanently enjoin each side from harassing the other side.
*422Discussion
The foremost issues we must resolve are: (1) the legality of the land registration; and (2) if the registration is invalid, whether the land is the individually owned land of “Lafa'aua & Children” or the communal land of the Taloalemaagao family.
I. Validity of Land Registration
The Territorial Registrar’s official records in evidence establish the procedures followed for the registration of the land. On July 3, 2000, Talo offered to register the land as the Taloalemaagao family’s communal land. The registration offer was accompanied by the survey of the land, Drawing No. 32-8-2000, which Talo requested and Meko Aiumu (“Aiumu”) created. Aiumu is a licensed professional surveyor and the Manager of the Survey Division of the American Samoa Government’s Department of Public Works. On May 2, 2002, Talo, in his capacity as Seetaga’s pulenu'u [mayor], and Aiumu collectively issued the “Surveyor and Pulenu'u Certificate.” The certificate confirmed that in order to give interested land owners opportunity to be present at the survey, Talo gave oral public notice in Seetaga at a meeting of village chiefs that Aiumu would perform the survey on May 15, 2000. On May 23, 2000, Aiumu, in his capacity as the Survey Division manager, certified that the survey was done in compliance with the applicable American Samoa laws and regulations, and he approved it for registration. These are required steps for surveys of land to be registered. A.S.C.A. §§ 37.0101-.0102.
Notice of proposed land registrations must be made in Samoan and English, and must be posted for a period of 60 days on the Courthouse bulletin board in Fagatogo and at two public places in the villege in which or nearest to which the land to be registered is located, and must also be published in a local newspaper once each 30 days during the 60-day notice period. A.S.C.A. § 37.0103(a).
Here, a member of the Territorial Registrar’s staff posted the notice of the proposed communal land registration in Seetaga. Talo saw the notice posted in Seetaga and, on July 12, 2000, instructed the Territorial Registrar to change the proposed communal land registration to registration as the individually owned land of “Lafa'aua Leo and Children.” The Acting Territorial Registrar complied with Tab’s request. Subsequently, the notice of the proposed registration as individually owned land was posted on the bulletin board at the Courthouse and in Seetaga from July 13 through September 11, 2000, a *423period of 61 days.3 Two registration notices were forwarded to the Samoa News for publication. Newspaper publication was made on July 14, 2000, and August 11,2000.
At least two defects vitiate the registration process in this case. First, it is inappropriate to register a land title in the name of a deceased person. Second, the newspaper notice of the proposed registration is seriously deficient. The notice of the proposed individually owned land registration was properly published within the first 30 days of the 60-day notice period. The second notice was also published during the first 30 days, two days shy of the second 30 day period. At first glance, this mistake appears minor and technical in nature, especially considering that the newspaper inadvertently published the communal land notice ahead of time on August 11. However, a closer look reveals that the Legislature added the newspaper publication requirement in 1989 specifically for the purpose of disseminating registration notices more widely to attract interested persons’ attention. Thus, the mistake is significant indeed. This court has held that omission of the mandated newspaper notice is fatal to the registration process. Timu v. McMoore, 24 A.S.R.2d 84, 86 (Land & Titles Div. 1993).
We acknowledge, however, that those persons most immediately affected by the proposed individually owned land registration, Afa and his family members, did learn of the registration offer and timely objected within the 60-day period. On September 25, 2000, as a result of the objection, the Territorial Register followed the prescribed procedure under A.S.C.A. § 43.0302 and referred the controversy to the Secretary of Samoan Affairs for mediation. The results stemming from the Secretary’s efforts is at the crux of the registration validity issue.
On or about December 24, 2002, after Talo advised the office of the Secretary of Samoan Affairs that the parties to the mediation process had settled their differences, the parties met at the office to personally convey their settlement to the Secretary. As a result, the Secretary sent to the Territorial Registrar a form notice, completed with modifications for the controversy at hand and signed by Talo, Muaau, Afa and other objectors, stating that the “Claimant(s)/Counter-Claimant(s) . . . have consented to withdraw their Claim/Objection” to the registration. The word “their” was handwritten and added above the crossed out words “his/her,” and the words “Counter-Claimant(s)” and “Objection” were underlined.
*424These modifications render some uncertainty as to whether the individually owned land registration was meant to proceed. The Registrar noted this ambiguity and sought the Secretary’s assistance to bring the parties to her office for clarification of their intentions. However, nothing materialized from this effort, and at the Registrar’s March 17, 2003 directions, the land was registered as the individually owned land of “Lafa'aua Leo & Children” on March 20,2003.
The parties have markedly different views of what actually transpired at the final hearing before the Secretary on or about December 24, 2002. They also disagree as to the nature of the agreement they entered or intended to enter into on that occasion. Talo and Muaau would, in essence, have us disregard the deficiencies in the registration process and believe that Afa and the other objectors withdrew their objection to the land registration to facilitate the proposed individually owned land registration. On the other hand, the evidence clearly shows that Afa and the other objectors understood that they were withdrawing their objection to the individually owned land registration in response to Tab’s and Muaau’s agreement to withdraw the proposed registration and fully restore the prior communal land status of the land.
We could vitiate the individually owned land registration based on the impropriety of proposing the registration in a deceased person’s name, and the lack of two correct proposed registration notices published in the newspaper. See Timu, 24 A.S.R.2d at 86. However, it is important to address other concerns of even greater substance for voiding the registration of the land. This case does not involve development of land from virgin bush, the principal basis for the initial judicial creation of individually owned land in the territory. See Lealaimatafao v. Lautele, 9 A.S.R.2d 39, 40 (Land & Titles Div. 1988). Rather, before Tab’s registration offer, the members of the Taloalemaagao family, including those who are parties to this action, knew and treated the land as the family’s communal land. The land is only a portion of the family’s communal land “Tuapa.”
Tab’s individually owned land registration effectively alienated his family’s communal land. As such, the safeguards to prevent improvident alienation immediately came into play upon offering the land for individually owned land registration. Before the proposed registration could become effective, it must be submitted to the Land Commission and Governor for review and approval. A.S.C.A. §§ 37.0203-.0204. Tab did not attempt to comply with these requirements. Therefore, at all times relevant to this action, the land was, and still is, the Taloalemaagao family’s communal land. The March 29,2003, registration of the land as the individually owned land of “Lafa’aua and Children” is properly voided, fully restoring the land to its present communal land status.
*425I.Communal or Individually Owned Land
Having found the registration invalid and for the reasons stated above, we find the land to be the Talealemaagao family’s communal land. Accordingly, because Afa is a blood member of the Taloalemaagao family, he is entitled to occupy and use the family’s communal land. By this right, Afa was properly assigned a portion of the land under a customary communal land assignment to a family member by Talialemaagao Line, a former sa'o of the family. His customary assignment remains in full force and effect, and he and his immediate family members on the assigned portion of the land are entitled to indefinitely continue their occupancy and use of the assigned portion, unless and until a sa'o of the family terminates the assignment for an appropriate overriding family purpose, after prior consultation with the family’s members. See Pen v. Lavatai, 30 A.S.R.2d 10, 18 (App. Div. 1996).
All the parties to this action are members of the same family and as such should work together for the family’s best interests. They live together in very close proximity on the land and the close quarters are a fact of their lives. They need to recognize and accept the situation as it is. They need to overcome — to forgive and forget — the past strife between them, and to seriously begin the healing process necessary for their coexistence on the land. We cannot orchestrate this process. Money damages will not adequately remedy any party. More than likely money damages would only exacerbate the situation, and would certainly not motivate peaceful and harmonious relationships among the parties. We can only take a single but prudent legal step to at least encourage movement in this direction by permanently enjoining each party from further harassment of this nature of any opposing party.
Order
1. The registration of the land on March 20, 2003, as the individually owned land of “Lafa'aua & Children” is void.
2. The customary assignment to Afa of the portion of the land occupied and used by him and his immediate family members remains in full force and effect. Plaintiffs’ complaint for Defendants’ eviction from the assigned portion is denied and dismissed with prejudice.
3. Each party, and his or her officers, agents, servants, employees, and attorneys, and those persons in active concert or participation with him or her, are permanently enjoined from physically and verbally annoying, *426molesting, harassing, or in any other manner disturbing the peace of any opposing party.
It is so ordered.
On October 26, 2004, we inspected the land in conjunction with contempt and amended complaint proceedings and observed the crowded living conditions among the occupants. The main public road in this area bisects the land east to west. Muaau and Plaintiff Maselina L. Semaia have a house near the land’s eastern boundaty as registered, located immediately east of and close to Afa’s house. Both houses are on the northerly mountain side of the bisecting road. Structures on the smaller southerly portion of the land between the road and the ocean beach are either occupied or still in serious hurricane disrepair.
The answer to the amended complaint and counterclaim was filed the morning of the trial, after Plaintiffs understandably sought a default judgment on their amended complaint. After argument, we took the default judgment motion under advisement and directed the parties to proceed with the trial. We now formally deny the default judgment motion; while we do not excuse the derelict late filing of this answer and counterclaim, the issues are properly determined upon trial on the merits.
Affidavits by the Clerk of Court and a Territorial Registrar staff member attested to the posting. A.S.C.A. § 37.0103(b) requires proof of posting in this manner. A technical discrepancy, not material to our present analysis, occurred. The pulenu 'u, not a Territorial Registrar staff member, must provide the proof of the village posting. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8486997/ | ORDER
Plaintiffs Eugene and Tuputasi Reid (the "Reids") own a tract of land, known as "Taileau" an area slightly over three and half acres, located in the village of Leone. In the early 1990s, the defendant Tia'i Sauni ("Sauni"), who at the time worked for and was sponsored by the Reids, implored the latter for some land to build a family home. On October 31, 1991, the Reids sold a small portion of this Taileau, 0.135 acres more or less, to Sauni for $12,500. See Exhibit "4" (Deed of Conveyance). Shortly thereafter in 1992, Sauni built his family home on Taileau. Eventually over the years, Sauni and his family added additional *427residential structures to the area.
In 1999, the Reids commissioned a subdivision of Taileau, see Exhibits "2" and "3," and following the subdivision exercise, the Reids discovered that Sauni's buildings were actually not positioned on Taileau in accordance to the metes and bounds description contained in their deed of conveyance, Exhibit "4." On the subdivision map, Exhibit "4" is identified as "Lot 9," whereas Sauni was actually located within the slightly larger subdivision area known as "Lot 12."
The parties having tried, but failed, to resolve the matter between themselves, are now before us with the Reids seeking, inter alia, an eviction order. Of more than passing interest to the court, however, is the uncontroverted fact established on the evidence that Lot 9 actually has a third-party occupant, with whom neither party before us wants to be associated. While the Reids claim that Lot 9's occupant derives his/her interest through Sauni, the latter claims no knowledge whatsoever of this third party, who is conspicuously not before the court.
On these facts, we find that the occupant of Lot 9 is a necessary party to these proceedings since his/her interests are by necessity intertwined with the rights of parties. The issues before the court necessarily requires our adjudication of the parties' respective rights to Lot 9. Under these circumstances, joinder of the absent third-party occupant of Lot 9 is appropriate. The Senate v. Lutali, 26 A.S.R.2d 125, 130 (Trial Div. 1994); see also S.W. California Production Credit Association v. The Vessel Conquistador, 11 A.S.R.2d 7, 9 (Trial Div. 1989)("The court is reluctant... to issue order affecting the rights of absent parties without affording them prior notice and opportunity to be heard.")
In matters of practice and procedure, the Land and Titles Division is statutorily guided by the standard of "natural justice and convenience." A.S.C.A. § 3.0242. We conclude, consistent with the notions of natural justice and convenience that this matter should be continued until all necessary and proper parties are before the court.
It is so ordered. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487028/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
HANNAH DARLING, UNPUBLISHED
November 17, 2022
Plaintiff-Appellee,
and
MEDICAL REHABILITATION PHYSICIANS
PLC, doing business as MICHIGAN SPINE AND
PAIN,
Intervening Plaintiff,
v No. 358267
Wayne Circuit Court
STATE FARM MUTUAL AUTOMOBILE LC No. 20-003161-NF
INSURANCE COMPANY,
Defendant-Appellant.
Before: GARRETT, P.J., and O’BRIEN and REDFORD, JJ.
PER CURIAM.
Defendant, State Farm Mutual Automobile Insurance company, appeals by leave granted 1
the trial court’s order denying State Farm’s motion to dismiss the lawsuit brought by plaintiff,
Hannah Darling, for failure to comply with a discovery order. We vacate the trial court’s order
and remand for further proceedings consistent with this opinion.
1
Darling v State Farm Mut Auto Ins Co, unpublished order of the Court of Appeals, entered
November 3, 2021 (Docket No. 358267).
-1-
I. FACTUAL AND PROCEDURAL BACKGROUND
Darling filed suit against State Farm in March 2020, seeking no-fault benefits for injuries
suffered following an automobile accident. A dispute soon arose after State Farm scheduled nine
insurance medical examinations (IMEs).2 Darling moved for a protective order, requesting that
the trial court limit State Farm to two or three IMEs. State Farm argued that Darling was treated
by a range of specialists, and therefore the IMEs were scheduled so that the physicians performing
the IMEs would match the specialties of Darling’s treating physicians.3 Without holding a hearing,
the trial court entered an order limiting State Farm to three IMEs. After Darling attended three
IMEs, State Farm moved to strike testimony and claims for damages supported by any expert that
did not match the specialties of these IME physicians, or require Darling to submit to the other
requested IMEs. The trial court entered an order denying State Farm’s motion without
explanation.
In Docket No. 355803, State Farm sought leave to appeal that order. This Court vacated
the trial court’s order and explained that State Farm was entitled to have Darling submit to the
disputed IMEs. Darling v State Farm Mut Auto Ins Co, unpublished order of the Court of Appeals,
entered March 18, 2021 (Docket No. 355803). On remand, State Farm rescheduled six IMEs.
After Darling indicated that she would not attend an IME with a psychiatrist, State Farm moved to
compel her attendance. The trial court granted State Farm’s motion and ordered Darling to attend
this IME within 30 days. Ultimately, Darling did not appear for some of the rescheduled IMEs,
including the IME with a psychiatrist, causing State Farm to incur no-show fees. State Farm
moved to dismiss Darling’s case because of her conduct and requested that Darling be ordered to
pay the no-show fees incurred by State Farm. Without holding a hearing, the trial court denied the
motion. The court’s order included a one-sentence explanation: “plaintiff has complied with
extensive discovery.” After the trial court denied a motion for reconsideration, this appeal from
State Farm followed.
II. STANDARD OF REVIEW
We review a trial court’s decision on discovery sanctions for an abuse of discretion.
Hardrick v Auto Club Ins Ass’n, 294 Mich App 651, 659; 819 NW2d 28 (2011). An abuse of
2
Although State Farm refers to these examinations as “independent medical examinations,” we
refer to them as insurance medical examinations. As we observed in Micheli v Mich Auto Ins
Placement Facility, ___ Mich App ___, ___; ___ NW2d ___ (2022) (Docket No. 356559); slip
op at 2 n 3, the phrase “independent medical examination” is a “euphemistic term of art.” In the
insurance context, “an IME involves obtaining a second opinion from a doctor who is entirely
selected and paid for by an insurance company, rendering the ‘independence’ of the examination
somewhat questionable.” Id.
3
Seven of the nine IME physicians matched the specialties of Darling’s treating physicians. The
remaining two IMEs were with an orthopedic surgeon and a psychiatrist, which State Farm
argued were appropriate because Darling alleged a host of orthopedic complaints and had been
diagnosed with a number of mental disorders.
-2-
discretion occurs when the trial court’s decision is outside the range of reasonable and principled
outcomes. Id. at 659-660. “A trial court necessarily abuses its discretion when it makes an error
of law.” Pirgu v United Servs Auto Ass’n, 499 Mich 269, 274; 884 NW2d 257 (2016).
III. ANALYSIS
State Farm argues that the trial court abused its discretion and ignored this Court’s
directives by denying the motion to dismiss.
In Docket No. 355803, this Court’s peremptory order stated:
Pursuant to MCR 7.205(E)(2), in lieu of granting leave to appeal, we
VACATE the Wayne Circuit Court’s October 30, 2020 order and REMAND this
matter to that court for further proceedings consistent with this order. Under MCL
500.3151(3),[4] defendant is entitled to have plaintiff submit to an independent
medical examination (IME) performed by a specialist “in the same specialty as the
physician providing the care, and if the physician providing the care is board
certified in the specialty, the examining physician must be board certified in that
specialty.” See generally Muci v State Farm Mut Auto Ins Co, 478 Mich 178; 732
NW2d 88 (2007); Roberts v Farmers Ins Exch, 275 Mich App 58, 68; 737 NW2d
332 (2007). On remand, defendant may schedule the disputed IMEs at times
mutually agreed upon by the parties or as ordered by the circuit court. On
appropriate motion, the trial court may place reasonable conditions on the IMEs,
but only provided that plaintiff is able to demonstrate “good cause” for such
conditions by way of “a particular and specific demonstration of fact, as
distinguished from stereotyped and conclusory statements.” See Muci, 478 Mich
at 192 (quotation marks and citation omitted).
This order is to have immediate effect. MCR 7.215(F)(2). We do not retain
jurisdiction. [Darling v State Farm Mut Auto Ins Co, unpublished order of the Court
of Appeals, entered March 18, 2021 (Docket No. 355803).]
This Court’s order provided that State Farm could require Darling to submit to IMEs performed
by a specialist in the same field as the physicians who treated Darling’s injuries for which she
claimed no-fault benefits. The order did not allow Darling to disregard the scheduled IMEs, and
only authorized the trial court to place “reasonable conditions” on the IMEs upon a showing of
“good cause.”
On remand, State Farm scheduled the remaining six IMEs that were in dispute at the time
this Court’s order was entered. Darling failed to appear for IMEs scheduled with four specialists.
And after the trial court specifically directed Darling to participate in an IME with a psychiatrist,
Darling still did not attend. Currently, it appears that two IMEs remain outstanding: one with a
psychiatrist and another with a neuropsychologist. The record does not reflect that Darling ever
4
MCL 500.3151(3) does not exist; MCL 500.3151(2)(a) is the correct statutory provision.
-3-
filed a motion attempting to show good cause for placing reasonable restrictions on any IMEs, as
this Court explained that she could do in its order. In sum, Darling failed to comply with this
Court’s, and the trial court’s, directives by refusing to attend certain IMEs.5
The trial court, however, denied State Farm’s motion to dismiss because Darling “complied
with extensive discovery.” State Farm argues that the trial court abused its discretion by doing so
because dismissal with prejudice was the only principled sanction for Darling’s willful
noncompliance with court orders. When deciding whether to dismiss a case for a discovery
violation, the trial court should consider the following nonexhaustive factors:
(1) whether the violation was wilful or accidental; (2) the party’s history of refusing
to comply with previous court orders; (3) the prejudice to the opposing party; (4)
whether there exists a history of deliberate delay; (5) the degree of compliance with
other parts of the court’s orders; (6) attempts to cure the defect; and (7) whether a
lesser sanction would better serve the interests of justice. [Vicencio v Ramirez, 211
Mich App 501, 507; 536 NW2d 280 (1995).]6
And “[d]ismissal is a drastic step that should be taken cautiously.” Id. at 506. Here, the trial court
gave virtually no analysis justifying its order denying State Farm’s motion to dismiss. The trial
court certainly did not “carefully evaluate all available options on the record” or explain why the
Vicencio factors did not support the requested sanctions. See id. at 506-507. By failing to employ
5
“If the mental or physical condition of a person is material to a claim that has been or may be
made for past or future personal protection insurance benefits, at the request of an insurer the
person shall submit to mental or physical examination by physicians.” MCL 500.3151(1)
(emphasis added). MCL 500.3153 lists potential sanctions for failure to attend required IMEs,
including “[a]n order refusing to allow the disobedient person to support or oppose designated
claims or defenses, or prohibiting him from introducing evidence of mental or physical
condition,” MCL 500.3153(b), “[a]n order rendering judgment by default against the disobedient
person as to his entire claim or a designated part of it,” MCL 500.3153(c), and “[a]n order
requiring the disobedient person to reimburse the insurer for reasonable attorneys’ fees and
expenses incurred in defense against the claim,” MCL 500.3153(d).
6
Darling suggests that the Vicencio factors do not apply when the question is what sanction to
impose under MCL 500.3153. This Court recently held the opposite. Gueye v State Farm Mut
Auto Ins Co, ___ Mich App ___, ___; ___ NW2d ___ (2022) (Docket No. 358992); slip op at 11
(footnote omitted) (“Accordingly, before dismissing a no-fault claim under MCL 500.3153, a
trial court should consider the applicable Vicencio factors, including the availability of
alternative sanctions, and decide whether dismissal is just.”). Darling also argues that State Farm
waived its reliance on the Vicencio factors because State Farm did not cite them below. We
disagree because “so long as the issue itself is not novel, a party is generally free to make a more
sophisticated or fully developed argument on appeal than was made in the trial court.” Glasker-
Davis v Auvenshine, 333 Mich App 222, 228; 964 NW2d 809 (2020).
-4-
the proper legal analysis, the trial court necessarily abused its discretion. See Pirgu, 499 Mich at
274. Accordingly, we vacate the trial court’s order denying State Farm’s motion to dismiss.
The remaining question, however, is what remedy to order. State Farm urges us to grant
the relief denied by the trial court—dismissing Darling’s case with prejudice and ordering her to
reimburse State Farm’s IME no-show fees—while Darling argues that dismissal is inappropriate.
But it is ordinarily for the trial court, and not this Court, to determine what sanctions are
appropriate. See Vicencio, 211 Mich App at 506-507. At this juncture, we believe that the trial
court should have the first opportunity to decide what type of sanction is appropriate under the
proper legal standard. To the extent that the trial court’s denial of State Farm’s motion to dismiss
reflects the court’s belief that no sanction is appropriate, that conclusion would be an abuse of
discretion. Given this Court’s order allowing State Farm to schedule the disputed IMEs, the trial
court’s order compelling attendance at an IME with a psychiatrist, and the mandatory nature of
IMEs under MCL 500.3151, see Roberts, 275 Mich App at 68, some sanction is appropriate for
Darling’s failure to attend multiple IMEs.7 But choosing the sanction is a task we decline in the
first instance.
On remand, the trial court should review the Vicencio factors, and in determining the
appropriate remedy, “carefully evaluate all available options on the record, including, in this case,
consideration of the options specifically provided for by the Legislature under MCL 500.3153.”
Gueye v State Farm Mut Auto Ins Co, ___ Mich App ___, ___; ___ NW2d ___ (2022) (Docket
No. 358992); slip op at 12 (quotation marks and citation omitted; emphasis added). 8 “Whether
dismissal ultimately proves to be the appropriate resolution is for the trial court to decide.” Id.
IV. CONCLUSION
While we conclude that the trial court abused its discretion by denying State Farm’s motion
to dismiss without a proper legal analysis, we decline State Farm’s invitation to decide what
particular sanction is appropriate. We trust that the parties and the trial court will comply with the
7
Contrary to Darling’s argument, this Court’s previous order did not have to specifically state
that Darling would be subject to sanctions if she again refused to attend IMEs. MCL 500.3153
makes the potential penalties clear, and it is well-known that discovery violations may result in
sanctions.
8
An unreasoned order from the trial court choosing a sanction and summarily stating that the
court considered the Vicencio factors is insufficient because it does not “allow for meaningful
appellate review.” See Kalamazoo Oil Co v Boerman, 242 Mich App 75, 88; 618 NW2d 66
(2000). This is particularly so on an abuse-of-discretion standard. This Court cannot determine
whether the trial court’s decision was a reasonable and principled outcome without knowing the
reason and principle underlying that decision.
-5-
instructions in this opinion, and on remand, the trial court will fashion an appropriate remedy for
Darling’s conduct.9
Vacated and remanded for further proceedings consistent with this opinion. We retain
jurisdiction.
/s/ Kristina Robinson Garrett
/s/ Colleen A. O’Brien
/s/ James Robert Redford
9
On this second remand to the trial court, we must note the extraordinary amount of litigation
and judicial resources involved in this discovery dispute. We hope the parties may consider
good-faith settlement discussions as an alternative means of resolution.
-6-
Court of Appeals, State of Michigan
ORDER
Kristina Robinson Garrett
Hannah Darling v State Farm Mutual Automobile Insurance Company Presiding Judge
Docket No. 358267 Colleen A. O’Brien
LC No. 20-003161-NF James Robert Redford
Judges
Pursuant to the opinion issued concurrently with this order, this case is REMANDED for
further proceedings consistent with the opinion of this Court. We retain jurisdiction.
Proceedings on remand in this matter shall commence within 56 days of the Clerk’s
certification of this order, and they shall be given priority on remand until they are concluded. As stated
in the accompanying opinion, the trial court shall review the Vicencio factors, carefully evaluate all
available options on the record, and fashion the appropriate remedy for Darling’s conduct. The
proceedings on remand are limited to this issue.
The parties shall promptly file with this Court a copy of all papers filed on remand. Within
seven days after entry, appellant shall file with this Court copies of all orders entered on remand.
The transcript of all proceedings on remand shall be prepared and filed within 21 days after
completion of the proceedings.
Kristina Robinson Garrett
Presiding Judge
November 17, 2022 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487012/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
In re LAJUANA CHERYL ISAAC, D.D.S.
DEPARTMENT OF LICENSING AND UNPUBLISHED
REGULATORY AFFAIRS, November 17, 2022
Petitioner-Appellee,
v No. 359723
Board of Dentistry
LAJUANA CHERYL ISAAC, D.D.S., LC No. 21-001212
Respondent-Appellant.
Before: M. J. KELLY, P.J., and SHAPIRO and PATEL, JJ.
PER CURIAM.
Respondent-appellant, LaJuana Cheryl Isaac, D.D.S., appeals as of right a December 12,
2021 final order of discipline entered by the Board of Dentistry’s Disciplinary Subcommittee
(BDDS), part of the Bureau of Professional Licensing (BPL) in the Department of Licensing and
Regulatory Affairs (LARA). For the reasons stated in this opinion, we affirm.
I. BASIC FACTS
On April 14, 2020, the BDDS issued an earlier final order pertaining to Isaac.1 In this April
order, the BDDS stated that, in January 2019, LARA had charged Isaac with violating the Public
Health Code, MCL 333.1101 et seq. The BDDS noted that a hearing took place before an
administrative law judge (ALJ) and that the BDDS had accepted the ALJ’s findings and
conclusions. The BDDS concluded that Isaac was subject to discipline under MCL 333.16221(a),
(b)(i), and (h). MCL 333.16221 states, in pertinent part:
1
Appellant did not appeal the April order, which was a final order. See MCL 333.16237(6).
-1-
Subject to section 16221b, the department shall investigate any allegation
that 1 or more of the grounds for disciplinary subcommittee action under this
section exist, and may investigate activities related to the practice of a health
profession by a licensee, a registrant, or an applicant for licensure or registration.
The department may hold hearings, administer oaths, and order the taking of
relevant testimony. After its investigation, the department shall provide a copy of
the administrative complaint to the appropriate disciplinary subcommittee. The
disciplinary subcommittee shall proceed under section 16226 if it finds that 1 or
more of the following grounds exist:
(a) Except as otherwise specifically provided in this section, a violation of
general duty, consisting of negligence or failure to exercise due care, including
negligent delegation to or supervision of employees or other individuals, whether
or not injury results, or any conduct, practice, or condition that impairs, or may
impair, the ability to safely and skillfully engage in the practice of the health
profession.
(b) Personal disqualifications, consisting of 1 or more of the following:
(i) Incompetence.
* * *
(h) A violation, or aiding or abetting in a violation, of this article or of a rule
promulgated under this article.
The BDDS put Isaac on probation for 1 to 60 days and ordered her to comply with the
Public Health Code and to complete three hours of continuing education in the area of ethics and
three hours in the area of documentation. The continuing-education classes were to be
preapproved. The BDDS also assessed a fine of $2,000 and ordered that Isaac pay restitution to a
patient for an incomplete partial denture. The sanctions were issued in connection with Isaac’s
inadequate charting and her failure to repair a partial denture for a patient after multiple requests.
The order stated that Isaac would be taken off probation if she paid the fine and restitution, did not
violate the Public Health Code, and provided satisfactory evidence of the completion of the
continuing-education courses. The fine and restitution were to be paid within six months. The
order further stated that the BDDS could take disciplinary action if Isaac did not comply with the
terms of the order.
On September 27, 2021, the BPL issued a first superseding administrative complaint
(FSAC), stating that Isaac had not submitted proof of completing the continuing-education courses
or of paying the fine and restitution and had violated the April order. The FSAC also stated that,
on September 7, 2021, Isaac sent “several obscene emails” to LARA. The FSAC indicated that
the e-mails contained the following statements:
a. “please send me the names of director of monitoring and board of
dentistry.”
-2-
b. “Every hour I am awake I will pray his soul never sees heaven in the
name of Jesus[.]”[]
c. “I hope/pray the folks in monitoring have a heart attack or a stroke and
drop dead.”
d. “They are full of shit . . . I hope the folks in monitoring drop dead.”
e. . . . “That mf is playing games. I will pray daily he drops dead.”
f. “The board chairman is an asshole . . . praying that mother fucker has a
heart attack or stroke.”
g. “What is the reason that that SOB will not accept a course offered by the
University of Michigan that the school recognized as fulfilling the state ethics
requirement? What is his name so I can pray his soul never sees the gates of
heaven!”
The FSAC stated that Isaac was subject to discipline under MCL 333.16221(h), and also
under MCL 333.16221(b)(vi) as viewed in connection with MCL 338.41(1). MCL
333.16221(b)(vi) refers to a “[l]ack of good moral character.” The definition of “good moral
character” in MCL 333.16104(6) refers to the definition of that phrase in MCL 338.41 through
MCL 338.47. MCL 338.41(1) states:
The phrase “good moral character”, when used as a requirement for an
occupational or professional license or when used as a requirement to establish or
operate an organization or facility regulated by this state in a statute of this state or
administrative rules promulgated under a statute of this state, means the propensity
on the part of an individual to serve the public in the licensed area in a fair, honest,
and open manner. [Emphasis added.]
The FSAC noted that Isaac, in accordance with MCL 333.16231(8), had 30 days to respond
in writing to the allegations in the complaint; the response could be sent by regular mail or by e-
mail. The FSAC also stated that, under MCL 333.16192(2), Isaac “is deemed to be in receipt of
the complaint 3 days after the date of mailing listed in the attached proof of service.” The
complaint, in accordance with MCL 333.16231(9), indicated that if Isaac did not respond within
30 days, she would be deemed to have admitted the allegations in the complaint, and LARA would
refer the matter to the BDDS to impose a sanction.
On December 13, 2021, the BDDS issued the final order at issue in the present appeal. The
BDDS stated that Isaac had failed to provide a written response to the FSAC within 30 days and
that the subcommittee was, therefore, imposing sanctions. It stated that Isaac’s license was
suspended but would be reinstated, under a period of probation, if she underwent evaluations,
complied with the April order, and paid a $5,000 fine. Isaac was also to be subject to monitoring
if such monitoring was deemed necessary by the Health Professional Recovery Program.
-3-
II. STANDARD OF REVIEW
No hearing was required or conducted in this case, which was based on implied admissions.
When an agency makes a decision without a contested case hearing, the trial
court[2] must review the agency’s or officer’s decision to determine whether the
decision was authorized by law. An agency’s decision is not authorized by law if
it violates a statute or constitution, exceeds the statutory authority or jurisdiction of
the agency, is made after unlawful procedures that result in material prejudice, or
is arbitrary and capricious. Courts—including trial courts reviewing an agency’s
decision—review de novo issues of constitutional law and statutory construction.
[Oshtemo Charter Twp v Kalamazoo Co Rd Comm, 302 Mich App 574, 582-583;
841 NW2d 135 (2013) (citations omitted; emphasis added.]
III. ANALYSIS
MCL 333.16231(9) states:
The department shall treat the failure of an applicant, licensee, registrant, or
individual to respond to a complaint within the 30-day period set forth in subsection
(8) as an admission of the allegations contained in the complaint. The department
shall notify the appropriate disciplinary subcommittee of the individual’s failure to
respond and shall forward a copy of the complaint to that disciplinary
subcommittee. The disciplinary subcommittee may then impose an appropriate
sanction under this article, article 7, or article 8. [Emphasis added.]
Because Isaac did not respond within 30 days to the FSAC, LARA was required to treat the
allegations in the complaint as admissions. As noted, the FSAC alleged that Isaac had not
submitted proof of completing the continuing-education courses or of paying the fine and
restitution and had violated the April order. In addition, the FSAC alleged that Isaac had sent
“several obscene emails” to LARA. The FSAC alleged that Isaac was subject to discipline under
MCL 333.16221(h), and also under MCL 333.16221(b)(vi).
The BDDS was empowered to impose sanctions on the basis of the allegations and
admissions. MCL 333.16231(9). Isaac’s appellate briefing is focused, in large part, on whether
LARA placed unreasonable standards on her for the continuing-education requirement, but the
time to make this argument was during the 30-day period stated in the FSAC. The BDDS followed
the law when it complied with the “admission” mandate of MCL 333.16231(9). See Oshtemo
Charter Twp, 302 Mich App at 582-583. Thus, there is no error.
To the extent Isaac may be arguing that the decision to impose sanctions was arbitrary and
capricious, see id. at 583, such an argument is unavailing in light of the admissions and other
2
Under MCL 333.16237(6), “A final decision of a disciplinary subcommittee rendered on or after
January 1, 1995 may be appealed only to the court of appeals.” Accordingly, no “trial court” is
involved here.
-4-
circumstances. The December final order indicates that Isaac was subject to discipline under MCL
333.16221(b)(vi) and (h). MCL 333.16221(h) speaks to discipline issued on the basis of “[a]
violation, or aiding or abetting in a violation, of this article or of a rule promulgated under this
article,” and Mich Admin Code, R 338.1632, states that “[a]n applicant, licensee, or registrant
must comply with a final order issued by a disciplinary subcommittee, board, or task force.”
(Emphasis added.) “A ruling is arbitrary and capricious when it lacks an adequate determining
principle, when it reflects an absence of consideration or adjustment with reference to principles,
circumstances, or significance, or when it is freakish or whimsical.” Wescott v Civil Serv Comm,
298 Mich App 158, 162; 825 NW2d 674 (2012). The conclusion that Isaac failed to comply with
the April order and should, therefore, be subject to discipline under MCL 333.16221(h) was not
arbitrary and capricious.
As for MCL 333.16221(b)(vi), the allegation was that Isaac lacked “the propensity . . . to
serve the public in the licensed area in a fair, honest, and open manner.” See MCL 338.41(1).
Given the crude and unprofessional manner in which Isaac communicated with LARA, given that
she repeatedly wished death upon persons involved in her case, and given that she did not prove
that she had rectified the issues leading to the initial disciplinary proceedings, the conclusion that
Isaac should be subject to discipline under MCL 333.16221(b)(vi) was not arbitrary and capricious.
It is a reasonable inference that Isaac lacked “the propensity . . . to serve the public in the licensed
area in a fair, honest, and open manner.” MCL 338.41(1); see also MCL 333.16226 (discussing
types of sanctions).
In addition, the extent of the sanctions imposed was not arbitrary and capricious in light of
the history of the proceedings.
In her supplemental brief on appeal, Isaac states that she was not notified of “a hearing.”
It is not clear to what “hearing” she is referring. She may be referring to the administrative hearing
held in advance of the April order. But that hearing is not at issue in the present appeal. In addition,
Isaac mentions this unspecified “hearing” in the “facts” portion of her supplemental brief, but she
does not make an argument related to it. She argues about due process, but only in connection
with “the Amendment eligibility criteria.” Isaac has not developed anything for this Court to
review in connection with this “hearing.” See Wilson v Taylor, 457 Mich 232, 243; 577 NW2d
100 (1998) (“It is not sufficient for a party simply to announce a position or assert an error and
then leave it up to this Court to discover and rationalize the basis for his claims, or unravel and
elaborate for him his arguments, and then search for authority either to sustain or reject his
position.”) (quotation marks and citation omitted).
In her reply brief on appeal, Isaac refers to not having received a “consent order.” Yet, the
FSAC was not a consent order. And to the extent that Isaac goes on to argue that this alleged lack
of notice resulted in a violation of her due-process rights, “[r]aising an issue for the first time in a
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reply brief is not sufficient to present the issue for appeal.” Bronson Methodist Hosp v Mich
Assigned Claims Facility, 298 Mich App 192, 199; 826 NW2d 197 (2012).3
Isaac also states in her reply brief that “the section of the dentistry act relied upon by the
Board as authority for suspension of her license is so lacking in definitive standards as to be
violative of . . . due process.” But it is unclear to what “section of the dentistry act” she is referring.
Moreover, her argument is another attempt to raise a new issue by way of a reply brief. See id.
Isaac additionally argues about fraud and about racial and gender discrimination. But she
points to no evidence in the record in support of any such fraud or discrimination. An issue not
properly briefed on its merits is considered abandoned. Wilson, 457 Mich at 243. Such
abandonment also applies to a large number of cursory statements that Isaac makes throughout her
briefing, including in her statements of questions presented for appeal. This Court will not expend
its resources addressing a multitude of undeveloped, unsupported, and bare statements made by
Isaac.
Affirmed.
/s/ Michael J. Kelly
/s/ Douglas B. Shapiro
/s/ Sima G. Patel
3
The FSAC explicitly referred to an “attached proof of service,” and MCL 333.16192(2) states,
in part, that “if service is by mail, service is effective 3 days after the date of mailing. . . .”
Therefore, it appears that Isaac was afforded due process in this case.
-6- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487025/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
PEOPLE OF THE STATE OF MICHIGAN, UNPUBLISHED
November 17, 2022
Plaintiff-Appellee,
v No. 358668
Ottawa Circuit Court
PATRICK GERARD WILLIAMS, LC No. 20-044151-FH
Defendant-Appellant.
Before: RIORDAN, P.J., and BOONSTRA and GADOLA, JJ.
PER CURIAM.
Defendant appeals as of right his jury trial convictions for possession of methamphetamine,
MCL 333.7403(2)(b)(i), and third-degree fleeing and eluding a police officer, MCL
257.602a(3)(a). We affirm.
I. FACTS
This case arises from a high-speed motorcycle chase in which Ottawa County Sheriff’s
deputies pursued and later arrested defendant. On October 17, 2020, Deputies Nathan McDaid
and McCauley O’Connor were on duty in Ottawa County in a marked police vehicle. Both
deputies were in uniform. During their patrol, defendant and a passenger rode past them on a
Harley-Davidson motorcycle driving 66 miles per hour (mph) in a 45-mph speed zone. Deputy
McDaid turned on the patrol car’s overhead emergency lights and followed defendant, observing
that the motorcycle did not have a license plate.
After Deputy McDaid activated the patrol car’s emergency lights, he saw defendant, who
was not wearing a helmet, turn and look at the patrol car. Defendant slowed down temporarily,
then sped away. When defendant failed to stop, the officers turned on the police siren and pursued
defendant through a residential neighborhood where the speed limit was 25 mph, reaching a speed
of 80 mph. After approximately one mile and two minutes of police pursuit, the chase ended when
defendant crashed the motorcycle into the yard of a private residence. Defendant and his passenger
were thrown from the motorcycle. Deputy McDaid testified that as he approached the crash scene,
defendant stated “F*** you, this is your fault, you’re not allowed to go faster than 100 miles per
hour while pursuing.” Later, defendant told an officer that he knew that the officers were following
-1-
him, and he had been “trying to get away” by accelerating to 100 mph because he believed that
the officers were not allowed to pursue a suspect at that speed.
Deputy McDaid then searched defendant and did not find any incriminating evidence.
Defendant’s left leg was injured in the crash, and during the search defendant was leaning on his
right side. Deputy McDaid reached his hand into defendant’s right pants pocket and searched the
pocket, but did not pull the pocket out, as was standard protocol, because he did not want to
aggravate defendant’s injury by forcing him to lean on his left leg. After the search, defendant
was taken to the hospital where he changed into a hospital gown, and his clothes were placed in a
secured hospital bag. The officers did not leave defendant or his clothing alone while at the
hospital. As defendant was being released from the hospital, Deputy Adam VanDis searched
defendant’s clothes in the hospital bag and found suspected methamphetamine and two syringes
in the right front pocket of defendant’s pants. Deputy VanDis testified that defendant initially
denied knowing about the drugs, but while changing back into his clothes told the officer that if
there were drugs in his pocket, it would most likely be “meth.” Defendant admitted that he used
methamphetamine and had used the drug two days earlier. The lab report later confirmed that the
substance found in defendant’s right pants pocket was methamphetamine.
Defendant was charged with possession of methamphetamine and third-degree fleeing and
eluding a police officer. At the close of the prosecution’s case at trial, defense counsel moved for
a directed verdict on both charges, arguing that the prosecution presented insufficient evidence to
establish (1) the element of possession to support the possession of methamphetamine charge and
(2) that defendant knew the police were pursuing him, as required to support the fleeing and
eluding charge. The trial court denied defendant’s motion for a directed verdict, and the jury
returned a guilty verdict on both counts. Defendant was sentenced, as a second-offense habitual
offender, MCL 769.10, to 28 to 180 months’ imprisonment for the possession of
methamphetamine conviction, and 28 to 90 months’ imprisonment for the third-degree fleeing and
eluding a police officer conviction. Defendant now appeals.
II. DISCUSSION
Defendant contends that the trial court erred by denying his motion for a directed verdict
on the charges of possession of methamphetamine and third-degree fleeing and eluding a police
officer. We disagree.
At the close of the prosecution’s case, a defendant may move for a directed verdict of
acquittal. MCR 6.419(A); People v Szalma, 487 Mich 708, 720-721; 790 NW2d 662 (2010). The
trial court is required to direct a verdict of acquittal if the evidence presented is not sufficient to
support a conviction. MCR 6.419(A); People v Lemmon, 456 Mich 625, 633-634; 576 NW2d 129
(1998). We review de novo a trial court’s decision on a motion for a directed verdict. People v
McKewen, 326 Mich App 342, 347 n 1; 926 NW2d 888 (2018). In doing so, we review the
evidence in a light most favorable to the prosecution “to determine whether a rational trier of fact
could have found that the essential elements of the crime were proved beyond a reasonable doubt.”
People v Schrauben, 314 Mich App 181, 198; 886 NW2d 173 (2018). We “draw all reasonable
inferences and make credibility choices in support of the jury verdict.” McKewen, 326 Mich App
at 347 n 1.
-2-
A. POSSESSION OF METHAMPHETAMINE
Subject to several exceptions not relevant in this matter, MCL 333.7403(1) prohibits a
person from “knowingly or intentionally possess[ing] a controlled substance.” Under MCL
333.7214(c)(ii), methamphetamine is classified as a controlled substance. To convict a defendant
of possession of methamphetamine under MCL 333.7403(2)(b), the prosecution must prove that
the defendant knowingly or intentionally possessed methamphetamine. People v Baham, 321
Mich App 228, 247; 909 NW2d 836 (2017). To establish the element of possession, the
prosecution must prove that the defendant had “dominion or right of control over the drug with
knowledge of its presence and character.” Id. (quotation marks and citation omitted). “Possession
may be actual or constructive.” Id. (quotation marks and citation omitted). The elements of a
crime may be established by circumstantial evidence and reasonable inferences arising from that
evidence. People v Oros, 502 Mich 229, 239; 917 NW2d 559 (2018). Minimal circumstantial
evidence may satisfy the intent element of a crime. People v Smith, 336 Mich App 297, 308; 970
NW2d 450 (2021).
In this case, defendant contends that the trial court erred by denying his motion for a
directed verdict because there was insufficient evidence that he possessed the methamphetamine
to support his conviction. Defendant argues that because no drugs were found in his pocket during
the search at the scene, and because defendant did not have access to his clothes at the hospital,
there was insufficient evidence that he possessed the methamphetamine found in his pants pocket
when the pants were removed from the hospital bag.
We conclude that there was sufficient evidence for the trial court to submit the charge to
the jury, and sufficient evidence to support the jury’s verdict. The officers did not discover the
evidence at the crash scene because the searching officer did not want to exacerbate defendant’s
injury by forcing defendant to lean on his injured left leg to facilitate a more thorough search of
his right pants pocket. Deputies accompanied defendant to the hospital and defendant’s clothes
were secured in a hospital bag. When defendant was preparing to leave the hospital, Deputy
VanDis discovered the methamphetamine in defendant’s right pants pocket that had not been fully
searched at the crash scene. Defendant informed the officer that he used methamphetamine two
days earlier and that if drugs were in his pocket, “it would most likely be meth,” confirming that
defendant knew of the presence and character of the controlled substance found in his pants pocket.
These facts, taken together, were sufficient to support the conclusion that defendant knowingly or
intentionally possessed the drugs in his pants pocket. The trial court did not err by denying
defendant’s motion for a directed verdict on the possession of methamphetamine charge.
B. THIRD-DEGREE FLEEING AND ELUDING A POLICE OFFICER
MCL 257.602a(1) provides, in relevant part:
A driver of a motor vehicle who is given by . . . emergency light, or siren a visual
or audible signal by a police or conservation officer, acting in the lawful
performance of his or her duty, directing the driver to bring his or her motor vehicle
to a stop shall not willfully fail to obey that direction by increasing the speed of the
motor vehicle . . . or otherwise attempting to flee or elude the officer.
-3-
Fleeing or eluding an officer is a third-degree offense if some portion of the violation took place
where the speed limit was thirty-five miles per hour or less, or the defendant’s conduct resulted in
an accident or collision. MCL 257.602a(3)(a), (b). Specifically, the elements of third-degree
fleeing and eluding are as follows, in relevant part:
(1) the law enforcement officer must have been in uniform and performing his
lawful duties and his vehicle must have been adequately identified as a law
enforcement vehicle, (2) the defendant must have been driving a motor vehicle, (3)
the officer, with his hand, voice, siren, or emergency lights must have ordered the
defendant to stop, (4) the defendant must have been aware that he had been ordered
to stop, (5) the defendant must have refused to obey the order by trying to flee from
the officer or avoid being caught, which conduct could be evidenced by speeding
up his vehicle or turning off the vehicle’s lights among other things, and (6) some
portion of the violation must have taken place in an area where the speed limit was
thirty-five miles an hour or less, or the defendant’s conduct must have resulted in
an accident or collision . . . . [People v Grayer, 235 Mich App 737, 741; 599 NW2d
527 (1999), citing MCL 750.479a(3).1]
Defendant contends that there was insufficient evidence to support a finding that he knew
the police were chasing him. Defendant argues the loud noise of his Harley-Davidson motorcycle
prevented him from hearing the police siren, as evidenced by his passenger’s statement to police
that she did not hear the siren because of the noise of the motorcycle. Defendant also argues that
although he ostensibly looked over his shoulder during the chase, there is no evidence that he
acknowledged the officers behind him. Defendant also argues that when the motorcycle was
recovered after the crash, the mirrors were facing upwards, indicating that the position of the
mirrors made it impossible for him to see that he was being pursued.
We conclude that there was sufficient evidence to establish all elements of the crime of
fleeing and eluding a police officer. Deputies McDaid and O’Connor were in uniform during the
chase, were on duty, and were driving a marked police vehicle. Deputy McDaid signaled
defendant to stop his motorcycle by using the police cruiser’s emergency lights and the siren.
Deputies McDaid and O’Connor testified that defendant looked back over his shoulder toward the
officers after Deputy McDaid turned on the police vehicle’s overhead emergency lights.
Defendant then turned down a residential street, slowed down, and then suddenly accelerated to a
high speed. The pursuit continued for approximately two minutes and one mile. The chase took
place in part in an area where the speed limit was 25 mph and the chase resulted in an accident.
After defendant crashed his motorcycle, he told officers at the scene, “F*** you, this is your fault,
you’re not allowed to go faster than 100 miles per hour while pursuing.” Defendant later told an
officer that he knew the officers were following him and he was trying to get away by driving over
100 mph because he believed the officers were prohibited from pursuing at that speed. This
evidence was sufficient for a jury to find that defendant knew the police were pursuing him. The
1
MCL 257.602a is substantively identical to that of MCL 750.479a.
-4-
prosecution established all elements of third-degree fleeing and eluding, and the trial court did not
err by denying defendant’s motion for a directed verdict.
Affirmed.
/s/ Michael J. Riordan
/s/ Mark T. Boonstra
/s/ Michael F. Gadola
-5- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487014/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
MICHIGAN CONCRETE ASSOCIATION, UNPUBLISHED
November 17, 2022
Plaintiff-Appellant,
V No. 359490
Court of Claims
DEPARTMENT OF TRANSPORTATION, LC No. 21-000175-MZ
Defendant-Appellee.
Before: HOOD, P.J., and JANSEN and K. F. KELLY, JJ.
PER CURIAM.
Plaintiff, Michigan Concrete Association, appeals by right the order of the Court of Claims
granting summary disposition in favor of defendant Department of Transportation and denying
plaintiff’s requests for preliminary injunction, declaratory relief, and writ of mandamus. Finding
no errors warranting reversal, we affirm.
I. BASIC FACTS AND PROCEDURAL HISTORY
Plaintiff is a nonprofit corporation that promotes and supports the interests of the Michigan
concrete paving industry and Michigan concrete paving contractors. Of particular interest to
plaintiff was the decision of defendant in 2015 to change the method of how it evaluated pavement
designs for certain projects. According to plaintiff’s complaint, defendant previously used the
American Association of State Highway and Transportation Officials-93 (AASHTO-93) pavement
design method. In 2015, however, defendant transitioned to a different version of this method.
According to plaintiff, the new methodology used by defendant begins with the prior AASHTO-
93 equations, and then changes the design by applying a number of variables through use of the
Mechanistic Empirical Model Design Program (“New Program”). In its complaint, plaintiff
alleged that although the New Program was supposed to result in a uniform system, the variables
utilized by defendant failed to account for conditions specific to Michigan. The result, according
to plaintiff, is that defendant produces designs that are in conflict with the performance history of
existing Michigan pavements.
The New Program, according to plaintiff, violates MCL 247.651h, which states in pertinent
part, that defendant has the obligation to:
-1-
develop and implement a life-cycle cost analysis for each project for which the
estimated total pavement costs exceed $1,500,000.00 funded in whole or in part
with state funds. The department shall design and award paving projects utilizing
material having the lowest life-cycle cost. All pavement design life shall ensure
that state funds are utilized as efficiently as possible. [MCL 247.651h(1).]
In addition, MCL 247.651h(3) states that when assessing “life cycle cost,” defendant “shall
compare equivalent designs and shall be based upon Michigan’s actual historic project
maintenance, repair, and resurfacing schedules and costs as recorded by the pavement management
system, and shall include estimates of user costs throughout the entire pavement life.”
When it became clear to plaintiff that defendant was not going to suspend use of the New
Program despite plaintiff’s protestations, plaintiff filed a three-count complaint in the Court of
Claims. Count I, labeled “INJUNCTIVE RELIEF,” alleged that defendant violated MCL
247.651h “by adopting and implementing the New Program and continuing to use it despite
knowing it produces results that violate the [statutory] requirement to employ life-cycle analysis
that compares equivalent designs.” In Count II, plaintiff asked for declaratory relief on the basis
of the same statutory violations asserted under Count I. Lastly, in Count III, plaintiff sought a writ
of mandamus asking the Court of Claims to compel defendant to comply with MCL 247.651h.
The Court of Claims concluded that plaintiff lacked standing to seek declaratory relief with
respect to defendant’s compliance with MCL 247.651h, because plaintiff asserted no interest
different from that of the public at large, and alternatively, that declaratory relief could not issue
because the alleged beneficiaries of the status quo—the state’s asphalt pavers—were not before
the court. The Court of Claims also concluded that plaintiff was not entitled to mandamus because
the action it sought to compel was not ministerial in nature and that plaintiff had no valid cause of
action that would support the remedy of injunctive relief. This appeal followed.
II. MANDAMUS
A. STANDARD OF REVIEW
This Court reviews a trial court’s decision whether to grant mandamus relief for an abuse
of discretion. Berry v Garrett, 316 Mich App 37, 41; 890 NW2d 882 (2016). The Court reviews
de novo, however, questions of law such as whether a defendant has a clear legal duty to perform
and whether a plaintiff has a clear legal right to such performance. Id. Any attendant issues of
statutory interpretation are also reviewed de novo. Id.
B. DISCUSSION
The Court of Claims, quoting MCL 247.651h(1) and (3), concluded that the action that
plaintiff sought to compel was not ministerial in nature, explaining that “the execution of MDOT’s
duties under the statute requires MDOT to exercise a great degree of discretion,” including
“making judgments and comparing ‘equivalent designs,’ as well as making assessments about
utilizing funds ‘as efficiently as possible.’ ” We agree.
As we explained in Rental Props Owners Ass’n of Kent Co v Kent Co Treasurer, 308 Mich
App 498, 518-519; 866 NW2d 817, 829 (2014) (quotation marks and citations omitted):
-2-
To obtain the extraordinary remedy of a writ of mandamus, the plaintiff
must show that: (1) the plaintiff has a clear, legal right to performance of the
specific duty sought, (2) the defendant has a clear legal duty to perform, (3) the act
is ministerial, and (4) no other adequate legal or equitable remedy exists that might
achieve the same result. In relation to a request for mandamus, a clear, legal right
is one clearly founded in, or granted by, law; a right which is inferable as a matter
of law from uncontroverted facts regardless of the difficulty of the legal question
to be decided.
“A ministerial act is one in which the law prescribes and defines the duty to be performed with
such precision and certainty as to leave nothing to the exercise of discretion or judgment.” Berry,
316 Mich App at 41(quotation marks and citation omitted).
We must analyze, therefore, the words of the statute to determine whether it affords
defendant any discretion or judgment when comparing designs and utilizing funds. MCL 247.651h
states:
(1) The department shall develop and implement a life-cycle cost analysis
for each project for which the estimated total pavement costs exceed $1,500,000.00
funded in whole or in part with state funds. The department shall design and award
paving projects utilizing material having the lowest life-cycle cost. All pavement
design life shall ensure that state funds are utilized as efficiently as possible.
(2) As used in this section . . . , “life-cycle cost” means the total of the cost
of the initial project plus all anticipated costs for subsequent maintenance, repair,
or resurfacing over the life of the pavement.
(3) Except as otherwise provided in this section, life-cycle cost shall
compare equivalent designs and shall be based upon Michigan’s actual historic
project maintenance, repair, and resurfacing schedules and costs as recorded by the
pavement management system, and shall include estimates of user costs throughout
the entire pavement life.
(4) For pavement projects for which there are no relevant Michigan actual
historic project maintenance, repair, and resurfacing schedules and costs as
recorded by the pavement management system, the department may use either of
the following as a substitute for the requirements listed in subsection (3):
(a) Actual historical and comparable data for reasonably equivalent designs
from geographic locations with similar climates, soil structures, or vehicle traffic.
(b) The department may determine appropriate estimated maintenance,
repair, and resurfacing schedules for a project by using preliminary results from a
demonstration project . . . that is underway at the time of the project. The schedules
described in this subdivision shall be determined using appropriate engineering
analysis techniques and shall be approved by the chief engineer of the department.
The temporary schedules described in this subdivision shall be superseded by actual
performance data as it is developed.
-3-
Plaintiff averred it was seeking a writ of mandamus in order to “compel MDOT to suspend
the use of the New Program until MDOT corrects the material flaws and known calibration defects
in the New Program so the New Program produces accurate results that comport with the
[statutory] requirement to employ a life-cycle cost analysis that compares equivalent designs in
determining pavement designs.” Plaintiff asserted that the applicable statute “is ministerial in all
material respects because, without limitation, MDOT is tasked with implementing a life-cycle cost
analysis that compares equivalent designs.” In its complaint, plaintiff set forth MCL 247.651h “in
pertinent part,” and presented that statute’s Subsections (1), (2), and (3), evidently deeming
Subsection (4) not pertinent at that time. Plaintiff was thus clearly referencing the procedure in
Subsection (3) while petitioning for mandamus.
On appeal, however, plaintiff concedes that MCL 247.651h grants defendant “discretion
insofar as its duties to ‘ensure that state funds are utilized as efficiently as possible,’ ” under
Subsection (1), and to “compare equivalent designs,” under Subsection (3). Plaintiff now asserts
that “no relevant Michigan-specific Performance Curves are available” and refers to defendant’s
“nondiscretionary duties under MCL 247.651h(4)(a) and (b).” Under this provision, plaintiff
asserts that defendant “has a clear legal duty to perform one of the two nondiscretionary functions
as between MCL 247.651h(4)(a) and (4)(b).” Plaintiff has thus retreated from seeking to compel
defendant specifically to implement a life-cycle cost analysis under Subparagraph (3) and has
shifted to seeking to compel defendant to choose between the two alternatives in Subsection (4).
In effect, plaintiff has admitted defendant has discretion under MCL 247.651h(1) and (3),
defeating its request for mandamus under those parts, and now hopes to revive that request by
injecting a new factual predicate in order to compel defendant to proceed in accordance with MCL
247.651h(4). Having asked the Court of Claims for a writ of mandamus in order to “compel
MDOT to suspend the use of the New Program until MDOT corrects the material flaws and known
calibration defects” under the statutory duty to “employ a life-cycle cost analysis that compares
equivalent designs in determining pavement designs,” then arguing on appeal that mandamus is
proper only to compel defendant to choose among the procedures in MCL 247.651h(4), defendant
is not challenging the Court of Claims’s decision, but rather is putting forward a new basis for
seeking mandamus. Because there was no decision below on whether defendant was obliged to
proceed under MCL 247.651h(4), as opposed to Subsection (3), we will not consider this argument
on appeal. See Ficano v Lucas, 133 Mich App 268, 275; 351 NW2d 198 (1983) (a party “may
not shift ground on appeal and come up with new theories . . . after being unsuccessful on the one
presented to the trial court”) (quotation marks and citation omitted).1 Accordingly, we affirm the
Court of Claims’s decision to deny the request for mandamus.
III. DECLARATORY RELIEF
1
Even if the argument were not waived, we find it unpersuasive. The Court of Claims’s
conclusions how “the execution of MDOT’s duties under the statute requires MDOT to exercise a
great degree of discretion,” including “making judgments and comparing ‘equivalent designs,’ as
well as making assessments about utilizing funds ‘as efficiently as possible’ ” for purposes of MCL
247.651h(1) and (3) apply equally to defendant’s determination whether existing data are sufficient
for analysis under Subsection (3) or insufficient and thus requiring recourse to Subsection (4).
-4-
A. STANDARD OF REVIEW
This Court reviews a trial court’s decision whether to grant declaratory relief for an abuse
of discretion. Van Buren Charter Twp v Visteon Corp, 319 Mich App 538, 550; 904 NW2d 192
(2017). However, whether a party has legal standing to assert a claim presents a question of law
we review de novo. Sterling Heights Pain Mgt, PLC v Farm Bureau Gen Ins Co of Mich, 335
Mich App 245, 249 n 1; 966 NW2d 456 (2020).
B. DISCUSSION
The Court of Claims held that any decision it issued with respect to plaintiff’s request for
declaratory judgment would not “affect what MCA’s members do or otherwise shape their
actions.” In other words, “MCA’s members will continue to bid on projects regardless of how
MDOT implements the statute and regardless of whether MDOT continues to employ the new
program for pavement design.” In addition, the Court of Claims concluded that plaintiff did not
have an interest in the litigation that was “different in any way from that of the public at large,”
rejecting plaintiff’s argument that it had a unique interest in the case because “[t]he public at large
undoubtedly has an interest in the efficient utilization of state funds.” Thus, the Court of Claims
concluded that plaintiff “has not [pleaded] and proven facts that demonstrate an adverse interest
necessitating the sharpening of the issues raised.” We agree.
“Every action shall be prosecuted in the name of the real party in interest . . . .” MCL
600.2041. “Where a cause of action is not provided at law, then a court should, in its discretion,
determine whether a litigant has standing.” Lansing Sch Ed Ass’n v Lansing Bd of Ed, 487 Mich
349, 372; 792 NW2d 686 (2010). “A litigant may have standing in this context if the litigant has
a special injury or right, or substantial interest, that will be detrimentally affected in a manner
different from the citizenry at large or if the statutory scheme implies that the Legislature intended
to confer standing on the litigant.” Id.
“In a case of actual controversy within its jurisdiction, a Michigan court of record may
declare the rights and other legal relations of an interested party seeking a declaratory judgment,
whether or not other relief is or could be sought or granted.” MCR 2.605(1). “The existence of
an actual controversy is a condition precedent to the invocation of declaratory relief.” Lansing
Sch Ed Ass’n v Lansing Bd of Ed (On Remand), 293 Mich App 506, 515; 810 NW2d 95 (2011)
(quotation marks and citation omitted). “An actual controversy exists when a declaratory
judgment is needed to guide a party’s future conduct in order to preserve that party’s legal rights.”
League of Women Voters v Secretary of State, 506 Mich 561, 586; 957 NW2d 731 (2020).
Plaintiff does not challenge the conclusion that there is no conduct for which its members
need guidance, but instead argues that under Lansing Sch Ed Ass’n (On Remand), 293 Mich App
at 515-516, it can establish an actual controversy by seeking relief to prevent imminent harm,
which plaintiff claims it does in this case by enjoining defendant’s purported violation of MCL
247.651h through use of the New Program. In Lansing Sch Ed Ass’n, however, this Court
reiterated that “[a]n actual controversy exists when declaratory relief is needed to guide a plaintiff’s
future conduct in order to preserve the plaintiff’s legal rights.” Id. at 515. We explained:
-5-
Plaintiffs do not allege imminent injury; the alleged physical injuries have already
occurred. They do not seek to prevent a violation of a criminal law, nor is there a
contractual issue for which the parties are in need of guidance. Declaratory relief
does not appear necessary to guide plaintiffs’ future conduct in order to preserve
their legal rights. [Id. at 516.]
From this passage, it is clear we did not imply that allegations of imminent injury, violation of
criminal law, or contract disputes were legitimate bases for declaratory relief wholly apart from
whether such relief would guide the plaintiffs’ future conduct; this Court instead considered those
circumstances as part of the inquiry as to whether the plaintiffs needed such guidance.
Moreover, plaintiff’s assertion that it seeks to prevent imminent harm to its members is
inapt, because losing out on future bids is not a cognizable legal interest. In Cedroni Assoc, Inc v
Tomblinson, Harburn Assoc, Architects & Planners Inc, 492 Mich 40, 46; 821 NW2d 1 (2012),
the Michigan Supreme Court acknowledged “the highly discretionary process of awarding
governmental contracts,” and held that “a disappointed low bidder on a public contract has no
standing to sue in order to challenge the award of a contract to another bidder.” Accordingly,
when a municipal charter provision requires the acceptance of the lowest responsible bid, that
provision exists “to protect the interest of the citizens of the city” while creating no legal interest
for bidders. Id. (quotation marks and citation omitted); see also Lasky v Bad Axe, 352 Mich 272,
276; 89 NW2d 520 (1958) (statutes requiring competitive bidding, and that contracts be awarded
to the lowest capable bidder, “are enacted for the benefit of property holders and taxpayers, and
not for the benefit of or enrichment of bidders”).
Plaintiff additionally asserts a special interest in the implementation of MCL 247.651h on
the grounds that it is the only party with an adverse interest and claims it “played an integral role
in the enactment” of MCL 247.651h, specifying that Subsection (4) was “achieved only with the
advice and assistance of [plaintiff].” However, plaintiff cites no authority for the proposition that
an organization acquires a legal interest in the proper implementation of legislation greater than
that of the general public when that organization’s lobbying had some apparent effect on the
legislative result. See Traverse City Record-Eagle v Traverse City Area Pub Sch Bd of Ed, 337
Mich App 281, 298; 975 NW2d 104 (2021) (“When a party fails to cite any supporting legal
authority for its position, the issue is deemed abandoned.”) (quotation marks and citation omitted).
Further, we observe that although the general public has an interest in the efficient use of
highway funds, plaintiff’s members, being concrete pavers, have a heightened interest in obtaining
funds themselves by successfully bidding on paving contracts, regardless of the efficiency. And
although plaintiff may hope, expect, and be prepared to prove that concrete offers a generally more
efficient paving option than asphalt or other alternatives, that is an issue left to defendant’s
discretionary implementation of MCL 247.651h. See Groves v Dep’t of Corrections, 295 Mich
App 1, 7; 811 NW2d 563 (2011) (“Litigation aimed at second-guessing the exercise of discretion
by the appropriate public officials in awarding a public contract will not further the public
interest . . . The only circumstance that may provide a basis for an action to review the bidding
process is the presence of evidence of fraud, abuse, or illegality. But such an action must be
brought by the proper public official.”) (quotation marks and citations omitted).
-6-
In the Court of Claims, plaintiff also relied on MCL 600.2041(3), which states that “an
action to prevent the illegal expenditure of state funds . . . may be brought in the name of a
domestic nonprofit corporation organized for civic, protective, or improvement purposes . . . .”
The Court of Claims held that MCL 600.2041(3) did not confer standing on plaintiff because “[t]he
‘expenditures’ at issue will occur regardless of whether one of plaintiff’s members or some other
contractor is awarded various paving contracts,” and “[t]hus, no expenditure will be stopped by
this action.” The court further noted that this Court has held that “an action which merely seeks
to change which bidder is awarded a state contract is not within the purview of MCL 600.2041(3),”
citing Groves, 295 Mich App at 9. On appeal, plaintiff invokes MCL 600.2041(3) exclusively in
connection with its claim for injunctive relief, thus leaving unchallenged the Court of Claims’s
conclusion that MCL 600.2041(3) did not confer standing for purposes of the claim for declaratory
relief. Accordingly, we will reserve our discussion of MCL 600.2041(3) for Part IV, and otherwise
affirm the order of the Court of Claims concluding that plaintiff lacks standing to seek declaratory
judgment.2
IV. INJUNCTIVE RELIEF
A. STANDARD OF REVIEW
“[E]quitable issues are reviewed de novo, although the findings of fact supporting the
decision are reviewed for clear error. However, the granting of injunctive relief is within the sound
discretion of the trial court . . . .” Cipri v Bellingham Frozen Foods, Inc, 235 Mich App 1, 9; 596
NW2d 620 (1999) (quotation marks and citations omitted).
B. DISCUSSION
In Count I of plaintiff’s complaint, it asked the Court of Claims to enjoin defendant “from
continuing to use the New Program until further order from this Court,” and to order that, “in the
interim or during the suspension, cessation, or discontinuation of the New Program, all projects
that [defendant] lets for bid or intends to let for bid be designed in compliance and accordance
with [MCL 247.651h].” The court held that plaintiff’s request for injunctive relief was improper
because injunctive relief is a remedy, not a cause of action. Thus, the court concluded that the
request for injunctive relief must be dismissed for that reason.
Plaintiff argues that when the complaint is read as a whole, its request for injunctive relief
is supported on the grounds that defendant’s alleged violation of MCL 247.651h constitutes
“wrongful conduct” over which the “requested injunction is an appropriate remedy.” For this
purpose, however, plaintiff neither specifies a tort, nor explains how any part of MCL 247.651h
implies the creation of a private cause of action. However, for the proposition that “courts sitting
in equity may enjoin the violation of a statute,” plaintiff cites Attorney General ex rel Mich Bd of
Optometry v Peterson, 381 Mich 445; 164 NW2d 43 (1969), Dearborn Nat’l Ins Co v Comm’r of
Ins, 329 Mich 107; 44 NW2d 892 (1950), and Meridian Charter Twp v Roberts, 114 Mich App
2
We need not address the Court of Claims’s alternative ground for denying declaratory relief on
the basis that a necessary party—the asphalt pavers—were not participating in the action. By
concluding that plaintiff lacks standing, that issue is moot.
-7-
803; 319 NW2d 678 (1982), amended on other grounds 324 NW2d 339 (1982). Those three cases,
however, stand for the proposition that governmental authorities may obtain injunctive relief to
prevent violations of criminal law. Reviewing MCL 247.651h, we can discern no basis for the
proposition that the Legislature intended to provide parties such as plaintiff with a private cause
of action, and plaintiff fails to identify any such language in the statute that would indicate the
Legislature did.
Plaintiff also argues that MCL 600.2041(3) “functions as a cause of action” supporting its
request for injunctive relief. We disagree.
In Groves, a disappointed bidder and its employees challenged the bidding process through
which a public contract was awarded for installation and maintenance of inmate telephone systems
at the Department of Corrections’ facilities. Groves, 295 Mich App at 3-4. This Court rejected
the plaintiffs’ invocation of MCL 600.2041(3) on the ground that, “even if successful, litigation
will not prevent public expense,” because the expenses at issue “will be necessary no matter which
bidder is awarded the contract.” Groves, 295 Mich App at 9. We also observed that while the
plaintiffs “ostensibly seek to rectify a public wrong, in reality, as employees of the disappointed
bidder for a government contract, plaintiffs seek to further their own interests and circumvent the
century-old rule that denies standing to disappointed bidders to challenge the discretionary award
of a public contract.” Id. at 6. The same is true here. Plaintiff is not advocating on behalf of the
taxpayers generally, but rather on behalf of concrete pavers concerned about competition from
asphalt pavers. MCL 600.2041(3) was not intended to act as a vehicle for such judicial lobbying
in circumvention of the well-established rule denying “standing to disappointed bidders to
challenge the discretionary award of a public contract.” Groves, 295 Mich App at 6.
Affirmed.
/s/ Noah P. Hood
/s/ Kathleen Jansen
/s/ Kirsten Frank Kelly
-8- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487000/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
UNPUBLISHED
In re BALOWSKI/CARNELL, Minors. November 17, 2022
No. 361525
Eaton Circuit Court
Family Division
LC No. 20-020390-NA
Before: M. J. KELLY, P.J., and SHAPIRO and PATEL, JJ.
PER CURIAM.
Respondent appeals by right from the trial court order terminating her parental rights to her
children, FB and JC, under MCL 712A.19b(3)(c)(i).1 For the reasons stated in this opinion, we
affirm.
I. BASIC FACTS
On August 24, 2020, the Department of Health and Human Services, filed a petition
seeking removal of FB and JC from respondent’s care and asking the court to take jurisdiction
over them under MCL 712A.19b(2).2 The petition included allegations of domestic violence,
unstable and unsanitary housing, physical abuse against FB, and improper supervision. Following
a probable-cause hearing, the trial court authorized the petition. Respondent later entered a plea
1
The trial court also terminated the parental rights of the children’s father under MCL
712A.19b(3)(a) and (c)(i). He has not appealed that decision.
2
Respondent has four children: HJ, FB, JC, and RE. At the time that the petition was filed in this
case, because of respondent’s unstable housing, HJ was in a temporary guardianship with
respondent’s adopted mother. RE was born during the pendency of the child protective
proceedings involving FB and JC. At the time of the termination hearing, RE had been removed
from respondent’s care and was placed in the same home as FB and JC; however, the goal in RE’s
case was reunification, not termination.
-1-
of admission to several allegations in the petition and she pleaded no contest to other allegations
in the petition. The court accepted her plea and took jurisdiction over FB and JC.
Respondent’s initial barriers to reunification included domestic violence, unstable housing,
emotional instability, substance abuse, and parenting skills. Respondent was offered services to
rectify those barriers, including a psychological evaluation, multiple referrals for counseling, drug
screens, outpatient substance-abuse treatment, and parenting classes, but she only made minimal
progress. Therefore, after FB and JC had been in care for approximately 16 months, petitioner
filed a supplemental petition seeking termination of respondent’s parental rights. Following the
termination hearing, the trial court found by clear and convincing evidence that termination of
respondent’s parental rights was warranted under MCL 712A.19b(3)(c)(i)3 and that termination of
respondent’s parental rights was in the best interests of FB and JC.
II. BEST INTERESTS
A. STANDARD OF REVIEW
Respondent argues that the trial court’s best-interests decision was clearly erroneous.4 This
Court reviews for clear error a trial court’s finding that termination of parental rights is in the best
interests of the children. In re A Atchley, ___ Mich App ___, ___; ___ NW2d ___ (2022) (Docket
No. 358502); slip op at 6-7. “A finding of fact is clearly erroneous if the reviewing court has a
definite and firm conviction that a mistake has been committed, giving due regard to the trial
court’s special opportunity to observe the witnesses.” In re Sanborn, 337 Mich App 252, 276; 976
NW2d 44 (2021) (quotation marks and citation omitted).
B. ANALYSIS
“[W]hether termination of parental rights is in the best interests of the child must be proven
by a preponderance of the evidence.” In re Moss Minors, 301 Mich App 76, 90; 836 NW2d 182
(2013). “In deciding whether termination is in the child’s best interests, the court may consider
the child’s bond to the parent, the parent’s parenting ability, the child’s need for permanency,
stability, and finality, and the advantages of a foster home over the parent’s home.” In re
3
On appeal, respondent does not challenge the trial court’s finding that termination was proper
under MCL 712A.19b(3)(c)(i). Accordingly, we will not address that part of the court’s decision.
4
Respondent’s appellant lawyer argues that the trial court erred by finding that termination of the
respondent’s parental rights was “clearly not in the child’s best interests.” In doing so,
respondent’s lawyer cites a former version of MCL 712A.19b(5). In 2008, however, the legislature
amended that part of MCL 712A.19b(5). See 2008 PA 199. The current version of the statute—
and the version that was in effect at the time of the termination hearing in this case—provides that
the trial court must find that “termination of parental rights is in the child’s best interests” before
it may order the termination of parental rights. See 2018 PA 58. The trial court in this case applied
the correct standard. Accordingly, despite respondent’s appellant’s lawyer’s failure argue that the
best-interests decision was improper under the current version of MCL 712A.19b(5), we will
address the challenge to the court’s finding.
-2-
Olive/Metts Minors, 297 Mich App 35, 41-42; 823 NW2d 144 (2012) (citations omitted). The trial
court may also consider psychological evaluations, the child’s age, a parent’s continued
involvement in domestic violence, and a parent’s history. In re Jones, 286 Mich App 126, 131;
777 NW2d 728 (2009). “The focus at the best-interest stage has always been on the child, not the
parent.” In re A Atchley, ___ Mich App at ___; slip op at 7 (quotation marks and citation omitted).
On appeal, respondent contends that the trial court erred by terminating her parental rights
to FB and JC because the children had a bond with her. The existence of a bond between a parent
and a child, however, does not preclude a finding that termination is in the child’s best interests.
The best-interests determination is made based upon all available evidence, id., so the fact that
some evidence—including the existence of a bond—may weigh against a finding that termination
of a parent’s rights is in the child’s best interest is not dispositive.
In this case, the trial court found that respondent had “some bond” with her children.
Testimony at the termination hearing showed that during in-person parenting time visits, FB would
hug respondent and engage in similar behaviors and that JC would turn to respondent for aid and
comfort. Moreover, the caseworker testified that when the children’s foster family would take out
or move a computer, the children would start asking if they were going to see respondent. The
caseworker also stated that the children were excited to see respondent during parenting time visits.
However, the trial court also found that the bond was diminishing. That finding was supported by
the record. For instance, a CASA volunteer—a woman who met with the children at least one
time per week—explained that FB would not talk about respondent outside of the parenting-time
visits. She did not observe any bond between JC and respondent at the visits that she observed.
Further, FB’s therapist opined that FB lacked a bond with respondent because she just ran around
the room, did not sit with respondent, talk to her, or bring her toys. In light of the evidence that
the bond was diminishing, the trial court determined that the bond between respondent and the
children was a neutral fact that did not weigh in favor of or against a finding that termination of
respondent’s parental rights was in the children’s best interests. On this record, that finding was
not clearly erroneous.
The court also found that there was a strong bond between the children and their foster
parents. That finding was supported by testimony from multiple witnesses. The CASA volunteer
testified that she met with the children at least one time per week, so she was able to observe them
with their foster parents. FB referred to the foster parents as “mommy” and “daddy,” gave them
hugs and kisses, and would often say “I love you” to them. Likewise, JC demonstrated a strong
bond with the foster family. The caseworker also described a strong bond between the children
and their foster parents, noting that they appeared settled and comfortable with the placement.
The court found that the children also demonstrated a strong need for permanency and
stability. The CASA volunteer testified that the children had night terrors. She also recounted an
occasion when the foster parents had to take the children’s sister to the hospital. After their foster
parents departed, FB and JC repeatedly asked when their foster parents would return. JC settled
down after she told him a couple of times that everything was okay and that they would return; FB
continued asking until she was assured at bedtime that she would see her foster parents as soon as
she woke up in the morning. FB’s therapist likewise testified that there was a bond between FB
and her foster parents. She also testified that JC currently understood that his foster mother was
his primary caregiver. The caseworker noted that JC was clingy and needed to be constantly
-3-
soothed. She testified that FB had recently articulated that she believed that respondent did not
miss her or love her.
FB’s therapist testified that FB had disinhibited social disorder, stress trauma that was not
related to any specific event, and that she struggled with having a secure attachment because she
had been in so many placements. She added that the disinhibited social disorder was due to a lack
of a primary caregiver. The therapist also stated that FB would hoard food, often ask where her
foster mother was and what was happening, and would have night terrors. She observed that, in
her current placement, FB’s mental-health needs were being met, that her attachment to her foster
family was growing, and that she was improving on her ability to interact with JC. She opined
that FB would benefit from stability. In light of that unrefuted evidence, the trial court did not
clearly err by finding that “nothing is more important to [the children] right now than their need
for permanency, stability, and finality.”
Indeed, the record reflected that respondent could not meet the children’s need for
permanency and stability because she continued to have barriers to reunification with the children.
Her emotional stability was still an issue. She received a psychological evaluation in 2020 and
was referred for mental health treatment. Her initial referral was to Community Mental Health
(CMH) in August 2020, but the case was closed for lack of participation. She was then referred
for mental-health services through Cherry Hill in September or November 2020; she was
discharged in April 2021 due to lack of participation. In May or June 2021, respondent returned
to CMH, but she was discharged after approximately three months. Respondent completed an
intake with Guidance Center, but—contrary to her claim that she had a therapy session with
Guidance Center—she did not attend any appointments. Because she did not attend any
appointments, Guidance Center was unable to provide her with psychiatric care. Respondent did
not take the medications that she was prescribed as directed. In January 2022, she survived a
suicide attempt. She was admitted to a hospital for a couple of days before being transferred to a
facility for inpatient psychological care. When she was released in February 2022, it was
recommended that she participate in outpatient treatment. Respondent did not follow that
recommendation.
Housing was also a concern that impacted respondent’s ability to provide the children with
permanency, stability, and finality. Respondent was evicted because of non-payment of rent.
Before her eviction, a caseworker observed that the house was filthy and unsafe for children. The
caseworker explained that there were trash bags piled three or four feet high with flies buzzing
around, that there were guinea pig and rabbit pens constructed on the living room carpet that would
be easy for children to access, that the house smelled like animals, that there were trash, debris,
and other items everywhere, and that respondent and her husband slept on the couch because their
bed was in such disarray. Moreover, after being evicted in December 2021, respondent lived in a
vehicle or a hotel, then with a friend until her youngest child was born, then in a hotel or vehicle
again, and, finally, in another rented apartment. At the time of the termination hearing, she was
$1,200 behind in rent and her landlord had advised that if payment in full was not made she would
be evicted.
Respondent’s parenting skills continued to be a problem. Although she attended most
parenting time sessions, she would frequently request that the visits—with her very young
children—be held over Zoom. During in-person visits, she frequently struggled to manage the
-4-
children. At times, she would attend to one child and leave the other two unsupervised. She would
also rely on the foster parents or caseworkers if they were in the room during in-person visits. In
light of this evidence, the court’s finding that the advantages of the foster home over respondent’s
home was “majorly in favor of the foster home,” was not clearly erroneous.
Finally, respondent argues on appeal that termination of her parental rights was not in the
best interests of FB and JC because there was an ongoing case with their baby sister, RE. She
suggests that because reunification was still possible in that case, maintaining her parental rights
to FB and JC was in their best interests. The record shows that FB and JC had a bond with RE,
and FB’s therapist opined that there might be issues for FB and JC in the future if respondent was
reunified with RE while her parental rights to them were terminated. Despite that evidence, the
court found that, although there was a chance that respondent might be reunified with FB and JC’s
baby sister, RE, in the future, the court found that termination of respondent’s parental rights was
nevertheless in FB and JC’s best interests because of their “desperate” need for permanency.
Given the significant evidence showing that FB and JC needed permanency and stability, the
court’s finding was not clearly erroneous.
Based on all available evidence, the trial court’s finding that termination of respondent’s
parental rights was in the children’s best interests was not clearly erroneous.
Affirmed.
/s/ Michael J. Kelly
/s/ Douglas B. Shapiro
/s/ Sima G. Patel
-5- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487005/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
UNPUBLISHED
In re VASQUEZ, Minors. November 17, 2022
No. 360827
Wayne Circuit Court
Family Division
LC No. 2019-000631-NA
In re RILEY, Minors. No. 360852
Wayne Circuit Court
Family Division
LC No. 2019-000631-NA
Before: RIORDAN, P.J., and BOONSTRA and GADOLA, JJ.
PER CURIAM.
In these consolidated appeals, respondent-mother appeals as of right the trial court's orders
terminating her parental rights to her minor children pursuant to MCL 712A.19b(3)(c)(i), (c)(ii),
and (j). In Docket No. 360827, the trial court terminated respondent’s parental rights to AV, CV,
LV, and WV (the “Vasquez children”). In Docket No. 360852, the trial court terminated her
parental rights to KR and TR (the “Riley children”). Because there are no errors warranting relief
in either appeal, we affirm.
I. FACTS
The Vasquez children were removed from respondent’s care in April 2019, and the trial
court acquired jurisdiction over the children after respondent pleaded no contest to allegations that
she failed to consistently provide stable housing or proper supervision for the children, that she
disciplined the children with a belt that left visible injuries on the faces of WV and LV, that WV
required staples for a head wound after a caretaker hit her over the head with a pan and had other
visible marks on her body where the caretaker hit her with a wire, and that respondent told the
children to lie to hospital workers about how they received their injuries.
-1-
The trial court acquired jurisdiction over the Riley children in January 2020, after
respondent entered a plea of admission to allegations that she was unable to provide a suitable
home for them upon their discharge from the hospital, where they had received treatment for their
injuries, and that she had not been consistently compliant with court-ordered services in the case
involving the Vasquez children.
In October 2021, petitioner filed a supplemental petition to terminate respondent’s parental
rights to all of her children. Following hearings in in January and February 2022, the trial court
found that there were statutory grounds to terminate respondent’s parental rights under MCL
712A.19b(3)(c)(i), (c)(ii), and (j), and that termination of respondent’s parental rights was in the
children’s best interests. This appeal followed.
II. GROUNDS FOR TERMINATION
Respondent first argues that the trial court erred by finding that the statutory grounds for
termination were established by clear and convincing evidence. We disagree.
To terminate parental rights, the trial court must find that at least one statutory ground
under MCL 712A.19b(3) has been established by clear and convincing evidence. In re Moss, 301
Mich App 76, 80; 836 NW2d 182 (2013). This Court reviews the trial court’s findings under the
clearly erroneous standard. MCR 3.977(K). A finding is clearly erroneous if the reviewing court
is left with a definite and firm conviction that a mistake has been committed. In re Miller, 433
Mich 331, 337; 445 NW2d 161 (1989).
The trial court terminated respondent’s parental rights pursuant to MCL 712A.19b(3)(c)(i),
(c)(ii), and (j), which permit termination of parental rights under the following circumstances:
(c) The parent was a respondent in a proceeding brought under this chapter,
182 or more days have elapsed since the issuance of an initial dispositional order,
and the court, by clear and convincing evidence, finds either of the following:
(i) The conditions that led to the adjudication continue to exist and there is
no reasonable likelihood that the conditions will be rectified within a reasonable
time considering the child’s age.
(ii) Other conditions exist that cause the child to come within the court’s
jurisdiction, the parent has received recommendations to rectify those conditions,
the conditions have not been rectified by the parent after the parent has received
notice and a hearing and has been given a reasonable opportunity to rectify the
conditions, and there is no reasonable likelihood that the conditions will be rectified
within a reasonable time considering the child’s age.
* * *
(j) There is a reasonable likelihood, based on the conduct or capacity of the
child’s parent, that the child will be harmed if he or she is returned to the home of
the parent.
-2-
For the purposes of MCL 712A.19b(3)(c)(i), one of the key conditions that led to the
adjudication was respondent’s failure to provide stable and suitable housing for the children.
During the case, petitioner provided referrals to Family Reunification Programs in Detroit and
Plymouth, sources for MDHHS housing, Section 8 housing, rent-to-own housing, and listings with
Zillow, Housing Network, and Habitat for Humanity. This condition continued to exist throughout
the case and, at the time of termination, respondent was not any closer to establishing safe and
suitable housing, and had no concrete plans for doing so.
The trial court did not explicitly state what “other conditions” existed to support
termination under MCL 712A.19b(3)(c)(ii). However, the trial court discussed respondent’s lack
of visitation and failure to regularly attend the Riley children’s medical and Early On
appointments. The parties and the trial court expressed concern throughout the case regarding
respondent’s failure to consistently and regularly visit with her children and to attend the Riley
children’s medical and physical-therapy appointments. Respondent was instructed several times
that she needed to rectify this situation. The workers and the trial court repeatedly expressed to
respondent that if she were to succeed in caring for the Riley children, she needed to participate
more fully in their care and medical appointments. Respondent’s inconsistent visitation with the
Vasquez children also caused their bond with respondent to significantly deteriorate. As the case
progressed, the children were no longer interested in seeing or visiting with respondent.
Respondent emphasizes her participation in other services and argues that she was close to
rectifying the conditions that led to the children’s removal. However, after almost three years,
respondent made little to no progress in rectifying the main barrier to reunification, which was to
obtain and maintain safe and suitable housing. In addition, respondent’s failure to consistently
visit with her children and actively participate in their medical appointments undermines her claim
that she was committed to reunification. The trial court did not clearly err by finding that
respondent’s failure to rectify her housing situation and failure to consistently visit her children
and attend their appointments supported termination under MCL 712A.19b(3)(c)(i) and (c)(ii).
Further, because respondent was unable to provide safe and suitable housing for her children, and
she failed to demonstrate that she was committed to addressing the Riley children’s special needs,
the trial court did not clearly err by finding that the children were reasonably likely to be harmed
if returned to respondent’s care, thereby supporting termination under MCL 712A.19b(3)(j).
III. BEST INTERESTS
Respondent next argues that the trial court erred by finding that termination of her parental
rights was in the children’s best interests. We disagree.
“The trial court must order the parent’s rights terminated if [DHHS] has established a
statutory ground for termination by clear and convincing evidence and it finds from a
preponderance of the evidence on the whole record that termination is in the children’s best
interests.” In re White, 303 Mich App 701, 713; 846 NW2d 61 (2014). “We review for clear error
the trial court’s determination regarding the children's best interests.” Id. “To determine whether
termination of parental rights is in a child’s best interests, the court should consider a wide variety
of factors that may include the child’s bond to the parent, the parent’s parenting ability, the child’s
need for permanency, stability, and finality, and the advantages of a foster home over the parent’s
home.” Id. (quotation marks and citation omitted). “The trial court may also consider a parent’s
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history of domestic violence, the parent’s compliance with his or her case service plan, the parent’s
visitation history with the child, the children’s well-being while in care, and the possibility of
adoption.” Id. at 714.
The evidence clearly established that respondent was unable to provide a safe and stable
home for the children, and would not be able to do so in the foreseeable future in light of her
uncertain employment situation. The children had been in care for three years and needed
permanence and stability. The foster parents were meeting all of the children’s needs and
expressed a willingness to adopt them. Because of respondent’s failure to maintain consistent
contact with the children and participate in the Riley children’s medical care, her bond with the
children had significantly deteriorated, to the point that they were no longer interested in visiting
with respondent. Moreover, the Riley children had significant medical needs, and respondent’s
failure to consistently attend their appointments showed that she was not prepared to provide them
with the level of care they needed. For these reasons, the trial court did not clearly err by finding
that termination of respondent’s parental rights was in the children’s best interests.
IV. CONCLUSION
The trial court did not clearly err by finding that the statutory grounds for termination were
proven by clear and convincing evidence or that termination of respondent’s parental rights was
in the children’s best interests. We affirm.
/s/ Michael J. Riordan
/s/ Mark T. Boonstra
/s/ Michael F. Gadola
-4- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487020/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
PEOPLE OF THE STATE OF MICHIGAN, UNPUBLISHED
November 17, 2022
Plaintiff-Appellee,
v No. 359110
Delta Circuit Court
SEAN MICHAEL PACH, LC No. 20-010166-FH
Defendant-Appellant.
Before: M. J. KELLY, P.J., and SHAPIRO and PATEL, JJ.
PER CURIAM.
Defendant, Sean Michael Pach, appeals as of right his jury-trial convictions of one count
of assaulting, resisting, or obstructing a police officer, MCL 750.81d(1); MCL 750.81d(7)(b)(i),1
and one count of assaulting, resisting, or obstructing a paramedic, MCL 750.81d(1); MCL
750.81d(7)&b)(ix).2 For the reasons stated in this opinion, we affirm.
I. BASIC FACTS
On April 18, 2020, three people observed Pach falling, getting up, and stumbling toward a
major highway. The witnesses believed that he was intoxicated and were unsure if he would be a
harm to himself, so they both called 9-1-1. All three witnesses left after emergency services
arrived.
In response to the calls, a police officer and a paramedic attempted to help Pach. The
officer arrived in a marked police car and identified himself as an officer when he approached
Pach. At the time, Pach was sitting on a flatbed trailer. The officer testified that he could smell
alcohol when he was near Pach, that Pach’s eyes were “glossy” and “droopy,” and that he was
1
MCL 750.81d(7)(b)(i) provides that the term “person,” includes a police officer.
2
MCL 750.81d(7)(b)(ix) provides that the term “person,” includes “[a]ny emergency medical
service personnel described in . . . MCL 333.20950.” A paramedic is one of the emergency
medical service personnel described in MCL 333.20950.
-1-
slurring his words. Pach told him that he had had ten beers and that he was going to go home, but
he would not provide the officer with his address. The paramedic arrived in an ambulance and
was wearing a “Rampart uniform shirt,” a badge, a radio, and a pager. He testified that he smelled
“presumed alcohol” on Pach and that when he asked Pach questions about how he was feeling,
Pach became agitated. Because Pach did not answer his questions, the paramedic was unable to
determine if Pach would be safe if he were left alone.
While the paramedic was questioning him, Pach stood up and tried to walk away.
However, as soon as he got up, he stumbled and fell forward. The officer and the paramedic caught
him before he hit the ground. At that point, the officer determined that Pach would be unable to
get home by himself. Although the officer and the paramedic tried to get Pach to sit down, he kept
trying to walk away. They also tried to walk him back to the flatbed trailer, but he tensed his
muscles and fought them. At one point, Pach hit the officer in the chest and shoulder with an
elbow. He also got “handsy” and threw his arms at the paramedic, grabbed the paramedic, and
pushed him away. Eventually, he used his elbow to hit the paramedic between his shoulder and
head. The officer ordered Pach to stop resisting them and to stop assaulting them, but Pach
elbowed them again. Pach turned to look at the officer and then tensed his muscles. Believing
that Pach was going to try and elbow him again, the officer decided to take Pach to the ground.
While the officer and the paramedic were attempting to control Pach’s arm, Pach continued to
tense his muscles. As a result, they used force to get his arms behind his back.
At trial, Pach testified that he was sitting on the flatbed trailer to regain his composure
before continuing to his residence. He explained that he had previously consumed six or twelve
beers and was having difficulty getting home. Pach recalled the officer—whom he knew was a
police officer—pulling up in his marked police car and approaching him on foot. According to
Pach, the officer told him about the 9-1-1 calls, but did not tell him that he was under arrest or that
he was being taken into protective custody. Pach testified that he did not need any help from the
officer, and he believed that he made that clear by standing up and heading toward his residence.
Pach stated that after he took approximately two steps, the officer tackled him to the ground, pinned
him on his stomach, and told him to stop resisting. Pach said he was not resisting; he was just
trying to move his arm. Pach had no recollection of the paramedic being present during the
incident.
II. SUFFICIENCY OF THE EVIDENCE
A. STANDARD OF REVIEW
Pach first argues that there was insufficient evidence to sustain his convictions because,
under the circumstances, he had a common-law right to resist the officer and the paramedic’s
illegal conduct. This Court reviews de novo a challenge to the sufficiency of the evidence. People
v Savage, 327 Mich App 604, 613; 935 NW2d 69 (2019). “To determine whether the prosecutor
has presented sufficient evidence to sustain a conviction, we review the evidence in the light most
favorable to the prosecutor and determine whether a rational trier of fact could find the defendant
guilty beyond a reasonable doubt.” People v Smith-Anthony, 494 Mich 669, 676; 837 NW2d 415
(2013) (quotation marks and citation omitted). Because the standard of review is deferential, “a
reviewing court is required to draw all reasonable inferences and make credibility choices in
support of the jury verdict.” People v Nowack, 462 Mich 392, 400; 614 NW2d 78 (2000).
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“Circumstantial evidence and reasonable inferences arising from that evidence can constitute
satisfactory proof of the elements of a crime.” People v Lymon, ___ Mich App ___, ___; ___
NW2d ___ (2022) (Docket No. 327355); slip op at 4 (quotation marks and citation omitted).
B. ANALYSIS
Pach was convicted of assaulting, resisting, or obstructing a police officer and a paramedic.
The elements for both convictions are set forth in MCL 750.81d(1). To convict a defendant of
assaulting, resisting, or obstructing a police officer, the prosecution must prove that: “(1) the
defendant assaulted, battered, wounded, resisted, obstructed, opposed, or endangered a police
officer, and (2) the defendant knew or had reason to know that the person that the defendant
assaulted, battered, wounded, resisted, obstructed, opposed, or endangered was a police officer
performing his or her duties.” People v Vandenberg, 307 Mich App 57, 68; 859 NW2d 229 (2014)
(quotation marks and citation omitted); MCL 750.81d(1). Moreover, because MCL 750.81d(1)
did not abrogate the common-law right to resist illegal police conduct, the prosecution must also
establish that the police officer’s actions were lawful. People v Moreno, 491 Mich 38, 51-52; 814
NW2d 624 (2012); see also People v Quinn, 305 Mich App 484, 492; 853 NW2d 383 (2014) (“the
prosecution must establish that the officers acted lawfully as an actual element of the crime of
resisting or obstructing a police officer under MCL 750.81d”). Pach was also convicted of
assaulting, resisting, or obstructing a paramedic. The elements of that offense are (1) the defendant
assaulted, battered, wounded, resisted, obstructed, opposed, or endangered a paramedic, and (2)
the defendant knew or had reason to know that the person that the defendant assaulted, battered,
wounded, resisted, obstructed, opposed, or endangered was a paramedic performing his or her
duties. MCL 750.81d(1).3
On appeal, Pach challenges the sufficiency of the evidence as it relates to the lawfulness of
the officer’s and the paramedic’s actions.4 To prove the lawfulness of an officer’s actions, the
prosecution must prove that the officer “gave the defendant a lawful command, was making a
lawful arrest, or was otherwise performing a lawful act.” M Crim JI 13.1(4). Likewise, the jury
was instructed that to prove the lawfulness of the paramedic’s actions, the prosecution had to prove
3
MCL 750.81d(7)(b)(ix) provides that the term “person,” includes “[a]ny emergency medical
service personnel described in . . . MCL 333.20950.” A paramedic is one of the emergency
medical service personnel described in MCL 333.20950.
4
There was sufficient evidence that Pach knew or had reason to know that the officer and the
paramedic were performing their lawful duties. Indeed, Pach admitted that he knew the officer
was a police officer. And, although he had no recollection of the paramedic’s presence, the record
supports an inference that he had reason to know that the paramedic was a person performing
lawful duties because the paramedic arrived in an ambulance, was wearing a uniform identifying
himself as medical personnel, and asked questions regarding Pach’s health. Additionally, there
was substantial evidence showing that Pach resisted, obstructed, or assaulted the officer and the
paramedic, including the testimony that he elbowed both multiple times, pushed the paramedic,
tensed his arms to prevent himself from being handcuffed, and ignored the commands to stop
resisting and assaulting the officer and the paramedic.
-3-
that the paramedic “gave the defendant a lawful command, was making a lawful arrest, or was
otherwise performing a lawful act.” M Crim JI 13.1(4).
The prosecution presented sufficient evidence to support a finding that the officer gave
Pach a lawful command and that he was otherwise performing a lawful act. The officer responded
in his lawful capacity as a community caretaker. See People v Slaughter, 489 Mich 302, 315; 803
NW2d 171 (2011) (stating that courts have included the removal of an intoxicated person from the
street as a police function within the meaning of the community-caretaking function).
Additionally, under the Mental Health Code, MCL 330.1001 et seq., peace officers are required to
take “an individual who appears to be incapacitated in a public place . . . into protective custody.”
MCL 330.1276(1). “ ‘Incapacitated’ means that an individual, as a result of the use of alcohol or
other drugs, is unconscious or has his or her mental or physical functioning so impaired that he or
she either poses an immediate and substantial danger to his or her own health and safety or is
endangering the health and safety of the public.” MCL 330.1100b(10). Here, the officer
responded to a report of a potentially intoxicated individual. Upon arrival, he observed that Pach
appeared to be intoxicated and that he smelled of alcohol. Subsequently, when Pach tried to walk
away, he only made it two steps before stumbling and falling forward. At that point, the officer
believed that Pach would be unable to make it home safely on his own. His actions—catching
Pach before he fell and attempting to get him to sit back down—were not unlawful. Moreover,
after Pach started physically resisting his efforts to aid him, including by repeatedly striking both
the officer and the paramedic with his elbow, the officer’s decision to restrain him was also lawful.
Similarly, the paramedic was acting in his capacity as a paramedic. He responded to the
scene to aid Pach. The paramedic testified that if someone does not want his assistance, the person
must answer his questions appropriately and sign a refusal form. Pach, however, failed to answer
the questions and kept saying that he wanted to go home. Instead, as noted above, he was unable
to take more than two steps before falling. The paramedic was not acting unlawfully when he
helped stop Pach from hitting the ground and when he tried to convince him to sit down so he
would not hurt himself. Moreover, viewed in the light most favorable to the jury verdict, there
was sufficient evidence to find that the paramedic, exercising his professional judgment, lawfully
determined that Pach would not be safe on his own. See MCL 333.20969 (providing that
emergency medical services personnel must abide by the decision of the patient to refuse treatment
or transportation unless “emergency medical services personnel, exercising professional judgment,
determine that the individual’s condition makes the individual incapable of competently objecting
to treatment or transportation . . . .”).
In sum, there was sufficient evidence to support both convictions.
III. OTHER-ACTS EVIDENCE
A. STANDARD OF REVIEW
Pach argues that the trial court abused its discretion when it admitted other-acts evidence
under MRE 404(b) to prove his knowledge or lack of mistake or accident. Further, he contends
that the trial court should have excluded the other-acts evidence under MRE 403. “A trial court’s
decision to admit or exclude evidence is reviewed for an abuse of discretion.” People v Thorpe,
504 Mich 230, 251; 934 NW2d 693 (2019). A trial court abuses its discretion when its decision is
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“outside the range of principled outcomes.” Id. at 251-252 (quotation marks and citations
omitted).
B. ANALYSIS
“It is a deeply rooted and unwavering principle that other-acts evidence is inadmissible for
propensity purposes.” People v Felton, 326 Mich App 412, 425; 928 NW2d 307 (2018) (quotation
marks and citation omitted). “This rule reflects the fear that a jury will convict a defendant on the
basis of his or her allegedly bad character rather than because he or she is guilty beyond a
reasonable doubt of the crimes charged.” Id. (quotation marks and citation omitted).
Consequently, MRE 404(b)(1) provides that “[e]vidence of other crimes, wrongs, or acts is not
admissible to prove the character of a person in order to show action in conformity therewith.”
However, such evidence may be “admissible for other purposes, such as proof of motive,
opportunity, intent, preparation, scheme, plan, or system in doing an act, knowledge, identity, or
absence of mistake or accident when the same is material . . . .” Id. In order to be admissible
under MRE 404(b), the evidence must be offered for a purpose other than propensity, the evidence
must be relevant, and the probative value of the evidence must not be outweighed by the danger
of unfair prejudice. People v VanderVliet, 444 Mich 52, 74-75; 508 NW2d 114 (1993), amended
445 Mich 1205 (1994).
In this case, trial court allowed the prosecution to introduce evidence showing that on
May 2, 2019, Pach was intoxicated at a store and, when law enforcement arrived and attempted to
escort him from the premises, Pach became resistant and assaulted the officers. The prosecution
articulated several allegedly non-propensity purposes for the evidence, and the trial court allowed
its admission to show knowledge and absence of mistake or accident. On appeal, Pach argues that
the court abused its discretion by admitting the evidence because it was improper character
evidence, was not relevant for a non-propensity purpose, and any marginal probative value that it
arguably had was substantially outweighed by the danger of unfair prejudice. We agree.
“The mechanical recitation of a permissible purpose, without explaining how the evidence
relates to the recited purpose, is insufficient to justify admission under MRE 404(b).” People v
Denson, 500 Mich 385, 400; 902 NW2d 306 (2017) (quotation marks and citation omitted).
Instead, a trial court must “vigilantly weed out character evidence that is disguised as something
else.” Felton, 326 Mich App at 426 (quotation marks and citation omitted). Here, the prosecution
contended that the May 2, 2019 altercation was admissible to show Pach’s knowledge that when
he becomes intoxicated in a public place and is approached by law enforcement, he becomes
agitated, resistive, and assaultive toward the law enforcement officers. In other words, the
prosecution asserts that the evidence is admissible to show that Pach was aware of his propensity
to become resistive and assaultive toward law enforcement when he was intoxicated in a public
space. The prosecution’s reclassification of the evidence that the defendant was aware of his bad
character trait and that he would act in conformity with it does not change the nature of the
evidence: it is impermissible propensity evidence that is excluded under MRE 404(a) and is not
admissible under MRE 404(b)(1). Accordingly, the trial court abused its discretion by admitting
the May 2, 2019 incident to show that Pach was aware of his propensity to resist the police if he
was approached by them while he was intoxicated in a public place.
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Next, the prosecution asserts that the evidence was admissible to show absence of mistake
or accident. Specifically, the prosecution argues that because of the May 2, 2019 incident, Pach
knew or should have known what a law enforcement officer looked like when performing his or
her lawful duties. Although absence of mistake or accident is a proper purpose for other-acts
evidence, such evidence must also be relevant under MRE 402 and not precluded under MRE 403.
VanderVliet, 444 Mich at 74.
“Evidence is probative if it tends ‘to make the existence of any fact that is of consequence
to the determination of the action more probable or less probable than it would be without the
evidence.’ ” Denson, 500 Mich at 401-402, quoting MRE 401. Other-acts evidence has probative
value if it is truly “probative of something other than the defendant’s propensity to commit the
crime.” Id. at 402 (quotation marks omitted). “[I]n order to determine whether an articulated
purpose is, in fact, merely a front for the improper admission of other-acts evidence, the trial court
must closely scrutinize the logical relevance of the evidence . . . .” Id. at 400. Logical relevance
is a pivotal determination in weighing the admissibility of other-acts evidence. Id. at 401. To be
logically relevant, evidence must be not only material, but also have probative value. Id. Other-
acts evidence is material if it is related to a fact of consequence in the case, and the pertinent
inquiry is whether the fact that the evidence seeks to establish is really at issue. Id.
Here, the prosecution contends that the evidence was relevant because it was probative of
the fact that Pach knew what a police officer looked like when he or she was wearing his or her
uniform. The prosecution asserts that the evidence was also material because when a defendant
pleads not guilty to a charged offense, it “puts the prosecution to its proofs regarding all elements
of the crime charged.” VanderVliet, 444 Mich at 78. Nevertheless, the record in this case does
not support a determination that Pach’s knowledge of what a police officer looked like was really
at issue. Pach did not argue that his actions in resisting the officer were the result of a mistake or
an accident. Indeed, it was undisputed that the officer arrived in a marked police car, was wearing
a police uniform, identified himself as a police officer. At no point did Pach argue that he elbowed
the officer and otherwise resisted his assistance because he was unaware that he was striking or
resisting a police officer. Although “a defense need not be formally set up to create an issue clearly
within the facts,” id. at 79, a general denial “does not automatically entitle the prosecutor” to a
ruling that other-acts evidence is admissible, id. at 78-79. Here, given that there was no indication
that Pach’s actions were the result of a mistake or accident, we conclude that the other-acts
evidence was not logically relevant to a non-character purpose.
And, even if it were logically relevant, it should have been excluded under MRE 403.
Under MRE 403’s balancing test, admissible evidence must be excluded if the probative value of
that evidence is substantially outweighed by the danger of unfair prejudice. “Evidence is unfairly
prejudicial when there exists a danger that marginally probative evidence will be given undue or
preemptive weight by the jury.” People v Bass, 317 Mich App 241, 259; 893 NW2d 140 (2016).
Here, the probative value of the May 2, 2019 incident was minimal. Again, there was no dispute
that Pach knew the officer was a police officer. At no point did he argue that he only resisted the
officer’s assistance because he did not know or have reason to know that he was resisting a police
officer carrying out his or her lawful duties. Instead, he testified that he resisted because the officer
unlawfully tackled him to the ground when he tried to walk home. As such, to the extent that the
prior incident supports an inference that Pach knew he was engaged in an altercation with a police
officer on April 18, 2020, the evidence was only marginally probative and was cumulative to the
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otherwise undisputed evidence showing that Pach knew or had reason to know that the officer was
a police officer. In contrast, given the similarity between the prior act—intoxication in public
leading to Pach fighting with and otherwise resisting law enforcement—the danger that the jury
would make the prohibited propensity inference was significant. Thus, even if the evidence was
relevant to a proper non-propensity purpose, it should have been excluded because the probative
value of the evidence was substantially outweighed by the danger of unfair prejudice.
Although the court abused its discretion by admitting the other-acts evidence, reversal is
not warranted. An error is harmless if “after an examination of the entire cause” it does not
“affirmatively appear that the error complained of has resulted in a miscarriage of justice.” MCL
769.26; People v Lukity, 460 Mich 484, 495; 596 NW2d 607 (1999). Under MCL 769.26, “a
defendant carries the burden of showing that ‘it is more probable than not that the error was
outcome determinative.’ ” People v Lyles, 501 Mich 107, 117-118; 905 NW2d 199 (2017), quoting
Lukity, 460 Mich at 495-496. Further, “[i]n making this determination, the reviewing court should
focus on the nature of the error in light of the weight and strength of the untainted evidence.”
Lyles, 501 Mich at 118 (quotation marks and citation omitted). When evaluating whether the
admission of other-acts evidence is harmless “the mere presence of some corroborating evidence
does not automatically render an error harmless.” Denson, 500 Mich at 413.
In this case, an examination of the entire cause shows that, even in the absence of the other-
acts evidence, there was substantial untainted evidence to support the jury’s verdict. Multiple
witnesses observed Pach in an intoxicated state and were concerned for his safety. In response to
the 9-1-1 calls, a paramedic and a police officer attempted to provide Pach with aid. While they
were talking with him, he attempted to walk away and instead stumbled and fell forward. They
caught him before he hit the ground and tried to get him to sit down. He instead resisted by tensing
his muscles, pushing at them, and elbowing them repeatedly. Although he contended that the
officer tackled him, he admitted that he had consumed six to twelve beers and that prior to the
officer’s arrival he had stopped to regain his composure. He had no memory of the paramedic
being present. In light of his level of intoxication and his inability to recall the presence of the
paramedic, the weight of his testimony was significantly lessened. Therefore, on the entirety of
this record, we conclude that the erroneous admission of the other-acts evidence was harmless and
reversal is not warranted.
Affirmed.
/s/ Michael J. Kelly
/s/ Douglas B. Shapiro
/s/ Sima G. Patel
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https://www.courtlistener.com/api/rest/v3/opinions/8487022/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
UNPUBLISHED
In re PERRY/ROBINSON, Minors. November 17, 2022
No. 358904
Oakland Circuit Court
Family Division
LC No. 2020-881987-NA
Before: GARRETT, P.J., and O’BRIEN and REDFORD, JJ.
PER CURIAM.
Respondent-mother appeals as of right the trial court’s order terminating her parental rights
to the minor children, NR and JP, under MCL 712A.19b(3)(b)(i) (parent’s act caused physical
injury to child), (b)(ii) (failure to prevent physical injury to child), (g) (failure to provide proper
care and custody), (j) (reasonable likelihood of harm if returned to parent), and (k)(iii) (parent
abused child and abuse involved battering, torture, or severe physical abuse). Respondent argues
that the trial court erred by terminating her parental rights at the initial dispositional hearing
without finding that there were aggravating circumstances to excuse petitioner, the Department of
Health and Human Services (DHHS), from making reasonable efforts at reunification. Respondent
also argues that the trial court erred by applying the doctrine of anticipatory neglect to justify
termination of her parental rights to JP, and by finding that termination of her parental rights was
in the children’s best interests. For the reasons set forth in this opinion, we affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Following an investigation by Children’s Protective Services (CPS), the DHHS filed a
petition requesting jurisdiction over NR and JP and seeking termination of respondent’s parental
rights at the initial disposition. The petition alleged that in November 2019, 8-month-old NR was
admitted to the hospital for bruising and burn marks. Dr. Rita Haddad observed that NR had burns
and blisters on her face and feet, along with an arm fracture that was already in the stages of
healing. According to the petition, respondent reported that she was unaware of NR’s injuries
until she received a phone call from her mother who noticed them. But the petition alleged that
“the injuries would have occurred while the child was in the custody” of respondent because the
age of the injuries did not align with the time frame provided by respondent. The petition further
alleged that JP was interviewed at Care House, an advocacy center for victims of child abuse, and
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she reported that “someone smeared a hot knife on [NR’s] stomach and poked her foot.” JP
reported that she heard respondent say to JP’s grandmother that something happened to NR and to
see if NR had any broken bones. JP also stated that NR had fallen off the bed while respondent
and her boyfriend were watching. The DHHS sought termination of respondent’s parental rights
under MCL 712A.19b(3)(b)(i), (b)(ii), (g), (j), and (k)(iii).1 Respondent pleaded no-contest to
statutory grounds for termination in June 2021. The trial court relied on the petition as a factual
basis, accepted respondent’s pleas, and found statutory grounds for terminating respondent’s
parental rights under MCL 712A.19b(3)(b)(i), (b)(ii), (g), (j), and (k)(iii).
The court later held a hearing to decide whether termination was in the children’s best
interests. Dr. Earl Hartwig testified that he treated NR in November 2019 after respondent brought
NR to the emergency room. Dr. Hartwig observed lesions at each corner of NR’s mouth that were
most likely caused by burns, bruising or burns on the tips of both ears, burns or abrasions around
the navel, and a blister surrounded by an old scar on her right foot. Dr. Hartwig testified that an
infant would be unable to sustain these injuries herself and therefore diagnosed the injuries as
nonaccidental trauma. NR also had weeks-old fractures in her right forearm. Dr. Hartwig testified
that respondent told him that she left NR with her paternal grandmother and aunt two days before
the hospital visit. She claimed that there were no lesions on NR’s body when she dropped NR off.
Based on the estimated ages of the injuries, Dr. Hartwig opined that NR’s arm and foot injuries
were inconsistent with respondent’s timeline.
Sylvie Bourget, a clinical psychologist, testified that she conducted a court-ordered
psychological evaluation of respondent one week before the best-interests hearing. Respondent
gave conflicting statements about her observations of NR’s injuries and “tended to project blame
on the paternal relatives” that NR had been visiting. Respondent told Bourget that her mother was
watching NR and called respondent to tell her to take NR to the hospital. Bourget contended that
respondent’s decision to leave the children with different relatives “may have disrupted the
bonding process between herself and her children.” In particular, respondent had left NR with
NR’s father for two weeks shortly after NR’s birth without having contact with the child.
Bourget also testified that she asked respondent about JP’s statement that NR fell to the
ground several times, and respondent largely dismissed JP’s claims. Respondent stated that JP
was “an impressionable little girl” who could not be trusted because she heard things from the
adults she knew. Bourget also had concerns with respondent’s supervision of the children because
JP had told an investigator that she sometimes prepared bottles for NR and changed NR’s diaper.
Bourget stated that respondent’s deficiencies in parenting her children involved improper
supervision, failure to protect, and unstable housing. Bourget believed termination was in the
children’s interests because the improper supervision, unstable housing, and disrupted bond
affected both children.
1
A separate petition involving NR’s father, who relocated to California, was pending at the time
of the trial court’s order terminating respondent’s parental rights. NR’s father is not a party to this
appeal, and JP’s father is deceased.
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Tiffany Denton, a CPS investigator, testified that she received this case in December 2019
after NR received medical treatment. Denton spoke with respondent, who told her that NR stayed
with her great-grandmother four days a week because respondent had to work, and JP stayed either
with her and her boyfriend in Oakland County or with respondent’s mother. Denton testified that
another CPS worker visited the home where respondent and the children lived with respondent’s
boyfriend and his mother. The home had minimal children’s items. NR slept in a swing that
respondent brought between homes; Denton advised her that this was unsafe and provided her with
a Pack-and-Play. As for NR’s injuries, Denton testified that respondent gave conflicting
statements about when she noticed the injuries and who was to blame. Respondent was never
charged with a crime following multiple police investigations into child abuse at the different
homes where NR stayed. Denton assessed respondent’s parenting ability as “minimal.” NR was
never consistently in respondent’s care because she was passed around among relatives. Denton
stated that the children never had stable bonding and stated that their bond with respondent was
minimal even before removal from her care. According to Denton, the children’s living
environment at the different relative homes was “chaotic.”
Sara Peoples, a foster care worker with the DHHS, testified that NR was placed with her
paternal great-aunt. NR was developing well and her great-aunt was interested in adoption.
Similarly, Peoples testified that JP was placed with her paternal grandmother, who was interested
in adopting JP if respondent’s parental rights were terminated. JP was happy and comfortable in
her placement, felt safe and loved, and seemed well-adjusted to her situation. Similarly, the
children’s paternal great-aunt, who was caring for NR, and the paternal grandmother, who was
caring for JP, respectively testified that the children were doing well in their placements. Both
relatives stated that they were willing to adopt the child in their care if respondent’s parental rights
were terminated.
Following the hearing, the trial court issued a written opinion and order finding that
termination of respondent’s parental rights was in the best interests of NR and JP. This appeal
followed.
II. REASONABLE EFFORTS
Respondent first argues that the trial court erred by terminating her parental rights at the
initial disposition, without requiring petitioner to make reasonable efforts at reunification, because
DHHS failed to allege aggravated circumstances in the petition and the trial court failed to make
a judicial finding on the existence of aggravated circumstances.
A. PRESERVATION AND STANDARD OF REVIEW
Because respondent did not raise this issue in the trial court, it is unpreserved. In re Utrera,
281 Mich App 1, 8; 761 NW2d 253 (2008). We review unpreserved claims for plain error affecting
substantial rights. Id. “To avoid forfeiture under the plain error rule, three requirements must be
met: 1) the error must have occurred, 2) the error was plain, i.e., clear or obvious, 3) and the plain
error affected substantial rights,” meaning the plain error prejudiced respondent. In re Sanborn,
337 Mich App 252, 258; 976 NW2d 44 (2021) (quotation marks and citation omitted). To the
extent that this issue involves the interpretation and application of statutes, such issues present
questions of law, which are reviewed de novo. In re Mason, 486 Mich 142, 152; 782 NW2d 747
-3-
(2010). “De novo review means that we review the legal issue independently,” without deference
to the trial court. Wright v Genesee Co, 504 Mich 410, 417; 934 NW2d 805 (2019).
B. ANALYSIS
Reasonable efforts to reunify a parent and child are not required if “[t]here is a judicial
determination that the parent has subjected the child to aggravated circumstances as provided in
[MCL 722.638](1) and (2).” MCL 712A.19a(2)(a); In re Simonetta, ___ Mich App ___, ___; ___
NW2d ___ (2022) (Docket No. 357909); slip op at 1. Aggravated circumstances exist when a
parent has abused the child and the abuse involves “[b]attering, torture, or other severe physical
abuse.” MCL 722.638(1)(a)(iii). If the parent “is a suspected perpetrator or is suspected of placing
the child at an unreasonable risk of harm due to the parent’s failure to take reasonable steps to
intervene to eliminate that risk, the [DHHS] shall include a request for termination of parental
rights at the initial dispositional hearing as authorized” under MCL 712A.19b. MCL 722.638(2).
In this case, the DHHS sought termination of respondent’s parental rights at the initial
dispositional hearing. Respondent eventually entered a no-contest plea to the existence of statutory
grounds for termination. “A respondent may make a plea of admission or of no contest to the
original allegations in the petition.” MCR 3.971(A). The court must advise the respondent “of
the consequences of the plea, including that the plea can later be used as evidence in a proceeding
to terminate parental rights if the respondent is a parent.” MCR 3.971(B)(4). To establish the
factual basis for a no-contest plea to statutory grounds for termination, “the court shall not question
the respondent, but, by some other means, shall obtain support for a finding that one or more of
the statutory grounds alleged in the petition are true.” MCR 3.971(D)(2).
MCR 3.977(E), which governs termination of parental rights at the initial disposition,
provides:
(E) Termination of Parental Rights at the Initial Disposition. The court
shall order termination of the parental rights of a respondent at the initial
dispositional hearing held pursuant to MCR 3.973, and shall order that additional
efforts for reunification of the child with the respondent shall not be made, if
(1) the original, or amended, petition contains a request for termination;
(2) at the trial or plea proceedings, the trier of fact finds by a preponderance
of the evidence that one or more of the grounds for assumption of jurisdiction over
the child under MCL 712A.2(b) have been established;
(3) at the initial disposition hearing, the court finds on the basis of clear and
convincing legally admissible evidence that had been introduced at the trial or plea
proceedings, or that is introduced at the dispositional hearing, that one or more facts
alleged in the petition:
(a) are true, and
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(b) establish grounds for termination of parental rights under MCL
712A.19b(3)(a), (b), (d), (e), (f), (g), (h), (i), (j), (k), (l), or (m);
(4) termination of parental rights is in the child’s best interests.
Respondent argues that it was improper to terminate her parental rights at the initial
disposition, without requiring the DHHS to offer reunification services, because the DHHS failed
to allege aggravated circumstances in the petition and the trial court made no finding about
aggravated circumstances. The DHHS responds that respondent’s no-contest plea to statutory
grounds for termination was sufficient to establish the requisite aggravated circumstances.
Although the DHHS did not use the phrase “aggravated circumstances” in the petition, it
sought termination of respondent’s parental rights under MCL 712A.19b(3)(b)(i), (b)(ii), (g), (j),
and (k)(iii). MCL 712A.19b(3)(k)(iii) authorizes termination of parental rights when a parent has
abused a child and the abuse involved “battering, torture, or other severe physical abuse.” Child
abuse involving “battering, torture, or other severe physical abuse” is also one of the enumerated
aggravated circumstances permitting termination of parental rights at the initial disposition,
excusing reasonable efforts toward reunification. MCL 722.638(1)(a)(iii); MCL 712A.19a(2)(a).
The petition also included factual allegations that identified the acts constituting “battering, torture,
or other severe physical abuse.” Respondent pleaded no contest to these allegations and stipulated
to their use to establish the factual basis for her plea. The trial court accepted respondent’s no-
contest plea to statutory grounds for termination, finding that the petition allegations provided an
adequate factual basis. The trial court also found that several statutory grounds for termination
had been proven, including MCL 712A.19b(3)(k)(iii). Although the trial court did not expressly
state that it found aggravated circumstances excusing the need for reasonable efforts, the court’s
finding of statutory grounds under subparagraph (k)(iii) “amount to a judicial determination” that
respondent subjected NR to aggravated circumstances under MCL 722.638(1)(a)(iii). See In re
Rippy, 330 Mich App 350, 358; 948 NW2d 131 (2019). The DHHS was therefore not statutorily
required to make reasonable efforts at reunification, and respondent cannot establish plain error.
Respondent cites In re Simonetta, 507 Mich 943, 943; 959 NW2d 170 (2021), to argue that
failing to make an appropriate finding of aggravated circumstances is a reversible error. Broadly
speaking, we agree. In Simonetta, 507 Mich at 943, our Supreme Court vacated the portion of this
Court’s opinion “holding that the trial court made the requisite judicial determination that the
respondent subjected [the minor child] to the circumstances provided for in MCL 722.638(1) and
(2), and satisfied the requirements of MCR 3.977(E) necessary to terminate the respondent’s
parental rights without requiring reasonable efforts at reunification.” The Supreme Court ordered
on remand that the trial court “either order that the petitioner provide reasonable services to the
respondent, or articulate a factual finding based on clear and convincing evidence that aggravated
circumstances exist such that services are not required.” Id. (emphasis added).
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The Supreme Court’s order in Simonetta2 could be read as requiring trial courts to
specifically state on the record that they found aggravated circumstances exist. But on closer
examination, we are not persuaded that the Supreme Court’s order mandated such a bright-line
rule. See In re Casper/Washington, unpublished per curiam opinion of the Court of Appeals,
issued June 9, 2022 (Docket No. 359270), p 6.3 Rather, Simonetta involved a trial court’s findings
that statutory grounds for termination existed under MCL 712A.19b(3)(g) and (j).4 These statutory
grounds are respectively established when the parent “fails to provide proper care or custody for
the child and there is no reasonable expectation that the parent will be able to provide proper care
and custody within a reasonable time considering the child’s age,” MCL 712A.19b(3)(g), and
“[t]here is a reasonable likelihood, based on the conduct or capacity of the child’s parent, that the
child will be harmed if he or she is returned to the home of the parent,” MCL 712A.19b(3)(j).
Finding that these statutory grounds have been met does not necessarily entail a “judicial
determination” of aggravated circumstances. MCL 722.638(1) and (2) list specific aggravated
circumstances, including abandonment and severe physical abuse, that are not established merely
by proving a “fail[ure] to provide proper care or custody” or a reasonable likelihood of harm; it
depends on the nature of that failure or harm, and whether it amounts to one of the enumerated
types of abuse listed in MCL 722.638(1) and (2).
Compare that with MCL 712A.19b(3)(k)(iii), which is met when the parent abused the
child, the abuse included “[b]attering, torture, or other severe physical abuse,” and there is a
reasonable likelihood that the child will be harmed if returned to the abusive parent. MCL
722.638(1)(a)(iii) specifically provides that one aggravating circumstance is abuse by a parent that
includes “[b]attering, torture, or other severe physical abuse”—identical language to MCL
712A.19b(3)(k)(iii). Here, the trial court found that several statutory grounds for terminating
respondent’s parental rights had been proven by clear and convincing evidence, including
subparagraph (k)(iii). And respondent pleaded no contest to the allegations supporting those
findings.5 Thus, unlike in Simonetta, the trial court here necessarily made a “judicial
determination” of aggravating circumstances under MCL 722.638(1)(a)(iii) by finding clear and
convincing evidence that respondent committed abuse involving “[b]attering, torture, or other
2
An order from our Supreme Court is “binding precedent if it constitutes a final disposition of an
application and contains a concise statement of the applicable facts and reasons for the decision.”
DeFrain v State Farm Mut Auto Ins Co, 491 Mich 359, 369; 817 NW2d 504 (2012).
3
Unpublished opinions are not binding precedent, but we may consider them for their instructive
or persuasive value. Cox v Hartman, 322 Mich App 292, 307; 911 NW2d 219 (2017).
4
In re Simonetta, unpublished per curiam opinion of the Court of Appeals, issued February 18,
2021 (Docket No. 354081), pp 1-2, vacated in part by Simonetta, 507 Mich at 943.
5
Although the DHHS filed an amended petition in October 2020 removing its request for
termination under subparagraph (k)(iii), respondent’s plea form incorporates the initial petition
from February 2020. While it is unclear from the transcript of the plea hearing if the trial court
similarly relied on the initial petition to establish a factual basis, the factual allegations in both
petitions are the same. And regardless, it is undisputed that the trial court found clear and
convincing evidence that the (k)(iii) statutory ground for termination had been proven.
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severe physical abuse.” Accordingly, respondent has not established that the trial court plainly
erred by terminating her parental rights without ordering the DHHS to provide reunification
services.6
III. BEST INTERESTS
Respondent next argues that the trial court erred by finding that termination of her parental
rights was in the children’s best interests. As for JP, respondent contends that the trial court’s best-
interests determination was tainted by an erroneous application of the anticipatory neglect doctrine.
A. PRESERVATION AND STANDARD OF REVIEW
The trial court addressed and decided whether termination of respondent’s parental rights
was in each child’s best interests, and it expressly applied the doctrine of anticipatory neglect in
its analysis of that issue. Respondent was not required to object to the trial court’s findings or
decision. MCR 2.517(A)(7). Therefore, this issue is preserved for our review.
We review the trial court’s best-interest findings for clear error. Sanborn, 337 Mich App
at 276. “A finding of fact is clearly erroneous if the reviewing court has a definite and firm
conviction that a mistake has been committed, giving due regard to the trial court’s special
opportunity to observe the witnesses.” In re BZ, 264 Mich App 286, 296-297; 690 NW2d 505
(2004).
B. ANALYSIS
“Even if the trial court finds that the [DHHS] has established a ground for termination by
clear and convincing evidence, it cannot terminate the parent’s parental rights unless it also finds
by a preponderance of the evidence that termination is in the best interests of the children.” In re
Gonzales/Martinez, 310 Mich App 426, 434; 871 NW2d 868 (2015). The focus of the best-interest
determination is on the children, not the parent. In re Schadler, 315 Mich App 406, 411; 890
NW2d 676 (2016). The trial court may consider a range of factors, including “the child’s bond to
the parent, the parent’s parenting ability, the child’s need for permanency, stability, and finality,
and the advantages of a foster home over the parent’s home.” In re Olive/Metts Minors, 297 Mich
App 35, 41-42; 823 NW2d 144 (2012) (citations omitted). Other relevant factors are “the parent’s
compliance with his or her case service plan, the parent’s visitation history with the child, the
children’s well-being while in care, and the possibility of adoption.” In re White, 303 Mich App
701, 714; 846 NW2d 61 (2014). “The trial court has a duty to decide the best interests of each
child individually,” Olive/Metts, 297 Mich App at 42, which the court here did in its written
6
Because respondent failed to establish plain error, we decline to consider whether respondent’s
plea and assent to proceeding with the best-interest hearing waived the necessity for specific
allegations and findings about aggravated circumstances.
-7-
opinion. Therefore, we review the trial court’s best-interests findings involving NR and JP
separately.
1. NR
The evidence established that NR had a series of injuries of different ages. The trial court
found that respondent either inflicted the injuries or knew who did. As the trial court explained:
Given the disturbing nature of the intentional injuries inflicted on NR,
mother’s conflicting stories presented by multiple witnesses regarding her lack of
culpability, and the otherwise chaotic situation representing the first 11 months of
NR’s life, the court can only reasonably conclude that mother is inflicting harm on
the child or being willfully blind to the physical and emotional harm inflicted on
her.
This finding was not clearly erroneous. The trial court observed the testimony of several witnesses
and drew credibility determinations about the truthfulness of this testimony, to which we defer,
throughout its opinion. This testimony included Dr. Hartwig’s opinions substantiating the severe
injuries suffered by NR. The evidence established that respondent gave conflicting explanations
for NR’s injuries and when she noticed them, and did not seek medical treatment for the injuries
until her mother instructed her to take NR to the hospital. Although Dr. Hartwig was unable to
precisely determine the ages of the injuries, he found that some injuries were inconsistent with
respondent’s timeframe and concluded that the injuries were nonaccidental.
The trial court further found that the stability of NR’s foster care environment, NR’s
wellbeing in foster care, and the willingness of NR’s paternal great-aunt to adopt her all favored
termination. The court recognized that while a placement with relatives generally weighs against
termination, see Olive/Metts, 297 Mich App at 43, this consideration was outweighed by the
trauma suffered by NR while in respondent’s care. The court also found that NR’s bond with
respondent was minimal at best. Witnesses testified that respondent left NR with her father for
two weeks immediately following her birth with little explanation, possibly harming the mother-
child bonding process. And NR’s paternal great-aunt, with whom she was placed in February
2020, testified that NR had an “extremely” strong bond with her and called her “Mommy.” In
sum, the trial court did not clearly err by finding that termination of respondent’s parental rights
was in NR’s best interests.
2. JP
Respondent also argues that the trial court clearly erred by finding that termination of her
parental rights was in JP’s best interests. She specifically contends that the trial court improperly
relied on the anticipatory neglect doctrine to infer that she would likely fail to protect JP.
The doctrine of anticipatory neglect “provides that the parents’ treatment of other children
is indicative of how they would treat the child in question.” In re Foster, 285 Mich App 630, 631;
776 NW2d 415 (2009). “However, the probative value of such an inference is decreased by
differences between the children, such as age and medical conditions.” In re Kellogg, 331 Mich
App 249, 259; 952 NW2d 544 (2020). In Kellogg, 331 Mich App at 260-261, this Court held that
-8-
the anticipatory neglect doctrine was insufficient to establish statutory grounds for jurisdiction
over one child because there were “substantial differences between the two children” involved in
the child protective proceedings. These differences included that one child was nine years younger
than the other child, lacked a history of trauma and behavioral issues that the older child had, and
had a stronger bond with the respondent. Id. Similarly, in In re LaFrance Minors, 306 Mich App
713, 730-732; 858 NW2d 143 (2014), this Court reversed the trial court’s decision to terminate
the respondents’ parental rights to their three older children under the doctrine of anticipatory
neglect because the doctrine had “little bearing” on the case. The trial court justifiably terminated
the respondents’ parental rights to their youngest child, an infant who had special needs and
medical vulnerabilities that the respondents failed to appreciate. Id. at 728-732. The older
children, however, did not share these medical needs, and importantly, “respondents had cared for
those children from birth without incident, including any allegation, let alone proof, that they had
abused or neglected” them. Id. at 730.
Here, there was similarly no proof that respondent ever physically abused JP, and JP’s
medical records did not show any health concerns. JP was roughly six years older than NR, who
was an infant, and thus JP did not share NR’s “inability to articulate personal needs or
discomforts.” See LaFrance, 306 Mich App at 731. Given the absence of proof or allegations of
any physical abuse against JP throughout the six years she was in respondent’s care, and the
difference in the children’s ages and abilities, the anticipatory neglect doctrine has little inferential
weight here. Thus, had the trial court solely relied on the doctrine of anticipatory neglect to find
that termination of respondent’s parental rights was in JP’s best interests, we would likely agree
with respondent’s claim of error.
But the trial court found that several other relevant factors favored termination—JP’s
weakened bond with respondent, JP’s need for permanency and stability, respondent’s lack of
involvement in JP’s life, the advantages of foster care over respondent’s home, JP’s well-being in
foster care, the possibility of adoption, and JP’s placement with her paternal grandmother. The
trial court noted that respondent’s unstable housing situation affected NR and JP equally. Denton,
the CPS investigator, testified that the children never had stable housing and were passed back and
forth between relatives for days at a time. While there is nothing wrong with relying on relatives
for childcare assistance, the evidence supported that the children’s living situation was fairly
unstable and chaotic. It was unclear at times where the children lived, as they moved between
their paternal grandmother, maternal grandmother, great-grandmother, and respondent’s home.
The evidence also showed that JP was doing well in her placement and that the grandmother was
willing to adopt JP. Thus, the trial court’s finding that JP’s need for permanency and stability
favored termination, and that JP’s grandmother provided a stable home, were supported by the
evidence.
Further, at the time of the best-interests hearing, JP had been out of respondent’s care for
over 18 months, and there was little evidence showing that JP had a strong bond with respondent.
Denton testified that from her observations, the children were not significantly bonded with
respondent even before their removal. Some evidence also supported that respondent failed to
supervise JP. JP told a Care House investigator that she prepared bottles for NR and changed her
diaper, an inappropriate task for a child of JP’s age. Considering the totality of the record evidence
and the trial court’s findings, we are not left with a definite and firm conviction that the trial court
erred by finding by a preponderance of the evidence that termination of respondent’s parental
-9-
rights was in JP’s best interests. While the probative value of an anticipatory-neglect inference
was weak, the trial court’s other best-interest findings were supported on the record. Accordingly,
the trial court did not clearly err by terminating respondent’s parental rights to JP.
IV. CONCLUSION
The trial court did not plainly err by terminating respondent’s parental rights at the initial
disposition without requiring the DHHS to make reasonable efforts at reunification. The trial court
did not clearly err by finding that termination was in the children’s best interests. Therefore, we
affirm.
/s/ Kristina Robinson Garrett
/s/ Colleen A. O’Brien
/s/ James Robert Redford
-10- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487008/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
UNPUBLISHED
In re BUTLER, Minors. November 17, 2022
No. 360271
Calhoun Circuit Court
Family Division
LC No. 2018-002434-NA
Before: M. J. KELLY, P.J., and SHAPIRO and PATEL, JJ.
PER CURIAM.
Respondent appeals by right the trial court order terminating her parental rights to her
children, RB and SB, under MCL 712A.19b(3)(b)(i) and (c)(i), and (j). Because the trial court did
not err by terminating respondent’s parental rights, we affirm.
I. BASIC FACTS
On August 29, 2018, petitioner, the Department of Health and Human Services, filed a
petition seeking removal of RB, SB, and KM from respondent’s care and seeking termination of
her parental rights to each of the children. The petition alleged that SB had been born with
morphine and oxycodone in his system because of prenatal exposure, that he was diagnosed with
neonatal abstinence syndrome, and that he was transported to a neonatal intensive care unit (NICU)
and treated for opioid withdrawals. Petitioner also alleged that respondent tested positive for
opiates at the time of SB’s birth, that she had admitted to taking unprescribed opiates during her
pregnancy, and that she had previously struggled with drug addiction.
-1-
Following a preliminary hearing, RB and SB were placed with their father 1 and KM was
placed with her father.2 Subsequently, respondent entered a plea of admission to several
allegations in the petition, including that she had used unprescribed opiates while pregnant with
SB, that she tested positive for opiates when she was admitted to the hospital to deliver SB, that
SB had been born positive for opiates, that SB experienced substance-abuse withdrawal symptoms
after his birth. At that time, the dispositional goal was changed from termination to reunification,
and the court entered an order taking jurisdiction over the children.
Respondent was provided with numerous services aimed at reunifying her with the
children, including referrals for psychological evaluations, parenting-time visits, a referral for
supportive visitation, individual counseling, substance-abuse counseling, parenting classes, drug
screens, assistance with employment, and housing resources. Yet, after approximately 39 months
she was, overall, not very compliant with the services offered and had failed to show any visible
benefit. She continued to have issues with substance-abuse, including testing positive for
amphetamines, methamphetamines, and marijuana, and being convicted of possession of
methamphetamines.3 She also continued to inconsistently attend parenting time, had yet to
complete the offered parenting-time classes, had only recently completed her (fourth) referral for
a psychological evaluation, had not consistently attended either individual or substance-abuse
counseling, and remained unemployed.
Respondent’s psychological evaluation was not favorable. Dr. Randall Haugen, who was
admitted as an expert in psychology, performed the evaluation in July 2021. Respondent reported
to him that she had a court-related history of drug use, including methamphetamine, that she had
used substances with the children’s father, that she had previously participated in inpatient
treatment and had been in sober-living houses, that she was still dealing with the legal
consequences of her substance-abuse, and that she was still struggling with substance use. Dr.
Haugen diagnosed respondent with stimulant disorder, moderate to severe personality disorder
with mixed features, unspecified anxiety, and cannabis-use disorder. He described respondent’s
manner as defensive and combative, and he stated that individuals with her “profile” tended to be
1
RB and SB were later removed from their father’s care due to allegations of substance abuse and
domestic-violence involving him throwing a brick at the children’s paternal grandfather. The
children’s father left the home after the incident with their paternal grandfather, but he later
returned and continued to be assaultive. When law enforcement arrived, the children’s father
threatened to attack the police with a weapon so that they would shoot him. At the time, he was
holding the children in his arms. Following a bench trial, the court found that there were statutory
grounds to exercise jurisdiction over the children under MCL 712A.2(b). His parental rights to
the children were terminated following a subsequent termination hearing, and he has not appealed
that decision.
2
During the pendency of the child protective proceedings, KM’s father obtained a court order
granting him sole custody of KM. As a result of that custody order, the court terminated its
jurisdiction over KM.
3
Her caseworker explained that, although marijuana use is not illegal in Michigan, respondent’s
cannabis use was a problem because she had been diagnosed with cannabis-use disorder.
-2-
impulsive and act in regrettable ways. Dr. Haugen opined that respondent had difficulty managing
and controlling her emotions, which led to violations of social rules, expectations, and boundaries,
and that her issues remained chronic or continued despite significant treatment interventions and
negative consequences arising from her use. Overall, Dr. Haugen explained that respondent’s
overall prognosis was poor because she had long-term substance abuse problems and because part
of her problem was characteriologically based, and was not the product of a mental illness. He
opined that she was “quite vulnerable to relapse, once external supervision is decreased.” Dr.
Haugen recommended that respondent maintain a consistent and responsible lifestyle and that she
participate in a program like AA or NA to aid her stability. He elaborated that to do so she would
have to maintain all treatment, obtain housing, income, stability, an external support system, and
develop some insight and awareness of her issues. He opined that, if she were 100% committed
to following the recommendations, it would take at least 9 months before reunification would be
possible, but if there was less than 100% compliance it would be longer before reunification would
be possible.
Dr. Haugen also conducted a psychological evaluation of RB. He stated that RB described
respondent as detached and not often there and that she had fading memories of respondent fighting
with RB’s father. RB suffered from a lot of uncertainty because the “adult world” was not able to
meet her needs, tended to keep others at a distance, had intrusive memories, had a sexual
preoccupation compared to other children her age, was intelligent but distracted and hyperactive,
and met the criteria for post-traumatic stress disorder (PTSD). Dr. Haugen opined that she really
needed permanence and direction so that she could form attachments, and he explained that she is
vulnerable to developing future emotional and behavior difficulties. He added that the significant,
chronic trauma that she had endured was preventing her from developing close and intimate
relationships. Given her age (7 years old at the time), he believed that stability was highly
important to her. He explained that RB’s progress in therapy would “improve” once she has a
sense of permanency.
With respect to SB, Dr. Haugen testified that he expected that, although SB was only three
years old, SB would have the same types of issues as RB when he got older. He stated that as SB
enters the 4-5 year age range, it was particularly important for him to achieve permanence and
stability so that he would be able to sort relationships into public and private and so that he would
know who to refer to as his parents.
Dr. Haugen explained that RB identified her foster parents as her parents. The foster
parents were willing to adopt and the caseworker testified that the children’s needs were being
met by the foster parents. She clarified that RB had 50% of her life in the care of someone other
than respondent and that SB had never been in respondent’s care. She also testified that the
children “absolutely” had an “obvious” bond with respondent; she described them as happy and
excited to see respondent when respondent would go to the parenting time visits. She believed
that the termination of respondent’s parental rights would be difficult for the children. To alleviate
that difficulty, while also providing the children with the permanence that Dr. Haugen opined they
needed, she suggested that the children continue to have some supervised contact with respondent
after they were adopted. On questioning from the court, the caseworker stated that a guardianship
was not appropriate because adoption would provide “a greater level of permanence.” And, again,
the children needed permanence and stability. She also explained that the recommendation for
-3-
continued contact was based only on her own opinion, and that Dr. Haugen had not—and was not
asked to—provide a professional opinion on whether such continued contact would be detrimental.
Following the termination hearing, the trial court found that termination of respondent’s
parental rights was warranted under MCL 712A.19b(30(b)(i) and (c)(i),4 and that termination of
respondent’s parental rights was in the children’s best interests. This appeal follows.
II. BEST INTERESTS
A. STANDARD OF REVIEW
Respondent argues that the trial court’s best-interests decision was clearly erroneous.5 A
trial court’s best-interests determination is reviewed for clear error. In re A Atchley, ___ Mich
App ___, ___; ___ NW2d ___ (2022) (Docket No. 358502); slip op at 6-7. “A finding of fact is
clearly erroneous if the reviewing court has a definite and firm conviction that a mistake has been
committed, giving due regard to the trial court’s special opportunity to observe the witnesses.” In
re Sanborn, 337 Mich App 252, 276; 976 NW2d 44 (2021) (quotation marks and citation omitted).
B. ANALYSIS
Under MCL 712A.19b(5), “[i]f the court finds that there are grounds for termination of
parental rights and that termination of parental rights is in the child’s best interests, the court shall
order termination of parental rights and order that additional efforts for reunification of the child
with the parent not be made.” MCL 712A.19b(5). “[W]hether termination of parental rights is in
the best interests of the child must be proven by a preponderance of the evidence.” In re Moss
Minors, 301 Mich App 76, 90; 836 NW2d 182 (2013). “In deciding whether termination is in the
child’s best interests, the court may consider the child’s bond to the parent, the parent’s parenting
ability, the child’s need for permanency, stability, and finality, and the advantages of a foster home
over the parent’s home.” In re Olive/Metts Minors, 297 Mich App 35, 41-42; 823 NW2d 144
(2012) (citations omitted). At this stage of the proceedings, the focus is on the child, not the parent.
In re A Atchley, ___ Mich App at ___; slip op at 7.
4
Respondent has not challenged the trial court’s finding that there was clear and convincing
evidence of statutory grounds to terminate her parental rights. Accordingly, we do not address
that aspect of the court’s order terminating respondent’s parental rights.
5
Respondent’s appellate lawyer quotes the former version of MCL 712A.19b(5), which required
the trial court to find that termination of the respondent’s parental rights was “clearly not in the
child’s best interests.” In 2008, however, the legislature amended that part of MCL 712A.19b(5)
to require the court to instead find that “termination of parental rights is in the child’s best interests”
before the court may order termination of parental rights. See 2008 PA 199. Thus, under the
current version of MCL 712A.19b(5), the trial court must make an affirmative finding that
termination is in the child’s best interests as opposed to a negative finding that termination is not
in the child’s best interests. Although it is concerning that respondent’s appellate lawyer would
cite to a former version of the statute, the trial court applied the correct version of the statute and
we are able to review that decision for clear error.
-4-
Respondent argues that the trial court did not consider any of the above factors, nor did it
take any testimony relating to the children’s best interests. The record, however, refutes that
assertion. First, testimony related to the children’s best-interests was presented. Dr. Haugen
testified and the caseworkers testified at length regarding the children’s need for permanence,
stability, and finality. Additionally, there was testimony related to the children’s bond with
respondent and to the advantages of the children’s pre-adoptive foster home over respondent’s
home.
Second, the trial court made express findings related to several of the best-interest factors.
The court found that it was “highly important” for RB to have stability and finality. The court
found that her memories of her biological parents were fading, but that she remembered arguing,
fighting, and respondent’s absence. He noted testimony that RB’s uncertainty regarding the future
was “absolutely limiting her progress” and that she needed permanence quickly so that she could
overcome her PTSD and her struggles with the trauma she endured because of her parents’ actions.
With regard to SB, the court found that he also needed permanence and stability, noting that he
was showing confusion as to who his parents were. The court also considered the advantages of
the foster home over respondent’s home. The court specifically found that there was a bond
between the children and their foster parents. Next, contrary to respondent’s claim on appeal, the
court also recognized that there was a bond between the children and respondent. Despite that
bond, the court determined that “these children can’t wait any longer for their mother to get her
situation straight.”
Respondent argues that the court failed to consider that, because she had completed a
parenting class, her parenting ability had improved. Yet, the caseworker testified that she had not
successfully completed the class because she had not turned in required homework. Respondent
also suggests that a comparison between her home and the foster home is unfair because a foster
home will always have advantages. The focus, however, is on the child’s best interests, not the
level of fairness to the respondent parent. In considering the child’s best interests, advantages over
the foster home can be considered. In re Olive/Metts, 297 Mich App at 41-42. In this case, after
over 1,000 days in care, respondent was no closer to reunification with her children. Primarily,
she continued to struggle to maintain sobriety. The children demonstrated a need for permanence
and stability that respondent was not in a position to provide them with. Further, in light of her
psychological evaluation and subsequent failure to fully comply with the recommendations made
by Dr. Haugen, it appears that any reunification would be delayed by a minimum of 9 months. In
contrast, the foster parents were willing to adopt the children and provide them with immediate
permanence. The children’s needs were being met in foster care, including RB’s need for therapy
to address her trauma-related mental health issues and detachment problems. The trial court did
not clearly err by finding that the advantages of the foster home, which was readily available to
provide the children with needed permanence, weighed in favor of finding that termination of
respondent’s parental rights was in the children’s best interests.
Finally, respondent contends that the court made no efforts to place the children with
relatives. The children, however, were initially placed with their biological father. They were
only placed in unrelated foster care after their father’s substance abuse and domestic violence led
to him assaulting the children’s paternal grandfather and attempting to get the police to shoot him
while he was holding the children. Respondent has not identified which other relatives were
willing to accept placement of the children and whom would constitute appropriate placements.
-5-
On this record, the trial court heard evidence related to the children’s best-interests and
made findings relevant to multiple best-interests factors. Further, the court’s factual findings were
not clearly erroneous. Termination, therefore, was mandated under MCL 712A.19b(5).
Affirmed.
/s/ Michael J. Kelly
/s/ Douglas B. Shapiro
/s/ Sima G. Patel
-6- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487023/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
JOHN TOMA KINAYA, UNPUBLISHED
November 17, 2022
Plaintiff-Appellee,
v No. 358879
Wayne Circuit Court
HANOVER INSURANCE COMPANY and LC No. 20-014410-CK
MASSACHUSETTS BAY INSURANCE
COMPANY,
Defendants-Appellants.
Before: SHAPIRO, P.J., and RICK and GARRETT, JJ.
PER CURIAM.
In this insurance coverage dispute, defendants, Hanover Insurance Company (Hanover)
and Massachusetts Bay Insurance Company (Massachusetts Bay), appeal as of right the trial
court’s order granting entry of judgment in favor of plaintiff, John Toma Kinaya, and challenge
the trial court’s earlier order granting plaintiff’s motion for summary disposition. We reverse and
remand.
I. BACKGROUND
Plaintiff, an employee of Indian Village Market, was arrested for assault of a customer.
The customer went to Indian Village Market and saw the cereal box he planned on purchasing was
stuck to another box by mold caused by water that was leaking into the store. The customer
complained to plaintiff and threatened to call the health department. When the customer started
to film the interaction with plaintiff, plaintiff walked out from behind the enclosed counter area.
Plaintiff testified that as he came to the door, the customer came charging toward plaintiff’s face
with his phone, and that he was afraid and did not know if the customer would hit him. Plaintiff
further testified that he then “flipped” the customer’s phone out of the customer’s hand, only
touching the phone when he slapped it out of the customer’s hand and that he did not make any
contact with the customer’s hand. However, the customer claimed that plaintiff threatened him
-1-
and caused injury to his hand during the interaction. The customer subsequently filed a complaint
against Indian Village Market and plaintiff for assault and negligence.1
Indian Village Market had two insurance policies that are at issue in this appeal. First, a
policy by Massachusetts Bay, a wholly owned subsidiary of Hanover Insurance Company. The
relevant portions of the Massachusetts Bay policy are as follows:
1. Insuring Agreement
a. We will pay those sums that the insured becomes legally obligated to pay
as damages because of “bodily injury” or “property damage” to which the insurance
applies. We will have the right and duty to defend the insured against any “suit”
seeking those damages. However, we will have no duty to defend the insured
against any “suit” seeking damages for “bodily injury” or “property damage” to
which this insurance does not apply. We may, at our discretion, investigate any
“occurrence” and settle any claim or “suit” that may result.
* * *
b. This insurance applies to “bodily injury” and “property damage” only if:
(1) The “bodily injury” or “property damage” is caused by an
“occurrence” that takes place in the “coverage territory”;
(2) The “bodily injury” or “property damage” occurs during the
policy period . . . .
The policy defines “occurrence” as “an accident, including continuous or repeated
exposure to substantially the same general harmful conditions.” The policy does not include a
definition of “accident.” The Massachusetts Bay policy also contains an exclusion providing the
policy does not apply to “Expected or Intended Injury,” which is defined as: “ ‘Bodily injury’ or
‘property damage’ expected or intended from the standpoint of the insured.” Additionally, this
bodily injury “exclusion does not apply to ‘bodily injury’ resulting from the use of reasonable
force to protect persons or property.”
The second policy is an umbrella insurance policy by Citizens Insurance Company of
America (Citizens), which included similar policy provisions as the Massachusetts Bay policy:
1. Coverage A—Follow Form Excess Liability Insuring Agreement
a. We will pay on behalf of the insured those sums in excess of the
“underlying insurance” which the insured becomes legally obligated to pay as
damages, provided:
1
Paulson v Kinaya, et al., Wayne Circuit Court Case No. 19-011250-NO.
-2-
(1) Such damages are covered by “underlying insurance”;
* * *
b. We will not pay damages that the “underlying insurance” does not pay
for any reason other than exhaustion of limits of the “underlying insurance” by
payment of judgments, settlements, related costs or expenses.
c. The terms and conditions of the “underlying insurance” in effect at the
inception of this policy apply unless they are inconsistent with the terms and
conditions of this policy.
* * *
2. Coverage B—Umbrella Liability Insuring Agreement
a. We will pay on behalf of the insured those sums in excess of the “retained
limit” shown in the Declarations which the insured because legally obligated to pay
as damages because of “bodily injury”, “property damage”, and “advertising
injury” to which this coverage applies, provided:
(1) The:
(a) “Bodily injury” or “property damage” is caused by an
“occurrence”[.]
The Citizens policy also defines “occurrence” as “an accident, including continuous or repeated
exposure to substantially the same general harmful conditions.”
Plaintiff moved for summary disposition under MCR 2.116(C)(8) and (C)(10), and for
declaratory judgment under MCR 2.605, asserting: (1) that coverage exists for plaintiff under both
insurance policies, (2) that defendants have a duty to defend and indemnify plaintiff, and (3)
defendants jointly and severally are responsible for plaintiff’s attorney fees in defense of the
underlying case. Plaintiff argued the underlying incident was an “occurrence” under the terms of
the policies because the incident fit within the definition of an accident under Michigan caselaw.
Alternatively, plaintiff argued he used reasonable force, which was appropriate under the policy.
Defendants responded, arguing they were entitled to summary disposition under MCR 2.116(I)(2),
and had no duty to defend plaintiff because plaintiff’s deliberate act of slapping the phone out of
the customer’s hand did not amount to an “accident” under the policies.
Without holding a hearing, the trial court granted plaintiff’s motion for summary
disposition. It wrote on a praecipe order that “coverage exists under both policies—reasonable
force was used.” The trial court offered no analysis nor made any specific findings to support its
determination. Defendants’ subsequent motion for reconsideration was denied by the trial court.
Later, plaintiff moved for entry of judgment because defendants continued to deny coverage to
plaintiff. The trial court granted plaintiff’s motion for entry of judgment, and his appeal followed.
On appeal, defendants argue the trial court erred when it granted summary disposition by
determining plaintiff was covered under both insurance policies on the basis that reasonable force
-3-
was used by plaintiff because the trial court did not first determine the assault was an “occurrence”
under the policies.
II. STANDARD OF REVIEW
This Court reviews de novo orders granting or denying summary disposition. Maiden v
Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999). An order denying reconsideration is
reviewed for an abuse of discretion. K & W Wholesale, LLC v Dep’t of Treasury, 318 Mich App
605, 611; 899 NW2d 432 (2017). “A motion under MCR 2.116(C)(8) tests the legal sufficiency
of the complaint.” Maiden, 461 Mich at 119. On the other hand, “[a] motion under
MCR 2.116(C)(10) tests the factual sufficiency of the complaint.” Id. at 120. This Court considers
“affidavits, pleadings, depositions, admissions, and documentary evidence filed in the action or
submitted by the parties, in a light most favorable to the party opposing the motion” in its review
under MCR 2.116(C)(10).2 Sanders v Perfecting Church, 303 Mich App 1, 4; 840 NW2d 401
(2013) (quotation marks and citation omitted). Under MCR 2.116(C)(10), summary disposition is
appropriate when no genuine issue of material fact exists and the moving party is entitled to
judgment as a matter of law. West v Gen Motors Corp, 469 Mich 177, 183; 665 NW2d 468 (2003).
“A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to
the opposing party, leaves open an issue upon which reasonable minds might differ.” Id.
III. LAW AND ANALYSIS
Defendants argue the trial court erred when it granted summary disposition in favor of
plaintiff, determining plaintiff was covered under the insurance policies, because plaintiff’s actions
cannot be considered an “occurrence” under the definition in the policies. We agree.
This question requires this Court to consider whether defendants had a duty to defend
plaintiff under the insurance policies. An insurer’s duty to defend arises when the insurance policy
is applicable. American Bumper & Mfg Co v Hartford Fire Ins Co, 452 Mich 440, 450; 550 NW2d
475 (1996). “If the policy does not apply, there is no duty to defend.” Id. However, an insurer’s
duty to defend is broad. Id. “If the allegations of a third party against the policyholder even
arguably come within the policy coverage, the insurer must provide a defense.” Id. at 450-451.
This is true even if “the claim may be groundless or frivolous.” Id. at 451.
This question also requires us to consider the meaning of the term “accident” as it relates
to an insurance policy. “An insurance policy is an agreement between parties that a court interprets
much the same as any other contract to best effectuate the intent of the parties and the clear,
unambiguous language of the policy.” Auto-Owners Ins Co v Harrington, 455 Mich 377, 381; 565
NW2d 839 (1997) (quotation marks and citation omitted). To do so, a court “looks to the contract
as a whole and gives meaning to all its terms.” Id.
2
Although plaintiff moved for summary disposition under MCR 2.116(C)(8) and
MCR 2.116(C)(10), the trial court relied on documents beyond the pleadings. Therefore, “we
construe the motion as having been granted pursuant to MCR 2.116(C)(10).” Cuddington v United
Health Servs, Inc, 298 Mich App 264, 270; 826 NW2d 519 (2012).
-4-
Interpretation of an insurance policy ultimately requires a two-step inquiry:
first, a determination of coverage according to the general insurance agreement and,
second, a decision regarding whether an exclusion applies to negate coverage. This
Court has held that an insurance policy provision is valid as long as it is clear,
unambiguous and not in contravention of public policy. [Id. at 382 (quotation
marks and citations omitted).]
Defendants essentially argue the trial court skipped the first step articulated in Harrington,
and determined the reasonable force provision in the contract applied to plaintiff without first
determining the threshold issue whether plaintiff was covered under the policies. The insurance
policy applied only if the “bodily injury” was caused by an “occurrence,” which is defined as “an
accident, including continuous or repeated exposure to substantially the same general harmful
conditions.” Therefore, this Court must determine whether the incident constituted an
“occurrence” such that the policy took effect.
As defendants point out, our Supreme Court has held the term “accident” should be defined
according to its ordinary meaning. See e.g., Frankenmuth Mut Ins Co v Masters, 460 Mich 105,
113-114; 595 NW2d 832 (1999) (“When the meaning of a term is not obvious from the policy
language, the ‘commonly used meaning’ controls.”) (citations omitted). “Accident” is not defined
by the insurance policy in the instant case. In Allstate Ins Co v McCarn, 466 Mich 277, 281; 645
NW2d 20 (2002), our Supreme Court interpreted a similar policy, which defined an occurrence as
an accident, but did not define what was considered an accident. In cases where the term
“accident” has not been defined, our Supreme Court has repeatedly stated that “an accident is an
undesigned contingency, a casualty, a happening by chance, something out of the usual course of
things, unusual, fortuitous, not anticipated and not naturally to be expected.” Id. (quotation marks
and citations omitted). Additionally, accidents are “evaluated from the standpoint of the insured,
not the injured party.” Id. at 282.
The policies in the instant case also provide an exclusion that no coverage exists for bodily
injury expected or intended by the insured. “[T]his Court has repeatedly held that the ‘intended or
expected’ language that is used in the policy exclusion is ‘clear and unambiguous’ as applied to a
variety of similar factual contexts.” Harrington, 455 Mich at 383 (citation omitted). However,
the insured’s actions do not need to be unintentional in order for an act to “constitute an ‘accident’
and therefore an ‘occurrence.’ ” Masters, 460 Mich at 115 (citation omitted). “[W]hen an
insured’s intentional actions create a direct risk of harm, there can be no liability coverage for any
resulting damage or injury, despite the lack of an actual intent to damage or injure.” Id. at 116
(quotation marks and citation omitted).
What this essentially boils down to is that, if both the act and the
consequences were intended by the insured, the act does not constitute an accident.
On the other hand, if the act was intended by the insured, but the consequences
were not, the act does constitute an accident, unless the intended act created a direct
risk of harm from which the consequences should reasonably have been expected
by the insured. [McCarn, 466 Mich at 282-283.]
Considering the incident from the standpoint of plaintiff as the insured, the incident was
not accidental, even though the consequences of the customer’s injury may not have been
-5-
intentional. Plaintiff testified he did not intend to harm the customer, but only intended to knock
the phone out of the customer’s hand to prevent him from filming the encounter and because
plaintiff did not want a video to reflect poorly on the store or its reputation.
The recorded video of the incident clearly shows that plaintiff intended his actions and that
plaintiff should have reasonably expected the direct risk of harm resulting from the consequences
of his actions. Plaintiff asserts that he acted in self-defense and was “unexpectedly required to
defend himself” because the customer put the phone near his face and he feared that the phone
would make contact with his face. However, the video shows that plaintiff first approached the
customer. It does not show that the customer put the phone “in plaintiff’s face” before plaintiff
knocked the phone out of the customer’s hand in the first instance. Additionally, after plaintiff
intentionally knocked the customer’s phone out of his hands the first time, plaintiff appeared to
grab the phone a second time.
The trial court did not undertake any analysis to resolve the motion for summary
disposition. The trial court did not conduct a proper analysis by first finding the incident fit within
the definition of an “occurrence” under the policies because the plain language of the policies
require bodily injury to arise from an occurrence to provide coverage. While we appreciate the
weight of a trial court docket, the short hand comments on a praecipe order were insufficient to
conduct a proper analysis. But for this Court’s ability to review the video at issue, we likely would
have remanded the matter for the trial court to conduct a proper analysis. Our review alleviates
the need for that here. The trial court’s order was clearly erroneous. Further, because plaintiff’s
actions do not fit within our Supreme Court’s definition of “accident,” the trial court erred in
determining plaintiff was covered under the insurance policies.
Reversed and remanded. We do not retain jurisdiction. Defendants may assess costs as
prevailing parties.
/s/ Douglas B. Shapiro
/s/ Michelle M. Rick
/s/ Kristina Robinson Garrett
-6- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487001/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
UNPUBLISHED
In re NIERMAN, Minors. November 17, 2022
No. 361519
Otsego Circuit Court
Family Division
LC No. 22-000110-NA
Before: HOOD, P.J., and JANSEN and K. F. KELLY, JJ.
PER CURIAM.
Respondent-mother appeals by right the trial court’s order of custody removing her two
minor children, ERN and ESN. Finding no errors warranting reversal, we affirm.
I. BASIC FACTS AND PROCEDURAL HISTORY
In May 2022, the Department of Health and Human Services (the “Department”) filed a
petition alleging that on April 25, 2022, law enforcement responded to a noise complaint at
respondent’s apartment and found the children’s father unconscious in the bathroom. He was later
pronounced dead as a result of a drug overdose. Respondent was also at the apartment and
appeared intoxicated. Respondent was drug-tested at her residence and tested positive for multiple
illegal substances. ERN and ESN were in the apartment at the time and stayed with a relative
afterwards. The petition also alleged that when ERN and ESN were born, they tested positive for
illegal substances and were removed from respondent’s care in 2018 because of her substance
abuse issues. An amended petition subsequently filed, which included allegations that respondent
tested positive for fentanyl the day the first petition was filed. The amended petition requested
that the trial court take jurisdiction over ERN and ESN on the basis of allegations of improper
supervision and requested that the children be removed from respondent’s care. The trial court
subsequently issued an ex parte order removing the children and placing them with the
Department.
At a preliminary hearing, Children’s Protective Services caseworker Michelle Hagerman
testified regarding the allegations in the petition. Hagerman testified that the Department and
respondent agreed that the Department would file a petition for in-home jurisdiction and allow the
children to remain with respondent on the condition she did not test positive for substances.
However, after respondent tested positive for fentanyl a second time, the Department filed the
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petition requesting removal. In addition, Hagerman testified that respondent repeatedly refused to
agree to a safety plan, disputed the results of her drug tests, and refused to attend substance abuse
treatment. Respondent also came to Hagerman’s office the day before the preliminary hearing
extremely angry and was “swearing, throwing things, [and] slamming doors” in front of the
children. Because respondent had not had a chance to consult with her attorney, the trial court
adjourned the preliminary hearing and did not authorize the petition, but did issue an order
removing the children from respondent’s care and custody and placing them with the Department.
This appeal followed.
II. STANDARD OF REVIEW
A trial court’s findings of facts are reviewed for clear error. In re Benavides, 334 Mich
App 162, 167; 964 NW2d 108 (2020). A finding is clearly erroneous if the reviewing court “is
left with a definite and firm conviction that a mistake has been made.” Id. (quotation marks and
citation omitted). The trial court’s proper interpretation and application of statutes and court rules
is reviewed de novo. In re Williams, 333 Mich App 172, 178; 958 NW2d 629 (2020).
III. DISCUSSION
Respondent argues that the trial court clearly erred when it removed the children from
respondent’s care because it relied on improper and inadmissible testimony. We disagree.
“At the preliminary hearing, the court must decide whether to authorize the filing of the
petition and, if authorized, whether the child should remain in the home, be returned home, or be
placed in foster care pending trial.” Benavides, 334 Mich App at 167 (quotation marks and citation
omitted). Under MCL 712A.13a(9), a trial court may remove a child from a parent’s care if it
finds that all of the following conditions have been satisfied:
(a) Custody of the child with the parent presents a substantial risk of harm
to the child’s life, physical health, or mental well-being.
(b) No provision of service or other arrangement except removal of the child
is reasonably available to adequately safeguard the child from risk as described in
subdivision (a).
(c) Continuing the child’s residence in the home is contrary to the child’s
welfare.
(d) Consistent with the circumstances, reasonable efforts were made to
prevent or eliminate the need for removal of the child.
(e) Conditions of child custody away from the parent are adequate to
safeguard the child’s health and welfare.
“If the trial court orders placement of the child in foster care, it must make explicit findings that
‘it is contrary to the welfare of the child to remain at home,’ MCR 3.965(C)(3), and ‘reasonable
efforts to prevent the removal of the child have been made or that reasonable efforts to prevent
removal are not required,’ MCR 3.965(C)(4).” Benavides, 334 Mich App at 168.
-2-
In cursory fashion, respondent argues that the trial court failed to make the statutorily
required factual findings to remove the children from respondent’s care because it relied on hearsay
testimony from a witness who “lacked personal knowledge” of the events at issue. To the extent
respondent challenges to the sufficiency of the trial court’s factual findings, it is unsupported by
argument or citation to relevant authority. See In re Warshefski, 331 Mich App 83, 87; 951 NW2d
90 (2020) (“An appellant may not merely announce his position and leave it to this Court to
discover and rationalize the basis for his claims, nor may he give issues cursory treatment with
little or no citation of supporting authority.”) (quotation marks and citation omitted).
On the merits, respondent’s claims fail because the trial court made the requisite factual
findings prior to removal and there was sufficient evidence to support those findings. The evidence
demonstrated that respondent used illegal substances since at least 2017, used substances in front
of her children, tested positive on multiple occasions for illegal substances, refused to engage in
substance abuse services, refused to sign a safety plan for the children, and refused to take drug
screens. Therefore, the evidence presented demonstrated that the children were at risk of
substantial harm in respondent’s custody, no other services except removal would adequately
safeguard the children, and remaining in respondent’s home was contrary to their welfare. See
MCL 712A.13a(9)(a)–(c). In addition, the Department made reasonable efforts to prevent the
removal of the children through the provision of services, including random drug tests, safety
planning, meetings, Department assistance, counseling referrals, the Women’s Resource Center,
health services, the Family Support Program, the Family Reunification Program, psychological
evaluation assessment, infant mental health assessment, Early On, and parenting education classes.
Regarding respondent’s argument that the caseworker’s testimony was inadmissible
hearsay, this argument is unpersuasive. A trial court’s findings at a preliminary hearing “may be
made on the basis of hearsay evidence that possesses adequate indicia of trustworthiness.” MCR
3.965(C)(3). Respondent’s additional argument that Hagerman did not have personal knowledge
of the events at issue is not supported by the record. Hagerman’s testimony was based on her
review of respondent’s drug-screen reports, conversations with law enforcement, and
conversations with respondent.
The trial court removed the children from respondent’s care concluding that respondent
presented a substantial risk of harm to the children, no other services except removal would
adequately safeguard the children, it was contrary to the welfare of the children to remain in
respondent’s care, reasonable efforts had been made, and conditions of custody at their placement
were adequate to safeguard the children’s health and welfare. The trial court’s findings were
supported by the record and satisfied the requirements of MCL 712A.13a(9) and MCR 3.965(C).
Affirmed.
/s/ Noah P. Hood
/s/ Kathleen Jansen
/s/ Kirsten Frank Kelly
-3- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487002/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
In re EMILY BATES.
VALERIE EVANS, UNPUBLISHED
November 17, 2022
Petitioner-Appellee,
v No. 361062
Washtenaw County Probate Court
EMILY BATES, LC No. 22-000224-MI
Respondent-Appellant.
Before: GARRETT, P.J., and O’BRIEN and REDFORD, JJ.
PER CURIAM.
Respondent appeals as of right the probate court’s order that she receive mental health
treatment. We affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
Respondent obtained mental health inpatient treatment at the University of Michigan
Hospital (the hospital) in early April 2022, the most recent of a series of hospitalizations and
emergency room visits for respondent between November 2020 and September, 2021. Doctors
issued two clinical certificates1 that specified respondent’s diagnosis as “unspecified psychotic
disorder” and concluded that respondent was a person requiring treatment who lacked insight into
her need for treatment.
1
A clinical certificate is “the written conclusion and statements of a physician or a licensed
psychologist that an individual is a person requiring treatment, together with the information and
opinions, in reasonable detail, that underlie the conclusion, on the form prescribed by the
department or on a substantially similar form.” MCL 330.1400(a).
-1-
The first certificate provided facts for the determination: “[Patient] with psychotic
symptoms including paranoia and disorganization that are resulting in reduced ability to function
including isolating to her home in fear. [Patient] denies suicidal/homicidal ideation, intent or
plan.” The certificate noted that, while respondent denied homicidal ideations, there was a “risk
for unintentional harm to others given symptoms of psychosis.” The certificate determined that
respondent could not care for her basic physical needs and reported the observation that she
presented “notably disheveled, isolating to home, not buying groceries and decreased intake with
reported weight loss.” The second certificate indicated that respondent was “disorganized,
paranoid about father with decreased ability to function and attend to basic self care [sic].” The
certificate did not determine that a likelihood of harm to others existed, but stated that respondent
could not attend to her basic physical needs. The certificate noted that respondent presented
“[d]isheveled with decreased self care and reported decreased eating & weight loss.”
Petitioner, a social worker, filed a petition seeking mental health treatment for respondent.
Petitioner signified that she believed respondent had a mental illness, and checked the box
indicating “as a result of that mental illness, the individual is unable to attend to those basic
physical needs that must be attended to in order to avoid serious harm in the near future, and has
demonstrated that inability by failing to attend to those basic physical needs.” Petitioner based her
conclusions on her personal observations, stating that “[respondent’s] presentation today is very
similar to previous psychiatric admission for psychosis and delusional parasitosis.”
A court liaison, a registered nurse, prepared a report on alternative mental health treatment.
The liaison recommended hospitalization for up to 60 days, and assisted outpatient treatment
afterward, supervised by Washtenaw County Community Mental Health (WCCMH). The liaison
recommended that the assisted outpatient treatment involve respondent taking her prescribed
medications, working with treatment teams, and giving permission to communicate with her
family and all treatment providers, past, present, or future. The liaison acknowledged respondent’s
objection to communication with her family, but also noted: “It has been shown that she does
involve her father both when the relationship is resolved or in conflict[,]” and, at the time the
liaison wrote the recommendation, respondent resided with her father. The proposed order
indicated “WCCMH or appropriate hospitals” could speak with respondent’s family members,
treatment providers, past, present, and future, and any other “contacts needed for collateral
information and help with discharge planning.”
At the mental health hearing, Dr. Scott Mariouw, a staff psychiatrist at the hospital, and
respondent’s attending psychiatrist at the inpatient psychiatric unit, testified regarding
respondent’s treatment. Dr. Mariouw diagnosed respondent with unspecified psychotic disorder
attached to respondent’s thoughts, as opposed to an unspecified psychotic disorder attached to
respondent’s mood, and noted that respondent had “multiple psychiatric admissions in the past”
which included diagnoses of “various forms of psychotic disorders[,]” including unspecified
psychotic disorder and ongoing delusional thoughts. Dr. Mariouw stated that respondent often
went to hospitals complaining of parasites or insect infestations causing skin issues, but medical
evaluations did not reveal any infestation or infection. Dr. Mariouw also expressed concern
regarding respondent’s reports of abuse from “numerous family members” because it was difficult
to determine if these reports were delusions. Respondent’s delusions impaired her ability to
function, as evidenced by her frequent hospitalizations. While respondent had no suicidal or
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homicidal thoughts, Dr. Mariouw had concern that respondent’s delusions posed a risk of
unintentional harm.
Dr. Mariouw stated that he needed to “clarify what [the] dynamic” between respondent and
her father because the hospital wanted to respect respondent’s reports of abuse, but also needed to
consider the fact that respondent’s father sought guardianship and previously served as
respondent’s guardian. Dr. Mariouw also noted that respondent lived with her father recently but
planned to leave which sparked concern regarding her ability to function. Respondent did not
understand her need for treatment, solely focused on treating her attention-deficit/hyperactivity
disorder (ADHD), and only willingly took stimulants to treat her ADHD which worsened her
mental illness. Dr. Mariouw confirmed that respondent expressed that she did not want the hospital
to contact her father; and when respondent’s attorney asked if it would be possible to perform the
Adult Protective Services (APS) investigation first before contacting respondent’s father, Dr.
Mariouw had responded: “We’re happy to do that. Yes.”
Respondent’s counsel explained that respondent only objected to the order requiring mental
health respecting the provision allowing the hospital to contact respondent’s father. Respondent
pointed to Dr. Mariouw’s agreement to refrain from contacting respondent’s father until after the
APS investigation concluded and asked the trial court to “fashion a remedy that allows that to
happen.” The probate court determined that petitioner established by clear and convincing
evidence that respondent was a person requiring treatment because of her inability to attend to her
basic physical needs, noting her poor nutrition and isolation. The trial court acknowledged that
respondent did not understand her need for treatment, which increased her chances of relapse and
“present[ed] a substantial risk of significant physical or mental harm to herself or others.” The
court granted the petition but refused to restrict the hospital’s ability to contact respondent’s father.
It explained that it understood that respondent believed she suffered abuse at that hands of relatives
and others but declined to direct the hospital regarding how to treat her and in what order, leaving
such decisions to the hospital. The court expressed approval to Dr. Mariouw’s plan on how to
proceed.
II. PRESERVATION
“Generally, to preserve a claim of error for appellate review, the party claiming the error
must raise the issue in the trial court.” Redmond v Heller, 332 Mich App 415, 430; 957 NW2d
357 (2020). Respondent preserved her argument regarding the trial court’s refusal to incorporate
the parties’ agreement into its order by requesting that the trial court include in its order a
requirement that the hospital refrain from contacting respondent’s father until it completed its APS
investigation. Respondent, however, admits that she did not raise the issue of the petition’s factual
deficiency to the trial court, and therefore, this issue is not preserved for appellate review.
Although this Court need not address an unpreserved issue, it may overlook
preservation requirements when the failure to consider an issue would result in
manifest injustice, if consideration is necessary for a proper determination of the
case, or if the issue involves a question of law and the facts necessary for its
resolution have been presented. [Gen Motors Corp v Dep’t of Treasury, 290 Mich
App 355, 387; 803 NW2d 698 (2010) (citation omitted).]
-3-
III. STANDARD OF REVIEW
“This Court reviews for an abuse of discretion a probate court’s dispositional rulings and
reviews for clear error the factual findings underlying a probate court’s decision.” In re Portus,
325 Mich App 374, 381; 926 NW2d 33 (2018) (quotation marks and citation omitted). “An abuse
of discretion occurs when the probate court chooses an outcome outside the range of reasonable
and principled outcomes.” Id. (quotation marks and citation omitted). “We review de novo matters
of statutory interpretation.” Id. “A probate court’s finding is clearly erroneous when a reviewing
court is left with a definite and firm conviction that a mistake has been made, even if there is
evidence to support the finding.” Id. “The probate court necessarily abuses its discretion when it
makes an error of law.” Id. (quotation marks and citation omitted). “A lower court’s error is not
ground for granting a new trial, for setting aside a verdict, or for vacating, modifying, or otherwise
disturbing a judgment or order, unless refusal to take this action appears to the court inconsistent
with substantial justice. MCR 2.613(A).” Portus, 325 Mich App at 396 (quotation marks omitted).
“An error is harmless if it did not affect the outcome of the proceeding.” Id.
“We review unpreserved issues for plain error.” Demski v Petlick, 309 Mich App 404,
426-427; 873 NW2d 596 (2015). Specifically: “To avoid forfeiture under the plain error rule,
three requirements must be met: 1) the error must have occurred, 2) the error was plain, i.e., clear
or obvious, 3) and the plain error affected substantial rights.” Id. at 427 (citations and quotation
marks committed). “Generally, an error affects substantial rights if it caused prejudice, i.e., it
affected the outcome of the proceeding.” In re Utrera, 281 Mich App 1, 9; 761 NW2d 253 (2008).
IV. ANALYSIS
A. FACTUAL BASIS FOR PETITION
Respondent first argues that the petition was factually deficient and the trial court erred by
holding the mental health hearing. We disagree.
The trial court did not err by holding the mental health hearing because petitioner
adequately supported the petition with facts asserting that respondent required treatment. MCL
330.1434 of the Mental Health Code, MCL 330.1001 et seq., states the procedural and substantive
requirements for a petition for mental health treatment as follows:
(1) Any individual 18 years of age or over may file with the court a petition
that asserts that an individual is a person requiring treatment.
(2) The petition shall contain the facts that are the basis for the assertion,
the names and addresses, if known, of any witnesses to the facts, and, if known, the
name and address of the nearest relative or guardian, or, if none, a friend, if known,
of the individual.
(3) Except as provided in subsection (7), the petition shall be accompanied
by the clinical certificate of a physician or a licensed psychologist, unless after
reasonable effort the petitioner could not secure an examination. If a clinical
certificate does not accompany the petition, the petitioner shall set forth the reasons
-4-
an examination could not be secured within the petition. The petition may also be
accompanied by a second clinical certificate. If 2 clinical certificates accompany
the petition, at least 1 clinical certificate must have been executed by a psychiatrist.
(4) Except as otherwise provided in subsection (7) and section 455, a
clinical certificate that accompanies a petition must have been executed within 72
hours before the filing of the petition, and after personal examination of the
individual.
(5) If the individual is found not to be a person requiring treatment under
this section, the petition and any clinical certificate shall be maintained by the court
as a confidential record to prevent disclosure to any person who is not specifically
authorized under this chapter to receive notice of the petition or clinical certificate.
(6) The petition described in this section may assert that the subject of the
petition should receive assisted outpatient treatment in accordance with section
468(2)(d).
(7) A petition that does not seek hospitalization but only requests that the
subject of the petition receive assisted outpatient treatment is not subject to
subsection (3) or (4).
MCL 330.1401(1)(b) explains a “person requiring treatment” is:
An individual who has mental illness, and who as a result of that mental
illness is unable to attend to those of his or her basic physical needs such as food,
clothing, or shelter that must be attended to in order for the individual to avoid
serious harm in the near future, and who has demonstrated that inability by failing
to attend to those basic physical needs.
The parties do not dispute that respondent qualifies as a person requiring treatment.
Petitioner checked the box in the petition indicating respondent was unable to attend to her basic
physical needs which were required to avoid serious harm. Petitioner also asserted that respondent
presented “very similar” to her previous admissions for psychosis and delusional parasitosis. In
addition to the petition, two clinical certificates were provided by two psychiatrists, as required by
MCL 330.1434(3) and (4), who determined that respondent suffered from mental illness and
diagnosed respondent with unspecified psychotic disorder. The certificates noted respondent’s
paranoia and disorganization, inability to attend to her basic physical needs, and inability to
understand her need for treatment. One certificate also determined that respondent posed a risk of
unintentional harm. The certificates provided factual support for their conclusions, stating
respondent’s paranoia, disorganization, isolation in her home, poor nutrition, and disheveled
appearance. The facts stated in the petition were supported by the petitioner’s personal and
professional observations as a social worker. The two clinical certificates also set forth facts that
supported the petition with the doctors’ determinations. The petition, therefore, met the statutory
requirements and the probate court did not err by holding a hearing to determine whether
respondent required mental health treatment.
-5-
B. INCORPORATION OF PARTIES’ AGREEMENT
Respondent also contends that the trial court erred when it refused to incorporate into its
order requiring mental health treatment the parties’ agreement that the hospital refrain from
contacting respondent’s father until after the APS investigation. We disagree.
“A trial court has the inherent authority to control its own docket.” Baynesan v Wayne
State Univ, 316 Mich App 643, 651; 894 NW2d 102 (2016). “A court possesses inherent authority
to enforce its own directives.” Walworth v Wimmer, 200 Mich App 562, 564; 504 NW2d 708
(1993). A trial court also has the express authority to direct and control the proceedings before it.
MCL 600.611 provides that “[c]ircuit courts have jurisdiction and power to make any order proper
to fully effectuate the circuit courts’ jurisdiction and judgments.” “An exercise of the court’s
inherent power may be disturbed only upon a finding that there has been a clear abuse of
discretion.” Colen v Colen, 331 Mich App 295, 304; 952 NW2d 558 (2020) (quotation marks and
citation omitted). “An abuse of discretion occurs when a court chooses an outcome outside the
range of principled outcomes.” Id. Once the party seeking to add a new argument exceeds the
temporal window of amendment by right, the trial court has authority to refuse to consider a new
issue. Similarly, here, the trial court, in managing its own docket, had the discretionary authority
to not consider an agreement the parties made minutes earlier at the hearing in which the trial court
was tasked solely with determining whether the petition sufficed to warrant ordering respondent
to undergo mental health treatment.
Further, the trial court indicated that it would not dictate the manner in which the hospital
treated respondent and would not limit the hospital’s ability to speak to respondent’s family “in
the order that they think is most appropriate to her . . . wellness.” Dr. Mariouw indicated he would
refer for investigation respondent’s abuse allegations and would wait to discuss respondent’s
treatment with her father until after the APS investigation concluded. Further, because respondent
was hospitalized at the time, the hospital could protect her from any alleged abuse. The hospital,
however, may need to speak with respondent’s family and other treatment providers to gain insight
into respondent’s condition and treatment history to properly ascertain how her treatment should
proceed. Contact with respondent’s father may be especially significant, considering his past
guardianship and his interest in reinitiating guardianship. The trial court did not abuse its
discretion by declining to make a ruling on the parties’ impromptu, informal agreement that the
hospital refrain from contacting respondent’s father until the conclusion of an APS investigation.
Affirmed.
/s/ Kristina Robinson Garrett
/s/ Colleen A. O’Brien
/s/ James Robert Redford
-6- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487029/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
PEOPLE OF THE STATE OF MICHIGAN, UNPUBLISHED
November 17, 2022
Plaintiff-Appellee,
v No. 358226
Isabella Circuit Court
GREGERY ROBERT LYTLE, LC No. 2020-001338-FH
Defendant-Appellant.
Before: HOOD, P.J., and JANSEN and K. F. KELLY, JJ.
PER CURIAM.
Defendant appeals as of right his jury-trial conviction of assault with intent to do great
bodily harm less than murder (AWIGBH), MCL 750.84.1 Defendant was sentenced as a fourth-
offense habitual offender, MCL 769.12, to serve 42 months to 20 years’ imprisonment. We affirm.
I. BACKGROUND
Defendant showed up unannounced at his ex-girlfriend’s house in November 2020. When
she refused to let him into the house and told him to leave, he called her a “stupid b****” and
began punching her. Defendant punched the victim three times in the face, causing her to trip and
fall. While the victim was still on the ground, defendant kicked her in the mouth with his work
boots. The assault knocked out one of the victim’s front teeth, split another tooth in half, and
embedded two others into her gums. A few hours after the assault, defendant was arrested,
provided with Miranda warnings,2 and interviewed by a Michigan State Police Trooper. During
the interview, defendant admitted to striking the victim, and he was subsequently taken to jail.
1
The jury acquitted defendant of first-degree home invasion, MCL 750.110a(2), and aggravated
domestic violence, MCL 750.81a(2).
2
Miranda v Arizona, 384 US 436; 86 S Ct 1602 (1966).
-1-
II. PROSECUTORIAL MISCONDUCT
Defendant first argues that he was denied a fair trial and that his conviction should be
reversed because the prosecutor argued facts that were not in evidence during closing argument.
We disagree that reversal is required.
Because defendant failed to preserve the alleged error by a contemporaneous objection and
a request for a curative instruction, our review of this issue is under the plain-error doctrine. People
v Callon, 256 Mich App 312, 329; 662 NW2d 501 (2003). To obtain appellate relief, defendant
must show: (1) an error occurred, (2) the error was clear or obvious, and (3) the error affected
substantial rights. People v Carines, 460 Mich 750, 763; 597 NW2d 130 (1999). To satisfy the
third element, the defendant must show that the error “affected the outcome of the lower court
proceedings.” Id. Reversal is discretionary, and we will only reverse “when the plain, forfeited
error resulted in the conviction of an actually innocent defendant or when an error seriously
affected the fairness, integrity or public reputation of judicial proceedings independent of the
defendant’s innocence.” People v Allen, 507 Mich 597, 614; 968 NW2d 532 (2021) (quotation
marks and citations omitted).
Claims of prosecutorial misconduct are reviewed “on a case-by-case basis by examining
the record and evaluating the remarks in context . . . .” People v Mann, 288 Mich App 114, 119;
792 NW2d 53 (2010) (quotation marks and citation omitted; ellipsis in original). We examine the
prosecutor’s remarks “in context to determine whether they denied defendant a fair trial.” People
v Bahoda, 448 Mich 261, 267; 531 NW2d 659 (1995). Prosecutors are “accorded great latitude
regarding their arguments and conduct.” Id. at 282 (quotation marks and citation omitted). A
prosecutor “may not make a statement of fact that is unsupported by the evidence,” but “may argue
reasonable inferences arising from the evidence to the extent that the inferences relate to the
prosecutor’s theory of the case.” People v Lane, 308 Mich App 38, 67; 862 NW2d 446 (2014).
Defendant argues that he was denied a fair trial because the prosecutor relied on facts not
in evidence during his closing argument. In describing the assault to the jury, the prosecutor stated:
Aggravated domestic violence. The defendant tried to physically injure another
person.
* * *
[T]he Defendant tried to injure Morgan Prout or intended to make Morgan Prout
reasonably fear an immediate battery. Of course it [sic] did, because he hit her
more than one time. She isn’t just—and you heard testimony, it wasn’t a situation
she got hit just one time and kind of threw her hands up in the air like you need to
leave. She told her (sic) to leave. She told him to leave and he called her a stupid
bitch. And that’s what she gets according to what he told her, that’s what you get
for not letting me in your house. You’re just going to get beat, and that’s exactly
what happened. [Emphasis added.]
Defendant takes the emphasized remark literally, arguing that the prosecutor improperly stated
that defendant actually told the victim that he would assault her if she did not let him into the
house. More likely, the prosecutor was indicating that defendant figuratively told the victim,
-2-
through his actions and his vulgar name-calling, “[T]hat’s what you get for not letting me into your
house.” The victim testified that after she refused to let defendant into her house, he called her a
“stupid b****” and assaulted her. Prosecutors are generally given great latitude in their arguments,
and they are free to argue all reasonable inferences from the evidence that relate to their theory of
the case. Lane, 308 Mich App at 67; People v Unger, 278 Mich App 210, 236; 749 NW2d 272
(2008). The prosecutor’s theory was that defendant was angry that the victim denied him entry
into her home and wanted to make her regret it. When the remark is reviewed in context, it appears
that the prosecutor did not intend for his remark to be taken literally. It is difficult to find a “clear
or obvious” error in this situation. See Carines, 460 Mich at 763.
Regardless, even if the prosecutor’s remark was improper, defendant has failed to show
that reversal is warranted. The remark comprised only two sentences of a closing argument that
spanned six transcript pages. Such brief remarks are generally seen as inadequate to prejudice a
defendant, People v McLaughlin, 258 Mich App 635, 649; 672 NW2d 860 (2003), and it is highly
unlikely that the prosecutor’s remark here had such a substantial impact as to prejudice defendant.
The prosecutor’s statement was made in reference to the charge of aggravated domestic violence,
MCL 750.81a(2), of which defendant was acquitted. As such, defendant cannot show prejudice.
Further, this issue is not preserved, and unpreserved claims of prosecutorial misconduct do not
warrant reversal unless a curative instruction would have been an insufficient remedy. Unger, 278
Mich App at 235. Defendant has failed to show that a curative instruction would have been an
insufficient remedy. The jurors were instructed by the court that they could base their verdict only
on the evidence and that the lawyer’s statements, arguments, and commentary are not evidence.
Jurors are presumed to follow instructions, and defendant has not presented this Court with any
reason to conclude otherwise. See id. Thus, defendant has failed to show that the prosecutor’s
remark affected his right to a fair trial.3
III. SUFFICIENCY OF THE EVIDENCE
Defendant also argues that the prosecution presented insufficient evidence to prove beyond
a reasonable doubt that he was guilty of AWIGBH. We disagree.
We review de novo challenges to the sufficiency of the evidence, viewing the evidence “in
the light most favorable to the prosecution to determine whether a rational trier of fact could have
found that the essential elements of the crime were proved beyond a reasonable doubt.” People v
Roper, 286 Mich App 77, 83; 777 NW2d 483 (2009). “Due process requires that a prosecutor
introduce evidence sufficient to justify a trier of fact to conclude that the defendant is guilty beyond
a reasonable doubt.” People v Tombs, 260 Mich App 201, 206-207; 679 NW2d 77 (2003), aff’d
472 Mich 446 (2005). It is the trier of fact’s role to determine “the weight of the evidence or the
credibility of witnesses,” and we will not interfere with that role. People v Kanaan, 278 Mich App
3
We note that defendant made a cumulative error argument in his brief on appeal. However,
defendant alleged only one instance of alleged prosecutorial misconduct, which lacked merit, as
described above. As such, defendant’s cumulative error argument fails. See McLaughlin, 258
Mich App at 649 (the cumulative effect of several minor errors may warrant reversal where one
individual error would not); People v McPherson, 263 Mich App 124, 136; 687 NW2d 370 (2004)
(failure to properly brief the merits of an issue on appeal constitutes abandonment of the issue).
-3-
594, 619; 751 NW2d 57 (2008). “Circumstantial evidence and reasonable inferences arising
therefrom can constitute satisfactory proof of the elements of a crime.” People v Reddick, 187
Mich App 547, 551; 468 NW2d 278 (1991).
MCL 750.84 governs AWIGBH and provides, in part:
(1) A person who does either of the following is guilty of a felony
punishable by imprisonment for not more than 10 years or a fine of not more than
$5,000.00, or both:
(a) Assaults another person with intent to do great bodily harm, less than
the crime of murder.
(b) Assaults another person by strangulation or suffocation.
To obtain a conviction under MCL 750.84(1)(a), the prosecution must show “(1) an attempt or
threat with force or violence to do corporal harm to another (an assault), and (2) an intent to do
great bodily harm less than murder.” People v Parcha, 227 Mich App 236, 239; 575 NW2d 316
(1997). The assault element only needs to satisfy the traditional definition of assault. People v
Dillard, 303 Mich App 372, 378; 845 NW2d 518 (2013), abrogated on other grounds by People v
Barrera, 500 Mich 14; 892 NW2d 789 (2017).
Defendant argues that the evidence presented at trial was sufficient only to prove beyond
a reasonable doubt that he was guilty of aggravated assault, MCL 750.81a(1), not AWIGBH. This
argument is without merit. Defendant admitted that he assaulted the victim. The victim testified
that defendant arrived at her house unannounced, called her a “stupid b****,” struck her repeatedly
in the face, and kicked her in the mouth with his work boot. Defendant struck the victim with such
force that he knocked her front tooth out, broke another tooth in half, and jammed two more into
her gums. It is obvious that forcefully kicking an individual in the face with a work boot while
she lies defenseless on the ground would cause serious injury. The fact that defendant did such
kicking supports an inference that he intended to cause a serious injury. Defendant’s argument
that the victim’s injuries were not substantial enough to show he intended to cause great bodily
harm is unavailing. It is unnecessary for an injury to actually occur for an AWIGBH conviction,
but if one does occur, “the extent of any injury and the presumption that one intends the natural
consequences of one’s acts are both proper considerations for the jury.” Dillard, 303 Mich App
at 378. It is the jury’s role to weigh evidence, not this Court’s. Id. at 379; Kanaan, 278 Mich App
at 619. A reasonable jury could view the evidence sufficient to find that defendant intended to
inflict great bodily harm.
Affirmed.
/s/ Noah P. Hood
/s/ Kathleen Jansen
/s/ Kirsten Frank Kelly
-4- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487035/ | If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
LAKE SERVICE SHIPPING COMPANY, UNPUBLISHED
November 17, 2022
Plaintiff-Appellee,
v No. 356073
Muskegon Circuit Court
GRAND RIVER NAVIGATION COMPANY, INC., LC No. 18-005250-CK
Defendant-Appellant.
Before: GLEICHER, C.J., and RONAYNE KRAUSE and BOONSTRA, JJ.
PER CURIAM.
This contract dispute involves a barge—the McKee Sons—owned by plaintiff Lake Service
Shipping Company (LSSC) that was chartered by defendant Grand River Navigation Company
(GRNC). The charter party agreement required GRNC to “maintain and repair the Vessel, together
with her machinery, appurtenances and spare parts, in a good state of repair and in seaworthy,
good and efficient operating condition[.]” LSSC brought this lawsuit, alleging that GRNC
breached the agreement by prematurely returning the vessel in a deplorable, non-seaworthy
condition. After a four-day trial, the jury agreed and awarded LSSC over $11 million in damages.
Among other smaller challenges, GRNC complains that the trial court improperly deemed
the phrase “then value” in the escape clause of the agreement ambiguous and allowed the jury to
determine its meaning. We discern no error and affirm.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
LSSC is the subsidiary of a mining company headquartered in Muskegon. It owns the
McKee Sons, a “self-unloading barge” that requires a tugboat for movement. However, LSSC
does not have the means to operate its own shipping services. Accordingly, in 2000, LSSC entered
a charter party agreement with GRNC, a large shipping company, to maintain and operate the
vessel. Under the agreement, GRNC was required to make charter (lease) payments to LSSC. It
was also fully responsible for the maintenance, repair, and operation of the vessel. The parties
renewed the agreement several times, with its final term set to expire in 2018.
-1-
As required by ¶¶ 1 and 4 of the 2000 agreement, LSSC delivered the McKee Sons to
GRNC “in class and in suitable condition to obtain its U.S. Coast Guard inspection certificate” and
“in good operating and seaworthy condition.” GRNC sailed the McKee Sons on the Great Lakes
for 12 years, until December 2012. By that time, the McKee Sons needed structural steel repairs
to remain in a seaworthy and good operating condition. GRNC placed the McKee Sons in “laid
up” status and did not perform any necessary repairs, either structural or more run-of-the-mill.
GRNC claimed that it intended to eventually put the McKee Sons back in service and continued
to make its charter payments throughout 2013 and 2014. However, in December 2014, GRNC
returned the McKee Sons to LSSC’s dock in Muskegon. When GRNC returned the barge, rotting
perishable goods remained unremoved. Barrels and cans of paint, gasoline, and other hazardous
waste had to be hauled away by specialists. Pipes had burst and electrical systems had rotted.
Below deck was a toxic wasteland. Even worse, it appears that GRNC may have looted the ship
for parts. The exhaust system was missing as were several critical machinery parts. After it
returned the vessel, GRNC notified LSSC that it was terminating the charter agreement under
¶ 15(a) because it opined that the cost of necessary repairs exceeded the then value of the vessel.
LSSC filed suit, alleging that GRNC breached the charter agreement. Relevant to this
appeal, ¶ 3(a) of the 2006 charter agreement provided:
[GRNC] agrees that at all times during the Term of this Agreement [GRNC]
shall maintain and repair the Vessel, together with her machinery, appurtenances
and spare parts, in a good state of repair and in a seaworthy, good and efficient
operating condition, always in accordance with the standards of the American
Bureau of Shipping [ABS], the United States Coast Guard and good commercial
maintenance practices. Repairs and maintenance include the costs of special
surveys due in 2003, 2008, 2013, and 2018, should [GRNC] elect to exercise its
option to extend this Agreement beyond 2018.
Paragraph 3(c) further provided that the parties “shall endeavor to mutually agree on repairs or
maintenance to be performed” and if they cannot, then qualified experts would evaluate the vessel
and deem what repairs and maintenance are necessary. Paragraph 6 also governed GRNC’s duty
to maintain the vessel, providing, “From the time of delivery to the expiration of the Agreement,
[GRNC] shall, at its own expense or by its own procurement, . . . repair and maintain the Vessel”
and requiring GRNC to bear the cost of “repairs and maintenance.”
Paragraph 11 governed the return of the vessel at the end of the contract:
[GRNC] agrees . . . that upon termination of this Charter, whether by limitation or
otherwise, to return said Vessel to [LSSC] at Muskegon, Michigan, or other agreed
Great Lakes location, in like good condition, ordinary wear and tear excepted. . . .
LSSC alleged that GRNC breached these provisions.
GRNC invoked ¶ 15(a) of the charter agreement in support of its early termination of the
agreement:
The parties hereto further mutually agree that in the event of a total loss
and/or constructive total loss of said Vessel, or if it has been irreparably damaged,
-2-
Charter hire payment shall terminate upon the date of said loss, and any prepaid
Charter hire shall be returned by [LSSC] to [GRNC]. In the event, however, of a
loss other than total loss or constructive total loss, irrespective of the cause of the
same, force majeure always excepted, or the duration of the delay occasioned
thereby, the Charter hire payment shall be paid in full as hereinbefore specified.
If at any time during the Term of the Charter under the Agreement the cost
of all required structural repairs necessary for [GRNC] to remain in compliance
under this Agreement at the time of each five year classification society inspection
due to normal wear and tear exceeds the then value of the Vessel, the Charter under
this Agreement may be terminated by [GRNC] upon 20 days’ written notice to
[LSSC]. In that event, the hire is to be prorated from the last yearly term payment.
[Emphasis added.][1]
The first paragraph of this provision relieves GRNC of its duty to maintain or repair the barge if
an event occurs resulting in a total or constructive loss of the vessel. The second paragraph
addresses “required structural repairs” “due to normal wear and tear.” If the cost of making the
structural repairs “exceeds the then value of the vessel,” GRNC did not have to undertake the cost.
GRNC sought summary disposition of LSSC’s suit based on ¶ 15(a) before trial, but the
trial court denied that motion. During the ensuing four-day jury trial, the parties presented
significant evidence related to their business dealings and contract negotiations, their
interpretations of the agreement language, the condition of the McKee Sons upon its return in
December 2014, the repairs needed and their costs, and GRNC’s lack of maintenance of the McKee
Sons between December 2012 and December 2014.
The parties also presented evidence regarding the ABS surveys conducted on the vessel.
The parties agreed that in order to maintain ABS class certification, vessels are subject to various
surveys. During a five-year survey, a vessel is taken out of the water and put on blocks for a
thorough inspection (also known as being “dry-docked”), including evaluation of the thickness of
the vessel’s steel hull using steel gauging. At a certain level of deterioration, steel must be
replaced. The McKee Sons was scheduled for a special survey in 2012. However, unlike saltwater
vessels, vessels in the Great Lakes can obtain a one-year extension of this survey by undergoing a
“year-of-grace survey.” During this year-of-grace survey, problems will still be identified and the
vessel will have to undergo necessary repairs to address any readily apparent issues.
1
The second paragraph of ¶ 15(a) was changed from the original 2000 agreement. In the original
agreement, the second paragraph of ¶ 15(a) provided:
If at any time during the Term of this Charter the cost of any required operational
repairs to equipment and machinery exceeds the then value of the Vessel, this
Charter may be terminated by [GRNC] upon 20 days’ written notice to [LSSC]. In
that event, the hire to be prorated from the last yearly term payment.
-3-
The McKee Sons underwent a year-of-grace survey in 2012, effectively postponing the
special survey until 2013. In anticipation of the 2013 special survey, GRNC evaluated the McKee
Sons for needed repairs, including undertaking visual inspections and ultrasonic readings related
to steel thickness. GRNC determined what repairs would likely be required, including structural
steel work, and secured quotes for the work. It then created a 10-year plan for completing that
work. GRNC never followed through with the 2013 special survey and the ABS neither confirmed
what work was required nor approved the repair plan.
At trial, the parties presented highly varying testimony regarding the costs of necessary
repairs to the McKee Sons, from a low of approximately $3.2 million to a high of $9 million. They
also presented evidence regarding the value of the McKee Sons. An expert appraiser hired by
GRNC opined that in its present condition, the McKee Sons had a fair market value of $3 million.
Its liquidation value if it were sold for scrap was $2.5 million. Alternatively, if sold as a
“permanently moored facility,” the McKee Sons would have a value of $5 million. However, if
the McKee Sons were repaired, such that it was operational and in class with all its certificates, its
fair market value would have been $14 million with a liquidation value of $11 million.
Given the wide gap in valuation and repair estimates, the parties heatedly debated the
meaning of the phrase “then value” in ¶ 15(a) of the charter agreement. GRNC contended that
¶ 15(a) was unambiguous and that it applied to the facts of this case because the McKee Sons’
value at the time of the special survey—without repairs—was exceeded by the costs of the repairs
needed, including the year-one repairs as well as repairs that could be performed in later years.
LSSC took the position that ¶ 15(a) was ambiguous and could be read to refer to the McKee Sons’s
value after repairs are made. LSSC also argued that the repairs at issue were the year-one repairs
required at the time of the 2013 survey, not additional repairs mapped out in the 10-year plan.
GRNC sought a directed verdict on this issue, just as it had sought summary disposition. The trial
court denied GRNC’s motion. The trial court concluded that ¶ 15(a) was ambiguous and instructed
the jury on the interpretation of ambiguous contracts consistent with the Michigan civil jury
instructions.
The jury found that GRNC had breached the charter agreement “in one or more ways” and
awarded LSSC $11,825,685 in damages. The trial court subsequently denied GRNC’s motions
for judgment notwithstanding the verdict (JNOV), a new trial, or remitter. GRNC now appeals.
II. ANALYSIS
As noted, GRNC filed motions for summary disposition, directed verdict, and JNOV, all
of which were denied by the trial court. We review these decisions de novo. Foreman v Foreman,
266 Mich App 132, 135; 701 NW2d 167 (2005). We review for an abuse of discretion the trial
court’s denial of GRNC’s request for a new trial. Moore v Detroit Entertainment, LLC, 279 Mich
App 195, 223; 755 NW2d 686 (2008). In considering these motions, we must review the evidence
in the light most favorable to the nonmoving party to determine whether there existed a material
factual question for the jury’s consideration, and we may not substitute our judgment for the jury’s
when reasonable jurors could disagree on the evidence. See Anaya v Betten Chevrolet, Inc, 330
Mich App 210, 215-216; 946 NW2d 560 (2019) (directed verdict); Landin v Healthsource
Saginaw, Inc, 305 Mich App 519, 545-546; 854 NW2d 152 (2014) (JNOV); Zaher v Miotke, 300
Mich App 132, 139-140; 832 NW2d 266 (2013) (summary disposition under MCR 2.116(C)(10));
-4-
Taylor v Kent Radiology, PC, 286 Mich App 490, 525; 780 NW2d 900 (2009) (a motion for new
trial is based on the great weight of the evidence, and we give deference to the finder of fact).
GRNC’s challenges are based on the interpretation of the charter agreement. We review
de novo legal questions regarding the proper interpretation of a contract, “including whether the
language of a contract is ambiguous and requires resolution by the trier of fact.” DaimlerChrysler
Corp v G Tech Prof Staffing, Inc, 260 Mich App 183, 184-15; 678 NW2d 647 (2003). GRNC’s
challenges also involve the instructions provided to the jury. We review de novo legal questions
regarding jury instructions, but review for an abuse of discretion a trial court’s determination
whether an instruction applies to the facts of a case. Moore v Detroit Entertainment, LLC, 279
Mich App 195, 223; 755 NW2d 686 (2008).
A. “THEN VALUE” IN ¶ 15(a) IS AMBIGUOUS
We begin with GRNC’s challenges based on ¶ 15(a) of the charter agreement.
A charter party contract is “maritime in nature.” Simon v Intercontinental Transp (ICT)
BV, 882 F2d 1435, 1441 (CA 9, 1989). Federal common law regarding maritime contracts governs
the interpretation of the charter agreement. Norfolk S R Co v Kirby, 543 US 14, 22-23; 125 S Ct
385; 160 L Ed 2d 283 (2004). Indeed, the charter agreement expressly indicated that it would be
governed by federal admiralty law.
When it comes to the identification of contractual ambiguity, federal law differs markedly
from Michigan law. In Michigan, we find contractual ambiguities only rarely; “ ‘ambiguity is a
finding of last resort . . . .’ ” Kendzierski v Macomb Co, 503 Mich 296, 311931 NW2d 604 (2019),
quoting Lansing Mayor v Pub Serv Comm, 470 Mich 154, 165 n 6; 680 NW2d 840 (2004). An
ambiguity may be found only when two provisions of the same contract “irreconcilably conflict”
with each other. Klapp v United Ins Group Agency, Inc, 468 Mich 459, 467; 663 NW2d 447
(2003).
Under federal law, “[a] contract that is reasonably and fairly susceptible of more than one
meaning is said to be ambiguous.” Ingersoll Milling Machine Co v M/V Bodena, 829 F2d 293,
306 (CA 2, 1987). This standard focuses on whether the competing interpretations of the language
in question are equally reasonable, not whether they irreconcilably conflict. Extrinsic evidence
cannot be used to find ambiguity; that decision must be made from the four corners of the
document. In re Fitzgerald Marine & Repair, Inc, 619 F3d 851, 858 (CA 8, 2010). However,
once a contract is deemed ambiguous, extrinsic evidence can be relied upon to determine its
meaning. Royal Ins Co of America v Orient Overseas Container Line Ltd, 525 F3d 409, 422 (CA
6, 2008)
The phrase at issue in this case is short and simple: “then value.” The parties agree on the
meaning of the word “value”: the amount of money that the barge could be sold for in the barge
market. The word “then,” however, is trickier. There are two equally reasonable interpretations
of the phrase when it is construed in the context of the entire agreement.
The phrase “then value” appears in a paragraph of the charter agreement addressing
GRNC’s obligation to perform “structural repairs” on the barge during the period of the charter,
for the purpose of keeping the vessel in seaworthy condition. As noted, other paragraphs—3, 6,
-5-
and 11—describe more generally GRNC’s duty to actively maintain the barge in seaworthy
condition. Read as a whole, the contract communicates that GRNC was contractually bound to
keep the barge in good repair and to maintain its seaworthiness. Abundant trial evidence supported
that GRNC did not do so. LSSC contended, and the jury found, that by returning the vessel in its
condition, GRNC breached the charter agreement. The larger issue, however, is whether GRNC’s
maintenance obligation included making the structural repairs that were necessary to maintain the
vessel’s seaworthiness. LSSC sought the cost of these structural repairs and the jury likely
included these costs in its large verdict.
Neither side contested that the barge needed structural repair work to pass the five-year
survey. GRNC’s defense centered on ¶ 15(a) of the charter agreement, which it claimed absolved
it from performing the structural repairs required in other provisions of the agreement. As noted,
¶ 15(a) read:
If at any time during the Term of the Charter under the Agreement the cost
of all required structural repairs necessary for [GRNC] to remain in compliance
under this Agreement at the time of each five year classification society inspection
due to normal wear and tear exceeds the then value of the Vessel, the Charter under
this Agreement may be terminated by [GRNC] upon 20 days’ written notice to
[LSSC]. In that event, the hire is to be prorated from the last yearly term payment.
[Emphasis added.]
The trial court determined that the meaning of “then value” was ambiguous, as it could
relate to the value of the vessel at the time of the five-year survey before any needed structural
steel repairs were undertaken, or it could also refer to the value of the vessel after the structural
repairs were accomplished. We discern no error in this assessment. “Then” can refer to a time in
the past or the future. For example, “I was living in Southfield then” relates to a past event, while
“give me the book next week, I won’t have time to read it until then” refers to the future. The
question presented here is whether the meaning of “then value” in its context in the charter
agreement is reasonably susceptible of more than one plausible interpretation. GRNC urges that
“then value” relates to the value of the barge at a singular moment in time: before the undertaking
of a five-year survey of the vessel’s seaworthiness. At the time of the five-year inspection at issue
here, the barge needed millions of dollars of structural steel work. Because GRNC had not
properly maintained and repaired the vessel during the years before the survey, the vessel was not
seaworthy at that point in time, and its market value had plummeted.
GRNC offers a reasonable interpretation of the contractual language. But a different
interpretation—that “then value” relates to the market value of the barge after the monetary
investment necessary to pass the five-year survey—is also reasonable. Therefore, the “then value”
paragraph of the charter agreement is ambiguous.
The trial evidence substantiates that at the time the five-year survey should have occurred,
the vessel had fallen into disrepair and was unseaworthy. Viewed in the light most favorable to
the jury’s verdict, due to GRNC’s breach of its maintenance responsibilities, the barge was an
inoperable mess. And indisputably, it needed structural repairs.
-6-
GRNC claimed that at that point, the value of the ship was $3 million, while the cost of the
needed repairs exceeded $4.8 million. The jury was permitted to consider the evidence GRNC
marshalled in support of this claim, and GRNC’s argument that ¶ 15(a) allowed it to return the
vessel without replacing the worn-out steel.2 LSSC contended that the cost of the structural repairs
was between $3.2 and $3.9 million, and that the barge was worth more than that. The jury
considered this evidence and LSSC’s extrinsic evidence supporting that ¶ 15(a) could not be
construed as meaning that the vessel’s “then value” was equal to its value before the necessary
repairs.
The “then value” sentence of ¶ 15(a) contains two references to time. The first
encompasses the entire term of the charter: “If at any time during the Term of the Charter under
this Agreement the cost of all required structural repairs necessary for [GRNC] to remain in
compliance under this Agreement . . . .” (Emphasis added.) The second, which immediately
follows, refers to the time of the five-year survey: “[T]he cost of all required structural repairs
necessary for [GRNC] to remain in compliance under this Agreement at the time of each five year
classification [ABS] inspection due to normal wear and tear exceeds the then value of the
Vessel . . . .” (Emphasis added.)
Both references to time require consideration, because the individual, discrete words of a
contract should be read holistically and within the context of the entire agreement. “[C]ontractual
terms must be construed in context and read in light of the contract as a whole[.]” Auto Owners
Ins Co v Seils, 310 Mich App 132, 148; 871 NW2d 530 (2015) (citations omitted). See also LLOG
Exploration Co, LLC v Signet Mar Corp, 673 Fed App’x 422, 425 (CA 5, 2016). Interpreted in
that spirit, ¶ 15(a) could reflect the parties’ intent that the “then value” of the vessel relates to the
value “during the time of the charter,” or at the time of each five-year survey. The ambiguity is
patent, and is reinforced when all the words of this sentence are subjected to a practical analysis
consistent with the rest of the charter agreement.
The parties intended that GRNC would maintain and repair the barge as needed to maintain
its seaworthiness. This proposition was expressed in ¶¶ 3(a), 3(c), 6, and 11. Another way of
looking at this mandate is that GRNC was charged with, and accepted, the obligation to maintain
the value of the vessel. LSSC expected—and the parties contracted for—the return of a seaworthy
barge. In that context, it makes little sense to interpret ¶ 15(a) as a “get out of jail free” card for
GRNC, absolving it of its ongoing responsibility to repair and maintain the vessel by allowing it
to fall into such disrepair that the cost of fixing it would exceed its damaged and trashed value.
Instead, one reasonable interpretation of this paragraph is that the parties intended that “then value”
refers to the value of a properly maintained, repaired, and seaworthy vessel, since that is what
GRNC agreed to return to LSSC. Given these differing, reasonable interpretations, the trial court
did not err in finding an ambiguity.
2
During oral argument on GRNC’s motion for a directed verdict, the trial court summarized
GRNC’s position regarding ¶ 15(a) as follows: “If the jurors find that Paragraph 15(A) applies
then that essentially gives you a trump card over other perceived violations, correct?” Counsel for
GRNC answered affirmatively.
-7-
B. “ALL REQUIRED STRUCTURAL REPAIRS”
GRNC also challenges the trial court’s interpretation of the phrase “all required structural
repairs” in ¶ 15(a). GRNC asserts that the phrase refers to all repairs mandated by the five-year
survey, but that might not be required until a year or more after the survey. However, GRNC
improperly isolates the phrase from its context in ¶ 15(a). The relevant language refers to “the
cost of all required structural repairs necessary for [GRNC] to remain in compliance under this
Agreement at the time of each five year classification society inspection due to normal wear and
tear.” This language is clear and contains an unambiguous temporal limitation. That is, the
relevant costs are those for repairs required to remain in compliance “at the time” of the five-year
survey. Any repairs that will not be required by the ABS until later years are, by definition, not
required to remain in compliance “at the time” of the survey. Accordingly, GRNC could not rely
on the higher cost of repairs that it deemed would be required at later years in its 10-year plan to
inflate the cost of repairs over the then-value of the vessel.
C. BREACH OF OTHER PROVISIONS
As GRNC could not rely on ¶ 15(a) to prematurely terminate the charter agreement, we
need not address its claim that ¶ 15(a) negated all of its contractual duties and thereby defeated all
of LSSC’s breach of contract claims. Ultimately, the charter agreement remained in place and
GRNC was required under several contractual provisions to maintain and repair the vessel. Given
the deplorable condition in which the McKee Sons was returned to LSSC, the jury easily could
determine that GRNC failed to perform as the contract required. Indeed, by its own admissions,
GRNC stopped all maintenance in December 2012, long before it gave notice of its intent to
terminate the contract.
D. SUBSTANTIAL BREACH DOCTRINE
GRNC further complains that the trial court improperly instructed the jury on the first-
substantial-breach doctrine, which LSSC allegedly invoked to preclude GRNC’s reliance on
¶ 15(a) to terminate the agreement. GRNC mischaracterizes the record.
At trial, LSSC specifically requested an instruction to the effect that “a party who breaches
a contract cannot in turn . . . rely upon terms of the contract to justify its breach.” GRNC objected,
asserting that LSSC was attempting to invoke the first-substantial-breach doctrine, which did not
apply. The trial court agreed with GRNC, concluding that the doctrine did not apply to the facts
of this case and declined to give LSSC’s proposed instruction.
The trial court did, however, instruct the jury on the parties’ respective theories of the case.
LSSC’s theory of the case stated, in part:
[LSSC] contends that [GRNC’s] reliance on [¶ 15(a)] is misplaced for the reason
that, one, [GRNC] was in breach of the [charter party agreement] for nearly two
years prior to the alleged terminations and, two, the cost of the necessary structural
repairs for the vessel did not exceed here—quote: then value, as the phrase is
commonly used.
-8-
GRNC objected to this statement of LSSC’s theory, asserting that this argument implicated the
substantial-breach doctrine, which the trial court had already ruled inapplicable. The trial court
overruled GRNC’s objection and read LSSC’s theory of the case, including the language set forth
above. However, the court asked LSSC’s counsel to refrain from using language to suggest that
GRNC’s breach before termination was a “disqualifier” that precluded invocation of ¶ 15(a).
Counsel complied with that request. When reading the parties’ theories, the trial court specifically
instructed the jury that they were the parties’ theories of the case and that the court had no
preference for either theory. The jury was also told that the court would instruct it on the law and
that the jury must “take the law” as instructed by the court.
Considering the trial court’s rulings and instructions, GRNC is not entitled to relief. GRNC
received the relief it requested—the trial court did not instruct the jury on the first substantial
breach doctrine. There is no further relief this Court could provide. See People v Miller (After
Remand), 211 Mich App 30, 42-43; 535 NW2d 518 (1995) (“[D]efendant objected below, and the
court struck the testimony. Defendant has already received his relief.”).
Moreover, to the extent LSSC’s theory of the case discussed the interplay between ¶ 3(a)
and ¶ 15, there was no error. Contrary to GRNC’s arguments, ¶ 15(a) is not a trump card that
retroactively cures prior breaches unrelated to the structural repairs at issue in ¶ 15(a). LSSC’s
theory that GRNC was in breach of ¶ 3(a) for two years before attempting to invoke ¶ 15(a) was
entirely consistent with the evidence and the charter agreement. Also contrary to GRNC’s
arguments, LSSC’s theory of the case did not implicate the substantial-breach doctrine; that is,
after the trial court made its ruling, LSSC did not argue that GRNC’s prior breach precluded or
disqualified it from invoking ¶ 15(a). And, in any event, the trial court’s jury instructions were
clear. The parties’ theories of the case were simply the parties’ theories. The jury was instructed
to apply the law as given to it by the judge. Jurors are presumed to follow their instructions.
Ykimoff v Foote Mem Hosp, 285 Mich App 80, 109; 776 NW2d 114 (2009).
We affirm.
/s/ Elizabeth L. Gleicher
/s/ Amy Ronayne Krause
-9- | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494084/ | REASONS FOR DECISION
HENLEY A. HUNTER, Bankruptcy Judge.
This matter is under advisement on the Defendants’ Motion to Dismiss. This *868Court has jurisdiction over cases and adversary proceedings pursuant to 28 U.S.C. § 1334 and by reference from the District Court, pursuant to Uniform District Court Rule 83.4, incorporated into Local Bankruptcy Rule 9029.3. No party has sought to withdraw the reference and the District Court has not done so on its own motion. Pursuant to these reasons, the Defendants’ Motion to Dismiss is Granted.
Findings of Fact
House of Mercy, Inc, is the Debtor-In-Possession in the above-captioned Chapter 11 case filed on November 3, 2004. Debt- or operated a healthcare business as a supplier of wheelchairs or “durable medical equipment or ‘DME,’ prosthetics, or-thotics and supplies” (DMEPOS supplier), as regulated by Medicare under a Medicare provider number. The plaintiff alleges the defendants wrongfully revoked its Medicare provider number on November 9, 2004, without a hearing, after notifications sent in September of 2004 from the Center for Medicare Services (CMS) indicated that an audit of the plaintiff showed it to be in violation of seven out of twenty-one provider requirements. The plain-tifiydebtor-in-possession seeks from the defendants reimbursements in the amount of $486,687.23 it claims became due prior to the revocation of its provider number.
The following excerpt most succinctly explains the general relationship between plaintiff and CMS:
Part A of the Medicare Act, established by Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq., in relevant part provides for payment on behalf of eligible beneficiaries for certain home health services furnished by home health agencies. 42 U.S.C. § 1395d. The Secretary of the United States Department of Health and Human Services (“HHS”) administers the Medicare Program and has delegated this function to the Health Care Financing Administration (“HCFA”), a component of HHS. A home health agency that meets Medicare certification standards may enter into a provider agreement with HCFA, 42 U.S.C. § 1395ec, and be reimbursed for the reasonable cost of covered services, as determined under detailed statutory and regulatory criteria. 42 U.S.C. §§ 1395f(b), 1395h, 1395x(v); 42 C.F.R. § 413.1 et seq. HHS’s payment scheme pays providers periodically on an interim basis on estimates of the provider’s projected cost for the entire year. 42 C.F.R. § 413.64(b), (e). After interim payments are made, audits are conducted that may reveal any under- or over-payments made to providers. Such under- or overpayments are corrected through ongoing adjustments in subsequent Medicare reimbursements. 42 C.F.R. § 405.371(a)(2), 3413.64(e), (h)(7). HHS is allowed to adjust payments to providers as is necessary to properly balance payments to providers. 42 U.S.C. § 1395g(a). The review of the interim payments is conducted by a fiscal intermediary, generally a private insurance company. 42 C.F.R. § 413.20(b), 413.24(f).
AHN Homecare, L.L.C. v. Home Health Reimbursement & Health Care Financing Admin., 222 B.R. 804, 805 (Bankr.N.D.Tex.1998).
The defendants assert in the memorandum in support of this motion, that the plaintiff received notice of the violations of the supplier standards and had an opportunity to provide evidence of compliance, but neither showed such compliance nor timely appealed the revocation decision. In a letter to the plaintiff dated October *86913, 2004, by the National Supplier Clearinghouse who conducted the audit of House of Mercy, Inc., the plaintiff was notified of the pending revocation of the provider number and instructed that plaintiff could request a hearing in writing within 90 days of the postmark of that letter. (CMS Exhibit 3.) Although the complaint asserts that plaintiff was “never afforded the right to a hearing,” the complaint never asserts that a written request for a hearing was ever timely made. Rather, plaintiff filed the Chapter 11 Petition just days before the revocation became effective.
Applicable Law and Analysis
The instant Motion to Dismiss under F.R.C.P. 12(b)(1),(2),(4),(5), and (6) was filed by the defendants. Under the guidance of In re Canion, this Court is mindful that “Federal courts must be assured of their subject matter jurisdiction at all times.” In re Canion, 196 F.3d 579, 584 (5th Cir.1999), citing, Bass v. Denney (In re Bass), 171 F.3d 1016, 1021 (5th Cir.1999). Therefore, defendants’ motion pursuant to F.R.C.P.12(b)(l), to dismiss for lack of subject matter jurisdiction, must be analyzed first. “Federal courts are courts of limited jurisdiction, and bankruptcy courts are no exception. Their jurisdiction is “wholly grounded in and limited by statute.’ ” Id. at 584.
Plaintiffs claim for reimbursements and the assertion of wrongful revocation of the provider number arise under and are governed by the Medicare Act, 42 U.S.C. § 1395 et seq. 42 U.S.C. § 405(h), through 42 U.S.C. § 1395Ü precludes judicial review of the Secretary’s determinations concerning the Medicare program, except as provided for in the Act itself, in stating:1 “The findings and decision of the Secretary after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Secretary, or any officer or employee thereof shall be brought under Section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.”
The Medicare statutory scheme limits judicial review of claims arising under the Act to those which have exhausted the administrative remedies including presentment of the claim to the Secretary and an exhaustion of the review/appeal procedures. 42 U.S.C. §§ 405(h) and 1395ff and 42 C.F.R. § 405.857. The statute requiring exhaustion of administrative remedies is not limited to decisions of the Secretary, be they of law or fact, but that requirement extends to “any action seeking to recover on any claim.” Mid-Delta Health Systems, Inc. v. Shalala, 251 B.R. 811, 813 (Bankr.N.D.Miss.1999)(emphasis supplied)(finding the bankruptcy court lacked subject matter jurisdiction over an adversary proceeding by Chapter 11 debtor seeking recalculation of overpaid reimbursements and other constitutional chal*870lenges until the exhaustion requirement was met), citing, Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975); AHN Homecare, L.L.C. v. Home Health Reimbursement & Health Care Financing Admin., 222 B.R. 804, (Bankr.N.D.Tex.l998)(bankruptcy court had no subject matter jurisdiction over a declaratory judgment action seeking determination of amounts due between home health care provider and the Department of Health and Human Services). It matters not that plaintiff mentions the wrongful revocation claim is made under the Due Process clause in that § 405(g) is the exclusive means of judicial review, especially considering the prayer for relief seeks reinstatement of the number. Bodimetric Health Services v. Aetna Life & Cas., 903 F.2d 480 (7th Cir.1990) cert. den. 498 U.S. 1012, 111 S.Ct. 579, 112 L.Ed.2d 584 (1990); See Heckler v. Ringer, 466 U.S. 602, 615, 104 S.Ct. 2013, 2021, 80 L.Ed.2d 622 (1984)(finding that § 405(h) precludes judicial review of Medicare provider claims that are “inextricably intertwined” with the Medicare Act payment determinations, before the administrative remedies are exhausted). Although it is plausible that the claim for wrongful revocation could be considered “wholly collateral” to the claim for reimbursements, under the guidance of Bodimetric, it appears that courts have previously considered claims to be “wholly collateral” when the accompanying claim is a state or other federal law claim that does not “arise under” the Medicare Act. Id., 903 F.2d 480. Here, both the claim for reinstatement of the number and the claim for reimbursements arise under the Medicare Act, and plaintiff, according to the pleadings presented thus far, never requested a hearing on the revocation decision, and instead, filed a Chapter 11 petition. Therefore, plaintiffs assertion that it is not bound to exhaust its administrative remedies under the Act is without merit.
In its response to the motion, plaintiff argues that 28 U.S.C. § 1334 grants this Court jurisdiction over this matter. However, the United States Fifth Circuit Court of Appeals has held that the “plain language of 1334(b) does not purport to give the district court exclusive jurisdiction over all matters arising under Title 11 to the exclusion of administrative agencies; rather, 1334(b) grants the district court concurrent jurisdiction over matters that would otherwise lie within the exclusive jurisdiction of another court.” MCorp Financial, Inc. v. Board of Governors, 900 F.2d 852, 855 (5th Cir.1990). Again, the case of AHN Homecare, L.L. C. v. Home Health Reimbursement & Health Care Financing Admin., 222 B.R. 804, 807-810, best explains why § 1334 does not grant this court jurisdiction in this matter:
The most extensive and detailed analysis of the jurisdictional intersection of § 405(h) and § 1334 was conducted by the court in In re St. Mary Hospital, 123 B.R. 14 (E.D.Pa.1991). St. Mary involved a home health provider that filed bankruptcy once an audit by HHS revealed overpayments. After filing Chapter 11 relief, the trustee filed an counterclaim with the bankruptcy court seeking declaratory relief and turnover of property. HHS filed a motion to dismiss contending that St. Mary Hospital had not exhausted all of its administrative remedies as provided under the Medicare Act, thus such action in the bankruptcy court was precluded under § 405(h). The court turned to the legislative history behind § 405(h) and § 1334 and stated:
When enacted in 1939, section 405(h) barred all actions brought pur*871suant to 28 U.S.C. § 41, including the grant of bankruptcy jurisdiction to the district court under section 41(19). See Social Security Act Amendments of 1939, Pub.L. No 379, § 205(h), 53 Stat. 1360, 1371 (1939); 42 U.S.C. § 405(h) (1982) (codification note). Certainly, if this suit had been brought then, it would have been barred. When section 41 was replaced with the current jurisdictional provisions, sections 1331 to 1348, 1350 to 1357, 1359, 1397, 2361, 2401 and 2401 of Title 28, the council for the Office of Law Revision recommended to Congress that it modify 405(h) to its present form. Congress adopted the proposed amendments in the Deficit Reduction Act of 1984, Subtitle D, Technical Corrections, using the following language: “section 205(h) [42 U.S.C. § 405(h)] of such Act is amended by striking out ‘section 24 of the Judicial Code of the United States’ [codified as section 41 of Title 28] and inserting in lieu thereof ‘section 1331 or 1346 of title 28, United States Code,’.” Pub.L. No. 98-369, 98 Stat. 1162 § 2663(a)(4)(D). Congress also cautioned the courts not to interpret the “Technical Corrections” as substantive changes:
[T]he amendments made by section 2663 shall be effective on the date of the enactment of this Act; but none of such amendments shall be construed as or affecting any right, liability, status, or interpretation which existed (under the provisions of law involved) before that date.
Id. at § 2664(b) (emphasis added). As the court in Bodimetric Health Services v. Aetna Life & Casualty, 903 F.2d 480, 489 (7th Cir.1990), stated: “In this section Congress clearly expressed its intent not to alter the substantive scope of section 405(h). Because the previous version of section 405(h) precluded judicial review of diversity actions, so too must newly revised section 405(h) bar these actions. Any other interpretation of this section would contravene section 2664(b) by ‘changing or affecting [a] right, liability, status, or interpretation’ of section 405(h) that existed before the Technical Corrections were enacted.” Bankruptcy actions, like diversity actions, were barred under the prior codification of section 405(h) and remain so today.
St. Mary Hospital, 123 B.R. at 17. Accord [In re] St. Johns, 173 B.R. [238]at 244 [(Bankr.S.D.Fla.1994)]; In re Upsher Laboratories, Inc., 135 B.R. 117, 119-120 (Bankr.W.D.Mo.1991); In re Home Comp Care, Inc., v. U.S. Dept. Of Health, 221 B.R. 202, (N.D.Ill.1998).
Such a reading of § 405(h) and § 1334 is fully consistent with the intent of Congress. As the court in St. Mary stated: “a broad reading of section 405(h) puts its interpretation in accord with Congress’ intent to permit the Secretary in Medicare disputes to develop the record and base decisions upon his unique expertise in the health care field. The misfortune that a provider is in bankruptcy when he has a reimbursement dispute with the Secretary should not upset the careful balance between administrative and judicial review.... [It] must be remembered that section 405(h) does not foreclose judicial review of administrative decisions, but merely postpones judicial review until the carefully prepared administrative system is given an opportunity to work.” St. Mary, 123 B.R. at 17. (Citing Weinberger v. Salfi, 422 U.S. 749, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975)).
*872The Ninth Circuit opinion in In re Town & Country Home Nursing Services, Inc., 963 F.2d 1146 (9th Cir.1992), disagreed with the analysis followed by St. Mary and other like cases. In Town & Country, the court’s decision primarily addressed questions as to the effect of § 106 of the Bankruptcy Code on waiver of sovereign immunity. Id. at 1149-1154. Only briefly did the court entertain questions as to the relationship between § 405(h) and § 1334. The Ninth Circuit looked summarily at the language of § 405(h) and stated that since § 1334 is not specifically mentioned as are §§ 1331 and 1346, there is no prohibition against a bankruptcy court exercising jurisdiction before all administrative remedies are exhausted. Id. at 1155. The court concluded that: “The rationale underlying section 1334’s broad jurisdictional grant over all matters conceivably having an effect on the bankruptcy estate is clear. This section allows a single court to preside over all of the affairs of the estate, which promotes a ‘congressional-endorsed objective: the efficient and expeditious resolution of all matters connected to the bankruptcy estate.’ ” In re Fietz, 852 F.2d 455, 457 (9th Cir.1988) (citing H.R.Rep. No, 595, 95th Cong., 1 st Sess. 43-48, reprinted in 1978 U.S.Code Cong. & Admin. News 5963, 6004-08). The language of section 1334(b) grants jurisdiction to the district courts, and therefore to the bankruptcy court, over civil proceedings related to bankruptcy and accords with “the intent of Congress to bring all bankruptcy related litigation within the umbrella of the district court, at least as an initial matter, irrespective of congressional statements to the contrary in the context of other specialized litigation.” 1 L. King, Collier on Bankruptcy, ¶ 3.01[l][c][ii], at 3-22 (15th ed.1991). Id. at 1155.
While Town & Country correctly describes the Congressional principles behind creating the bankruptcy courts as a forum where varied and multi-faceted disputes may be resolved in an expeditious fashion, the decision completely ignores the legislative history behind § 405(h). It also ignores the Congressional purpose behind the complex and balanced administrative review provided for under the Medicare Act as explained by St. Mary. In this court’s view, the better reading of § 405(h) and § 1334 holds that § 405(h) intends to have the administrative remedies exhausted before judicial review is taken by a bankruptcy court when the matter is one which “arises under” the Medicare Act. As stated by the St. Johns court, “The filing of a bankruptcy petition does not and should not create a shortcut to judicial review of administrative decisions otherwise subject to exhaustion requirements.” St. Johns, 173 B.R. at 243. Such an interpretation of § 405(h) and § 1334 would also comport with the logic behind the Fifth Circuit decision in MCorp Financial, Inc. v. Board of Governors, 900 F.2d 852 (5th Cir.1990) aff d in part, rev’d in part, Board of Governors v. MCorp Financial, 502 U.S. 32, 112 S.Ct. 459, 116 L.Ed.2d 358 (1991). In MCorp, the Fifth Circuit was confronted with a specialized banking statute that prohibited judicial interference with administrative proceedings, 12 U.S.C. § 1818®, and the general grant of jurisdiction afforded to the bankruptcy courts under § 1334. It was argued that § 1334, which was enacted subsequent to § 1818®, granted to the bankruptcy courts jurisdiction over the matter even though § 1818® seemed to *873preclude the involvement of the bankruptcy court because the legislative history of § 1334 explained the broad grant of bankruptcy jurisdiction conferred by § 1334. The Fifth Circuit disagreed, holding that such an interpretation would have the effect of “impliedly repealing” § 1818®. An implied repeal of a statute is highly disfavored and will only be held to have occurred if there is a “positive repugnancy” between two statutory provisions. Id. at 855-856. The court concluded,
Absent some clear intention to the contrary, however, a specific statute will not be controlled by a general one regardless of the priority of enactment. Crawford Fitting Co. v. J.T. Gibbons, Inc., 482 U.S. 437, 107 S.Ct. 2494, 96 L.Ed.2d 385 (1987). Congress revealed no intent to supersede the specific jurisdictional bar of § 1818® in the legislative history of the Bankruptcy Reform Act, nor in the recently enacted [FIRREA], We decline to imply any affirmative powers to the bankruptcy court from Congress’ failure to act in this area.
Id. at 856.(citations omitted).
As in MCorp, the legislative history of § 1334 evidences no intention to make its general provisions override the specific provisions enumerated in § 405(h). Given the Fifth Circuit’s reasoning in MCorp, this court declines to follow Town and Country, but will follow instead the decisions of St. Mary Hospital, St. Johns Home Health Agency, Home Comp Care, and Bodimetric. Accordingly, this court finds that the cause of action and the requests for relief based on the alleged overpayments to AHN “arise under” the Medicare Act. Section 405(h) intended to preclude bankruptcy jurisdiction over matters “arising under” the Medicare Act until all administrative remedies had been exhausted. Since those remedies have not been exhausted, this court does not have jurisdiction to hear those matters or to determine the amounts due and owing between the parties.
Rarely does this Court quote so much text from another court, however, it cannot be overemphasized how totally this Court concurs with the Judge McGuire’s jurisdictional analysis found in AHN Homecare, including the in-depth explanation of why Town & Country, decided by the Ninth Circuit, does not comport with the Fifth Circuit’s interpretation in MCorp. This Court fully adopts the court’s finding and reasoning in AHN Homecare, as quoted above, and finds this Court lacks subject matter jurisdiction over the plaintiffs complaint in its entirety.
Having found this Court lacks subject matter jurisdiction over this complaint in its entirety at this time, and that it should be dismissed until plaintiff can show that it has exhausted its administrative remedies, it need not rule further on the issues raised under F.R.C.P. 12(b)(2) [lack of personal jurisdiction], F.R.C.P. 12(b)(4) [insufficiency of process], F.R.C.P. 12(b)(5) [insufficient service of process], and F.R.C.P. 12(b)(6) [failure to state a claim upon which relief may be granted],
CONCLUSION
For the reasons set forth above, the Defendants’ Motion to Dismiss is Granted. A separate and conforming Order shall enter this date.
. 42 U.S.C. § 1395Ü provides: "The provisions of sections 406 and 416(j) of this title, and of subsections (a), (d), (e), (h), (i), (j), (k), and (1) of section 405 of this title, shall also apply with respect to this subchapter to the same extent as they are applicable with respect to subchapter II of this chapter, except that, in applying such provisions with respect to this subchapter, any reference therein to the Commissioner of Social Security or the Social Security Administration shall be considered a reference to the Secretary or the Department of Health and Human Services, respectively.” Hence, any reference in 405(h) to "Commissioner” is replaced herein with "Secretary.” | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487037/ | In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-22-00223-CR
__________________
BART THOMAS MOORE, Appellant
V.
THE STATE OF TEXAS, Appellee
__________________________________________________________________
On Appeal from the 258th District Court
Polk County, Texas
Trial Cause No. CR-21-0092
__________________________________________________________________
ORDER
The Court has received one volume of a reporter’s record from court reporter,
Louella Badipour, who also filed a letter stating that “[a]ll other hearings were taken
by the electronic recording device.” The remaining reporter’s record (consisting of
certified copies of the audio storage devices, any designated exhibits, and the log
prepared by the court recorder) in this appeal, due August 31, 2022, has not been
filed. Leona Wiggins, a court recorder, is responsible for preparing, certifying, and
timely filing the remaining reporter’s record. See Tex. R. App. P. 35.3(b). On
1
September 30, 2022, we informed the court recorder that the record must be filed
within thirty days or the matter would be referred for an enforcement order. The
court recorder failed to file the remaining record by the due date.
It is, therefore, ORDERED that the appeal is abated and the cause remanded
to the trial court for a hearing to determine why the remaining reporter’s record has
not been filed. The trial court shall determine whether the appellant has requested
that the reporter’s record be prepared, and whether the party responsible for paying
for the preparation of the remaining reporter’s record has paid the reporter’s fee, or
has made satisfactory arrangements with the reporter to pay the fee, or is entitled to
the reporter’s record without paying the fee. The trial court shall determine why the
court recorder did not timely file the record and may make such orders as shall be
necessary to ensure the remaining reporter’s record is promptly filed. A reporter’s
record shall be made of the hearing and, together with a supplemental clerk’s record
containing any findings or orders of the trial court, shall be filed with the Court of
Appeals by December 19, 2022.
ORDER ENTERED November 17, 2022.
PER CURIAM
Before Golemon, C.J., Kreger and Johnson, JJ.
2 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487041/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 01:07 AM CST
- 814 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
Michael T. and Cathy D. Christensen, individually
and as parents and next friends of Chad M.
Christensen, and as Coguardians and
Coconservators of Chad M. Christensen,
a protected person, appellants and
cross-appellees, v. Broken Bow Public Schools,
also known as Broken Bow School District 25,
a political subdivision of the State of Nebraska,
defendant and third-party plaintiff, appellee
and cross-appellant, and Beverly L. Sherbeck,
Personal Representative of the Estate of
Albert F. Sherbeck, deceased, third-party
defendant, appellee and cross-appellant.
___ N.W.2d ___
Filed November 4, 2022. No. S-21-885.
1. Directed Verdict: Appeal and Error. In reviewing a trial court’s rul-
ing on a motion for directed verdict, an appellate court must treat the
motion as an admission of the truth of all competent evidence submit-
ted on behalf of the party against whom the motion is directed; such
being the case, the party against whom the motion is directed is entitled
to have every controverted fact resolved in its favor and to have the
benefit of every inference which can reasonably be deduced from
the evidence.
2. Statutes: Ordinances: Legislature: Intent: Torts: Liability. In deter-
mining whether a statute or ordinance creates a duty, a court may deter-
mine that a statute gives rise to a tort duty to act in the manner required
by the statute where the statute is enacted to protect a class of persons
which includes the plaintiff, the statute is intended to prevent the par-
ticular injury that has been suffered, and the statute is intended by the
Legislature to create a private liability as distinguished from one of a
- 815 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
public character. Consideration of the Legislature’s purpose in enacting
a statute is central to the analysis of whether the statute defines a duty
in tort and creates private civil liability.
3. Negligence: Proof: Statutes. The violation of a statute alone does not
prove negligence.
4. Negligence: Proof: Probable Cause: Damages. A plaintiff in ordinary
negligence must prove all four essential elements of the claim: the
defendant’s duty not to injure the plaintiff, a breach of that duty, proxi-
mate causation, and damages.
5. Negligence: Proof. A cause of action for negligence depends not only
upon the defendant’s breach of duty to exercise care to avoid injury to
the plaintiff, but also depends upon a showing that the injury suffered
by the plaintiff was caused by the alleged wrongful act or omission of
the defendant.
6. Proximate Cause: Evidence. Neb. Rev. Stat. § 60-6,273 (Reissue 2021)
explicitly makes all “[e]vidence that a person was not wearing an occu-
pant protection system or a three-point safety belt system” inadmissible
for the issue of proximate cause.
7. Statutes. Statutory text is to be given its plain and ordinary meaning.
8. Statutes: Appeal and Error. An appellate court is not at liberty to add
language to the plain terms of a statute to restrict its meaning.
Appeal from the District Court for Custer County: Karin L.
Noakes, Judge. Affirmed.
David S. Houghton and Keith A. Harvat, of Houghton,
Bradford & Whitted, P.C., L.L.O., and James V. Duncan and
John O. Sennett, of Sennett, Duncan, Jenkins & Wickham,
P.C., L.L.O., for appellants.
Matthew B. Reilly and Thomas J. Culhane, of
Erickson | Sederstrom, P.C., L.L.O., for appellee Broken Bow
Public Schools.
Jared J. Krejci, of Smith, Johnson, Allen, Connick & Hansen,
for appellee Beverly L. Sherbeck.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
and Papik, JJ., and Stratman, District Judge.
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312 Nebraska Reports
CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
Miller-Lerman, J.
I. NATURE OF CASE
Appellants, Michael T. and Cathy D. Christensen, brought
this case in the district court for Custer County individually
and as parents of their son, Chad M. Christensen, who was
seriously injured when a Broken Bow Public Schools (BBPS)
activities van in which he was a passenger was hit head on by
a truck driven by Albert F. Sherbeck. Chad was not wearing a
seatbelt. The Christensens separately sued Sherbeck’s widow,
Beverly L. Sherbeck, as personal representative of Sherbeck’s
estate (the Sherbeck estate) and the cases were consolidated.
On remand from a memorandum opinion of the Nebraska
Court of Appeals that reversed a directed verdict in favor of
BBPS, the district court considered several additional argu-
ments by BBPS. Following due consideration, the district
court granted a directed verdict in favor of BBPS and against
the Christensens, dismissed the Christensens’ complaint, and
dismissed BBPS’ third-party complaint against the Sherbeck
estate as moot. These rulings give rise to the instant appeal
by the Christensens and the cross-appeals by BBPS and the
Sherbeck estate.
In its order directing a verdict in favor of BBPS, the dis-
trict court stated, inter alia, that despite the provision in Neb.
Rev. Stat. § 60-6,267(2) (Reissue 2021) that drivers ensure
seatbelt use for children, Neb. Rev. Stat. § 60-6,269 (Reissue
2021) “explicitly states, ‘violations of the provisions of sec-
tions 60-6,267 . . . shall not constitute prima facie evidence
of negligence.’” The district court noted that Neb. Rev. Stat.
§ 60-6,273 (Reissue 2021) prohibits “using evidence that
a person was not wearing a seatbelt to establish proximate
cause” and in the absence of other admissible evidence of
proximate cause, the Christensens’ claims failed and were dis-
missed. Because we agree with the district court’s reading of
the relevant statutes, we affirm its order of a directed verdict
in favor of BBPS and in addition dismiss the cross-appeals
as moot.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
II. STATEMENT OF FACTS
1. The Collision
On June 1, 2012, a BBPS activities van collided with
a truck driven by Sherbeck. The van was driven by Zane
Harvey, a high school basketball coach for BBPS. Another
coach, Anthony Blum, and eight students, including Chad,
were passengers in the van, which was returning from a
summer basketball clinic in Kearney, Nebraska. Sherbeck’s
vehicle crossed the centerline and collided head on with the
van. Sherbeck, Harvey, and Blum died at the scene. The
Christensens’ son, Chad, was riding in the van unrestrained by
a seatbelt and was seriously injured. Chad was age 17 at the
time of the accident.
2. Procedural History
The Christensens filed separate actions against BBPS and
against Sherbeck’s widow, as personal representative of the
Sherbeck estate. In the action against BBPS, the Christensens
asserted five separate theories of recovery, including claims
that (1) BBPS was negligent in its operation of the van and was
negligent in its supervision of the students because it failed to
ensure that students were wearing seatbelts and (2) BBPS vio-
lated § 60-6,267(2), which provides:
Any person in Nebraska who drives any motor vehicle
which has or is required to have an occupant protection
system or a three-point safety belt system shall ensure
that all children eight years of age and less than eighteen
years of age being transported by such vehicle use an
occupant protection system.
The district court consolidated the cases; the case against the
Sherbeck estate was tried to a jury and the case against BBPS
was tried to the court. The jury returned a verdict in favor of
the Sherbeck estate on the Christensens’ claims against it. The
Court of Appeals affirmed the judgment in the case against the
Sherbeck estate in Christensen v. Sherbeck, 28 Neb. App. 332,
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
943 N.W.2d 460 (2020), and we denied the Christensens’ peti-
tion for further review.
At the close of evidence in the Christensens’ case in chief
against BBPS, BBPS moved for a directed verdict. The dis-
trict court granted a directed verdict in favor of BBPS on
the grounds that Sherbeck’s vehicle’s crossing the centerline
constituted an efficient intervening cause that broke the causal
connection between Chad’s injuries and any failure on the part
of BBPS to ensure that Chad was wearing a seatbelt.
The Christensens appealed, and the Court of Appeals
reversed the district court’s decision to grant a directed verdict.
See Christensen v. Broken Bow Public Schools, No. A-19-125,
2020 WL 5785351 (Neb. App. Sept. 29, 2020) (selected for
posting to court website).
The Court of Appeals concluded that the district court erred
when it found, as a matter of law, that Sherbeck’s actions
constituted an efficient intervening cause. For purposes of its
analysis, the Court of Appeals assumed without deciding that
BBPS had a duty to ensure that Chad was wearing a seat-
belt while riding in the school activities van. Based on that
assumption, the Court of Appeals reasoned that the purpose
of such a duty would be to protect children in the event of
any sort of traffic accident and that therefore, the potential
for liability based on a violation of that duty did not rest on
the foreseeability of the exact circumstances of the collision.
The Court of Appeals concluded that because a head-on colli-
sion between the van and another vehicle was the sort of harm
against which a seatbelt was meant to protect, the collision
could not, as a matter of law, constitute an efficient intervening
cause to insulate BBPS from liability for failing to ensure that
Chad was wearing a seatbelt. The Court of Appeals remanded
the cause to the district court with directions to consider the
other arguments BBPS made in its motion for directed ver-
dict, and, if it rejected those other arguments, to proceed with
BBPS’ presentation of evidence in its defense.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
BBPS moved for rehearing and argued that the Court of
Appeals should have addressed its alternative argument that
§ 60-6,269 precluded the Christensens from establishing a neg-
ligence claim against BBPS based on the failure to ensure that
Chad was wearing a seatbelt. The Court of Appeals denied the
motion for rehearing, and we denied further review.
3. District Court Order
on Remand
Upon remand, the district court, as directed by the Court of
Appeals, considered BBPS’ other arguments for directed ver-
dict. The district court rejected BBPS’ argument that Harvey’s
and Blum’s actions related to the trip in the van were outside
the scope of their employment with BBPS because, as asserted
by BBPS, the trip occurred during the summer, which was out-
side the period of their teaching/coaching contracts. The court
reasoned that although their work was gratuitously provided
outside the time of their contracts, it was within the scope of
their employment, and that BBPS was not relieved of liability
on that basis.
The district court then considered BBPS’ argument regard-
ing the effect of § 60-6,269. The district court noted that
§ 60-6,269 “explicitly states, ‘violations of the provisions of
sections 60-6,267 and 60-6,268 shall not constitute prima facie
evidence of negligence.’” The court determined that given
the language of § 60-6,269, the Christensens’ claim based on
violation of § 60-6,267 must fail, and that BBPS’ motion for
directed verdict should be granted.
In its analysis, the district court noted that there was no
evidence that the actions of Harvey and Blum were deficient
in any way other than failing to ensure that the students were
wearing seatbelts. In considering the evidence of the elements
of the Chistensens’ negligence claim, the court noted the provi-
sions of § 60-6,273, which state:
Evidence that a person was not wearing an occupant
protection system or a three-point safety belt system at
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312 Nebraska Reports
CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
the time he or she was injured shall not be admissible in
regard to the issue of liability or proximate cause but may
be admissible as evidence concerning mitigation of dam-
ages, except that it shall not reduce recovery for damages
by more than five percent.
The court stated that the plain language of § 60-6,273
“prohibits using evidence that a person was not wearing a
seatbelt to establish proximate cause” and that it also “clearly
prohibits evidence of non-use in regard to liability.” The
court determined that because § 60-6,273 “does not allow
evidence of non-use of a seatbelt to prove liability or proxi-
mate cause” and because the Christensens presented no other
evidence of proximate cause, their various claims for negli-
gence must fail.
Having determined that the Christensens had not presented
evidence to support their claims, the court dismissed all of
the Christensens’ claims against BBPS. The court later denied
the Christensens’ motion for a new trial and dismissed BBPS’
third-party complaint against the Sherbeck estate as moot.
The Christensens appeal, and BBPS and the Sherbeck estate
cross-appeal.
III. ASSIGNMENTS OF ERROR
The Christensens claim, summarized and restated, that
the district court erred when it interpreted §§ 60-6,269 and
60-6,273 to preclude their claims against BBPS and determined
that they had not presented evidence other than nonuse of seat-
belts to support their claims.
In its cross-appeal, BBPS claims, restated, that the district
court erred when it found that BBPS employed Harvey and
Blum on the date of the collision, and BBPS also asserts that it
was entitled to summary judgment on various defenses, includ-
ing assumption of risk and contributory negligence.
In its cross-appeal, the Sherbeck estate contends that all
claims against it in this case are barred by issue preclusion and
the law-of-the-case doctrine.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
IV. STANDARD OF REVIEW
[1] In reviewing a trial court’s ruling on a motion for
directed verdict, an appellate court must treat the motion as an
admission of the truth of all competent evidence submitted on
behalf of the party against whom the motion is directed; such
being the case, the party against whom the motion is directed
is entitled to have every controverted fact resolved in its favor
and to have the benefit of every inference which can reason-
ably be deduced from the evidence. de Vries v. L & L Custom
Builders, 310 Neb. 543, 968 N.W.2d 64 (2021).
V. ANALYSIS
The Christensens claim that the district court erred when
it granted a directed verdict and dismissed all of their claims
against BBPS. We conclude that through Nebraska’s statutes
addressing civil litigation and seatbelt use, the Legislature
has determined the legal significance of seatbelt nonuse and
specifically did not intend for evidence of seatbelt nonuse to
be admissible to show proximate cause and create civil liabil-
ity. As we explain below and given the record, we affirm the
order of the district court, which directed a verdict in favor of
BBPS. Consequently, the cross-appeals filed by BBPS and the
Sherbeck estate are moot.
1. Relevant Statutes
We begin by setting forth the statutes relevant to our analy-
sis. Section 60-6,267(2) describes a driver’s responsibility to
ensure seatbelt use by children. It provides:
Any person in Nebraska who drives any motor vehicle
which has or is required to have an occupant protection
system or a three-point safety belt system shall ensure
that all children eight years of age and less than eighteen
years of age being transported by such vehicle use an
occupant protection system.
Neb. Rev. Stat. § 60-6,268 (Reissue 2021) makes it an
infraction to violate subsections (1) or (2) of § 60-6,267 and
provides for a monetary fine.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
Section 60-6,269 provides for the legal significance of viola-
tions and compliance with seatbelt usage and states:
Violations of the provisions of sections 60-6,267 and
60-6,268 shall not constitute prima facie evidence of neg-
ligence nor shall compliance with such sections constitute
a defense to any claim for personal injuries to a child or
recovery of medical expenses for injuries sustained in
any motor vehicle accident. Violation of such sections by
a driver shall not constitute a defense for another person
to any claim for personal injuries to a child or recovery
of medical expenses for injuries sustained in any motor
vehicle accident.
Critical to our analysis is the evidentiary rule set forth in
§ 60-6,273:
Evidence that a person was not wearing an occupant
protection system or a three-point safety belt system at
the time he or she was injured shall not be admissible in
regard to the issue of liability or proximate cause but may
be admissible as evidence concerning mitigation of dam-
ages, except that it shall not reduce recovery for damages
by more than five percent.
2. Christensens’ Claims Against BBPS
Many of the Christensens’ arguments are based on their
linguistic examination of the statutory framework set forth
above that they contend distinguishes between seatbelt use by
adults, which is inadmissible in regard to liability or proximate
cause, and seatbelt use by children, which they contend may be
admitted to demonstrate the negligence of a driver who fails to
secure them. As we explain below, we reject these arguments.
Reading the statutes in harmony, we conclude that a driver’s
violation of a seatbelt statute does not form a prima facie case
of his or her negligence and that such evidence is inadmis-
sible on the issue of liability or proximate cause predicated
on seatbelt nonuse, including a claim on behalf of a child for
personal injuries.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
(a) Breach of a Statutory “Duty” and
Evidence of Proximate Cause
The Christensens assert that §§ 60-6,269 and 60-6,273 apply
only to seatbelt use by adults. They further contend that by
not securing a child, a driver has violated § 60-6,267(2) and
has thereby breached his or her duty to protect children from
collisions. That is, the Chistensens claim that failure to com-
ply with § 60-6,267(2) in and of itself forms the basis for a
breach of a statutory duty for purposes of negligence. The
Christensens contend that the policy goals of the Legislature
are tailored to protect an accident victim and not to protect a
driver who broke a child safety law from being held account-
able in civil court by the parents of an injured child.
[2] In determining whether a statute or ordinance creates
a duty, a court may determine that a statute gives rise to a
tort duty to act in the manner required by the statute where
the statute is enacted to protect a class of persons which
includes the plaintiff, the statute is intended to prevent the
particular injury that has been suffered, and the statute is
intended by the Legislature to create a private liability as
distinguished from one of a public character. Stonacek v. City
of Lincoln, 279 Neb. 869, 782 N.W.2d 900 (2010) (quoting
Claypool v. Hibberd, 261 Neb. 818, 626 N.W.2d 539 (2001)).
Consideration of the Legislature’s purpose in enacting a stat-
ute is central to the analysis of whether the statute defines a
duty in tort and creates private civil liability. Stonacek v. City
of Lincoln, supra.
We conclude that the plain statutory language does not sup-
port the Christensens’ theory of the Legislature’s intention.
The provision in § 60-6,269 that a violation of § 60-6,267
“shall not constitute prima facie evidence of negligence” is
antithetical to the prosecution of a negligence case based on a
driver’s failure to secure a child. The Legislature’s inclusion
of § 60-6,269 shows that the purpose of the statutory scheme
was decidedly not to create private civil liability.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
[3-5] Even if BBPS’ violation of § 60-6,267 breached a
statutory duty to ensure Chad was using an occupant protection
system, it is fundamental that the violation of a statute alone
does not prove negligence. A plaintiff in ordinary negligence
must prove all four essential elements of the claim: the defend
ant’s duty not to injure the plaintiff, a breach of that duty,
proximate causation, and damages. Susman v. Kearney Towing
& Repair Ctr., 310 Neb. 910, 970 N.W.2d 82 (2022). A cause
of action for negligence depends not only upon the defendant’s
breach of duty to exercise care to avoid injury to the plaintiff,
but also depends upon a showing that the injury suffered by
the plaintiff was caused by the alleged wrongful act or omis-
sion of the defendant. Id. In Susman, we recently recalled one
of our earliest negligence cases, which stated: “‘“The cause
of action in any case embraces not only the injury which the
complaining party has received, but it includes more. All the
facts which, taken together, are necessary to fix the responsi-
bility are parts of the cause of action.”’” 310 Neb. at 921, 970
N.W.2d at 91 (quoting Westover v. Hoover, 94 Neb. 596, 143
N.W. 946 (1913)).
[6-8] Even assuming that the violation of § 60-6,267
breached a duty of care, there is no admissible evidence that
violation of the child seatbelt requirement proximately caused
Chad’s injuries. To the contrary, § 60-6,273 explicitly makes
all “[e]vidence that a person was not wearing an occupant
protection system or a three-point safety belt system” inad-
missible for the issue of proximate cause. Statutory text is to
be given its plain and ordinary meaning. Dutcher v. Nebraska
Dept. of Corr. Servs., ante p. 405, 979 N.W.2d 245 (2022). An
appellate court is not at liberty to add language to the plain
terms of a statute to restrict its meaning. Id. The Legislature
has dictated that seatbelt nonuse is excluded on the issue of
proximate cause.
The Christensens urge us to factor in Chad’s age as a
child into our statutory analysis. This argument is unavailing.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
We are aware that the Legislature imposed a fine on drivers
who fail to secure children in their vehicles. See § 60-6,268.
However, it did not distinguish the age or status of the “per-
son” without the seatbelt when setting forth the evidentiary
rule in § 60-6,273. According to the Legislature, all nonuse
evidence is inadmissible regarding proximate cause. Id. We
are not inclined to add language regarding age to change the
statute’s exclusionary plain meaning. See id. Indeed, we have
explained in the past that given the language of § 60-6,273,
evidence of seatbelt nonuse is admissible only for mitigation
of damages. Werner v. County of Platte, 284 Neb. 899, 824
N.W.2d 38 (2012); Fickle v. State, 273 Neb. 990, 735 N.W.2d
754 (2007), modified on denial of rehearing 274 Neb. 267,
759 N.W.2d 113.
In this case, aside from the failure to ensure Chad was
restrained by a seatbelt in the activities van, there was no evi-
dence that Harvey’s or Blum’s actions were deficient. Without
the seatbelt evidence, the Christensens’ claims based on BBPS’
violation of § 60-6,267, or even a purported breach of a statu-
tory duty based in § 60-6,267, were properly dismissed. We
find no error in the directed verdict in favor of BBPS.
(b) Evidence of BBPS’ Negligent
Supervision of Students
The Christensens attempt to circumvent §§ 60-6,267 and
60-6,269 by arguing that seatbelt nonuse by a student could
be direct evidence that the school breached its duty to exer-
cise reasonable care under the circumstances. We reject this
argument.
The circumstances of this case are unrestrained children in
a van which was hit head on by a truck. Evidence of a per-
son’s seatbelt nonuse is inadmissible for the issue of “liability
or proximate cause.” § 60-6,273. The district court prop-
erly excluded evidence of seatbelt nonuse. See § 60-6,273.
Without evidence of seatbelt nonuse, which evidence was
essential to the claim of negligent supervision, but which
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Cite as 312 Neb. 814
was properly excluded, the Christensens’ evidence failed
to show proximate cause. Taking every controverted fact
resolved in the Christensens’ favor and giving them the ben-
efit of every inference which can reasonably be deduced from
the admissible evidence, we agree with the district court that
the Christensens failed to show that BBPS caused Chad’s
injuries. We find no error in the directed verdict in favor
of BBPS.
3. Cross-Appeals and BBPS’ Third-Party
Complaint Against Sherbeck Estate
In view of our disposition affirming the directed verdict in
favor of BBPS, we determine that the district court correctly
dismissed as moot BBPS’ third-party complaint against the
Sherbeck estate.
VI. CONCLUSION
For the reasons explained above, we affirm the order of the
district court that directed the verdict in favor of BBPS and
dismissed the Christensens’ claims against BBPS. The issues
raised by the cross-appeals filed by BBPS and the Sherbeck
estate are now moot or without merit, and we decline to reach
them. See In re Maint. Fund of Sunset Mem. Park Chapel, 302
Neb. 954, 925 N.W.2d 695 (2019).
Affirmed.
Freudenberg, J., not participating. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487043/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 01:07 AM CST
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312 Nebraska Reports
LANCASTER CTY. BD. OF EQUAL. V. MOSER
Cite as 312 Neb. 757
Lancaster County Board of Equalization,
appellant, v. Brad Moser and
Mary Moser, appellees.
___ N.W.2d ___
Filed October 28, 2022. No. S-21-774.
1. Taxation: Judgments: Appeal and Error. Appellate courts review
decisions rendered by the Tax Equalization and Review Commission for
errors appearing on the record.
2. Judgments: Appeal and Error. When reviewing a judgment for errors
appearing on the record, an appellate court’s inquiry is whether the deci-
sion conforms to the law, is supported by competent evidence, and is
neither arbitrary, capricious, nor unreasonable.
3. Administrative Law: Judgments: Words and Phrases. Agency action
is arbitrary, capricious, and unreasonable if it is taken in disregard of the
facts or circumstances of the case, without some basis which would lead
a reasonable and honest person to the same conclusion.
4. Taxation: Valuation: Presumptions: Evidence. A presumption exists
that a board of equalization has faithfully performed its official duties in
making an assessment and has acted upon sufficient competent evidence
to justify its action. That presumption remains until there is competent
evidence to the contrary presented.
5. ____: ____: ____: ____. If the challenging party overcomes the pre-
sumption of validity by competent evidence, the reasonableness of the
valuation fixed by the board of equalization becomes one of fact based
upon all of the evidence presented.
6. Taxation: Valuation: Proof: Appeal and Error. The burden of show-
ing that a valuation is unreasonable or arbitrary rests upon the taxpayer
on appeal from the action of the board of equalization.
7. Taxation: Valuation: Proof. The burden of persuasion imposed on
a complaining taxpayer is not met by showing a mere difference of
opinion unless it is established by clear and convincing evidence that
the valuation placed upon the property, when compared with valuations
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Cite as 312 Neb. 757
placed on other similar property, is grossly excessive and is the result of
a systematic exercise of intentional will or failure of plain duty, and not
mere errors of judgment.
8. Taxation: Valuation: Words and Phrases. Equalization is the process
of ensuring that all taxable property is placed on the assessment rolls
at a uniform percentage of its actual value. The purpose of equalization
of assessments is to bring the assessment of different parts of a taxing
district to the same relative standard, so that no one of the parts may be
compelled to pay a disproportionate part of the tax.
9. Taxation. While absolute uniformity of approach for taxation may not
be possible, there must be a reasonable attempt at uniformity.
10. Taxation: Valuation: Constitutional Law. The object of the uniformity
clause is accomplished if all of the property within the taxing jurisdic-
tion is assessed and taxed at a uniform standard of value.
11. Taxation: Valuation: Public Policy. No difference in the method of
determining the valuation or rate of tax to be imposed can be allowed
unless separate classifications rest on some reason of public policy or
some substantial difference of situation or circumstance that would natu-
rally suggest justice or expediency of diverse legislation with respect to
the objects classified.
12. Taxation: Valuation. Generally, taxpayers are entitled to have their
property assessed uniformly and proportionately, even though the result
may be that it is assessed at less than the actual value.
13. Taxation: Valuation: Proof. The burden of proof is on the taxpayer to
establish that the value of the property has not been fairly and propor-
tionately equalized with all other properties, resulting in a discrimina-
tory, unjust, and unfair assessment.
14. Taxation: Valuation: Constitutional Law: Statutes. The county board
of equalization has a statutory duty to fairly and impartially equalize
the values of all items of real property in the county so that all real
property is assessed uniformly and proportionately. This statutory duty
is informed, in turn, by the constitutional principles of uniformity and
proportionality set out in Neb. Const. art. VIII, § 1.
15. Taxation: Valuation: Constitutional Law. In carrying out its duty to
correct and equalize individual discrepancies and inequalities in assess-
ments within the county, a county board of equalization must give effect
to the constitutional requirement that taxes be levied uniformly and
proportionately upon all taxable property in the county.
16. ____: ____: ____. The rule of uniformity applies to both the rate of
taxation and the valuation of property.
17. Taxation: Valuation: Constitutional Law: Intent. When property
owners contend their property has been disproportionately valued as
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Cite as 312 Neb. 757
compared to other comparable property, such contention must be sus-
tained by evidence that the valuation is arbitrary or capricious, or so
wholly out of line with actual values as to give rise to an inference
that the assessor and county board of equalization have not properly
discharged their duties. Mere errors of judgment do not sustain a claim
of discrimination. There must be something more, something which in
effect amounts to an intentional violation of the essential principle of
practical uniformity.
Appeal from the Tax Equalization and Review Commission.
Reversed and remanded with directions.
Patrick Condon, Lancaster County Attorney, and Daniel J.
Zieg for appellant.
David C. Solheim, of Solheim Law Firm, for appellees.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Stacy, J.
In 2018, 2019, and 2020, Mary Moser and Brad Moser
protested the valuation of their agricultural land, and the
Lancaster County Board of Equalization (County Board)
affirmed the valuations. The Mosers appealed to the Tax
Equalization and Review Commission (TERC), and after a
consolidated evidentiary hearing, TERC affirmed the County
Board’s decision regarding the 2020 tax year, but reversed its
decisions for the 2018 and 2019 tax years. For both 2018 and
2019, TERC reduced the value of the Mosers’ irrigated acres
to equalize those acres with a nearby parcel of agricultural
property. The County Board timely petitioned for review of
TERC’s decision, 1 and we moved the case to our docket. We
now reverse the decision of TERC and remand the matter with
directions to affirm the decision of the County Board.
1
See Neb. Rev. Stat. § 77-5019(2)(a)(i) (Reissue 2018).
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I. BACKGROUND
The facts in this matter are largely undisputed. The Mosers
own approximately 116 acres of agricultural land located in
Lancaster County. The parcel number of the subject property
is 02-36-400-001-000, and it is referred to by the parties as
“Mary’s Farm.”
At all relevant times, Mary’s Farm was classified as unim-
proved agricultural land, and the acres were inventoried into
different subclasses. 2 During the 2018, 2019, and 2020 tax
years, Mary’s Farm had a center pivot irrigator, so some of the
acres were subclassified as irrigated cropland. Other acres were
subclassified as dryland cropland, grassland, and wasteland.
Under the assessment methodology and schedule of values
used by Lancaster County during the relevant tax years, the
actual value of an acre of irrigated cropland was higher than
the actual value of an acre of dryland cropland, grassland, and
wasteland, but all subclasses were assessed at the same per-
centage of actual value. 3
1. 2018 Protest
For tax year 2018, the Lancaster County assessor determined
the taxable value of Mary’s Farm was $612,500. This valuation
was based in part on property records subclassifying 88.09 of
the acres as irrigated cropland. In protesting the 2018 valu-
ation, the Mosers focused on the acres of irrigated cropland,
asserting that “[c]omparable ground 1 mile west is valued
much lower than this property.” As authorized by Neb. Rev.
Stat. § 77-1502.01 (Reissue 2018), the County Board used a
referee to hear the protest.
2
See, generally, Neb. Rev. Stat. § 77-1363 (Cum. Supp. 2020) (requiring
agricultural and horticultural land to be divided into classes and subclasses
for purposes of valuation, including, but not limited to, irrigated cropland,
dryland cropland, grassland, wasteland, nursery, feedlot, or orchard); Betty
L. Green Living Trust v. Morrill Cty. Bd. of Equal., 299 Neb. 933, 911
N.W.2d 551 (2018).
3
See, generally, Neb. Rev. Stat. § 77-201(2) (Reissue 2018) (agricultural
land “shall be valued at seventy-five percent of its actual value”).
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In support of their protest, the Mosers submitted the 2018
property record for a neighboring parcel of agricultural land,
referred to by the parties as the “Morrison property.” This
evidence showed the Morrison property had been classified
as improved agricultural land, with some acres subclassified
as dryland cropland and other acres subclassified as grassland
and wasteland. The Morrison property record did not show
any acres of irrigated cropland, but the Mosers claimed that
the Morrison property had two center pivot irrigators. In sup-
port, they offered a “Google Earth” image which purportedly
showed center pivot irrigators, but no crop circles, in a field
represented to be the Morrison property. Based on that evi-
dence, the Mosers argued that Mary’s Farm and the Morrison
property were “comparable in soil type and both have irrigated
and dryland acres.” They argued that because the irrigated
acres on the Morrison property had been subclassified and val-
ued as dryland, the irrigated acres on Mary’s Farm should be
revalued as dryland, too.
The referee rejected the Mosers’ argument, reasoning that
the evidence adduced did not support a reduction in the valua-
tion of the irrigated acres of Mary’s Farm. The County Board
agreed with the referee. However, pursuant to an unrelated
2017 settlement between the Mosers and TERC, the County
Board reduced the 2018 assessed value of Mary’s Farm to
$598,900.
2. 2019 Protest
A similar protest process occurred in 2019. In that year, the
county assessor determined the taxable value of Mary’s Farm
was $570,300, based in part on 90.69 acres which were sub-
classified and valued as irrigated cropland. The Mosers filed
a protest, again asking that their irrigated cropland be valued
as dryland. In support, they provided the 2019 property record
file for the Morrison property, which again showed that none
of the acres on the Morrison property were subclassified or
valued as irrigated cropland. The Mosers also provided color
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photographs of an operating center pivot in a cropfield they
represented was part of the Morrison property. And, as they
had done in 2018, the Mosers asked that the irrigated cropland
on Mary’s Farm be revalued as dryland cropland.
After reviewing the evidence provided by the Mosers, the
referee found that the Morrison property was “irrigated by
2 pivots[,] but taxed as dryland,” and recommended that the
assessor’s data on the Morrison property be corrected. However,
the referee concluded that the error in subclassifying and valu-
ing the Morrison property did “not support a valuation error
within [the] current assessment” of Mary’s Farm. The County
Board agreed with the referee and affirmed the assessor’s 2019
valuation of Mary’s Farm.
3. 2020 Protest
For the 2020 tax year, the assessor determined the taxable
value of Mary’s Farm was $551,300. The Mosers protested this
valuation, but this time they did not challenge the valuation of
the irrigated acres. Instead, they argued that their wasteland
acres were valued higher than wasteland acres in surround-
ing counties. In support, the Mosers offered information on
the standard land values for the different subclasses and soil
types in Saline County. The referee concluded that the infor-
mation provided by the Mosers did not support a valuation
error with the current assessment of Mary’s Farm. The County
Board agreed with the referee and affirmed the assessor’s
2020 valuation.
4. TERC Appeal
The Mosers appealed the 2018, 2019, and 2020 valuations
of Mary’s Farm to TERC, and a consolidated evidentiary hear-
ing was held on April 5, 2021. Mary testified on behalf of the
Mosers. She explained that in 2018 and 2019, they protested
the valuation of the irrigated acres on Mary’s Farm because
the Morrison property was located nearby and was “valued so
much lower than ours.” In support, Mary offered the evidence,
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described above, that the Mosers had presented to the County
Board in 2018 and 2019 regarding pivot irrigators on the
Morrison property. Mary testified that the Morrison property
records for 2018 and 2019 did not show that any portion of
the Morrison property was irrigated, and she asked that the
property record for Mary’s Farm be changed to “also reflect
non-irrigated land,” because that would be “equal.”
Derrick Niederklein, the chief field deputy for the Lancaster
County assessor’s office, testified on behalf of the County
Board. Niederklein testified that in 2018 and 2019 the asses-
sor’s office did not know the Morrison property had any irri-
gated acres. He explained that usually, a property owner reports
adding a pivot irrigator, 4 and the assessor’s office also uses
aerial and oblique imagery to identify pivots. Niederklein testi-
fied that “leaving the pivot off the Morrisons’ property [was]
not an intentional act by the assessor’s office.” He admitted
that it was “not uncommon” for the assessor’s office to learn
that something was incorrect in its property records because
conditions can change from year to year, but he testified that
generally, the property records were “accurate.” Niederklein
also testified that beginning in the 2020 tax year, the irrigated
acres on the Morrison property were correctly subclassified
and valued as irrigated cropland.
In an order entered on August 24, 2021, TERC made a
finding that the irrigated acres on the Morrison property were
“comparable to irrigated acres” on Mary’s Farm. TERC further
found that the documents the Mosers had submitted to the
County Board during their 2018 and 2019 protests provided
“compelling evidence” that the Morrison property had pivot
irrigation, even though the county’s property records for 2018
and 2019 did not show that any portion of the Morrison prop-
erty was irrigated. TERC recited the rule that
4
See Neb. Rev. Stat. § 77-1318.01(1) (Reissue 2018) (requiring owner of
real property to report improvement valued at $2,500 or more to assessor).
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[i]f taxable values are to be equalized it is necessary for
a Taxpayer to establish by clear and convincing evidence
that the valuation placed on the property[,] when com-
pared with valuations placed on other similar properties[,]
is grossly excessive and is the result of systematic exer-
cise of intentional will or failure of plain legal duty, and
not mere errors of judgment. 5
TERC then reasoned:
In the context of an appeal to this Commission, the
systematic exercise of intentional will or failure of a plain
duty is that of the County Board, not the County Assessor.
During the protest process, the [Mosers] presented the
County Board with clear evidence that the Morrison Farm
included irrigated land that was not being assessed as
irrigated land. At that point, the County Board had a plain
legal duty to equalize the assessments, even though the
result may have been that [Mary’s Farm] was assessed at
less than the actual value.
Based on this reasoning, TERC found there was clear and
convincing evidence that the County Board’s decisions in 2018
and 2019 were arbitrary or unreasonable. TERC ordered that
the irrigated acres on Mary’s Farm must be revalued as dryland
for both the 2018 and 2019 tax years. Using the county asses-
sor’s scheduled value for dryland cropland, TERC reduced the
total assessed value of Mary’s Farm by $125,715 for 2018 and
by $119,605 for 2019.
TERC concluded that no equalization was necessary for
the 2020 tax year “[b]ecause the irrigated parcels on the
Morrison farm were assessed as irrigated land” for that tax
year. Additionally, TERC rejected the Mosers’ contention that
they were entitled to have any subclass of agricultural land
in Lancaster County equalized with comparably subclassified
property in Saline County, reasoning that the scheduled values
5
See Newman v. County of Dawson, 167 Neb. 666, 94 N.W.2d 47 (1959).
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in another taxing district did not constitute sufficient evidence
that the assessment of the Mosers’ property was incorrect, arbi-
trary, or unreasonable.
5. Petition for Judicial Review
The County Board filed this timely petition for judicial
review in the Nebraska Court of Appeals. 6 The petition chal-
lenges only TERC’s decision to reduce the valuation of Mary’s
Farm for the 2018 and 2019 tax years. We moved the matter to
our docket on our own motion.
II. ASSIGNMENTS OF ERROR
The County Board assigns, restated, that TERC erred in
reducing the valuation of Mary’s Farm because there was not
clear and convincing evidence that the value, when compared
to similar property, was grossly excessive and was the result of
a systematic exercise of intentional will or failure of plain legal
duty and not mere errors of judgment.
III. STANDARD OF REVIEW
[1-3] Appellate courts review decisions rendered by TERC
for errors appearing on the record. 7 When reviewing a judg-
ment for errors appearing on the record, an appellate court’s
inquiry is whether the decision conforms to the law, is sup-
ported by competent evidence, and is neither arbitrary, capri-
cious, nor unreasonable. 8 Agency action is arbitrary, capricious,
and unreasonable if it is taken in disregard of the facts or cir-
cumstances of the case, without some basis which would lead a
reasonable and honest person to the same conclusion. 9
6
See § 77-5019.
7
Wheatland Indus. v. Perkins Cty. Bd. of Equal., 304 Neb. 638, 935 N.W.2d
764 (2019).
8
Id.
9
Id.
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IV. ANALYSIS
The ultimate question presented in this appeal is whether
TERC’s decision to revalue the irrigated cropland on Mary’s
Farm as dryland cropland conformed to the law, was supported
by competent evidence, and was neither arbitrary, capricious,
nor unreasonable. 10 Before addressing that question, we first
review the taxpayer’s burden of proof in an appeal before
TERC. We then review the foundational principles of taxing
agricultural land in Nebraska, as well as the constitutional
requirements of uniformity and proportionality that govern our
analysis.
1. Presumption of Validity and Burden of Proof
When reviewing appeals from decisions of county boards of
equalization, TERC must follow the standard set out in Neb.
Rev. Stat. § 77-5016(9) (Reissue 2018), which provides:
In all appeals, excepting those arising [from a county tax
levy], if the appellant presents no evidence to show that
the order, decision, determination, or action appealed
from is incorrect, [TERC] shall deny the appeal. If the
appellant presents any evidence to show that the order,
decision, determination, or action appealed from is incor-
rect, such order, decision, determination, or action shall
be affirmed unless evidence is adduced establishing that
the order, decision, determination, or action was unrea-
sonable or arbitrary.
[4,5] We have held that the language of § 77-5016(9) creates
a presumption in an appeal to TERC that a board of equaliza-
tion has faithfully performed its official duties in making an
assessment and has acted upon sufficient competent evidence
to justify its action. 11 That presumption remains until there is
10
See id.
11
E.g., Wheatland Indus., supra note 7; Betty L. Green Living Trust, supra
note 2; JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 120,
825 N.W.2d 447 (2013); Brenner v. Banner Cty. Bd. of Equal., 276 Neb.
275, 753 N.W.2d 802 (2008); Ideal Basic Indus. v. Nuckolls Cty. Bd. of
Equal., 231 Neb. 653, 437 N.W.2d 501 (1989).
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competent evidence to the contrary presented. 12 If the chal-
lenging party overcomes the presumption of validity by com-
petent evidence, the reasonableness of the valuation fixed by
the board of equalization becomes one of fact based upon all
of the evidence presented. 13
[6,7] The burden of showing that a valuation is unreason-
able or arbitrary rests upon the taxpayer on appeal from the
action of the board. 14 And the burden of persuasion imposed on
a complaining taxpayer is not met by showing a mere differ-
ence of opinion unless it is established by clear and convincing
evidence that the valuation placed upon the property, when
compared with valuations placed on other similar property, is
grossly excessive and is the result of a systematic exercise of
intentional will or failure of plain duty, and not mere errors
of judgment. 15
2. Taxation of Agricultural Land
Mary’s Farm and the Morrison property are both classified
as agricultural land. 16 According to § 77-1363, agricultural land
is to be inventoried and valued by class and subclass:
Agricultural land and horticultural land shall be
divided into classes and subclasses of real property under
section 77-103.01, including, but not limited to, irri-
gated cropland, dryland cropland, grassland, wasteland,
nurseries, feedlots, and orchards, so that the categories
reflect uses appropriate for the valuation of such land
according to law. Classes shall be inventoried by sub-
classes of real property based on soil classification stan-
dards developed by the Natural Resources Conservation
Service of the United States Department of Agriculture as
12
Id.
13
See Wheatland Indus., supra note 7. See, also, Betty L. Green Living Trust,
supra note 2; JQH La Vista Conf. Ctr., supra note 11.
14
See id.
15
Id.
16
See § 77-201 and Neb. Rev. Stat. § 77-1359 (Reissue 2018).
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converted into land capability groups by the Property Tax
Administrator. Land capability groups shall be Natural
Resources Conservation Service specific to the applied
use and not all based on a dryland farming criterion.
County assessors shall utilize soil surveys from the
Natural Resources Conservation Service of the United
States Department of Agriculture as directed by the
Property Tax Administrator. Nothing in this section shall
be construed to limit the classes and subclasses of real
property that may be used by county assessors or the Tax
Equalization and Review Commission to achieve more
uniform and proportionate valuations.
And according to Neb. Rev. Stat. § 77-103.01 (Reissue 2018):
Class or subclass of real property means a group of
properties that share one or more characteristics typically
common to all the properties in the class or subclass, but
are not typically found in the properties outside the class
or subclass. Class or subclass includes, but is not limited
to, the classifications of agricultural land or horticultural
land listed in section 77-1363 . . . .
It is undisputed that during the 2018 and 2019 tax years, the
irrigated acres on Mary’s Farm were correctly subclassified as
irrigated cropland, while the irrigated acres on the Morrison
property were erroneously subclassified as dryland cropland.
It is also undisputed that the erroneous subclassification of
the Morrison property resulted in a lower assessed value than
if the acres had been correctly subclassified as irrigated crop-
land. We find no prior cases in our equalization jurisprudence
presenting a similar fact pattern. To analyze the duty of the
County Board under these unique facts, we rely on settled
principles of uniform and proportionate taxation.
3. Uniform and Proportionate Taxation
Uniform and proportionate taxation, sometimes referred to
as “equalization,” is a constitutional requirement in Nebraska.
Article VIII, § 1(1), of the Nebraska Constitution provides
in relevant part that “[t]axes shall be levied by valuation
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uniformly and proportionately upon all real property . . . except
as otherwise provided in or permitted by this Constitution.”
And article VIII, § 1(4), governs how agricultural and horti-
cultural land is to be uniformly and proportionately valued and
taxed. It provides:
[T]he Legislature may provide that agricultural land and
horticultural land, as defined by the Legislature, shall
constitute a separate and distinct class of property for pur-
poses of taxation and may provide for a different method
of taxing agricultural land and horticultural land which
results in values that are not uniform and proportion-
ate with all other real property and franchises but which
results in values that are uniform and proportionate upon
all property within the class of agricultural and horticul-
tural land. 17
[8] We have explained the process and purpose of equaliza-
tion as follows:
“Equalization is the process of ensuring that all taxable
property is placed on the assessment rolls at a uniform
percentage of its actual value. The purpose of equaliza-
tion of assessments is to bring the assessment of different
parts of a taxing district to the same relative standard, so
that no one of the parts may be compelled to pay a dispro-
portionate part of the tax.” 18
[9-12] We have also recognized that while “absolute uni-
formity of approach for taxation may not be possible, there
must be a reasonable attempt at uniformity.” 19 The object of
the uniformity clause is accomplished “‘if all of the prop-
erty within the taxing jurisdiction is assessed and taxed at a
uniform standard of value.’” 20 No difference in the method
17
Neb. Const. art. VIII, § 1(4) (emphasis supplied).
18
Krings v. Garfield Cty. Bd. of Equal., 286 Neb. 352, 357, 835 N.W.2d 750,
754 (2013), quoting Brenner, supra note 11.
19
Constructors, Inc. v. Cass Cty. Bd. of Equal., 258 Neb. 866, 873, 606
N.W.2d 786, 792 (2000).
20
Id. at 873, 606 N.W.2d at 792, quoting County of Gage v. State Board of
Equalization & Assessment, 185 Neb. 749, 178 N.W.2d 759 (1970).
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of determining the valuation or rate of tax to be imposed
can be allowed unless “separate classifications rest on some
reason of public policy or some substantial difference of
situation or circumstance that would naturally suggest jus-
tice or expediency of diverse legislation with respect to the
objects classified.” 21 Generally, taxpayers are entitled to have
their property assessed uniformly and proportionately, even
though the result may be that it is assessed at less than the
actual value. 22
In this case, we consider an issue of first impression in
Nebraska: whether constitutional principles of uniform and
proportionate taxation require that an isolated error in the
subclassification and undervaluation of one taxpayer’s prop-
erty must be replicated through the equalization process. As
we explain, we find no such requirement in the Nebraska
Constitution, Nebraska statutes, or Nebraska case law.
4. Facts and Law Do Not Support
TERC’s Decision
(a) Presumption of Validity
In any appeal before TERC, the threshold determination
should be whether the taxpayer presented competent evidence
to rebut the presumption of validity in favor of the board
of equalization. 23 Here, TERC made an express finding that
the Mosers had presented “competent evidence to rebut the
presumption that the County Board faithfully performed its
duties and had sufficient competent evidence to make its deter-
mination.” In arriving at this conclusion, TERC did not find
any error in the assessor’s valuation of Mary’s Farm. Rather,
TERC concluded the Mosers had presented “compelling evi-
dence of pivot irrigation on the Morrison farm” in 2018 and
2019 and had shown that the assessor’s property records for
those years taxed the Morrison property as dryland cropland.
21
Constructors, Inc., supra note 19, 258 Neb. at 874, 606 N.W.2d at 793.
22
Constructors, Inc., supra note 19.
23
See Wheatland Indus., supra note 7.
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As such, we understand TERC to have concluded that the pre-
sumption of validity was rebutted by photographic evidence
that the Morrison property contained irrigated cropland that
was erroneously valued as dryland cropland.
The County Board has not challenged TERC’s conclusion
that the Mosers’ evidence sufficiently rebutted the presump-
tion, and we express no opinion in that regard. Because, as we
explain next, even if the Mosers’ evidence was sufficient to
rebut the presumption of validity, they did not ultimately sat-
isfy their burden to prove by clear and convincing evidence that
the valuation of Mary’s Farm was unreasonable or arbitrary. 24
(b) Mosers Did Not Meet Burden of Proof
To prove the value placed on Mary’s Farm was unreason-
able or arbitrary, 25 the Mosers had to show that when compared
to the valuations placed on similar property, the valuation of
Mary’s Farm was grossly excessive and was the result of either
a systematic exercise of intentional will or the failure of a plain
legal duty, and not a mere error of judgment. 26
(i) Grossly Excessive Valuation
We question whether the Mosers proved by clear and con-
vincing evidence that the valuation of their irrigated acres
was grossly excessive when compared to similar property. We
agree the Mosers’ evidence showed that the irrigated acres on
Mary’s Farm were valued higher than the irrigated acres on
the Morrison property. But the Mosers did not compare the
irrigated acres on Mary’s Farm to any of the irrigated acres
in the taxing district which, like their property, had been
subclassified and valued as irrigated cropland. Instead, they
compared their valuation to the valuation of irrigated acres
which had been erroneously subclassified and valued as dry-
land cropland.
24
See § 77-5016(9).
25
See id.
26
See Betty L. Green Living Trust, supra note 2.
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But even if we set aside the different land classification
groups of Mary’s Farm and the Morrison property and assume,
without deciding, that the Mosers proved their valuation was
grossly excessive when compared to similar property, we
nevertheless conclude they failed to prove their valuation was
the result of either a systematic exercise of intentional will
or the failure of a plain legal duty, and not a mere error of
judgment. 27
(ii) Insufficient Evidence of Systematic
or Intentional Action
The Mosers offered no evidence of a systematic or inten-
tional misclassification and undervaluation of irrigated acres
in Lancaster County. Instead, they offered evidence of a single
parcel—the Morrison property—where irrigated cropland had
been erroneously subclassified and valued as dryland. And it
was undisputed that such error was unintentional and resulted
from an improvement to the property of which the asses-
sor’s office was unaware, despite its use of aerial and oblique
imagery to identify pivot irrigators. The evidence also showed
that when the county became aware of the erroneous subclas-
sification via the Mosers’ tax protests, the error was corrected
for the 2020 tax year. On this record, the Mosers failed to
prove the valuation was the result of a systematic exercise of
intentional will.
(iii) No Plain Legal Duty to Equalize
Mary’s Farm and Morrison Property
Similarly, the Mosers did not carry their burden of proving
that the valuation of Mary’s Farm resulted from the failure of
a plain legal duty and not a mere error of judgment. TERC’s
order did not explain why it determined the County Board had
“a plain legal duty to equalize the assessments” by revaluing
the irrigated acres on Mary’s Farm as dryland cropland. But
in its appellate briefing, TERC argues that once the Mosers
presented evidence that their irrigated acres were assessed at
27
See id.
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a higher value than the irrigated acres on the Morrison prop-
erty, it “trigger[ed] a duty to equalize.” 28 We thus understand
TERC to contend that these circumstances implicated constitu-
tional principles of uniform and proportionate taxation. On this
record, we disagree.
TERC appears to have ignored the fact that a subclassifica-
tion error regarding the Morrison property was the reason for
the disparate valuations, but we cannot. When determining
whether principles of uniformity and proportionality have been
violated by disparate valuations, we have said it is appropriate
to consider the reasons offered for “why a particular valua-
tion is what it is” because, without such context, evidence of
disparate valuations “indicates nothing.” 29 Here, the irrigated
acres on the Morrison property were valued lower because they
had been erroneously subclassified as dryland. It was that error
in subclassification, and only that error, which caused the dis
parate valuation about which the Mosers complain.
[13-15] The burden of proof is on the taxpayer to establish
that the value of the property has not been fairly and pro-
portionately equalized with all other properties, resulting in
a discriminatory, unjust, and unfair assessment. 30 The county
board of equalization has a statutory duty to “fairly and impar-
tially equalize the values of all items of real property in the
county so that all real property is assessed uniformly and
proportionately.” 31 This statutory duty is informed, in turn, by
the constitutional principles of uniformity and proportionality
set out in Neb. Const. art. VIII, § 1. In carrying out its duty to
correct and equalize discrepancies and inequalities in assess-
ments within the county, a county board of equalization “‘must
give effect to the constitutional requirement that taxes be
28
Brief for appellee at 8.
29
County of Franklin v. Tax Equal. & Rev. Comm., 296 Neb. 193, 201, 892
N.W.2d 142, 147 (2017).
30
Lincoln Tel. & Tel. Co. v. County Board of Equalization, 209 Neb. 465,
308 N.W.2d 515 (1981).
31
Neb. Rev. Stat. § 77-1501 (Reissue 2018).
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levied uniformly and proportionately upon all taxable property
in the county.’” 32 We see no evidence that these constitutional
principles were implicated by the County Board’s decision to
affirm the valuation of Mary’s Farm.
[16] The rule of uniformity applies to both the rate of tax
ation and the valuation of property. 33 And the object of the
uniformity clause is accomplished “‘if all of the property
within the taxing jurisdiction is assessed and taxed at a uni-
form standard of value.’” 34 The evidence presented in this
case and relied upon by TERC showed that in 2018 and 2019,
all agricultural land within the taxing district was assessed
and taxed at a uniform standard of value based on land clas-
sification group and soil type. Under that methodology, which
no one challenges as unreasonable or arbitrary, the scheduled
value of an acre of dryland cropland was lower than the
scheduled value of an acre of irrigated cropland of the same
soil type. The same assessment methodology was applied to
both Mary’s Farm and the Morrison property, but due to an
unknown improvement on the Morrison property, the irrigated
acres on that property were mistakenly subclassified and
valued as dryland cropland in 2018 and 2019. As such, this
case does not present a uniformity problem; rather, it presents
a classification problem that equalization would exacerbate,
not correct.
[17] A property owner’s contention that property has been
disproportionately valued as compared to other comparable
property
must be sustained by evidence that the valuation is arbi-
trary or capricious, or so wholly out of line with actual
values as to give rise to an inference that the assessor
and county board of equalization have not properly dis-
charged their duties. Mere errors of judgment do not
32
Krings, supra note 18, 286 Neb. at 358, 835 N.W.2d at 754.
33
Gordman Properties Co. v. Board of Equal., 225 Neb. 169, 403 N.W.2d
366 (1987).
34
Constructors, Inc., supra note 19, 258 Neb. at 873, 606 N.W.2d at 792.
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sustain a claim of discrimination. There must be some-
thing more, something which in effect amounts to an
intentional violation of the essential principle of practi-
cal uniformity. 35
Here, there was no evidence of something more. The only
reason for the lower valuation of the irrigated acres on the
Morrison property was that the cropland had been erroneously
subclassified and valued as dryland because the assessor’s
office was unaware the parcel had center pivots. Our record
contains no evidence of an intentional violation of the essential
principles of uniformity or proportionality and no evidence that
would give rise to an inference that either the assessor’s office
or the County Board failed to properly discharge its duties
under the law.
We reject TERC’s suggestion that constitutional principles
of uniformity and proportionality require a county board of
equalization to replicate what has been shown to be an isolated
and unintentional error in the subclassification and undervalua-
tion of one taxpayer’s property. Were we to adopt such a rule,
it would have far-reaching consequences to our equalization
jurisprudence. As the County Board argues:
Under [TERC’s] order, all a taxpayer must do is locate a
single unknown or unreported improvement to receive a
reduction on their property value. A taxpayer with a fin-
ished basement would only need to locate a single house
with a finished basement that is unknown to a county
assessor and by the TERC’s standard, the taxpayer would
have met their burden for proving a lack of equalization.
Similarly, a residence that is built and unreported to a
county assessor would result in all improvements being
removed from the assessment roll under the TERC’s
standard. 36
And we generally agree with the County Board’s observation
that by ordering equalization in response to evidence that a
35
Newman, supra note 5, 167 Neb. at 672, 94 N.W.2d at 50.
36
Brief for appellant at 10-11.
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single irrigated parcel was misclassified and thus undervalued,
“TERC created two parcels that are undervalued [and] imper-
missibly shifted the tax burden to every other irrigated parcel
that did not protest.” 37
The dissent suggests the County Board had a plain legal duty
to value the irrigated acres on Mary’s Farm as dryland under
the reasoning of the U.S. Supreme Court in Sioux City Bridge
v. Dakota County. 38 In that case, the Court was reviewing a
decision of the Nebraska Supreme Court which had affirmed
the denial of a tax protest over the valuation of a bridge in
Dakota County. 39 The bridge company had argued it was enti-
tled to have the valuation of the bridge reduced to 55 percent
of its true value because “other property in the district [was]
assessed at 55 [percent] of its true value.” 40 The Nebraska
Supreme Court rejected that argument and held that “when
property is assessed at its true value, and other property in the
district is assessed below its true value, the proper remedy is
to have the property assessed below its true value raised, rather
than to have the property assessed at its true value reduced.” 41
The U.S. Supreme Court granted certiorari and reversed. 42
Relying on the Due Process and Equal Protection Clauses of
the 14th Amendment to the U.S. Constitution, the Supreme
Court reasoned it was “utterly impossible for [the protesting
taxpayer] by any judicial proceeding to secure an increase in
the assessment of the great mass of under-assessed property
in the taxing district.” 43 The Court held that under such cir-
cumstances, “the right of the taxpayer whose property alone is
37
Id. at 9.
38
Sioux City Bridge v. Dakota County, 260 U.S. 441, 43 S. Ct. 190, 67 L.
Ed. 340 (1923).
39
Sioux City Bridge Co. v. Dakota County, 105 Neb. 843, 182 N.W. 485
(1921).
40
Id. at 848, 182 N.W. at 487.
41
Id.
42
Sioux City Bridge, supra note 38.
43
Id., 260 U.S. at 446.
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taxed at 100 [percent] of its true value is to have [the] assess-
ment reduced to the percentage of that value at which others
are taxed even though this is a departure from the requirement
of the statute.” 44
Sioux City Bridge is readily distinguishable from this case.
First, the holding was grounded in the 14th Amendment, not
the uniformity clause of the Nebraska Constitution, and we
do not understand the Mosers to have raised or preserved a
due process or equal protection claim in this case. Moreover,
the underassessment of property in Sioux City Bridge was
intentional and systematic—the bridge was being taxed at
100 percent of its actual value, while the “great mass” 45 of
property in the district was being taxed at 55 percent of its
actual value. That is nothing like the situation here, where the
evidence showed that dryland cropland and irrigated cropland
were taxed at the same percentage of actual value, and the
same assessment methodology and uniform valuation standards
were applied to all agricultural land in the taxing district. And
finally, although the taxpayer in Sioux City Bridge apparently
had no way to secure an increase in the intentionally under
assessed property, the Mosers point to nothing that prevented
them from protesting the misclassification of the irrigated acres
on the Morrison property. 46 Indeed, the record indicates that
the Mosers’ protests resulted in correcting the misclassification
of irrigated acres on the Morrison property for the 2020 tax
year. We are not persuaded that the holding or the reasoning in
Sioux City Bridge has application here.
The dissent also relies on a settled proposition from our
equalization jurisprudence which states, “‘“The constitution
forbids any discrimination whatever among taxpayers, thus, if
the property of one citizen is valued for taxation at one-fourth
44
Id.
45
Id.
46
See Neb. Rev. Stat. § 77-1502 (Cum. Supp. 2022) (directing county clerk
to mail copy of protest to owner when person filing protest is not owner
of property).
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its value, others within the taxing district have the right to
demand that their property be assessed on the same basis.”’” 47
But this proposition is not implicated here either, because
the Mosers’ property and the Morrison property were both
assessed at the same percentage of actual value based on sub-
classification. Again, the only reason shown for the valuation
differences between these two properties was their different
subclass. And we do not understand the dissent to be suggest-
ing that constitutional principles of uniformity and propor-
tionality are offended by a tax assessment methodology under
which each subclass of agricultural land has a different sched-
uled actual value. The Mosers have not shown unconstitutional
discrimination in the valuation of their property as compared to
the Morrison property.
We find no principled support for TERC’s conclusion that
an unintentional error in subclassifying the Morrison property
as dryland cropland imposed on the County Board a plain legal
duty to replicate that error through equalization by applying a
factually false subclassification to reduce the valuation of the
cropland on Mary’s Farm.
We instead conclude, on this record, that the Mosers failed
to prove by clear and convincing evidence that the valuation
of Mary’s Farm, when compared to the valuation of similar
property, was grossly excessive and was the result of a sys-
tematic exercise of intentional will or failure of plain duty,
and not mere errors of judgment. 48 Nor did the Mosers adduce
sufficient evidence to establish that the County Board’s deci-
sion to affirm the Mosers’ assessments in 2018 and 2019 was
unreasonable or arbitrary. 49
47
Gamboni v. County of Otoe, 159 Neb. 417, 435, 67 N.W.2d 489, 501
(1954), overruled in part on other grounds, Hansen v. County of Lincoln,
188 Neb. 461, 197 N.W.2d 651 (1972). See State v. Savage, 65 Neb. 714,
91 N.W. 716 (1902).
48
See, Betty L. Green Living Trust, supra note 2; JQH La Vista Conf. Ctr.,
supra note 11.
49
See § 77-5016(9).
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TERC’s conclusion that the County Board had a plain legal
duty to equalize the 2018 and 2019 assessments by treating
irrigated cropland on Mary’s Farm as dryland cropland was
factually incorrect, was not supported by competent evidence,
failed to conform to the law, was unreasonable, and must
be reversed. 50
V. CONCLUSION
For the foregoing reasons, we reverse TERC’s decision
to the extent it ordered that the irrigated cropland on Mary’s
Farm be valued as dryland cropland for the 2018 and 2019 tax
years, and we remand the matter with directions to affirm the
County Board’s assessments on parcel 02-36-400-001-000 for
both tax years.
Reversed and remanded with directions.
50
See Wheatland Indus., supra note 7.
Cassel, J., dissenting.
Although the majority concedes that irrigated acres on the
Morrison property were incorrectly classified as dryland and
that as a result, the Morrison property was erroneously given a
lower value than the comparable property of Brad Moser and
Mary Moser, the majority concludes that this triggered no plain
duty to equalize the two properties. I respectfully disagree. The
Nebraska Constitution compels otherwise.
Neb. Const. art. VIII, § 1(4), plainly commands that prop-
erties within the class of agricultural land and horticultural
land must be equalized despite being in separate subclasses.
The majority effectively holds that an error in subclassifica-
tion relieved the county board of its duty to equalize. This
court thereby fails to enforce the plain duty imposed by the
constitution.
For the sake of completeness, and at the risk of some
duplication of the majority opinion, I set forth this plain con-
stitutional language, the principle commanding adherence to
the constitutional mandate, and the history of the uniformity
clause and the amendments permitting separate classification
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of agricultural land and horticultural land. The majority here
effectively deprives an agricultural-land taxpayer of any
remedy for the misclassification of comparable agricultural
property. Because the organic law of this state requires the
action taken by the Tax Equalization and Review Commission
(TERC), I respectfully dissent.
For convenience, I refer generally to the language of article
VIII, § 1, as the uniformity clause. Insofar as it relates to the
case before this court, the uniformity clause states as follows:
The necessary revenue of the state and its governmen-
tal subdivisions shall be raised by taxation in such manner
as the Legislature may direct. Notwithstanding Article I,
section 16, Article III, section 18, or Article VIII, sec-
tion 4, of this Constitution or any other provision of this
Constitution to the contrary: (1) Taxes shall be levied by
valuation uniformly and proportionately upon all real
property and franchises as defined by the Legislature
except as otherwise provided in or permitted by this
Constitution; [and] (4) the Legislature may provide that
agricultural land and horticultural land, as defined by the
Legislature, shall constitute a separate and distinct class
of property for purposes of taxation and may provide for a
different method of taxing agricultural land and horticul-
tural land which results in values that are not uniform and
proportionate with all other real property and franchises
but which results in values that are uniform and propor-
tionate upon all property within the class of agricultural
land and horticultural land; . . . Each actual property tax
rate levied for a governmental subdivision shall be the
same for all classes of taxed property and franchises. 1
To the extent pertinent here, one can readily discern that § 1
addresses uniformity in two clauses. First, § 1(1) imposes a
general duty to levy taxes by valuation uniformly and propor-
tionately upon all real property except as otherwise allowed by
the Nebraska Constitution. Then, § 1(4) permits classification
1
Neb. Const. art. VIII, § 1 (emphasis supplied).
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of agricultural land and horticultural land as “a separate and
distinct class of property” and imposes a uniformity require-
ment upon “all property within the class of agricultural land
and horticultural land.”
This court, TERC, and the county boards of equalization
are all bound by the Nebraska Constitution. As this court has
said:
“A written Constitution is not only the direct and basic
expression of the sovereign will, but is the absolute rule
of action and decision for all departments and offices of
government with respect to all matters covered by it and
must control as it is written until it shall be changed by
the authority that established it. . . .” 2
As I explain below, article VIII, § 1(4), commands that all agri-
cultural land and horticultural land be equalized with all other
agricultural and horticultural lands, regardless of subclasses.
Neither this court nor the tribunals below may ignore this con-
stitutional mandate.
The uniformity clause has ancient roots. It originated in
the constitution of 1875. 3 The modern language began with
the constitutional revisions of 1920, which, as relevant here,
required simply that “taxes shall be levied by valuation uni-
formly and proportionately upon all tangible property.” 4
The rules as to uniformity and equal protection of the laws
apply not only to acts of the legislative department but also
to the valuation by the assessing officers. 5 Discrimination in
valuation, where it exists, does not necessarily result from the
terms of the tax statute, but may be caused by the acts of the
taxing officer or officers. 6
2
State ex rel. Caldwell v. Peterson, 153 Neb. 402, 408, 45 N.W.2d 122, 127
(1950) (quoting 11 Am. Jur. Constitutional Law § 44).
3
See Neb. Const. art. IX, § 1 (1875).
4
Neb. Const. art. VIII, § 1 (1920).
5
Constructors, Inc. v. Cass Cty. Bd. of Equal., 258 Neb. 866, 606 N.W.2d
786 (2000).
6
Id.
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This court has long said that the paramount object of the
constitution and the laws relative to taxation is to raise all
needful revenues by valuation of the taxable property so that
each owner of property taxed will contribute his, her, or its
just proportion of the public revenues. 7 The object of the law
of uniformity is accomplished if all property within the taxing
jurisdiction is assessed at a uniform standard of value, as com-
pared with its actual market value. 8 “Thus if the property of
one citizen is valued for taxation at one-fourth its value, others
within the taxing district have the right to demand that their
property be assessed on the same basis.” 9 In other words, this
court said, the constitution forbids any discrimination whatever
among taxpayers. 10 Numerous cases have applied the uniform
ity clause in this way. 11
As to most real estate, Nebraska law still mandates equal-
ization with all other real estate subject to taxation. Above, I
quoted article VIII, § 1(1), which commands that “[t]axes shall
be levied by valuation uniformly and proportionately upon all
real property . . . as defined by the Legislature except as other-
wise provided in or permitted by this Constitution.” Likewise,
7
See State v. Savage, 65 Neb. 714, 91 N.W. 716 (1902).
8
See id.
9
Id. at 744, 91 N.W. at 720.
10
Id.
11
See, e.g., County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262
Neb. 578, 635 N.W.2d 413 (2001); AT&T Information Sys. v. State Bd.
of Equal., 237 Neb. 591, 467 N.W.2d 55 (1991); Konicek v. Board of
Equalization, 212 Neb. 648, 324 N.W.2d 815 (1982); County of Buffalo
v. State Board of Equalization & Assessment, 158 Neb. 353, 63 N.W.2d
468 (1954); Laflin v. State Board of Equalization and Assessment, 156
Neb. 427, 56 N.W.2d 469 (1953); Homan v. Board of Equalization, 141
Neb. 400, 3 N.W.2d 650 (1942); Continental Ins. Co. v. Smrha, 131 Neb.
791, 270 N.W. 122 (1936); Chicago, R. I. & P. R. Co. v. State, 111 Neb.
362, 197 N.W. 114 (1923); State v. Fleming, 70 Neb. 523, 97 N.W. 1063
(1903); State v. Savage, supra note 7; State v. Osborn, 60 Neb. 415, 83
N.W. 357 (1900); High School District v. Lancaster County, 60 Neb. 147,
82 N.W. 380 (1900); State, ex rel. Ahern, v. Walsh, 31 Neb. 469, 48 N.W.
263 (1891); Clother v. Maher, 15 Neb. 1, 16 N.W. 902 (1883).
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a Nebraska statute requires that “[t]he county board of equal-
ization shall fairly and impartially equalize the values of all
items of real property in the county so that all real property
is assessed uniformly and proportionately.” 12 The purpose of
equalization of assessments is to bring the assessment of dif-
ferent parts of a taxing district to the same relative standard, so
that no one of the parts may be compelled to pay a dispropor-
tionate part of the tax. 13
But through amendments begun in 1984, 14 revised in 1989, 15
and completed in 1992, 16 the constitution was amended to allow
agricultural and horticultural lands to be valued disproportion-
ately from other types of real property but to require them to
be valued uniformly and proportionately with other agricultural
and horticultural lands. 17 For the reader’s convenience, I repeat
that portion of the constitution, which now reads,
the Legislature may provide that agricultural land and
horticultural land, as defined by the Legislature, shall
constitute a separate and distinct class of property for pur-
poses of taxation and may provide for a different method
of taxing agricultural land and horticultural land which
results in values that are not uniform and proportion-
ate with all other real property and franchises but which
results in values that are uniform and proportionate upon
all property within the class of agricultural land and hor-
ticultural land. 18
The principles of interpreting a constitutional provision are
well settled. The words in a constitutional provision must be
interpreted and understood in their most natural and obvious
12
Neb. Rev. Stat. § 77-1501 (Reissue 2018).
13
Krings v. Garfield Cty. Bd. of Equal., 286 Neb. 352, 835 N.W.2d 750
(2013).
14
See 1984 Neb. Laws, L.R. 7, § 1.
15
See 1989 Neb. Laws, L.R. 2, § 1.
16
See 1992 Neb. Laws, L.R. 219CA, § 1.
17
See Neb. Const. art. VIII, § 1(4).
18
Neb. Const. art. VIII, § 1(4) (emphasis supplied).
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meaning unless the subject indicates or the text suggests that
they are used in a technical sense. 19 If the meaning of a consti-
tutional provision is clear, the court will give to it the meaning
that obviously would be accepted and understood by layper-
sons. 20 Constitutional provisions are not subject to strict con-
struction and receive a broader and more liberal construction
than do statutes. 21 It is the duty of courts to ascertain and to
carry into effect the intent and purpose of the framers of the
constitution or of an amendment thereto. 22
Here, the plain language requires uniformity within the
entire class of agricultural land and horticultural land. This
court is not permitted to read into this clause words which
are not there or to omit words. I respectfully submit that the
majority does so, at least implicitly. But the plain constitutional
language commands that “all property within the class of agri-
cultural land and horticultural land” be equalized.
First, the beginning part of § 1(4) states the singular—“a
separate and distinct class”—and not a plural—“one or more
separate and distinct classes.” (Emphasis supplied.) Second,
the words “all property” immediately precede the words
“within the class.” 23 Third, the last phrase reads, “uniform
and proportionate upon all property within the class of agri-
cultural land and horticultural land”—a construction using
singular and not plural. 24 This provides a plain command to
equalize all property within the class of agricultural land and
horticultural land, and it simply does not permit equalization
only within an agricultural subclass. My reading is, I respect-
fully suggest, the way these words and phrases would be read
by a layperson.
19
State ex rel. Peterson v. Shively, 310 Neb. 1, 963 N.W.2d 508 (2021).
20
Id.
21
Id.
22
Id.
23
Neb. Const. art. VIII, § 1(4).
24
Id. (emphasis supplied).
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The Legislature reads § 1(4) the same way that I do. A
statute proclaims, “The Legislature finds and declares that
agricultural land and horticultural land shall be a separate and
distinct class of real property for purposes of assessment.” 25 It
then states, “The assessed value of agricultural land and hor-
ticultural land shall not be uniform and proportionate with all
other real property, but the assessed value shall be uniform and
proportionate within the class of agricultural land and horti-
cultural land.” 26 Thus, the legislative language, consistent with
that of the constitution, mandates that assessed value shall be
uniform and proportionate within the class of agricultural land
and horticultural land.
Our previous case law construed this constitutional lan-
guage the same way. We said that after the amendments to
article VIII, § 1, and the enactment of statutes pursuant to such
authority providing for a different method of taxing agricultural
and horticultural land, the constitution does not require uni
formity between the class of agricultural and horticultural land
and other types of real estate. 27 From this development, we
drew two principles: (1) “[I]t is no longer required or proper
to equalize the value of nonagricultural, nonhorticultural land
with the value of agricultural and horticultural land,” and (2)
“[e]qualization is still required within the class of agricultural
and horticultural land, because the constitution still requires
uniformity within that class.” 28
For the sake of completeness, I note that during floor debate
of the 1984 legislation submitting an amendment of article
VIII, § 1, to the voters, senators read the phrase the same
way. Admittedly, that language was slightly different, in that
it added a sentence stating, “The Legislature may provide that
agricultural land and horticultural land used solely for agricul-
tural or horticultural purposes shall constitute a separate and
25
Neb. Rev. Stat. § 77-1359 (Reissue 2018).
26
Id.
27
Krings v. Garfield Cty. Bd. of Equal., supra note 13.
28
Id. at 361, 835 N.W.2d at 756.
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distinct class of property for purposes of taxation.” 29 One sena-
tor stated:
If you read the language very carefully, it says, I’ll just
read the last part, “shall constitute a separate and distinct
class.” Very singular. It says there will be one class, a class.
What it says is, “agricultural land and horticultural land
taken together as a group will constitute a single class.” I
think we could probably diagram that on the blackboard
and all but I believe it is very clear that it is singular and
it is just a class. We’re not creating two classes. 30
Another senator agreed “100 percent.” 31 Although the 1984
language differed slightly, it closely resembles the current con-
stitutional wording.
While another statute further divides agricultural land and
horticultural land into classes and subclasses, nothing in that
other statute suggests that a misclassification protects an assess-
ment from the requirements of uniformity and proportionality. 32
Here, TERC was reviewing the refusal of the county board
of equalization to equalize comparable agricultural proper-
ties within the same taxing district in Lancaster County. The
majority suggests that the county board had no plain duty to
correct an individual discrepancy. But our case law teaches
otherwise.
In Bartlett v. Dawes Cty. Bd. of Equal., 33 this court reiterated
three important principles. First, a county board of equalization
has the duty to correct and equalize individual discrepancies
and inequalities in assessments within the county. 34 Second, in
29
1984 Neb. Laws, L.R. 7, § 1.
30
Floor Debate, L.R. 7, 88th Leg., 1st Spec. Sess. 340 (Aug. 29, 1984)
(remarks of Senator Ron Withem).
31
Id. (remarks of Senator Peter Hoagland).
32
See Neb. Rev. Stat. § 77-1363 (Cum. Supp. 2020).
33
Bartlett v. Dawes Cty. Bd. of Equal., 259 Neb. 954, 613 N.W.2d 810
(2000) (superseded by statute on other grounds as stated in Cain v. Custer
Cty. Bd. of Equal., 298 Neb. 834, 906 N.W.2d 285 (2018)).
34
See id.
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carrying out this function, the county board must give effect to
the constitutional requirement that taxes be levied uniformly
and proportionately upon all taxable property in the coun-
ty. 35 Finally, this basic duty of county boards of equalization
remains unchanged by enactment of the Tax Equalization and
Review Commission Act. 36
The correct remedy for equalization was recognized by the
U.S. Supreme Court nearly 100 years ago in Sioux City Bridge
v. Dakota County, 37 which reversed a decision of this court. 38
There, this court found that a property, which had a valuation
disproportionately higher than comparable property, should
not have its valuation lowered. 39 This court ruled that when a
property is assessed at its true value, and other property in the
district is assessed below its true value, the proper remedy is
to have the property assessed below its true value raised, rather
than to have property assessed at its true value reduced. 40
The U.S. Supreme Court reversed this court’s decision and
remanded the case for further proceedings. 41 The high court
stated that “such a result as that reached by [this court] is
to deny the injured taxpayer any remedy at all because it is
utterly impossible for him by any judicial proceeding to secure
an increase in the assessment of the great mass of under-
assessed property in the taxing district.” 42 The Court further
stated, “The conclusion is based on the principle that where
it is impossible to secure both the standard of the true value,
35
See id.
36
See id.
37
Sioux City Bridge v. Dakota County, 260 U.S. 441, 43 S. Ct. 190, 67 L.
Ed. 340 (1923).
38
See Sioux City Bridge Co. v. Dakota County, 105 Neb. 843, 182 N.W. 485
(1921).
39
See id.
40
See id.
41
See Sioux City Bridge v. Dakota County, supra note 37.
42
Id., 260 U.S. at 446.
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and the uniformity and equality required by law, the latter
requirement is to be preferred as the just and ultimate purpose
of the law.” 43
Because the high court applied federal constitutional law,
the majority attempts to discredit the remedy. But the basic
principle of that case is instructive. Where it is impossible to
increase the misclassified agricultural land to its true value, the
preferred remedy is to reduce the injured taxpayer’s property
value to achieve the uniformity required. To refuse to do so
deprives the taxpayer of a remedy.
This court’s more recent uniformity clause jurisprudence
has also provoked criticism. 44 The majority’s implicit applica-
tion of the uniformity clause only within a subclass is fraught
with the danger of unintended consequences. Surely, this recent
experience counsels that in interpreting the uniformity clause,
this court should strictly adhere to the constitutional text, the
enabling legislation, and our previous case law—all of which
require application of the uniformity clause to all property
within the class of agricultural land and horticultural land.
After all, “Those who cannot remember the past are con-
demned to repeat it.” 45
Properly understood, § 1(4) accomplishes two related goals.
First, it permits agricultural and horticultural lands not to be
valued uniformly and proportionately with other types of real
estate, such as residential, commercial, or industrial lands.
Second, it imposes a uniformity requirement for all lands
within the separate class of agricultural land and horticul-
tural land.
Here, the assessments were not equalized. Mary’s Farm was
comparable to the Morrison property: they were located in
close proximity to one another and both were used as irrigated
43
Id.
44
See George Kilpatrick, Personal Property Tax Post Mortem: What Lies
Ahead for Nebraska, 27 Creighton L. Rev. 25 (1993).
45
George Santayana, The Life of Reason: Reason in Common Sense 284
(Scribner’s 1905).
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cropland. Though comparable, the Morrison property was mis-
classified as dry cropland. This led to its having a lower tax
valuation. Because the irrigated acres on the Morrison property
were assessed at a lower rate than the irrigated acres on Mary’s
Farm, the Mosers’ property was not “equalized” with the value
of other agricultural land in Lancaster County. As a result, the
Mosers paid a disproportionate part of the tax.
If a taxpayer’s property is assessed at a value in excess of
its actual value, or in excess of that value at which others are
taxed, then the taxpayer has a right to relief. 46 The right is to
have the taxpayer’s property assessment reduced to the per-
centage of the property’s value at which others are taxed. 47
TERC’s decision enforced that right.
The majority incorrectly contends that application of our
long-established uniformity clause jurisprudence would have
“far-reaching consequences.” It quotes the county board’s brief
regarding equalization that might be required due to a protest
based on a “finished basement” or a “residence that is built and
unreported.” 48
But these examples would not result in reduction of the val-
ues of all other properties. Only a taxpayer who protested and
persisted in that protest would receive equalization and only if
that taxpayer’s property were significantly overvalued in com-
parison to the undervalued property. In other words, the situa-
tion here did not require the county board to lower all irrigated
farmland valuations to the Morrison property’s level. But it did
require the county board to equalize the Mosers’ property with
the Morrison property.
This is a natural consequence of equalization at the local
level, in order to provide a remedy for a protesting taxpayer
disadvantaged by another taxpayer’s undervaluation. Here,
46
See, AT&T Information Sys. v. State Bd. of Equal., supra note 11; Zabawa
v. Douglas Cty. Bd. of Equal., 17 Neb. App. 221, 757 N.W.2d 522 (2008).
47
See, Chief Indus. v. Hamilton Cty. Bd. of Equal., 228 Neb. 275, 422
N.W.2d 324 (1988); Konicek v. Board of Equalization, supra note 11.
48
See brief for appellant at 11.
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equalization would reduce the protesting taxpayers’ burden in
a way not required for other similarly situated taxpayers who
failed to file protests or to appeal from the denial of their pro-
tests. This matters not. Other taxpayers’ failure to exercise their
rights is no defense to granting such relief to a taxpayer who
did so exercise such taxpayer’s rights. 49
The majority purports to avoid this clear constitutional com-
mand, but it cannot hide from the reality. The majority suggests
the Mosers should have protested the Morrison property’s valu-
ation. Nothing in the statute cited by the majority 50 or in that
statute’s 2018 amendment 51 suggests an intention to displace
the traditional equalization remedy. Nothing in the county
board’s brief makes any such argument. Nor has any decision
of this court or the Nebraska Court of Appeals so held. And
this notion flies in the face of long-settled uniformity clause
jurisprudence. I have already cited our numerous cases requir-
ing equalization. And this court has repeatedly said that if the
property of one citizen is valued for taxation at one-fourth its
value, others within the taxing district have the right to demand
that their property be assessed on the same basis. 52 Here, the
owners of the Morrison property are the “one citizen” and the
Mosers are the “others within the taxing district.” The Mosers
had the right to demand assessment on the same basis.
In this situation, the county board had the plain duty to
equalize. TERC was perhaps charitable in relying only on
plain duty and not systemic discrimination. The county board’s
49
84 C.J.S. Taxation § 42 (2022) (citing Kuiters v. County of Freeborn, 430
N.W.2d 461 (Minn. 1988)).
50
See Neb. Rev. Stat. § 77-1502 (Cum. Supp. 2022).
51
See 2018 Neb. Laws, L.B. 885, § 1 (adding requirement that protest “indi-
cate whether the person signing the protest is an owner of the property or
a person authorized to protest on behalf of the owner”).
52
See, Gamboni v. County of Otoe, 159 Neb. 417, 67 N.W.2d 489 (1954),
overruled in part on other grounds, Hansen v. County of Lincoln, 188 Neb.
461, 197 N.W.2d 651 (1972); State v. Back, 72 Neb. 402, 100 N.W. 952
(1904); State v. Savage, supra note 7; State v. Karr, 64 Neb. 514, 90 N.W.
298 (1902); State v. Osborn, supra note 11.
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failure to correct the misclassification after hearing the taxpay-
ers’ protest for the first year suggests, at best, bureaucratic
ineptitude, or, worse, a disdain for taxpayers’ rights in the
equalization process. Our traditional equalization jurisprudence
places the incentive for diligence where it belongs—upon the
taxing authority.
The majority purports to limit its refusal to equalize to
“error in the subclassification and undervaluation of one tax-
payer’s property.” But there is no principled distinction, based
in law, between errors in misclassification involving multiple
tracts. Perhaps at some point, such errors might be described
as systemic. But the majority does not announce a principle
which can guide county boards of equalization and TERC in
distinguishing when misclassifications are merely “isolated
error.” And I respectfully urge that the uniformity clause does
not condone this notion. Our case law teaches otherwise.
TERC was required to faithfully apply Neb. Const. art.
VIII, § 1(4), and it did so. TERC’s decision conforms to the
law, is supported by competent evidence, and is neither arbi-
trary, capricious, nor unreasonable. I would affirm its deci-
sion. Because the majority takes a different course, I respect-
fully dissent.
Papik and Freudenberg, JJ., join in this dissent. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487056/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 01:08 AM CST
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Robert J. Heist II, appellant, v. Nebraska
Department of Correctional
Services et al., appellees.
___ N.W.2d ___
Filed September 23, 2022. No. S-20-813.
1. Summary Judgment: Appeal and Error. An appellate court affirms a
lower court’s grant of summary judgment if the pleadings and admitted
evidence show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts and that
the moving party is entitled to judgment as a matter of law.
2. ____: ____. An appellate court reviews the district court’s grant of 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.
3. Immunity: Jurisdiction. Sovereign immunity is jurisdictional in nature,
and courts have a duty to determine whether they have subject matter
jurisdiction over a matter.
4. Jurisdiction: Statutes. Subject matter jurisdiction and statutory inter-
pretation present questions of law.
5. Judgments: Appeal and Error. An appellate court independently
reviews questions of law decided by a lower court.
6. Judgments: Jurisdiction: Appeal and Error. A jurisdictional question
which does not involve a factual dispute is determined by an appellate
court as a matter of law, which requires the appellate court to reach a
conclusion independent from the lower court’s decision.
7. Sentences: Statutes: Time. The good time law to be applied to a
defendant’s sentence is the law in effect at the time the defendant’s sen-
tence becomes final.
8. Jurisdiction: Appeal and Error. Where a lower court lacks subject
matter jurisdiction to adjudicate the merits of a claim, issue, or question,
an appellate court also lacks the power to determine the merits of the
claim, issue, or question presented to the lower court.
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9. Administrative Law: Immunity: Waiver: Jurisdiction: Declaratory
Judgments. The Administrative Procedure Act provides a limited statu-
tory waiver of the State’s sovereign immunity and confers subject matter
jurisdiction for a declaratory judgment action seeking a determination
regarding the validity of a state agency’s rule or regulation.
10. Administrative Law: Words and Phrases. The Administrative
Procedure Act defines a “rule or regulation” as any standard of general
application adopted by an agency in accordance with the authority con-
ferred by statute.
11. Administrative law. Under the Administrative Procedure Act, a rule or
regulation shall not include internal procedural documents which pro-
vide guidance to staff on agency organization and operations, lacking
the force of law, and not relied upon to bind the public.
12. Administrative Law: Jurisdiction: Declaratory Judgments: Statutes.
The Administrative Procedure Act does not confer jurisdiction for
declaratory relief concerning judicial interpretation of a statute.
13. Declaratory Judgments: Immunity: Waiver. Nebraska’s Uniform
Declaratory Judgments Act does not waive the State’s sovereign
immunity.
14. Declaratory Judgments: Public Officers and Employees: Immunity.
A declaratory judgment action against a state officer or agent seeking
relief from an invalid act or an abuse of authority by an officer or agent
is not a suit against the State and is therefore not barred by the prin-
ciples of sovereign immunity.
15. Statutes: Appeal and Error. Statutory language is to be given its plain
and ordinary meaning, and an appellate court will not resort to inter-
pretation to ascertain the meaning of statutory words which are plain,
direct, and unambiguous.
16. Statutes: Legislature: Intent. Components of a series or collection of
statutes pertaining to a certain subject matter are in pari materia and
should be conjunctively considered and construed to determine the
intent of the Legislature, so that different provisions are consistent, har-
monious, and sensible.
17. ____: ____: ____. In order for a court to inquire into a statute’s legisla-
tive history, that statute in question must be open to construction, and a
statute is open to construction when its terms require interpretation or
may reasonably be considered ambiguous.
18. Statutes. The statutory canon of expressio unius est exclusio alterius
recognizes that an expressed object of a statute’s operation excludes the
statute’s operation on all other objects unmentioned by the statute.
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19. Sentences. Where a mandatory minimum sentence is involved, an
inmate’s parole eligibility date is calculated by subtracting the manda-
tory minimum sentence from the court’s minimum sentence, halving the
difference, and adding that difference to the mandatory minimum.
20. Statutes: Legislature: Presumptions: Intent. In construing a statute,
it is presumed that the Legislature intended a sensible, rather than an
absurd, result.
21. Statutes. Under the absurd results doctrine, a court may deviate from
the plain language of the statutory text if application of the plain lan-
guage would lead to manifest absurdity.
22. ____. The absurd results doctrine does not include substantive errors
arising from a drafter’s failure to appreciate the effect of certain statu-
tory provisions.
Appeal from the District Court for Lancaster County: John
A. Colborn, Judge. Affirmed.
Robert J. Heist II, pro se.
Douglas J. Peterson, Attorney General, and Scott R. Straus
for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
and Papik, JJ., and Steinke, District Judge.
Funke, J.
I. INTRODUCTION
Robert J. Heist II, an inmate in the Nebraska Department of
Correctional Services (DCS) system, appeals the dismissal of
his petition for declaratory judgment under the Administrative
Procedure Act (APA) and Nebraska’s Uniform Declaratory
Judgments Act (UDJA). Heist argues that good time credit
earned pursuant to Neb. Rev. Stat. § 83-1,107(2)(b) (Cum.
Supp. 2020) applies to an inmate’s parole eligibility date
(PED). In affirming the decision of the district court, we con-
clude that good time earned pursuant to § 83-1,107(2)(b) is
applicable only to reduce an inmate’s maximum sentence and,
accordingly, has no applicability to an inmate’s PED.
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II. BACKGROUND
1. Factual Background
On April 4, 2016, Heist was sentenced to imprisonment
for a minimum of 11 years (with a mandatory minimum of 3
years) and a maximum of 25 years in the DCS system for child
enticement. According to DCS records, Heist’s PED is March
30, 2023, and DCS’ brief on appeal gives his tentative release
date (TRD) as February 10, 2030.
Since his incarceration, Heist has been earning good time
credit under § 83-1,107. It is undisputed that the reductions
of Heist’s sentence under § 83-1,107 have been, and continue
to be, deducted from the maximum term of his sentence to
calculate the date when discharge from state custody becomes
mandatory. It further appears that, currently, no reductions have
been applied to Heist’s minimum sentence, mandatory mini-
mum sentence, or PED.
2. DCS Policy 104.08
DCS has adopted “Policy 104.08,” which is titled “Inmate
Time Calculations and Sentencing.” The stated purpose of
DCS’ Policy 104.08 is to “outlin[e] methodology for calcu-
lating inmate’s sentences.” As to procedures for inmate time
computations, Policy 104.08 notes that there are seven separate
Nebraska laws that govern the release of all inmates commit-
ted to DCS and explains that “[t]hese statutes, along with the
opinions of Nebraska courts and the state Attorney General’s
office, form the basis of all time calculations.” The first
Nebraska law identified is 2011 Neb. Laws, L.B. 191, which
Policy 104.08 describes as follows:
A. Effective March 16, 2011, LB 191 amended sections
83-1,107 and 83-1,108
1. LB 191 added an opportunity [for a committed
offender] to earn additional good time based on institu-
tional behavior. [DCS] will reduce the term of a commit-
ted inmate by three days on the first day of each month,
following a 12-month period of incarceration within
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[DCS], during which the inmate has not been found guilty
of a Class I or Class II offense, or more than three Class
III offenses under [DCS’] disciplinary code. Reductions
earned pursuant to LB 191 shall not be subject to forfeit
or withholding by [DCS].
3. Procedural Facts
Heist filed a petition against DCS, Scott Frakes in his offi-
cial capacity as DCS director, Mickie Baum in her official
capacity as DCS records administrator, and Candace Bottorf
in her official capacity as DCS agency legal counsel (here-
inafter collectively DCS) for declaratory judgment under
the APA and the UDJA. Heist alleged that Policy 104.08
improperly withholds L.B. 191 good time from PEDs. He
also argued that Policy 104.08 is a rule or regulation for pur-
poses of the APA and is not authorized by the language of
§ 83-1,107 and Neb. Rev. Stat. § 83-1,110 (Reissue 2014).
DCS filed a motion to dismiss which, by agreement and
notice to both parties, was converted to a motion for sum-
mary judgment. Heist subsequently filed a cross-motion for
summary judgment.
In October 2020, the district court entered an order sustain-
ing DCS’ motion, overruling Heist’s motion, and dismissing
Heist’s complaint. The court concluded that it lacked jurisdic-
tion over Heist’s APA claim, because Policy 104.08 was not a
rule or regulation as defined by Neb. Rev. Stat. § 84-901 (Cum.
Supp. 2020) and the State did not waive its sovereign immu-
nity. The court further concluded that DCS was entitled to
summary judgment on the UDJA claim, because Policy 104.08
accurately outlines how sentences are to be calculated pursu-
ant to Nebraska law and Heist’s PED was correctly calculated.
Heist appeals.
Heist filed a petition to bypass review by the Nebraska
Court of Appeals, asserting the case involves an issue of first
impression in Nebraska. We granted the petition to bypass and
moved the case to our docket.
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III. ASSIGNMENTS OF ERROR
Heist assigns, restated and consolidated, that the district
court erred in (1) finding that DCS Policy 104.08 is an internal
procedural document and thus concluding that it lacked subject
matter jurisdiction over his APA claim; (2) granting summary
judgment in favor of DCS on his UDJA claim, when Nebraska
law requires application of good time credit earned under
§ 83-1,107(2)(b) to PEDs; and (3) finding that 62 inmates hav-
ing a PED after their respective TRD, which is colloquially
referred to as an “inverted sentence,” is not so absurd that the
Legislature could not have intended § 83-1,107 to be inter-
preted as applying only to the maximum sentence.
IV. STANDARD OF REVIEW
[1,2] An appellate court affirms a lower court’s grant of
summary judgment if the pleadings and admitted evidence
show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts
and that the moving party is entitled to judgment as a matter
of law. 1 An appellate court reviews the district court’s grant of
summary judgment de novo, viewing the record in the light
most favorable to the nonmoving party and drawing all reason-
able inferences in that party’s favor. 2
[3-5] Sovereign immunity is jurisdictional in nature, and
courts have a duty to determine whether they have subject mat-
ter jurisdiction over a matter. 3 Subject matter jurisdiction and
statutory interpretation present questions of law. 4 An appellate
court independently reviews questions of law decided by a
lower court. 5
[6] A jurisdictional question which does not involve a fac-
tual dispute is determined by an appellate court as a matter of
1
Lassalle v. State, 307 Neb. 221, 948 N.W.2d 725 (2020).
2
Id.
3
Burke v. Board of Trustees, 302 Neb. 494, 924 N.W.2d 304 (2019).
4
In re Estate of Brinkman, 308 Neb. 117, 953 N.W.2d 1 (2021).
5
Id.
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law, which requires the appellate court to reach a conclusion
independent from the lower court’s decision. 6
V. ANALYSIS
[7] As an initial matter, we note that the good time law to be
applied to a defendant’s sentence is the law in effect at the time
the defendant’s sentence becomes final. 7 Because Heist was
sentenced in 2016, L.B. 191 is the applicable law governing
his sentence. Prior to the enactment of L.B. 191, § 83-1,107
reduced an inmate’s sentence by 6 months for each year of
the inmate’s term. L.B. 191 amended § 83-1,107 to allow an
inmate to earn additional good time at the rate of 3 days per
month after completion of 1 year of incarceration so long as
the offender did not commit certain offenses under DCS’ disci-
plinary code. Section 83-1,107(2) now reads as follows:
(a) [DCS] shall reduce the term of a committed offender
by six months for each year of the offender’s term and
pro rata for any part thereof which is less than a year.
(b) In addition to reductions granted in subdivision
(2)(a) of this section, [DCS] shall reduce the term of a
committed offender by three days on the first day of each
month following a twelve-month period of incarceration
within [DCS] during which the offender has not been
found guilty of (i) a Class I or Class II offense or (ii)
more than three Class III offenses under [DCS’] discipli
nary code. Reductions earned under this subdivision shall
not be subject to forfeit or withholding by [DCS].
(c) The total reductions under this subsection shall be
credited from the date of sentence, which shall include
any term of confinement prior to sentence and com-
mitment as provided pursuant to section 83-1,106, and
shall be deducted from the maximum term, to determine
the date when discharge from the custody of the state
becomes mandatory.
6
US Ecology v. State, 258 Neb. 10, 601 N.W.2d 775 (1999).
7
State v. Nollen, 296 Neb. 94, 892 N.W.2d 81 (2017).
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L.B. 191 also amended Neb. Rev. Stat. § 83-1,108 (Reissue
2014) to require that the Board of Parole reduce a parolee’s
parole term for good conduct while under parole by 10 days
for each month. Such reduction shall be deducted from the
maximum term, less good time granted pursuant to § 83-1,107,
to determine the date when discharge from parole becomes
mandatory.
As briefly discussed above, DCS inmates may accrue two
different good time credits under § 83-1,107. However, the
central issue in this case involves good time credits earned
pursuant to § 83-1,107(2)(b). As such, we decline to dis-
cuss the implications of good time credits earned pursuant to
§ 83-1,107(2)(a).
1. APA Claim
[8] Before reaching the legal import of § 83-1,107(2)(b)
and Policy 104.08, it is our duty to determine whether we
have jurisdiction over this matter. 8 Where a lower court lacks
subject matter jurisdiction to adjudicate the merits of a claim,
issue, or question, an appellate court also lacks the power to
determine the merits of the claim, issue, or question presented
to the lower court. 9
Heist argues that the district court erred in determining that
Policy 104.08 is not a rule or regulation and, thus, also in
determining that it lacked jurisdiction to adjudicate whether
the policy exceeds DCS’ statutory authority. Specifically, Heist
maintains Policy 104.08 is a rule or regulation because it
prescribes penalties, affects private rights, and sets its own
standards for calculating good time. He also maintains it has
the force of law, as shown by DCS’ “[p]ast practice” in releas-
ing approximately 300 inmates prematurely. 10 DCS disagrees,
arguing that Policy 104.08 is an internal procedural document
8
See Butler Cty. Landfill v. Butler Cty. Bd. of Supervisors, 299 Neb. 422,
908 N.W.2d 661 (2018).
9
Id.
10
Brief for appellant at 11.
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that repeats the relevant statutory language about calculating
inmate sentences “nearly verbatim,” rather than sets its own
standards. 11 DCS also asserts that any past misapplication of
good time does not establish the policy has the force of law.
We find no error in the district court’s determination that
Policy 104.08 is not a rule or regulation and hold that we, like
the district court, lack subject matter jurisdiction to consider
Heist’s APA claims.
[9-11] This court has repeatedly recognized that under Neb.
Rev. Stat. § 84-911 (Reissue 2014), the APA provides a limited
statutory waiver of the State’s sovereign immunity and confers
subject matter jurisdiction for a declaratory judgment action
seeking a determination regarding the validity of a state agen-
cy’s rule or regulation. 12 This waiver applies only to a “rule
or regulation,” which the APA defines to mean “any standard
of general application adopted by an agency in accordance
with the authority conferred by statute.” 13 The APA further
provides that the term “rule or regulation” shall not include
“internal procedural documents which provide guidance to
staff on agency organization and operations, lacking the force
of law, and not relied upon to bind the public.” 14 However, it
also provides that “every standard which prescribes a penalty
shall be presumed to have general applicability and any stan-
dard affecting private rights, private interests, or procedures
available to the public is presumed to be relied upon to bind
the public.” 15
Specifically, Heist asserts that language in sections I.B.3,
I.D.3, I.E.3, I.F.5, I.G.3, and I.H.5 of Policy 104.08, calling for
good time reductions to be forfeited or withheld for miscon-
duct, prescribes penalties, and as such, he maintains that Policy
104.08 is a rule or regulation. He similarly maintains that
11
Brief for appellees at 11.
12
See Engler v. State, 283 Neb. 985, 814 N.W.2d 387 (2012).
13
§ 84-901(2).
14
Id.
15
Id.
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language in sections I.A.1, I.F.6, I.G.3, and I.H.5, regarding
how good time can be earned and how lost good time can be
restored, affects private rights and, as such, means that Policy
104.08 must be a rule or regulation and cannot be an internal
procedural document.
Of the various sections of Policy 104.08 cited by Heist,
however, only section I.A.1 involves L.B. 191 good time. The
other sections pertain to good time under earlier statutes whose
application Heist does not challenge. As such, we focus our
discussion on section I.A.1.
Section I.A.1 essentially restates § 83-1,107(2)(b) when it
calls for inmates’ terms to be reduced by 3 days on the first
day of each month, following a 12-month period of incarcera-
tion within DCS, during which the inmate has not been found
guilty of a Class I or II offense, or more than three Class III
offenses, under DCS’ disciplinary code, and provides that any
such good time shall not be subject to forfeiture or withholding
by DCS. The only differences between the policy here and the
statute are immaterial; for example, section I.A.1 uses “NDCS”
and “will,” while the statute uses “the department” and “shall.”
Aside from these minute differences, DCS neither added any-
thing to nor removed anything from the statutory language
when restating it in the policy. As such, the purported penalties
and provisions affecting private rights that Heist points to do
not mean that Policy 104.08 is a rule or regulation. In fact, to
the contrary, they indicate that Policy 104.08 is a prototypical
internal procedural document insofar as it provides guidance to
staff by summarizing the seven statutes relevant to the release
of all DCS inmates and explaining their effect.
[12] Allowing Heist to challenge Policy 104.08 under the
APA simply because it restates statutory language that could be
seen to prescribe penalties or affect private rights would negate
our holding in Perryman v. Nebraska Dept. of Corr. Servs. 16
16
Perryman v. Nebraska Dept. of Corr. Servs., 253 Neb. 66, 568 N.W.2d 241
(1997), disapproved on other grounds, Johnson v. Clarke, 258 Neb. 316,
603 N.W.2d 373 (1999).
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The plaintiff in Perryman was an inmate whom DCS initially
credited with good time when computing his PED and TRD,
even though he was sentenced to a mandatory minimum
term. 17 However, DCS later revoked these credits after the
Nebraska Attorney General indicated that DCS’ practice was
contrary to the governing statute. 18 The plaintiff sued, seek-
ing a judicial determination as to whether DCS could take
this action based on the Attorney General’s memorandum.
However, the district court found it lacked jurisdiction under
the APA, because “‘the conflict is simply one of statutory
interpretation.’” 19 We affirmed, noting that the memoran-
dum “involve[d] a matter of statutory interpretation” and that
§ 84-911’s limited waiver of sovereign immunity “does not
confer jurisdiction for declaratory relief concerning judicial
interpretation of a statute.” 20
Heist attempts to distinguish his case from Perryman by
arguing that Policy 104.08 is not a memorandum, applies to
all inmates, “does prescribe a penalty,” and exceeds the DCS’
statutory authority. 21 However, these arguments are unavail-
ing. Nothing in the APA’s definition of “rule or regulation”
suggests that a document’s denomination as a “policy” or
“memorandum” is dispositive. The same is true as to whether
the document affects all inmates or a subset of inmates.
Moreover, as we have already noted, the policy merely restates
good time calculations set forth in the statute; it does not pre-
scribe a penalty. Further, the question of whether the policy
exceeds DCS’ statutory authority is an argument on the merits
which cannot be reached under Heist’s APA claim, because
we lack subject matter jurisdiction. Thus, we agree with the
district court and conclude that Policy 104.08 is not a rule or
17
Id.
18
Id.
19
Id. at 69, 568 N.W.2d at 244.
20
Id. at 70, 568 N.W.2d at 245.
21
Brief for appellant at 12.
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regulation, because it merely recites Nebraska statute. The
limited waiver of sovereign immunity does not confer juris-
diction for declaratory relief concerning judicial interpretation
of a statute. Accordingly, the district court correctly found
that it lacked subject matter jurisdiction under the APA in
Heist’s petition against DCS, because the State did not waive
its sovereign immunity.
2. UDJA Claim
Heist also argues that the district court erred in grant-
ing summary judgment in favor of DCS on his UDJA claim,
because Nebraska law requires that good time credit earned
under § 83-1,107(2)(b) apply to PEDs. DCS counters that the
plain language of § 83-1,107(2)(c) clearly indicates that good
time earned under § 83-1,107(2)(b) is only to be deducted from
an inmate’s maximum term to determine when discharge from
state custody becomes mandatory.
[13,14] As an initial matter, we note that although the UDJA
itself does not waive the State’s sovereign immunity, a declara-
tory judgment action against a state officer or agent seeking
relief from an invalid act or an abuse of authority by an offi-
cer or agent is not a suit against the State and is therefore not
barred by the principles of sovereign immunity. 22 Heist’s peti-
tion for declaratory relief named, in addition to DCS, Frakes,
Baum, and Bottorf in their official capacities as respondents,
and asserted that each was improperly “withholding the good
time implemented by LB 191 . . . by applying LB 191 Good
Time only to [TRDs] and not to [PEDs].” As such, like the
district court, we have jurisdiction to consider the merits of
Heist’s UDJA claim, which he brought as an alternative to his
APA claim. However, upon consideration of this claim, we find
no error by the district court.
22
See, Logan v. Department of Corr. Servs., 254 Neb. 646, 578 N.W.2d
44 (1998); County of Lancaster v. State, 247 Neb. 723, 529 N.W.2d 791
(1995). See, also, Burke, supra note 3.
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(a) § 83-1,107
[15,16] In considering the parties’ arguments concerning
the interpretation of § 83-1,107, we apply our familiar prin-
ciples of statutory interpretation, which we briefly review
here. Two basic principles of statutory interpretation control. 23
First, statutory language is to be given its plain and ordinary
meaning, and an appellate court will not resort to interpreta-
tion to ascertain the meaning of statutory words which are
plain, direct, and unambiguous. 24 Second, components of a
series or collection of statutes pertaining to a certain subject
matter are in pari materia and should be conjunctively consid-
ered and construed to determine the intent of the Legislature,
so that different provisions are consistent, harmonious, and
sensible. 25
[17] Ordinarily, we look no further than the text. 26 In order
for a court to inquire into a statute’s legislative history, that
statute in question must be open to construction, and a statute
is open to construction when its terms require interpretation or
may reasonably be considered ambiguous. 27
Here, like the district court, we find that § 83-1,107 unam-
biguously provides that good time reductions are deducted
from the maximum term. Subsection (2)(c) of § 83-1,107 spe-
cifically states:
The total reductions under this subsection shall be cred-
ited from the date of sentence, which shall include any
term of confinement prior to sentence and commitment
as provided pursuant to section 83-1,106, and shall be
deducted from the maximum term, to determine the date
when discharge from the custody of the state becomes
mandatory.
23
State v. McGuire, 301 Neb. 895, 921 N.W.2d 77 (2018).
24
Id.
25
Id.
26
Id.
27
Id.
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(Emphasis supplied.) Admittedly, subsection (2)(c) does not
expressly state that good time shall only be deducted from the
maximum term, and subsection (2)(b) uses the word “term”—
rather than “maximum term”—when discussing how L.B. 191
good time may be accrued. However, contrary to Heist’s sug-
gestion, neither factor renders § 83-1,107 ambiguous.
Subsection (2)(c) of § 83-1,107 plainly states that the total
reductions shall be deducted from the maximum term. It does
not state reductions should be made from the minimum term
or the mandatory minimum term, which is tantamount to say-
ing that the reductions shall be from only the maximum term.
Moreover, subsection (2)(c) expressly states that it applies to
all “reductions under this subsection,” including those under
subsection (2)(b).
[18] The district court buttressed its conclusion regarding
the plain meaning of § 83-1,107 by referencing the statutory
canon of expressio unius est exclusio alterius, which recog-
nizes that “an expressed object of a statute’s operation excludes
the statute’s operation on all other objects unmentioned by
the statute.” 28 Specifically, it noted that § 83-1,107(2)(c)’s
provisions for deductions from the maximum term necessarily
excludes § 83-1,107(2)(b) from operating on an inmate’s mini-
mum term and, by extension, PED.
Heist maintains that this was erroneous and that the district
court should instead have adopted his interpretation, based
on the canon of in pari materia. He maintains that the district
court’s approach “creates conflict” between the various provi-
sions of the Nebraska Treatment and Corrections Act, while his
approach “harmonizes” them. 29
The district court considered Heist’s proposed interpreta-
tion based on in pari materia and properly rejected it. Heist’s
argument seems to be that because § 83-1,110(1) states that
“[e]very committed offender shall be eligible for parole when
28
Pfizer v. Lancaster Cty. Bd. of Equal., 260 Neb. 265, 272, 616 N.W.2d
326, 335 (2000).
29
Brief for appellant at 17.
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the offender has served one-half the minimum term of his or
her sentence as provided in sections 83-1,107 and 83-1,108,”
good time credit accrued under § 83-1,107(2)(b) must be con-
sidered when determining PEDs. Heist similarly maintains
that not counting L.B. 191 good time toward PEDs “creates
conflict” between §§ 83-1,107 and other provisions of the
Nebraska Treatment and Corrections Act, specifically Neb.
Rev. Stat. §§ 83-170(7) and 83-1,109 (Cum. Supp. 2020)
and 83-1,110.
[19] Heist’s arguments are unpersuasive. Section 83-170(7)
merely defines “good time” as any reduction of a sentence
granted pursuant to §§ 83-1,107 and 83-1,108 and makes
no reference to an inmate’s PED. Section 83-1,109 merely
requires DCS to manage information relevant to parole eligi-
bility, as well as good time credits, but makes no reference to
how to calculate an inmate’s PED. 30 Section 83-1,110 specifi-
cally provides that where a mandatory minimum sentence is
involved, as is the case here, an inmate’s PED is calculated
by subtracting the mandatory minimum sentence from the
court’s minimum sentence, halving the difference, and add-
ing that difference to the mandatory minimum. 31 Under these
provisions, good time reductions taken under § 83-1,107(2)(b)
would not affect an inmate’s PED unless they can be applied
to an inmate’s minimum or mandatory minimum sentence,
something which is not possible under the plain meaning
of § 83-1,107(2)(c), as we have previously discussed. Thus,
the language of § 83-1,107 can be adequately understood
when considered in pari materia with other statutes in the
Nebraska Treatment and Corrections Act. Further, although we
do not find any conflict between §§ 83-1,107 and 83-1,110,
we agree with the district court that even if conflict did exist,
the specific language of § 83-1,107(2)(c) would control over
the general language of § 83-1,110. To the extent conflict
30
See, generally, Gray v. Frakes, 311 Neb. 409, 973 N.W.2d 166 (2022).
31
State v. Castillas, 285 Neb. 174, 826 N.W.2d 255 (2013), disapproved on
other grounds, State v. Lantz, 290 Neb. 757, 861 N.W.2d 728 (2015).
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exists between two statutes, the specific statute controls over
the general. 32
Additionally, Heist directs us to Neb. Rev. Stat
§ 29-2204(6)(a) (Reissue 2016), which requires a court, when
imposing an indeterminate sentence, to advise the offender of
the time the offender will serve on his or her minimum term
before attaining parole eligibility and the time the offender will
serve on his or her maximum term before attaining mandatory
release, assuming that no good time for which the offender will
be eligible is lost. However, Heist’s argument that this statute
“assume[s] good time is used to calculate parole eligibility” is
also unpersuasive. 33 Section 29-2204(6)(a) merely requires a
court to give certain advisements to an offender when imposing
an indeterminate sentence upon that offender; it neither states
nor assumes that good time reductions are applicable to an
inmate’s minimum sentence. Thus, Heist’s assignments of error
regarding the interpretation of § 83-1,107 are without merit.
Additionally, we acknowledge that Heist urges this court
to look at the legislative history of L.B. 191 to ascertain the
Legislature’s intent and that the district court did so. However,
in order for a court to inquire into a statute’s legislative his-
tory, that statute in question must be open to construction, and
a statute is open to construction when its terms require inter-
pretation or may reasonably be considered ambiguous. 34 As
discussed above, the language of § 83-1,107 is not ambiguous
and therefore not open to construction. As such, we decline
Heist’s invitation to consider the legislative history behind
L.B. 191.
(b) Nebraska Law
Heist also maintains that the district court erred because
its interpretation of § 83-1,107 “violates” three of our earlier
32
State v. Street, 306 Neb. 380, 945 N.W.2d 450 (2020).
33
Brief for appellant at 15.
34
McGuire, supra note 23.
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decisions, “which all state good time reductions are used to
calculate PEDs.” 35 However, a closer examination of each of
these decisions reveals otherwise.
Heist first directs us to our decision in Adams v. State. 36 In
Adams, a DCS inmate brought a declaratory judgment action
against the Board of Parole, seeking a determination that
§ 83-1,110(1) unconstitutionally usurped the board’s authority
and a declaration that he was eligible for parole. 37 In discuss-
ing § 83-1,110(1), we stated, “The Legislature has declared that
‘[e]very committed offender shall be eligible for parole when
the offender has served one-half the minimum term of his or
her sentence . . . ,’ as adjusted for good time.” 38 Heist argues
that this language indicates this court’s “clear interpretation
that the one-half reduction to the minimum term is for good
time.” 39 We disagree.
First, the plain language of § 83-1,110 makes it clear that
the phrase “one-half the minimum term” refers to the point at
which an inmate shall be eligible for parole, not to a reduc-
tion in an inmate’s minimum sentence. Second, to the extent
§ 83-1,110 references good time reductions, the plain language
of the statute states that such reductions are not applicable to
a sentence imposing a mandatory minimum term, as is the
case here. Third, and most important, our opinion in Adams
discussed § 83-1,110(1) under the conditions clause of the
Nebraska Constitution. A case is not authority for any point not
necessary to be passed on to decide the case or not specifically
raised as an issue addressed by the court. 40 In other words, our
use of the phrase “as adjusted for good time” in Adams is dicta
and is not to be interpreted as meaning this court has opined
35
Brief for appellant at 16.
36
Adams v. State, 293 Neb. 612, 879 N.W.2d 18 (2016).
37
Id.
38
Id. at 618, 879 N.W.2d at 22.
39
Brief for appellant at 14.
40
Mach v. County of Douglas, 259 Neb. 787, 612 N.W.2d 237 (2000).
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that good time reductions apply to an inmate’s minimum sen-
tence or PED.
Heist also argues that the district court erred in its reliance
on Caton v. State 41 and State v. Castillas 42 to conclude that
good time reductions are not used to calculate an inmate’s
PED. We note, however, that the district court only refer-
enced Castillas and Caton to recite how PEDs and TRDs are
calculated in Nebraska. Additionally, though Heist is correct
that both cases “deal with calculating mandatory minimums
. . . and neither addresses [L.B.] 191 good time,” 43 he fails to
appreciate that those cases did not discuss L.B. 191 good time,
because the sentences at issue in those cases occurred prior
to the enactment of L.B. 191. Therefore, L.B. 191 good time
reductions would not have been available to the petitioners in
Castillas and Caton, and as such, it was not necessary for us to
discuss such reductions there.
(c) Impact of § 83-1,107(2)
Heist further argues that the district court erred in find-
ing that § 83-1,107(2) unambiguously provides that L.B. 191
good time applies only to reductions in the maximum term,
because this approach results in the “anomalous, unusual,
or absurd result” of 62 inmates currently having inverted
sentences. 44 In support of his argument, Heist points to our
decisions in Castillas and Johnson v. Kenney. 45 In Castillas,
we recognized that one of the purposes behind § 83-1,107
was to “ensure that no one would reach mandatory discharge
before reaching parole eligibility.” 46 Then, in Johnson, we
explained that it would not serve the legislative intent if a
41
Caton v. State, 291 Neb. 939, 869 N.W.2d 911 (2015).
42
Castillas, supra note 31.
43
Brief for appellant at 15.
44
Id. at 20.
45
Johnson v. Kenney, 265 Neb. 47, 654 N.W.2d 191 (2002).
46
Castillas, supra note 31, 285 Neb. at 189, 826 N.W.2d at 267.
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defendant could be mandatorily discharged before being eli-
gible for parole. 47
[20,21] In construing a statute, it is presumed that the
Legislature intended a sensible, rather than an absurd, result. 48
When possible, an appellate court will try to avoid a statu-
tory construction that would lead to an absurd result. 49 Under
the absurd results doctrine, a court may deviate from the
plain language of the statutory text if application of the plain
language would lead to manifest absurdity. 50 In that situa-
tion, a court may correct an error in a provision if failing to
do so would result in a disposition that no reasonable person
could approve. 51 However, the bar of manifest absurdity is
not easily cleared, and we have refused to apply the doctrine
if the result dictated by the plain language is not “‘so absurd
that the Legislature could not possibly have intended it.’” 52
Additionally, the absurdity must be able to be corrected by
changing or supplying a particular word or phrase whose
inclusion or omission was obviously a technical or ministe-
rial error. 53 The doctrine does not justify judicial revision of
a statute simply to make the statute more reasonable in the
judges’ view. 54
Though the current version of § 83-1,107(2)(c) makes clear
that good time is deducted only from the maximum sentence,
earlier versions of the statute had no such language. In fact,
prior to 1995, the statute specifically directed that good time
47
Johnson, supra note 45.
48
State v. Gales, 269 Neb. 443, 694 N.W.2d 124 (2005).
49
Thomas v. Peterson, 307 Neb. 89, 948 N.W.2d 698 (2020).
50
Parks v. Hy-Vee, 307 Neb. 927, 951 N.W.2d 504 (2020).
51
Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of
Legal Texts 234-39 (2012), citing Cernauskas v. Fletcher, 211 Ark. 678,
201 S.W.2d 999 (1947).
52
Parks, supra note 50, 307 Neb. at 945, 951 N.W.2d at 518.
53
Scalia & Garner, supra note 51.
54
Id.
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was to be deducted from the minimum term to determine the
date an inmate was eligible for parole and from the maximum
term to determine when discharge from the state became man-
datory. 55 However, in 1995, the Legislature passed 1995 Neb.
Laws, L.B. 371, which explicitly removed any reference to
good time being deducted from an inmate’s minimum sentence,
as well as any reference to parole. Since 1995, § 83-1,107 has
been amended on numerous occasions, but the Legislature
has never again referred to good time being applied to reduce
an inmate’s minimum sentence. Thus, the omission of those
phrases from the statute appears intentional and not a techni-
cal or ministerial error; and the absurdity Heist complains of
cannot be corrected by simply supplying the words “minimum
sentence” or “parole eligibility date” into the language of
§ 83-1,107.
[22] Further, although L.B. 191 has caused some inmates
to incur inverted sentences, such result appears to be an unin-
tended consequence of L.B. 191. The absurd results doctrine
does not include substantive errors arising from a drafter’s
failure to appreciate the effect of certain statutory provisions. 56
Thus, conceding that the DCS interpretation of § 83-1,107(2),
of which Heist complains, has produced the allegedly absurd
result of 62 inmates with inverted sentences, this falls far short
of meeting the high bar of manifest absurdity.
We are not the only court to take this view. In Chung Fook
v. White, 57 the U.S. Supreme Court upheld a provision in the
Immigration Act of 1917, which exempted wives and children
of naturalized citizens from mandatory detention upon entering
the country if they were found to be affected with a contagious
disease, but made no such provisions for wives and children of
native-born citizens. In so doing, the Court noted the oddness
55
See § 83-1,107. See, also, Von Bokelman v. Sigler, 186 Neb. 378, 183
N.W.2d 267 (1971).
56
See Scalia & Garner, supra note 51.
57
Chung Fook v. White, 264 U.S. 443, 44 S. Ct. 361, 68 L. Ed. 781 (1924).
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of such disparate treatment, insofar as “it cannot be supposed
that Congress intended to accord to a naturalized citizen a right
and preference beyond that enjoyed by a native-born citizen.” 58
Nonetheless, it found that because the statute plainly refers to
only the wives and children of naturalized citizens, it could not
read the words “native-born citizen” into the statute without
usurping the legislative function. 59 The Court concluded that
any remedy lies with Congress, and not the courts, if the statute
unjustly discriminates against native-born citizens or is cruel or
inhuman in its results. 60
The U.S. Supreme Court has taken a similar view in other
decisions, including one decision where it specifically noted
that laws enacted with good intentions, when put to the test,
frequently, and to the surprise of the lawmaker, turn out to be
mischievous, absurd, or otherwise objectionable. 61 But in such
a case, the remedy lies with the lawmaking authority, and not
with the courts. 62
Here, L.B. 191 was enacted to allow inmates an opportunity
to earn additional good time credit. However, the application
of L.B. 191 has created inverted sentences for some inmates.
Nevertheless, because § 83-1,107(2)(c) plainly states that good
time is to be applied to reduce an inmate’s maximum sen-
tence, we cannot interpolate the words “minimum sentence” or
“parole eligibility date” without usurping the legislative func-
tion. As such, the district court did not err in failing to find
absurdity in the practical effects of L.B. 191.
VI. CONCLUSION
Policy 104.08 is not a rule or regulation for purposes of the
APA, and thus, the district court and this court lack jurisdiction
58
Id., 264 U.S. at 445.
59
Id.
60
Chung Fook, supra note 57.
61
Crooks v. Harrelson, 282 U.S. 55, 51 S. Ct. 49, 75 L. Ed. 156 (1930).
62
Id.
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over Heist’s APA claim. Moreover, the plain, direct, and unam-
biguous language of § 83-1,107 makes it clear that good time
reductions earned under this section apply to an inmate’s maxi-
mum sentence, not to an inmate’s minimum sentence and, thus,
not to an inmate’s PED. Further, to the extent Heist argues L.B.
191 has produced an unintended result, the resolution of such
unintended result is within the province of the Legislature, not
with this court. Accordingly, Heist’s assignments of error are
without merit.
Affirmed.
Freudenberg, J., not participating. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487066/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 01:08 AM CST
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CARRIZALES V. CREIGHTON ST. JOSEPH
Cite as 312 Neb. 296
Natasha Carrizales, individually and on behalf of
Nina Carrizales, a minor, as her guardian and next
friend, and Nina Carrizales, by and through her
mother, guardian, and next friend, Natasha
Carrizales, appellants, v. Creighton Saint
Joseph Regional Healthcare System,
LLC, et al., appellees.
___ N.W.2d ___
Filed August 26, 2022. No. S-21-150.
1. Judgments: Jurisdiction: Appeal and Error. The question of juris-
diction is a question of law, upon which an appellate court reaches a
conclusion independent of the trial court; however, findings of the lower
court as to underlying factual disputes, if any, in regard to the jurisdic-
tional issue will be upheld unless they are clearly erroneous.
2. Limitations of Actions: Dismissal and Nonsuit. Neb. Rev. Stat.
§ 25-217 (Reissue 2016) is self-executing, so that an action is dismissed
by operation of law, without any action by either the defendant or the
court, as to any defendant who is named in the action and not served
with process within the time set forth in the statute.
3. Limitations of Actions: Dismissal and Nonsuit: Jurisdiction. After
dismissal of an action by operation of law under Neb. Rev. Stat.
§ 25-217 (Reissue 2016), there is no longer an action pending and the
district court has no jurisdiction to make any further orders except to
formalize the dismissal.
4. Evidence: Appeal and Error. Generally, the control of discovery is a
matter for judicial discretion, and decisions regarding discovery will be
upheld on appeal in the absence of an abuse of discretion.
5. Appeal and Error. Appellate review of a district court’s use of inherent
power is for an abuse of discretion.
6. Judgments: Words and Phrases. An abuse of discretion occurs when
a trial court’s decision is based upon reasons that are untenable or
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unreasonable or if its action is clearly against justice or conscience,
reason, and evidence.
7. Courts. Nebraska courts, through their inherent judicial power, have
the authority to do all things necessary for the proper administration
of justice.
8. Summary Judgment: Appeal and Error. An appellate court affirms a
lower court’s grant of summary judgment if the pleadings and admitted
evidence show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts and that
the moving party is entitled to judgment as a matter of law.
9. ____: ____. An appellate court reviews the district court’s grant of 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.
10. Summary Judgment: Malpractice: Physicians and Surgeons:
Affidavits: Proof. At the summary judgment stage, it is well settled that
a physician’s self-supporting affidavit suffices to make a prima facie
case that the physician did not commit medical malpractice.
11. Expert Witnesses. A court should not admit expert testimony if it
appears the witness does not possess facts that will enable him or her
to express an accurate conclusion, as distinguished from a mere guess
or conjecture.
Appeal from the District Court for Douglas County: James
T. Gleason, Judge. Affirmed.
Theodore R. Boecker, Jr., of Boecker Law, P.C., L.L.O., for
appellants.
Joseph S. Daly and Mary M. Schott, of Evans & Dixon,
L.L.C., for appellees.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Papik, J.
Natasha Carrizales, individually and on behalf of her
minor daughter, Nina Carrizales (individually and collectively
Carrizales), brought a medical malpractice action alleging neg-
ligence during Nina’s birth. The district court found that one
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defendant was dismissed by operation of law as a result of
Carrizales’ failure to timely serve it. The district court granted
summary judgment in favor of the remaining defendants after
granting a motion to strike Carrizales’ expert witness. Carrizales
appeals these rulings. Finding no error, we affirm.
I. BACKGROUND
Carrizales filed her lawsuit on October 30, 2013. In her
complaint, Carrizales alleged that on October 30, 2011, she
was admitted to an Omaha, Nebraska, hospital and that she
gave birth to her daughter that day. Carrizales also alleged
that various doctors responsible for her and her daughter’s
care negligently failed to respond to signs of fetal distress and
that, as a result, her daughter was born with severe disabilities,
which will reduce her life expectancy and require extended
medical attention throughout the course of her life.
Among the defendants named in the lawsuit were Creighton
University Medical Center-Saint Joseph Hospital (Creighton
University Medical Center) and Creighton University. Carrizales
alleged that Creighton University Medical Center operated
the hospital at which the birth took place and that Creighton
University employed or granted privileges to practice medicine
at the hospital to several individual defendants. The individ
uals named as defendants included three doctors: Caron J.
Gray, Nicholas L. Wulf, and Richard G. Arms III (collectively
the doctors). Carrizales alleged that the doctors provided care
and treatment to Carrizales and her daughter during the course
of Carrizales’ hospital stay.
At issue in this appeal is the district court’s disposition of
Carrizales’ claims against Creighton University and the doc-
tors. Carrizales filed a motion for default judgment against
Creighton University, alleging that it had failed to respond to the
complaint. The district court concluded, however, that because
Carrizales failed to serve Creighton University within the dead-
line provided at the time in Neb. Rev. Stat. § 25-217 (Reissue
2016), Creighton University was dismissed by operation of
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law. The district court granted summary judgment in favor of
the doctors after entering an order striking Carrizales’ expert
witness. The district court also denied Carrizales’ motion to
alter or amend. Additional background regarding these issues
is provided in the analysis section below.
II. ASSIGNMENTS OF ERROR
Carrizales assigns, condensed and restated, that the dis-
trict court erred (1) in finding that Creighton University was
dismissed by operation of law under § 25-217, (2) in failing
to grant her motion for default judgment against Creighton
University, (3) in striking her expert witness, (4) in granting
the doctors’ motion for summary judgment, and (5) in denying
her motion to alter or amend.
III. ANALYSIS
1. Dismissal of Creighton University
(a) Background
As noted above, Carrizales filed her lawsuit on October 30,
2013. On October 31, Carrizales filed a praecipe for a sum-
mons to be served on Creighton University, in care of its reg-
istered agent, James S. Jansen, by certified mail. The clerk of
the district court issued the summons the same day consistent
with the instructions of the praecipe. The summons was No.
226226. There is no dispute that Carrizales did not immedi-
ately serve this summons.
Months later, on April 16, 2014, Carrizales filed a sec-
ond praecipe to issue a summons. Like the October 2013
praecipe, it requested a summons to be served on Creighton
University, in care of its registered agent, Jansen, by certified
mail. Later the same day, the clerk of the court issued a sum-
mons. The summons, however, listed the party to be served as
Creighton University Medical Center. This second summons
was No. 255379.
Carrizales filed a service return in the district court on April
28, 2014. The service return listed the No. 226226 summons
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in the upper right-hand corner. It indicated that copies of the
summons were sent by certified mail to “Creighton University
Medical Center” care of “James S. Jansen, RA” on April 17.
An accompanying return receipt showed the certified mail was
received April 21.
Over 4 years later, in July 2018, Carrizales filed a motion
asking the district court to enter a default judgment against
Creighton University. It alleged that Creighton University had
been served with the summons, but had not responded to the
complaint. At the hearing on Carrizales’ motion for default
judgment, Creighton University argued that a default judgment
should not be entered against it, because it was not obligated to
respond to Carrizales’ complaint. Creighton University argued
that it was not obligated to respond because Carrizales either
served the wrong party or served the October 2013 summons
after it expired.
In support of the motion for default judgment, Carrizales
offered an affidavit signed by her counsel. That affidavit stated
that Carrizales “filed a Praecipe for issuance of Summons and
Complaint upon Creighton University” on April 14, 2014.
It also stated that “[w]ithin ten days of the issuance of the
Summons by the Clerk, [Carrizales] caused a Summons to
be issued and said Summons was served via certified mail
. . . . A copy of the Summons and Complaint are attached as
Exhibit 2.” The attached exhibit 2 was a copy of summons
No. 255379, dated April 16, 2014. The affidavit also stated
that “[s]ervice was accomplished upon Creighton University
by delivery of a Summons and Complaint upon its registered
agent . . . on or about April 21, 2014, as reflected in the return
of service, a copy of which is attached hereto as Exhibit 6.”
The attached exhibit 6 is a copy of the service return that was
filed with the district court, which lists No. 226226 in the
upper right-hand corner.
The district court entered a written order in December
2020, addressing Carrizales’ motion for default judgment. In
the order, the district court observed that the service return
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Carrizales filed listed the document number associated with
the summons issued in October 2013. The district court found
that the October 2013 summons was not delivered until April
2014 and was thus not sent within 10 days of issuance as
required by Neb. Rev. Stat. § 25-505.01(1)(c) (Reissue 2016).
Based on this determination, the district court concluded
that Carrizales failed to serve Creighton University within 6
months of the filing of her lawsuit and that, under § 25-217,
the action against Creighton University was thus dismissed
without prejudice by operation of law.
(b) Standard of Review
[1] By finding that Carrizales’ claims against Creighton
University were dismissed by operation of law, the district
court concluded it lacked subject matter jurisdiction over those
claims. See, Stone Land & Livestock Co. v. HBE, 309 Neb.
970, 962 N.W.2d 903 (2021); Kovar v. Habrock, 261 Neb.
337, 622 N.W.2d 688 (2001). The question of jurisdiction is a
question of law, upon which an appellate court reaches a con-
clusion independent of the trial court; however, findings of the
lower court as to underlying factual disputes, if any, in regard
to the jurisdictional issue will be upheld unless they are clearly
erroneous. Walksalong v. Mackey, 250 Neb. 202, 549 N.W.2d
384 (1996).
(c) Analysis
Carrizales argues that rather than finding that Creighton
University was dismissed by operation of law, the district
court should have entered a default judgment against it. We
focus our attention on the district court’s determination that
Creighton University was dismissed by operation of law. If that
determination is correct, the district court obviously did not
err by declining to enter a default judgment against Creighton
University.
Carrizales makes both factual and legal arguments in con-
tending that the district court erred by finding that Creighton
University was dismissed by operation of law pursuant to
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§ 25-217. She argues that the district court erred by making
the factual finding that the summons that Carrizales served in
April 2014 was the summons that was issued in October 2013.
Alternatively, she argues that even if she served the summons
issued in October 2013 in April 2014, the district court erred
by finding as a matter of law that § 25-217 applied.
We will address Carrizales’ factual argument first. Carrizales
argues that her counsel’s affidavit established that the sum-
mons served in April 2014 was the summons issued earlier
that month and that there is no evidence to the contrary. We
disagree with Carrizales that her counsel’s affidavit conclu-
sively established that the summons served in April 2014 was
the summons issued that month. Carrizales’ counsel clearly
averred that he served “a Summons” in April 2014, but it is
not clear to us from the face of the affidavit that he was aver-
ring that he served the summons the clerk had issued earlier
that month. Furthermore, as noted above, Carrizales’ counsel
averred in the affidavit that service of “a Summons” was
accomplished in April 2014 “as reflected in the return of serv
ice.” The service return, however, listed the document number
corresponding to the summons issued in October 2013. We
also note that while counsel for Carrizales expressed a belief at
oral argument that the summons served in April 2014 was the
summons issued in April 2014, he also acknowledged “some
chance” that it was actually the summons issued in October
2013 that was served in April 2014. Given the evidence before
the district court, we do not find that its determination that
Carrizales served the summons issued in October 2013 was
clearly erroneous.
Having found no grounds to reverse the district court’s deci-
sion based on its factual determination, we turn to Carrizales’
legal argument. Here, Carrizales argues that even if the sum-
mons served on Creighton University was not served within
10 days of issuance as required by § 25-505.01(1)(c), she
nonetheless “served” Creighton University within the deadline
set by § 25-217. She also argues that if Creighton University
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had some objection to the summons or service of process,
it was obligated to file a motion under Neb. Ct. R. Pldg.
§ 6-1112(b)(4) or (5). By not filing such a motion, she argues,
Creighton University waived any objection to the service it
received.
At the time Carrizales filed her complaint, § 25-217 pro-
vided that an action “shall stand dismissed without prejudice
as to any defendant not served within six months from the
date the complaint was filed.” Carrizales’ argument requires
us to determine what a plaintiff must do in order for a defend
ant to be “served” for purposes of the version of § 25-217 in
effect at the time the complaint was filed in this case. On this
point, Carrizales suggested at oral argument that a defendant
is “served” for purposes of § 25-217 when it actually receives
a copy of the summons and complaint pursuant to a method
of service authorized by statute. In Carrizales’ view then,
Creighton University was “served” because service by certified
mail is authorized by statute and it actually received a copy of
the complaint with a summons, albeit an expired one. We are
not persuaded by this argument.
A similar question was at issue in State Farm Mut. Auto
Ins. Co. v. Allstate Ins. Co., 268 Neb. 439, 684 N.W.2d 14
(2004). There, we had to determine when service for pur-
poses of § 25-217 occurred in a situation in which a plaintiff
attempted to serve a defendant by publication. We consid-
ered § 25-217 in pari materia with Neb. Rev. Stat. § 25-519
(Reissue 2016), the statute directing how service by publica-
tion is to be accomplished, and concluded that the defendant
was not served under § 25-217 until the publication had been
printed in a newspaper in 3 successive weeks, as required by
§ 25-519.
In line with State Farm Mut. Auto Ins. Co., supra, we
believe it appropriate in this case to consider § 25-217 in pari
materia with § 25-505.01(1)(c). The latter statute directs how
service by certified mail is to be accomplished—by send-
ing the summons to the defendant by certified mail “within
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ten days of issuance.” Id. In this case, however, the district
court found that Carrizales failed to send a summons to
Creighton University within 10 days of its issuance, and, as we
have stated, that finding was not clearly erroneous. Because
Carrizales failed to follow the statute that directs how certi-
fied mail service is to be accomplished, we find that Creighton
University was not served for purposes of § 25-217.
[2,3] We likewise find no merit to Carrizales’ argument
that without a motion from Creighton University under
§ 6-1112(b)(4) or (5) of the rules of pleading, the district court
could not find that the claim against Creighton University was
dismissed by operation of law pursuant to § 25-217. As we
have explained on many occasions, § 25-217 is self-executing,
so that an action is dismissed by operation of law, without any
action by either the defendant or the court, as to any defend
ant who is named in the action and not served with process
within the time set forth in the statute. See Davis v. Choctaw
Constr., 280 Neb. 714, 789 N.W.2d 698 (2010). After dismissal
of an action by operation of law under § 25-217, there is no
longer an action pending and the district court has no jurisdic-
tion to make any further orders except to formalize the dis-
missal. Davis, supra. That is what the district court did here
with respect to Creighton University, and for reasons we have
explained, we find that was not erroneous.
2. Striking of Expert Witness
(a) Background
In September 2017, after this case had been pending for
nearly 4 years, the doctors filed a motion requesting that
the district court enter an order striking Dr. Fred Duboe as
an expert witness for Carrizales. In the motion to strike, the
doctors asserted that after Carrizales designated Duboe, a
physician based in Illinois, as an expert witness in August
2015, their counsel contacted counsel for Carrizales on several
occasions between March 2016 and August 2017. The motion
claimed that the doctors’ counsel asked that Carrizales’ counsel
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provide dates on which Duboe could be deposed, but that no
deposition was ever scheduled.
In response to the doctors’ September 2017 motion to strike,
the district court issued an order on February 22, 2018. The
order did not grant the motion to strike, but directed that
Carrizales “shall within 14 days from the date hereof find
and determine dates upon which [Duboe] can be available for
deposition, which dates must be reasonably agreeable to [the
doctors].” It also provided that “[s]aid deposition must be taken
and concluded within two months from the date hereof.” The
order expressly warned that if “said deposition is not com-
pleted within two months from the date hereof, the Court will
strike [Duboe] as an expert witness.”
On May 3, 2018, the doctors filed another motion to strike
Duboe as an expert witness, asserting that Duboe’s deposi-
tion had not been taken and dates had not been identified for
such a deposition. At the hearing on this motion to strike,
the doctors offered and the district court received copies
of correspondence exchanged by counsel for the doctors,
Carrizales, and Creighton University Medical Center after the
district court’s order on the initial motion to strike. The corre
spondence included a letter from counsel for the doctors dated
February 23, 2018, identifying several dates in March and
April on which he would not be available for a deposition; a
copy of an email dated March 8, 2018, from Carrizales’ counsel
in which he asked the other attorneys if they would be avail-
able on April 23 to 25 for a deposition of Duboe and advised
that there were limited days on which both he and counsel
for the doctors were available; an email dated March 9, 2018,
from Carrizales’ counsel stating that he was also available for
a deposition of Duboe on April 11; an email dated March 9,
2018, from counsel for the doctors saying that he would be
available on April 23 and 24, but not April 11; and an email
dated March 13, 2018, from counsel for Creighton University
Medical Center stating that she was available for a deposition
on April 23 and 24.
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The district court also received at the hearing an affidavit
from Carrizales’ counsel. In the affidavit, he stated that by the
time April 23 and 24, 2018, were identified as feasible dates
for defense counsel, Duboe advised counsel for Carrizales
that he was no longer available on those dates. Counsel for
Carrizales also stated in his affidavit that while the first motion
to strike, filed in September 2017, was pending, he sent an
email to defense counsel indicating that Duboe would be avail-
able for a deposition on October 10, but that counsel for the
doctors replied that he wanted to “wait and see what happens”
at the hearing on the motion to strike.
The district court entered an order granting the motion to
strike Duboe as an expert witness.
(b) Standard of Review
[4-6] Generally, the control of discovery is a matter for
judicial discretion, and decisions regarding discovery will be
upheld on appeal in the absence of an abuse of discretion.
Putnam v. Scherbring, 297 Neb. 868, 902 N.W.2d 140 (2017).
Similarly, appellate review of a district court’s use of inherent
power is for an abuse of discretion. Id. An abuse of discretion
occurs when a trial court’s decision is based upon reasons that
are untenable or unreasonable or if its action is clearly against
justice or conscience, reason, and evidence. Id.
(c) Analysis
Carrizales contends that the district court erred by striking
Duboe as an expert witness. She first argues that the district
court could not strike Duboe’s testimony because the doctors
never served a notice of deposition or subpoena upon him.
Alternatively, she argues that the district court’s order striking
Duboe was unduly harsh.
We begin by addressing Carrizales’ argument that the dis-
trict court could not strike Duboe’s testimony because the
doctors did not serve a notice of deposition or subpoena
upon him. In support of this argument, Carrizales points to
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decisions in which courts have held that sanctions cannot
be imposed under provisions analogous to Neb. Ct. R. Disc.
§ 6-337 (Rule 37) for a deponent’s nonappearance at a deposi-
tion if the deponent was not compelled to appear by a proper
subpoena. See, e.g., Laws v. Louisville Ladder, Inc., 146 So.
3d 380 (Miss. App. 2014). We find those cases inapposite,
because, as we will explain, we disagree that the district
court order striking Duboe’s testimony was issued as a Rule
37 sanction.
[7] Rule 37 provides “a range of sanctions” that a court may
impose for specific violations of discovery rules. See John P.
Lenich, Nebraska Civil Procedure, § 28:2 at 1199 (2022). In
this case, Carrizales does not appear to have committed any
of those violations. But Rule 37 sanctions are not the only
tool trial courts have to manage discovery. Nebraska courts,
through their inherent judicial power, have the authority to do
all things necessary for the proper administration of justice.
Putnam, supra. We have recognized that this inherent power
authorizes trial courts to issue and enforce progression orders
related to discovery. See id. Indeed, we have noted that trial
courts are encouraged to issue and enforce such orders in order
to meet case progression standards adopted by this court and
that members of the bar are responsible for cooperating with
the judiciary in attempting to meet these standards. See id., cit-
ing Neb. Ct. R. § 6-101(B)(5) and (C) (rev. 2013).
We understand the district court’s February 22, 2018, order
to have been a type of progression order—it ordered deadlines
by which the parties were to identify dates for Duboe’s deposi-
tion and by which the deposition was to be completed. It also
specified that if the deposition was not completed by the dead-
line, Duboe would not be permitted to testify. We understand
the district court to have enforced that order when it issued its
subsequent order striking Duboe’s testimony.
The fact that the district court’s orders concerning Duboe’s
deposition were issued pursuant to its inherent power does
not shield them from all review. A trial court’s exercise of its
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inherent power is reviewed for an abuse of discretion. See
Putnam v. Scherbring, 297 Neb. 868, 902 N.W.2d 140 (2017).
We have emphasized, however, that this is “a fairly deferential
standard” and that a court abuses its discretion “when its deci-
sion is based upon reasons that are untenable or unreasonable
or if its action is clearly against justice or conscience, reason,
and evidence.” Id. at 878, 902 N.W.2d at 146 (emphasis in
original). We have also recognized that a trial court has broad
discretion to make discovery and evidentiary rulings condu-
cive to the conduct of a fair trial. Id. We find that neither the
district court’s February 22, 2018, order nor its subsequent
order striking Duboe as an expert witness was an abuse of this
broad discretion.
By February 22, 2018, the lawsuit had been pending for
over 4 years and Carrizales’ expert witness had not yet been
deposed. Case progression standards adopted by this court
provide that 98 percent of civil jury cases are to be disposed of
within 18 months of filing. See § 6-101(A). It appears that the
district court could have and should have done more at earlier
stages in this case to expedite its completion. But even if the
district court’s initial case management efforts were wanting,
we do not believe that precluded the district court from even-
tually taking steps to hasten the resolution of a case that had
been pending for over twice as long as our case progression
standards state the vast majority of cases of this type should.
Specifically, we do not find it unreasonable that the district
court imposed a relatively short deadline by which the parties
were required to identify dates when Duboe could be deposed
and to complete the deposition. We reach this conclusion even
assuming Carrizales was not solely to blame for the fact that
Duboe had not yet been deposed or for the overall delay in
bringing this case to completion.
As for the district court’s order striking Duboe as an expert
witness, we cannot, under the circumstances, say that was an
abuse of discretion either. The district court’s February 22,
2018, order required Carrizales to, within 14 days from the
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date of the order, identify dates within the next 2 months in
which both Duboe and the defendants’ counsel were avail-
able for Duboe’s deposition to be taken. The evidence in our
record demonstrates that Carrizales did not comply with this
portion of the order. The evidence shows that the only dates
Carrizales’ counsel identified on which both he and defense
counsel would be available were April 23 and 24, 2018.
Setting aside the fact that April 23 and 24 were just outside
the district court’s 2-month deadline, counsel for Carrizales
stated in his affidavit that by the time both defense counsel
confirmed they would be available on those dates, counsel for
Carrizales learned Duboe was no longer available.
We would perhaps have a different case before us if, after
failing to identify dates in which Duboe and the necessary
lawyers were available for Duboe to be deposed, counsel for
Carrizales had promptly alerted the district court of the dif-
ficulty of complying with its order. There is nothing in our
record, however, showing that counsel for Carrizales did any-
thing to bring the issue to the attention of the district court
until the doctors filed a motion to strike in May 2018. By that
time, more than 2 months had passed and Duboe still had not
been deposed. Only then did the district court do what it said it
would do in its February 22, 2018, order and strike Duboe as
an expert witness.
Under these circumstances, we do not believe that the
district court’s decision to strike Duboe as an expert witness
was based on reasons that were untenable or unreasonable.
See Putnam v. Scherbring, 297 Neb. 868, 902 N.W.2d 140
(2017). Neither can we find that the district court’s action was
clearly against justice or conscience, reason, and evidence.
See id. Rather, it appears that the district court concluded that
Carrizales had not complied with its earlier order and had not
offered a compelling reason for noncompliance, and therefore,
it enforced the order in the manner it said that it would. We
find no abuse of discretion.
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3. Summary Judgment
(a) Factual Background
Shortly after the district court issued its order striking Duboe
as an expert witness, Creighton University Medical Center
and the doctors filed motions for summary judgment. Prior to
the hearing on the motion for summary judgment, Carrizales
voluntarily dismissed her case against Creighton University
Medical Center.
At the hearing on the doctors’ motion for summary judg-
ment, they offered, among other things, an affidavit of Gray.
Gray’s affidavit stated that she, Wulf, and Arms provided
medical care to Carrizales in connection with the birth of
Carrizales’ daughter; that Gray was familiar with the allega-
tions in Carrizales’ complaint; that she was familiar with the
standard of care required of physicians monitoring the labor of
patients and the delivery of children; and that based upon her
review of the medical records, her personal knowledge, and
her training, education, and experience, she, Wulf, and Arms
met the applicable standard of care in treating Carrizales and
Carrizales’ daughter.
Carrizales objected to the receipt of Gray’s affidavit, argu-
ing that the doctors failed to designate her as an expert witness
and that her testimony lacked foundation. In opposition to
the motion for summary judgment, Carrizales offered, among
other things, various discovery responses of the doctors, por-
tions of a deposition of Gray, portions of a deposition of a
midwife who provided care to Carrizales during the labor and
delivery, and an affidavit of Carrizales. Carrizales also offered
an affidavit of Duboe in which Duboe averred that the doctors
breached the standard of care during the labor and delivery
process. The district court sustained the doctors’ objection to
Duboe’s affidavit, referring to its earlier ruling striking Duboe
as an expert witness.
The district court issued an order granting the doctors’
motion for summary judgment. The district court concluded
that Gray’s affidavit could be considered for purposes of the
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doctors’ summary judgment motion and that it was sufficient
to make a prima facie case that each of the doctors met the
applicable standard of care. The district court then found that
Carrizales failed to create a genuine issue of material fact as to
whether the doctors met the standard of care. It explained that
in order to create a genuine issue of material fact as to whether
the doctors breached the standard of care, Carrizales was
required to provide expert testimony contradicting Gray’s testi-
mony that the doctors had met the standard of care. The district
court stated that it had stricken Duboe as an expert witness and
that Carrizales had failed to provide other expert testimony that
would create a genuine issue of material fact.
(b) Standard of Review
[8] An appellate court affirms a lower court’s grant of sum-
mary judgment if the pleadings and admitted evidence show
that there is no genuine issue as to any material facts or as to
the ultimate inferences that may be drawn from the facts and
that the moving party is entitled to judgment as a matter of law.
Lassalle v. State, 307 Neb. 221, 948 N.W.2d 725 (2020).
[9] An appellate court reviews the district court’s grant of
summary judgment de novo, viewing the record in the light
most favorable to the nonmoving party and drawing all reason-
able inferences in that party’s favor. Id.
(c) Analysis
Carrizales argues on appeal that the district court erred both
by finding that Gray’s affidavit established a prima facie case
that the doctors met the standard of care and by finding that
Carrizales failed to present evidence showing the existence of
a genuine issue of material fact. We address each of these argu-
ments below.
[10] At the summary judgment stage, it is well settled that
a physician’s self-supporting affidavit suffices to make a prima
facie case that the physician did not commit medical malprac-
tice. Lombardo v. Sedlacek, 299 Neb. 400, 908 N.W.2d 630
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(2018). Carrizales contends that because of certain discovery
responses provided by the doctors and certain testimony in
Gray’s deposition, however, the district court should not have
found that Gray’s affidavit made such a prima facie case here.
As we will explain, we disagree.
Carrizales first argues that the doctors should not have been
permitted to rely on Gray’s affidavit because they failed to
designate her as an expert witness. In support of this argu-
ment, Carrizales argues that if the doctors desired to rely on
an affidavit from Gray in support of their motion for summary
judgment, they were obligated to disclose their intention to
do so in discovery. Specifically, Carrizales argues that the
doctors did not disclose their intention to rely on Gray as an
expert in their expert witness designation, in response to vari-
ous requests for production of documents, and in response to
interrogatories.
We are not persuaded that the doctors were required to dis-
close an intention to rely on Gray for purposes of summary
judgment. The interrogatories Carrizales relies on sought the
identity of persons the doctors expected or intended to call
“at the trial.” The doctors’ expert witness designation likewise
identified those experts “who will be called to testify on behalf
of [the doctors] at a trial of this case.” The doctors did not
seek to call Gray as a witness at trial; they offered her affidavit
in support of their motion for summary judgment. As for the
doctors’ responses to Carrizales’ requests for production, the
requests for production at issue sought reports of or commu-
nications with experts the doctors either “retained” or “com-
missioned.” Carrizales has not directed us to anything in our
record suggesting that Gray, a party to the case, was retained
or commissioned as an expert witness, and even assuming she
was, Carrizales has not shown that the doctors failed to pro-
duce documents responsive to these requests.
Carrizales also argues that even if Gray’s affidavit could
shift the burden to Carrizales as to the claim against Gray, it
could not do so with respect to the claims against the other
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doctors. On this point, however, Carrizales argues only that the
other doctors also did not identify Gray in response to inter-
rogatories seeking the identity of persons the other doctors
expected or intended to call at trial. As mentioned above, Gray
was not called as a witness at trial.
Carrizales next contends that Gray’s affidavit testimony
lacked adequate foundation. In support of this argument,
Carrizales relies primarily on portions of Gray’s deposition
testimony. Gray stated in that deposition that she lacked an
independent recollection of Carrizales’ labor apart from her
medical records. She also stated that she had not reviewed the
medical records of Carrizales’ daughter and did not have an
opinion as to whether Carrizales’ daughter suffered an injury
on the day she was born. Counsel for the doctors also stated
during the deposition that Gray would not be expressing an
opinion as to what caused Carrizales’ daughter’s current con-
dition. Carrizales argues that these statements showed Gray
lacked adequate foundation to provide an opinion that she and
the other doctors met the standard of care. We disagree.
[11] A court should not admit expert testimony if it appears
the witness does not possess facts that will enable him or her
to express an accurate conclusion, as distinguished from a mere
guess or conjecture. Orchard Hill Neighborhood v. Orchard
Hill Mercantile, 274 Neb. 154, 738 N.W.2d 820 (2007). Gray
may have needed to rely on medical records to assess the care
provided by the doctors, and she may not have formed opinions
as to whether Carrizales’ daughter was injured or the causation
thereof, but we do not believe any of this would preclude her
from offering an accurate conclusion as to whether the doctors
met the standard of care.
Finally, Carrizales contends that the district court should not
have granted summary judgment to the doctors because she
offered evidence that created a genuine issue of material fact.
Gray’s affidavit shifted the burden to Carrizales to produce
admissible evidence that would create a genuine issue of mate-
rial fact as to whether the doctors complied with the standard
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of care. See Lombardo v. Sedlacek, 299 Neb. 400, 908 N.W.2d
630 (2018). Generally, expert testimony from a medical profes-
sional is required to establish the standard of care in a medical
malpractice action. See id. The only expert opinion Carrizales
offered that contradicted Gray’s standard of care opinion was
expressed by Duboe. As we have already concluded, however,
the district court acted within its discretion when it precluded
Carrizales from relying on Duboe as an expert.
There is an exception to the general rule requiring expert
testimony as to the medical standard of care. Under the com-
mon knowledge exception, expert testimony is not required
where a layperson with common knowledge can infer neg-
ligence. See, e.g., Green v. Box Butte General Hosp., 284
Neb. 243, 818 N.W.2d 589 (2012). Although Carrizales does
not rely expressly on this exception, she claims that other
evidence in the summary judgment record besides Duboe’s
affidavit created a genuine issue of material fact. She points
to statements in her own affidavit that she was told during
her labor she would undergo a cesarean section but that the
procedure was never performed. She also directs us to depo-
sition testimony of a midwife involved in Carrizales’ labor
and delivery who disagreed with Gray’s deposition testimony
that Gray was merely a consulting physician. The midwife
testified to her belief that Gray was supervising the midwife.
None of this evidence, however, can create a genuine issue
of material fact as to whether the doctors complied with the
standard of care. There is no expert testimony contradicting
Gray’s opinion that the doctors met the standard of care, and
we do not believe a layperson could infer negligence under
these circumstances.
We find no merit to Carrizales’ arguments that the district
court erred by granting summary judgment to the doctors.
4. Motion to Alter or Amend
Carrizales also argues that the district court erred by deny-
ing her motion to alter or amend. In support of her contention
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that the district court should have granted her motion to alter
or amend, Carrizales merely repeats the arguments we have
already rejected above. We find no error in the district court’s
denial of the motion to alter or amend.
IV. CONCLUSION
Because we find no error on the part of the district court,
we affirm.
Affirmed. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487053/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 01:08 AM CST
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YOCHUM V. YOCHUM
Cite as 312 Neb. 535
Heather K. Yochum, now known as
Heather K. Underwood, appellant,
v. Chad C. Yochum, appellee.
___ N.W.2d ___
Filed September 30, 2022. No. S-21-563.
1. Divorce: Judgments: Appeal and Error. The meaning of a divorce
decree presents a question of law, in connection with which an appellate
court reaches a conclusion independent of the determination reached by
the court below.
2. Contempt: Appeal and Error. In a civil contempt proceeding where
a party seeks remedial relief for an alleged violation of a court order,
an appellate court employs a three-part standard of review in which (1)
the trial court’s resolution of issues of law is reviewed de novo, (2) the
trial court’s factual findings are reviewed for clear error, and (3) the trial
court’s determinations of whether a party is in contempt and of the sanc-
tion to be imposed are reviewed for abuse of discretion.
3. Attorney Fees: Contempt: Appeal and Error. A trial court’s decision
awarding or denying attorney fees in a contempt proceeding will be
upheld on appeal absent an abuse of discretion.
4. Judgments: Words and Phrases. A judicial abuse of discretion
requires that the reasons or rulings of the trial court be clearly unten-
able insofar as they unfairly deprive a litigant of a substantial right and
a just result.
5. Damages: Evidence: Proof. A plaintiff’s evidence of damages may not
be speculative or conjectural and must provide a reasonably certain basis
for calculating damages.
6. ____: ____: ____. The question whether the evidence of damages is
“reasonably certain” is a question of law, and not as a matter to be
decided by the trier of fact.
7. Evidence: Records: Pleadings: Appeal and Error. An appellate record
typically contains the bill of exceptions, used to present factual evidence
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to an appellate court, and the transcript, used to present pleadings and
orders of the case to the appellate court.
8. Evidence: Records: Appeal and Error. A bill of exceptions is the only
vehicle for bringing evidence before an appellate court; evidence which
is not made a part of the bill of exceptions may not be considered.
9. ____: ____: ____. Before an appellate court can consider evidence bear-
ing upon an issue of fact, evidence must have been offered at the trial
court and embodied in the bill of exceptions.
10. Divorce: Contempt. When a party willfully violates a decree, coercive
and remedial sanctions are appropriate.
11. Contempt. Civil contempt proceedings are instituted to preserve and
enforce the rights of private parties to a suit when a party fails to com-
ply with a court order made for the benefit of the opposing party.
12. Contempt: Costs: Attorney Fees. Costs, including reasonable attorney
fees, can be awarded in a contempt proceeding when there has been a
finding of contempt.
13. Attorney Fees. The decision to award attorney fees is a matter of
discretion.
Appeal from the District Court for Lancaster County: Susan
I. Strong, Judge. Affirmed in part, vacated in part, and in part
reversed and remanded for further proceedings.
Ryan Mick Swaroff, of Swaroff Law, L.L.C., for appellant.
Jeanelle S. Kleveland, of Kleveland Law Office, for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Miller-Lerman, J.
NATURE OF CASE
The district court for Lancaster County found that Heather
K. Yochum, now known as Heather K. Underwood, was in
contempt of court orders contained in the divorce decree
from Chad C. Yochum. Specifically, it found that for the tax
years 2014 and 2019, she willfully violated the dependency
tax exemption provisions of her marital dissolution decree
and the order in modification. Heather appeals the findings of
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contempt, the amount of damages awarded to Chad, and attor-
ney fees. We reverse the district court’s order finding Heather
in contempt for taking tax exemptions for the 2014 tax year,
but affirm with respect to her filing for 2019. We vacate the
award of $3,975 awarded to Chad for tax year 2014, because
he was not harmed in 2014. We also vacate $600 in dam-
ages awarded to Chad for the 2019 tax year for lack of proof.
Finally, we reverse the award of attorney fees to Chad and
remand the cause for further proceedings with respect to the
amount of Chad’s attorney fees.
STATEMENT OF FACTS
On March 7, 2011, the district court entered a decree dis-
solving the marriage of Heather, the appellant, and Chad, the
appellee. The parties have four children together. In 2016, the
decree of dissolution was modified as to child support obli-
gations, custody, and specific parenting time. In 2020, Chad
filed an application for order to show cause, alleging that
Heather was in contempt of the district court’s prior orders
because she claimed dependency tax exemptions on her fed-
eral taxes in 2014 and 2019. The district court for Lancaster
County held hearings on three dates in the fall of 2020 and
a fourth date in June 2021. In October 2020, Heather filed a
motion for Chad to show cause why he should not be found
in contempt of court for allegedly failing to pay his portion
of childcare expenses during 2019. The record may be sum-
marized as follows:
2011 Decree.
The 2011 decree awarded Heather physical custody of the
parties’ minor children, and Chad received reasonable rights
of parenting time set forth in the parenting plan. It provided
that Chad pay child support to Heather and subjected him to
income withholding. The attached property settlement also
provided that “in the event [Chad] fails to pay any support
as such failure is certified each month by the Clerk of the
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Lancaster County District Court in which court-ordered sup-
port is delinquent in an amount equal to the support due and
payable for a one-month period of time,” he would be required
to show cause why such payment was not made or face a war-
rant for his arrest. Critical to the arguments made in this litiga-
tion, the decree provided:
7. DEPENDENCY EXEMPTIONS: Commencing the
year 2011, [Chad] shall have the right to claim [two
of the minor children] as dependents on his State and
Federal Taxes. At such time as there are three (3) minor
children, [Heather] shall claim two (2) of the children
in even-numbered years, and [Chad] shall claim one (1)
child in even-numbered years. In odd-numbered years,
[Heather] shall claim one (1) minor child and [Chad]
shall claim two (2) children. At such time as there are
two (2) minor children, each party shall claim one (1)
child. When there is only one minor child, the parties
shall alternate the dependency exemption with [Heather]
claiming the minor child in all even-numbered years
and [Chad] claiming the minor child[] all odd-numbered
years. [Chad] shall only be entitled to claim any of the
minor children for dependency exemption purposes in
any year so long as he is current on his child support,
child care, and medical care obligations at the end of
the appropriate tax year. [Heather] agrees to not make
any conflicting claim for said exemptions and shall upon
request execute an IRS form 8332 releasing all right to
claim said exemption.
8. CHILD CARE: The parties shall each pay 50% [of]
the work related child care costs incurred on behalf of the
minor children, and [Chad] shall reimburse [Heather], as
necessary, for child care expenses within fifteen (15) days
of receipt of the statement for the same. [Heather] shall be
allowed to claim the child care expense as a deduction on
her taxes each year.
(Emphasis supplied.)
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2016 Order in Modification.
On July 27, 2016, the district court entered an order in
modification which, inter alia, modified the amount of Chad’s
child support obligations. The order of modification did not
provide for any changes to the parties’ dependency tax exemp-
tions and childcare obligations and stated that “[a]ny provi-
sions not herein modified from prior orders remain in full force
and effect.”
2014 Dependent Tax Exemption.
Chad offered as an exhibit a notice of penalty he received
from the Internal Revenue Service after both he and Heather
had claimed the same two minor children for the tax year
2014.
Chad testified, and the record reflects, that in 2014, he
had an automatic wage withholding for his child support.
However, a payment history report from the Department
of Health and Human Services (DHHS) showed that on
December 31, 2014, Chad owed $557.79. Chad and Heather
testified that Chad did not meet his child support obligations
for a period of several weeks in 2013 because he lost his
job, and the amount owed shown on the DHHS report at the
end of 2014 reflected what remained of his prior arrearage.
The DHHS report showed that Chad’s consistent payments
throughout 2014 applied to satisfy the present month’s child
support obligation, and DHHS applied any remaining money
from Chad’s payments to the balance in arrears carried for-
ward from past months.
Heather had testified at depositions taken in July 2016
that she believed Chad could not take the 2014 dependency
exemption, because he was not “current” on child support.
She testified that she had talked to child support enforcement
and obtained a copy of the payment history report for that
year. Because Chad did not have a zero balance at the end
of 2014, she filed her taxes believing he could not take the
exemption.
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2019 Dependent Tax Exemption.
With respect to the 2019 tax year, the payment history report
from DHHS showed that Chad had a credit on December 31,
2019, of $114.85 for child support. Chad testified about a
timing issue, specifically that the account showed a credit,
because there are periods of time where there are credits and
periods of time where money is owed, depending on how
many pay periods are in a month. He testified that in January
or early February 2020, he sent a text message to Heather
reminding her that he could claim the two minor children
on the taxes for the 2019 tax year. He received no response.
He testified that he sent a text message to Heather in August
2020 asking why she used the child tax deduction and that she
stated she forgot.
Chad testified at the October 2020 trial that he lost a $2,000
tax credit because he could not claim one child in 2019 and
that he subsequently lost out on a coronavirus relief payment
of $500. He explained that the 2019 coronavirus relief package
would have given him an additional payment for each child
under the age of 17 and requested that Heather repay the relief
money as well as the tax credit.
Daycare.
Chad testified on cross-examination that the children
attended daycare from 2010 to 2018, and he conceded that he
had never paid childcare expenses to Heather or to the child-
care facilities. He claimed he had never received any statement
or receipt from Heather regarding expenses for daycare or
childcare. He acknowledged two text message conversations
and agreed that Heather had previously told Chad that he owed
half of childcare expenses. Chad testified that he thought day-
care expenses were free for Heather because of her work for
the childcare providers. He testified that he believed that day-
care continued to be free as a benefit of Heather’s employment
and that that was their understanding at the time of the divorce.
He testified that he did not receive an invoice to pay daycare
expenses until late 2020.
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Heather testified that she had provided Chad three daycare
receipts over the years and that she alone paid for daycare
from 2011 through 2018. Heather testified that she stopped
providing Chad receipts, because he would get angry and call
her names. Heather testified that she received “Title 20” and
$5,000 per year of daycare costs from her employer. Heather
did not provide any exhibits showing receipts she sent to Chad
prior to October 2020, which date was proximate to Heather’s
filing for contempt for Chad’s alleged failure to pay childcare.
Heather offered exhibits 21 and 22, which included attach-
ments to an October 5, 2020, text message sent by Heather to
Chad. The attachments were represented as reflecting daycare
expenses. After her benefits, Heather claimed to have paid
childcare expenses of $946 in 2016, $1,135.95 in 2017, and
$757.28 in 2018. Exhibits 21 and 22 were excluded from evi-
dence as hearsay.
District Court Order.
At the conclusion of the evidence, the district court found
Heather in contempt for taking incorrect dependency exemp-
tions in 2014 and 2019. The court noted that Chad fell behind
in 2013 when he lost his job. In June 2021, the court issued an
order finding Heather in willful and contumacious contempt
of the decree, sentencing her to 30 days in jail, with the abil-
ity to avoid jail time by making $200 monthly payments to
Chad for 24 months. The court ordered Heather to pay a total
judgment of $10,075, which was composed of $3,975 in addi-
tional taxes Chad paid in 2014, a $2,000 tax refund he lost for
2019, $500 and $600 2020 coronavirus relief payments, and
$3,000 in attorney fees. Heather appeals.
ASSIGNMENTS OF ERROR
Heather claims, summarized and restated, that the district
court erred when it found that Heather was in willful and con-
tumacious contempt of the decree and order in modification.
She also claims that the district court abused its discretion with
respect to damages and attorney fees awarded to Chad.
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Cite as 312 Neb. 535
STANDARDS OF REVIEW
[1] The meaning of a divorce decree presents a question
of law, in connection with which an appellate court reaches
a conclusion independent of the determination reached by the
court below. Vyhlidal v. Vyhlidal, 311 Neb. 495, 973 N.W.2d
171 (2022).
[2] In a civil contempt proceeding where a party seeks reme-
dial relief for an alleged violation of a court order, an appellate
court employs a three-part standard of review in which (1) the
trial court’s resolution of issues of law is reviewed de novo, (2)
the trial court’s factual findings are reviewed for clear error,
and (3) the trial court’s determinations of whether a party is in
contempt and of the sanction to be imposed are reviewed for
abuse of discretion. Id.
[3,4] A trial court’s decision awarding or denying attorney
fees in a contempt proceeding will be upheld on appeal absent
an abuse of discretion. See Becher v. Becher, 311 Neb. 1, 970
N.W.2d 472 (2022). A judicial abuse of discretion requires that
the reasons or rulings of the trial court be clearly untenable
insofar as they unfairly deprive a litigant of a substantial right
and a just result. Id.
ANALYSIS
Heather claims that the district court erred when it found
that she was willfully in contempt of court because she had
claimed dependency exemptions on her federal income taxes
for the years 2014 and 2019. She also challenges the amounts
of damages and attorney fees awarded to Chad. Heather
contends that the language of the decree, unchanged by the
subsequent order in modification, permitted Chad to claim
the minor children for dependency exemption purposes only
“so long as he is current on his child support, child care, and
medical care obligations at the end of the appropriate tax
year” and that he was not “current.” Brief for appellant at 14
(emphasis omitted). Below, we examine whether Chad was
current on these obligations at the end of the 2014 and 2019
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tax years and conclude that Chad was not current in 2014 but
was current in 2019 and thereby entitled to the dependency tax
exemption for 2019, but not 2014. We also adjust the damages
awarded to Chad and remand the issue of attorney fees to the
district court.
2014 Tax Year.
With respect to 2014, Heather argues that Chad was in
arrears on child support payments and was not “current” at the
end of the year—and thus not entitled to claim the dependent
tax exemption—and was not harmed with respect to his liabil-
ity for the 2014 tax year. We agree with Heather’s argument.
Chad does not contest that he owed a balance on December
31, 2014, but argues that because he had not missed monthly
payments in 2014, he was “current.” We conclude that “cur-
rent” in the context of this decree means fully paid and up to
date. Chad was not “current” at the end of the 2014 tax year.
The testimony was consistent that Chad had an automatic
wage withholding, except for 6 weeks in 2013 when he lost
his job. Exhibits at trial, including child support payment his-
tory reports from DHHS, confirmed this testimony. When Chad
missed several child support payments in 2013, his account fell
into arrears. As Chad resumed his regular payments, each pay-
ment applied first to the pending month’s child support obliga-
tion. Money remaining after the pending month’s support obli-
gation served to reduce the amount in arrears, and the arrearage
decreased until Chad became fully caught up in 2016. On
December 31, 2014, Chad owed a balance of $557.79, largely
composed of the arrearage incurred in 2013 for failure to pay
child support.
Chad argues that he was “current” under the decree, because a
balance of $557.79 was not enough to trigger enforcement pro-
ceedings. As authority, he cites Neb. Rev. Stat. § 43-1718.01(4)
(Reissue 2016), which provides:
No obligor whose child support payments are automati-
cally withheld from his or her paycheck shall be regarded
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or reported as being delinquent or in arrears if (a) any
delinquency or arrearage is solely caused by a disparity
between the schedule of the obligor’s regular pay dates
and the scheduled date the child support is due, (b) the
total amount of child support to be withheld from the
paychecks of the obligor and the amount ordered by the
support order are the same on an annual basis, and (c) the
automatic deductions for child support are continuous and
occurring.
Section 43-1718.01 concerns child support enforcement. This
case is not an enforcement action. Instead, we are called upon
to follow the language of the decree. See Vyhlidal v. Vyhlidal,
311 Neb. 495, 973 N.W.2d 171 (2022). Even if § 43-1718.01
could provide context for the meaning of certain words used
in the decree, it is factually inapplicable here because Chad’s
arrearage is not a timing issue “solely caused by a disparity
between the schedule of the obligor’s regular pay dates and the
scheduled date the child support is due.” Chad’s arrearage was
not caused solely by bureaucratic lag or timing discrepancies;
the reason he was not current was because of events in 2013.
Under the plain language of the decree, because Chad was not
current on his child support obligations at the end of the 2014
tax year, he was not entitled to claim the dependency exemp-
tion on his federal taxes.
The record shows that Heather was informed by DHHS
reports that Chad was in arrears on December 31, 2014, and
thus, Chad was not “current.” Appropriately, she filed her taxes
and claimed the dependency exemption for the 2014 tax year.
The district court erred when it held Heather in willful and
contumacious contempt of court for having taken child tax
exemptions in her tax filings for 2014. We reverse this portion
of the order of the district court. Further, based on our ruling,
because Chad was not harmed with respect to his tax liability
for the 2014 tax year, we vacate the damage award of $3,975
to which Chad was not entitled.
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2019 Tax Year.
With respect to 2019, Heather claims that the district court
erred when it found her in contempt for taking the dependent
tax credit for 2019. Specifically, Heather claims that Chad was
not current on paying his portion of childcare expenses and
thus not entitled to the exemptions. We find no merit to this
claim of error.
Heather testified that she paid work-related childcare
expenses for the children over the years, and Chad admitted
that he had never paid Heather for daycare, because he believed
it was a benefit of Heather’s employment. However, turning to
the decree which controls our analysis, the question for the trial
court and for us on appeal is whether Chad failed to “reimburse
[Heather], as necessary for child care expenses within fifteen
(15) days of receipt of the statement for the same.”
The record before us has no evidence that Heather timely
submitted childcare expense statements to Chad prior to
December 31, 2019, as anticipated by the decree or that such
statements remained unpaid at the end of December 2019.
Heather’s requests for reimbursement for childcare expenses
submitted to Chad after December 31, 2019, are not encom-
passed by the assignments of error in this appeal. The record of
admitted evidence does not prove a failure by Chad to timely
pay childcare, and we note merely incidentally that DHHS pay-
ment history reports demonstrate that on December 31, 2019,
Chad had a child support credit of $114.85.
Given the admitted evidence, Chad established that Heather
took the dependency exemption for 2019, even though Chad
was current on his obligations under the decree and order
in modification. The district court did not err when it found
Heather in contempt of the decree, because she took the depen-
dency exemptions for the 2019 tax year. We affirm this portion
of the district court’s order.
Damages for 2019 Tax Year.
Because we have concluded that Chad was entitled to the
dependency exemption for 2019, we must consider the damages
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he may have suffered as a consequence of being deprived of
the exemption in 2019. Specifically, although there was evi-
dence that Chad did not receive a $500 coronavirus relief pay-
ment, Heather claims that Chad did not adduce evidence of the
second 2020 relief payment, and the district court erred when
it included an extra $600 in damages for Chad that was unsup-
ported by the evidence at trial. We agree with Heather that the
record lacks evidence related to a hypothetical $600 payment
and vacate the award of $600.
[5,6] We have often stated that a plaintiff’s evidence of dam-
ages may not be speculative or conjectural and must provide
a reasonably certain basis for calculating damages. Pribil v.
Koinzan, 266 Neb. 222, 665 N.W.2d 567 (2003). We have con-
sistently framed the question whether the evidence of damages
is “reasonably certain” as a question of law, and not as a matter
to be decided by the trier of fact. Id.
[7-9] Here, to evaluate whether the evidence of Chad’s
claimed damages is reasonably certain, we must examine the
evidence in the record. An appellate record typically contains
the bill of exceptions, used to present factual evidence to an
appellate court, and the transcript, used to present pleadings
and orders of the case to the appellate court. In re Estate of
Radford, 297 Neb. 748, 901 N.W.2d 261 (2017). A bill of
exceptions is the only vehicle for bringing evidence before an
appellate court; evidence which is not made a part of the bill
of exceptions may not be considered. Id. Before this court can
consider evidence bearing upon an issue of fact, evidence must
have been offered at the trial court and embodied in the bill
of exceptions. Smick v. Langvardt, 216 Neb. 778, 345 N.W.2d
830 (1984). Specifically, we must consider whether the bill
of exceptions contains any evidence which contributed to the
lower court’s decision either through exhibits, through judicial
notice, or as a result of a stipulation or admission by the par-
ties. See In re Estate of Radford, supra.
The parties do not dispute that Chad lost a $2,000 refund
he would have received if he had claimed a dependent on his
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2019 taxes. Chad also testified at the October 5, 2020, hearing
that he lost a $500 payment from the federal coronavirus relief
package. However, although Chad did not testify to a second
relief payment, the district court nevertheless awarded Chad
$1,100 to reflect $500 and $600 coronavirus relief payments.
Although there was some argument by counsel for Chad rela-
tive to the $600 stimulus opportunity, the record does not con-
tain evidence, judicial notice, or stipulation or admission of the
parties that Chad lost a $600 relief payment which may have
been available later in 2020. Accordingly, we reverse the award
of the additional $600 in damages to Chad because it exceeded
the evidence in the record.
Attorney Fees.
Finally, Heather assigns error to the district court’s award of
$3,000 for Chad’s attorney fees, noting that Chad had submit-
ted an affidavit that indicated his attorney fees were $2,031.44.
[10-12] We have explained that when a party willfully vio-
lates a decree, coercive and remedial sanctions are appropri-
ate. See Vyhlidal v. Vyhlidal, 311 Neb. 495, 973 N.W.2d 171
(2022). Civil contempt proceedings are instituted to preserve
and enforce the rights of private parties to a suit when a party
fails to comply with a court order made for the benefit of the
opposing party. Id. Costs, including reasonable attorney fees,
can be awarded in a contempt proceeding when there has been
a finding of contempt. Id.
[13] The decision to award attorney fees is a matter of dis-
cretion. See Becher v. Becher, 311 Neb. 1, 970 N.W.2d 472
(2022). Because we reverse the portion of the order which
found Heather in contempt related to the 2014 dependency
exemption and we vacate the damage awards of $3,975 and
$600 to Chad, we believe the district court should exercise its
discretion anew in light of these outcomes. Accordingly, we
reverse the award of attorney fees and remand the cause for
reconsideration and recalculation of attorney fees in light of
this opinion.
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CONCLUSION
For the reasons above, we conclude that Heather was not
in contempt of the decree when she took a dependency tax
exemption for 2014, and we reverse the order of the district
court which found Heather in contempt regarding the 2014 tax
exemption and vacate the award to Chad of $3,975 occasioned
by this incorrect ruling. We affirm the order finding Heather
in contempt with respect to the 2019 tax year. We vacate the
award of $600 in damages to Chad for a lost coronavirus relief
payment for the 2019 tax year which was unsupported by the
record. We reverse the award of attorney fees to Chad and
remand the cause with directions to award Chad reasonable
attorney fees, and for further proceedings in conformity with
this opinion.
Affirmed in part, vacated in part, and
in part reversed and remanded
for further proceedings. | 01-04-2023 | 11-18-2022 |
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11/18/2022 01:08 AM CST
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
Great Plains Livestock Consulting, Inc.,
and Ki Fanning, appellants, v.
Midwest Insurance Exchange,
Inc., et al., appellees.
___ N.W. ___
Filed September 2, 2022. No. S-21-722.
1. Standing: Jurisdiction: Pleadings: Evidence: Appeal and Error. 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 outside the pleadings, it is considered a “factual challenge.”
Where the trial court’s decision to dismiss for lack of subject matter
jurisdiction is based on a factual challenge, the court’s factual findings
are reviewed under the clearly erroneous standard.
2. Jurisdiction: Appeal and Error. Aside from any factual findings, the
trial court’s ruling on subject matter jurisdiction is reviewed de novo,
because it presents a question of law.
3. Appeal and Error. The grant or denial of a stay of proceedings is
reviewed for an abuse of discretion.
4. Jurisdiction: Words and Phrases. Subject matter jurisdiction is the
power of a tribunal to hear and determine a case in the general class or
category to which the proceedings in question belong and to deal with
the general subject matter involved.
5. Jurisdiction: Courts. Ripeness is one component of subject matter
jurisdiction; its fundamental principle is that courts should avoid entan-
gling themselves, through premature adjudication, in abstract disagree-
ments based on contingent future events that may not occur at all or may
not occur as anticipated.
6. ____: ____. A determination with regard to ripeness depends upon the
circumstances in a given case and is a matter of degree.
7. Actions: Jurisdiction: Appeal and Error. An appellate court uses a
two-part inquiry to determine ripeness: (1) the fitness of the issues for
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
judicial decision and (2) the hardship to the parties of withholding court
consideration.
8. Negligence: Proof. To prevail in a negligence action, a plaintiff must
prove the defendant’s duty not to injure the plaintiff, breach of duty,
proximate causation, and damages.
9. Courts: Actions. Courts inherently possess the power to stay proceed-
ings when required by the interests of justice.
Appeal from the District Court for Cass County: Michael A.
Smith, Judge. Reversed and remanded for further proceedings.
Andrew D. Weeks, of Baylor Evnen, L.L.P., for appellants.
Brien M. Welch and David A. Blagg, of Cassem, Tierney,
Adams, Gotch & Douglas, for appellee Midwest Insurance
Exchange, Inc.
Sean A. Minahan and Patrick G. Vipond, of Lamson, Dugan
& Murray, L.L.P., for appellees UNICO Group, Inc., and Sean
Krueger.
Heavican, C.J., Miller-Lerman, Cassel, Funke, Papik,
and Freudenberg, JJ., and Kozisek, District Judge.
Funke, J.
INTRODUCTION
Great Plains Livestock Consulting, Inc., and its president,
Ki Fanning (collectively Great Plains), appeal the order of the
district court for Cass County, Nebraska, which dismissed its
complaint for lack of subject matter jurisdiction. Great Plains
alleged that Midwest Insurance Exchange, Inc. (Midwest), as
well as UNICO Group, Inc., and agent Sean Krueger (col-
lectively UNICO), negligently failed to transfer or procure
an errors and omissions insurance policy, which, had it been
in place, would have covered the costs of defense and settle-
ment or judgment for two lawsuits filed against Great Plains
in another state. The district court found that Great Plains’
complaint is not ripe because Midwest’s and UNICO’s liabil-
ity and Great Plains’ damages are currently unknown and
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
because Great Plains may never be found liable in the lawsuits
against it. Great Plains appeals. We reverse, and remand for
further proceedings.
BACKGROUND
In early 2018, Great Plains had an errors and omissions
policy underwritten by Capitol Specialty Insurance Corporation
(Cap Specialty) through Midwest when it approached UNICO
for assistance in procuring various insurance coverages. The
record on appeal does not disclose what, if any, agreements
the parties reached regarding coverage at that time, but Great
Plains notified Midwest on April 18, 2018, that it was mov-
ing its errors and omissions policy. Great Plains subsequently
obtained an errors and omissions policy underwritten by
Lloyd’s London Syndicate 2987 (Lloyd’s) through UNICO on
or about November 11, 2019. This policy was renewed on or
about November 11, 2020.
In late 2020, Great Plains was named a third-party defend
ant in two lawsuits filed in the Iowa district court for Emmet
County based on consulting work it had performed for Spencer
Ag Center, LLC (Spencer Ag). The parties to the two lawsuits
were different, but both lawsuits complained of negligence
and breach of implied warranty of fitness by Spencer Ag
customers. These customers named Spencer Ag a third-party
defendant, and Spencer Ag, in turn, asserted third-party claims
against Great Plains, alleging Great Plains had provided the
feed ration formulas and feed products to the customers. As of
this appeal, the Iowa lawsuits are pending.
Between early December 2020 and the end of February
2021, Great Plains submitted claims and requests for a tender
of defense and indemnification related to the Iowa lawsuits to
Midwest, UNICO, Cap Specialty, and Lloyd’s. All claims and
requests were denied.
Subsequently, on March 24, 2021, Great Plains brought a
declaratory judgment action against Midwest, UNICO, Cap
Specialty, and Lloyd’s to ascertain whether any policy effective
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
between Great Plains and the insurers covered the events under-
lying the Iowa lawsuits. It also sought recovery of the costs of
the Iowa lawsuits and of its declaratory judgment action.
Great Plains filed a separate negligence lawsuit against
Midwest and UNICO alleging they had a duty to transfer or
procure an errors and omissions policy for it and breached this
duty by failing to ensure the requested policy was in place.
Great Plains further alleged that Midwest’s and UNICO’s
breach of duty had “caused” and “will continue to cause” it
damages because it had to retain counsel at its own expense to
defend the Iowa lawsuits; it will also have to pay any judgment
entered against it in the lawsuits. Great Plains asserted these
costs would have been covered under the requested errors and
omissions policy.
UNICO moved to dismiss Great Plains’ negligence com-
plaint for failure to state a claim under Neb. Ct. R. Pldg.
§ 6-1112(b)(6). UNICO based this motion primarily on the fact
that “[Great Plains] currently do[es] not and cannot provide
. . . the amount of defense cost or potential judgments against
[Great Plains] in the two Iowa lawsuits.” As such, UNICO
argued, Great Plains’ “alleged damages are speculative” and its
complaint is not ripe.
Great Plains filed a statement of disputed facts in opposition
to UNICO’s motion to dismiss, asserting that it had already
incurred attorney fees of approximately $4,000 in the Iowa
lawsuits and $16,000 in its declaratory judgment and negli-
gence actions. Great Plains also moved to stay proceedings on
its negligence complaint pending the resolution of the Iowa
lawsuits. In so doing, Great Plains asserted that the full extent
of its damages is “contingent” on the outcome of these law-
suits, but “not speculative.”
The district court held a hearing on June 21, 2021, at which
the parties to the declaratory judgment action essentially
agreed that Great Plains did not have errors and omissions
coverage for the Iowa lawsuits. The hearing also touched on
Great Plains’ motion to stay, with Midwest’s and UNICO’s
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
position being that Great Plains’ negligence complaint is
“premature” and “not ripe” and should be dismissed, not
stayed. They proposed that Great Plains “bring an action in
negligence or a contribution indemnity” “when and if they
do have any damages in the Iowa case[s].” However, Great
Plains expressed concern about dismissal with the option to
refile later insofar as its claims could be seen to involve pro-
fessional negligence subject to a 2-year statute of limitations,
rather than ordinary negligence subject to a 4-year statute
of limitations.
The district court subsequently issued an order on August 2,
2021, dismissing Great Plains’ negligence complaint on ripe-
ness grounds. In relevant part, the order stated:
The liability of [Midwest and Unico] to [Great Plains] is
currently unknown as is the amount of any damages. In
fact, there may not ever be a finding of liability in the
Iowa litigation. As any claim of [Great Plains] is entirely
dependent on the outcome of the Iowa litigation, the case
is not fit for a judicial decision at this time, and there is
no showing of a hardship to [Great Plains] by withholding
the court’s decision in the case.
The order did not address Great Plains’ motion for a stay.
Midwest filed its own motion to dismiss on August 4, 2021,
because it was unclear whether the earlier order applied to
Midwest. In its motion, Midwest asserted Great Plains’ com-
plaint “is based on a theoretical contingency” that it may be
entitled to contribution or indemnity from Midwest if judg-
ment is entered against it in the Iowa lawsuits. Midwest further
asserted that “[a]t this stage, any claims for contribution and
indemnity or for damages are speculative at best.”
The district court also granted this motion, “consistent with”
its earlier ruling on UNICO’s motion to dismiss. The language
of the order was the same as that in the earlier order, and Great
Plains’ motion to stay was not addressed.
Great Plains appealed to the Nebraska Court of Appeals, and
we moved the matter to our docket.
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
ASSIGNMENTS OF ERROR
Great Plains assigns, restated, that the district court erred in
finding that its negligence complaint is not ripe and in declin-
ing to stay proceedings pending the resolution of the Iowa
lawsuits.
STANDARD OF REVIEW
[1,2] If a motion challenging a court’s subject matter juris-
diction is filed after the pleadings stage, and the court holds
an evidentiary hearing and reviews evidence outside the plead-
ings, it is considered a “factual challenge.” 1 Where the trial
court’s decision to dismiss for lack of subject matter jurisdic-
tion is based on a factual challenge, the court’s factual findings
are reviewed under the clearly erroneous standard. 2 But aside
from any factual findings, the trial court’s ruling on subject
matter jurisdiction is reviewed de novo, because it presents a
question of law. 3
[3] The grant or denial of a stay of proceedings is reviewed
for an abuse of discretion. 4
ANALYSIS
Ripeness
Great Plains argues that in dismissing its complaint on
ripeness grounds, the district court “focus[ed] only on the
prospective settlements or judgments in the two Iowa cases”
and ignored the costs Great Plains has already incurred in
defending the Iowa lawsuits and bringing the declaratory judg-
ment and negligence actions. 5 Midwest and UNICO counter
that Great Plains’ claims “currently require litigating abstract
1
See North Star Mut. Ins. Co. v. Stewart, 311 Neb. 33, 970 N.W.2d 461
(2022).
2
Hawley v. Skradski, 304 Neb. 488, 935 N.W.2d 212 (2019).
3
Id.
4
Hawkins v. Delgado, 308 Neb. 301, 953 N.W.2d 765 (2021).
5
Brief for appellants at 8.
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
issues of future and contingent outcomes that may or may not
occur or may not occur as anticipated,” given that the Iowa
lawsuits are ongoing and Great Plains has not yet been found
liable for any act or omission. 6 They also argue that Great
Plains’ own motion to stay proceedings “betrays” that its neg-
ligence complaint is not ripe. 7
We agree with Great Plains that the district court erred in
dismissing its negligence complaint on ripeness grounds given
the facts and circumstances of this case. The district court based
its decision on its view that Midwest’s and UNICO’s “liabil-
ity” and Great Plains’ “damages” are “currently unknown,”
and “there may not ever be a finding of liability in the Iowa
litigation.” The district court is correct that there are numerous
unknowns regarding the claims pending against Great Plains
in Iowa, including whether Great Plains will be found lia-
ble. However, despite these unknowns, the elements of Great
Plains’ negligence complaint as to its attorney fees already
incurred in defending the Iowa lawsuits are not conjectural or
hypothetical. Our finding that Great Plains’ complaint is ripe
is based upon these costs; we offer no opinion regarding the
other damages alleged in the complaint.
[4-6] Subject matter jurisdiction is the power of a tribunal
to hear and determine a case in the general class or category
to which the proceedings in question belong and to deal with
the general subject matter involved. 8 Ripeness is one compo-
nent of subject matter jurisdiction; its fundamental principle
is that courts should avoid entangling themselves, through
premature adjudication, in abstract disagreements based on
contingent future events that may not occur at all or may
not occur as anticipated. 9 A determination regarding ripeness
6
Brief for appellee UNICO at 10.
7
Id. at 13.
8
Davis v. Moats, 308 Neb. 757, 956 N.W.2d 682 (2021).
9
See State ex rel. Wagner v. Evnen, 307 Neb. 142, 948 N.W.2d 244 (2020).
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
depends upon the circumstances in a given case and is a mat-
ter of degree. 10
[7] In making this determination, we use a two-part inquiry:
(1) the fitness of the issues for judicial decision and (2) the
hardship to the parties of withholding court consideration. 11
The fitness-for-decision inquiry goes to the court’s ability to
visit an issue and safeguards against judicial review of hypo-
thetical or speculative disagreements. 12 Generally, a case is ripe
when no further factual development is necessary to clarify a
concrete legal dispute susceptible to specific judicial relief,
as distinguished from an advisory opinion regarding contin-
gent future events. 13 The hardship inquiry, in turn, goes to the
question of whether delayed review will result in significant
harm. 14 “Harm” includes both the traditional concept of actual
damages—pecuniary or otherwise—and also the heightened
uncertainty and resulting behavior modification that may result
from delayed resolution. 15
For example, in City of Omaha v. City of Elkhorn, 16 we
considered the issue of ripeness in a declaratory judgment
action. In City of Omaha, the plaintiff sought a determination
as to whether severance provisions in certain employment
contracts that the defendant had entered into prior to being
annexed by the plaintiff were enforceable. We determined
that the declaratory judgment action was ripe despite the fact
that a lawsuit challenging the validity of the annexation was
still pending when the declaratory judgment action was filed.
In so doing, we noted that the question of whether the sever-
ance provisions ran afoul of the Nebraska Constitution was
10
Shepard v. Houston, 289 Neb. 399, 855 N.W.2d 559 (2014).
11
See Stewart v. Heineman, 296 Neb. 262, 892 N.W.2d 542 (2017).
12
Id.
13
Shepard v. Houston, supra note 10.
14
See Stewart v. Heineman, supra note 11.
15
Id.
16
City of Omaha v. City of Elkhorn, 276 Neb. 70, 752 N.W.2d 137 (2008).
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
“essentially legal in nature” and could be “resolved without
further factual development.” 17 We also noted that deciding
the case at this time would avoid delay and the unnecessary
expenditure of judicial resources in relitigating this question
and resolve the uncertainty about the severance provisions’
enforceability. 18
Similarly, in Shepard v. Houston, 19 we found that a declara-
tory judgment action challenging the constitutionality of a
statute which required that an inmate who refused to submit
a DNA sample forfeit his good time credits was ripe, even
though the statute would not be applied to the inmate until
his release date. We noted that the question of whether the
statute had impermissible retroactive effect as to the inmate
was “essentially legal” and could be “resolved without fur-
ther factual development.” 20 We also noted that although the
inmate could change his mind, this possibility was “more
speculative than the present reality,” given that he had already
refused to submit a sample and professed he would continue
to refuse. 21 In addition, we found that deciding the case at this
time would avoid the waste of judicial resources in relitigating
the issue, as well as potentially “significant hardship” to the
inmate, who might otherwise be unlawfully detained after his
release date. 22
[8] We find that this case, like the declaratory actions in
City of Omaha and Shepard, is ripe, because Great Plains’
negligence complaint can be resolved without further factual
development. As the plaintiff in a negligence action, Great
Plains must prove Midwest’s and UNICO’s duty not to injure
Great Plains, a breach of that duty, proximate causation, and
17
Id. at 82, 752 N.W.2d at 147.
18
Id.
19
Shepard v. Houston, supra note 10.
20
Id. at 407, 855 N.W.2d at 566.
21
Id. at 408, 855 N.W.2d at 567.
22
Id.
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
damages. 23 Midwest and UNICO focus their ripeness argument
on the elements of duty and damages. Midwest asserts that
resolution of the Iowa lawsuits is necessary to determine what,
if any, duty it breached by “defining the parameters of the
claims from which Midwest is charged with failing to protect
Great Plains.” 24 Both Midwest and UNICO further assert that
Great Plains’ damages are “too contingent or remote to sup-
port present adjudication” 25 because (1) the costs of defending
the Iowa lawsuits are “currently incomplete and contingent on
[Great Plains’] continuing to defend [itself]” 26; (2) Great Plains
has not been, and may never be, found liable in the Iowa law-
suits; and (3) any act or omission for which Great Plains might
be found liable may not be covered by the allegedly requested
errors and omissions policy.
As to the element of duty, we find that Great Plains’ com-
plaint alleges a duty on the part of Midwest and UNICO that
is neither conjectural or hypothetical nor dependent upon the
outcome of the Iowa lawsuits. Midwest incorrectly relies on
our decisions in U.S. Specialty Ins. Co. v. D S Avionics 27 and
Harleysville Ins. Group v. Omaha Gas Appliance Co. 28 for
the propositions that a declaratory judgment action regarding
insurance coverage is premature when “there is [a pending]
underlying action” involving “identical issues” and ripe only
when “coverage can be determined separately from the under-
lying action.” 29
23
See Susman v. Kearney Towing & Repair Ctr., 310 Neb. 910, 970 N.W.2d
82 (2022).
24
Brief for appellee Midwest at 19.
25
Brief for appellee UNICO at 11.
26
Id. at 10.
27
U.S. Specialty Ins. Co. v. D S Avionics, 301 Neb. 388, 918 N.W.2d 589
(2018), modified on denial of rehearing 302 Neb. 283, 923 N.W.2d 367
(2019).
28
Harleysville Ins. Group v. Omaha Gas Appliance Co., 278 Neb. 547, 772
N.W.2d 88 (2009).
29
Brief for appellee Midwest at 16 (internal quotation marks omitted).
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
These arguments, however, miss the substance of Great
Plains’ complaint, as well as the point of our earlier decisions
cited above. Great Plains does not allege that Midwest failed
to protect it from specific claims or failed to fulfill the duties
of an insurer as to defense and indemnification. Rather, Great
Plains alleges that Midwest and/or UNICO negligently failed
to transfer or procure an errors and omissions policy, under
which the insurer would have had certain duties to Great
Plains. The determination of whether such a duty existed is not
conjectural or hypothetical pending the outcome of the Iowa
lawsuits; it can be determined in proceedings on Great Plains’
negligence complaint.
Similarly, as to the cases cited by Midwest, we note that
this is a negligence suit, not a declaratory judgment action.
Additionally, the Iowa lawsuits do not raise “identical issues”
insofar as they concern Great Plains’ alleged negligence and
breach of implied warranty of fitness as to feed ration formu-
las and feed products, while this case concerns Midwest’s and
UNICO’s alleged negligence in failing to transfer or procure
an errors and omissions policy. We also note that Midwest has
not pointed to any aspect of the allegedly requested insurance
policy or the facts and circumstances of this case which would
indicate that the actual outcome of the Iowa litigation, as
opposed to the substance of the underlying claims and related
facts, is necessary to determine whether the allegedly requested
policy would cover these claims. 30
30
Compare Cincinnati Ins. Co. v. Becker Warehouse, Inc., 262 Neb. 746,
635 N.W.2d 112 (2001) (rejecting argument that court lacked subject
matter jurisdiction over declaratory judgment action regarding whether
insurance policy covered claims pending resolution of claims because
determination could be made based on policy’s language), with Allstate
Ins. Co. v. Novak, 210 Neb. 184, 313 N.W.2d 636 (1981) (finding that
declaratory judgment action regarding whether insurance policy covered
claim could not be resolved until after claim was resolved because claim
alleged intentional tort, and policy expressly excluded claims arising from
intentional bodily injury).
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
In turning to the issue of damages, it is undisputed that
Great Plains has defended itself in the Iowa lawsuits, instead
of relying on an insurer to do so, as it would have done under
the allegedly requested errors and omissions policy. We find
that its alleged damages in this regard suffice for purposes of
ripeness. Our recent decision in Susman v. Kearney Towing &
Repair Ctr. 31 helps illustrate this.
Kearney Towing & Repair Ctr. involved a dispute over
whether the statute of limitations on a claim for ordinary neg-
ligence began to run from the time of the defendant’s alleged
negligence in mounting and installing tires on a vehicle or
from when the tread on one of the tires separated, causing
the driver to lose control and the vehicle to roll over. 32 We
found that the claim did not accrue—and the statute of limita-
tions did not begin to run—until the accident occurred. 33 In
reaching this conclusion, we noted that “under longstanding
principles of justiciability, a party is not aggrieved and can-
not 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.” 34 As such, the plaintiffs could
not have brought and maintained suit when the tires were
installed merely because they were among the broad group
of persons who might suffer some harm in the future. 35 It
was not until the tread failed and the vehicle rolled over—
nearly 1 year after the tires were installed—that the plaintiffs
suffered an injury and could initiate and maintain a suit for
negligence. 36
31
Kearney Towing & Repair Ctr., supra note 23.
32
Id.
33
Id.
34
Id. at 921, 970 N.W.2d at 91.
35
Kearney Towing & Repair Ctr., supra note 23.
36
Id.
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Nebraska Supreme Court Advance Sheets
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GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
Great Plains’ current situation is not like that of the Kearney
Towing & Repair Ctr. plaintiffs prior to their accident. Great
Plains is not seeking damages in the event a claim is filed
against it. Two such claims have already been filed, and the
record shows that Great Plains had incurred approximately
$4,000 in attorney fees in defending these claims as of June
16, 2021. Midwest and UNICO effectively admitted as much
at oral argument when they conceded that they would agree
Great Plains’ complaint is ripe if all it sought to recover was
the approximately $4,000 it had spent in defending the Iowa
lawsuits through June 16. As this admission indicates, the
unknowns that Midwest and UNICO point to do not pertain
to the existence of damages as such, but, rather, the amount of
damages—namely, the total costs of defending the Iowa law-
suits, the amount of any settlement or judgment, and whether
Great Plains is entitled to attorney fees for its declaratory judg-
ment action in light of the prayer for relief in its negligence
complaint and our decision in Tetherow v. Wolfe. 37
Motion to Stay
Great Plains also argues that the district court erred in not
staying proceedings on its negligence complaint until the Iowa
lawsuits are resolved. Midwest and UNICO variously counter
that the district court lacked the power to stay proceedings
once it found it lacked subject matter jurisdiction, that the issue
is not properly before this court on appeal because the district
court did not rule on Great Plains’ motion for a stay, and that
Great Plains failed to provide any argument as to why the dis-
trict court abused its discretion in granting “dismissal in lieu
of a stay.” 38
37
Tetherow v. Wolfe, 223 Neb. 631, 392 N.W.2d 374 (1986) (holding that
one who through tort of another has been required to act in protection of
his or her interests by bringing or defending action against third person is
entitled to recover reasonable compensation for loss of time, attorney fees,
and other expenditures thereby suffered or incurred in earlier action).
38
Brief for appellee UNICO at 14.
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GREAT PLAINS LIVESTOCK V. MIDWEST INS. EXCH.
Cite as 312 Neb. 367
[9] Stays are often used to regulate the court’s own proceed-
ings or to accommodate the needs of parallel proceedings. 39
Courts inherently possess the power to stay proceedings when
required by the interests of justice. 40
Because we reverse the district court’s finding that Great
Plains’ complaint is not ripe, we express no opinion on whether
Great Plains’ motion to stay has merit. In determining whether
to exercise this power on remand, the trial court should bal-
ance the competing needs of the parties, taking into account,
among other things, the interest of the courts, the probability
that the proceeding will work a constitutional violation on the
movant, the presence or absence of hardship or inequity, and
the burden of proof. 41
CONCLUSION
We conclude that Great Plains’ action was ripe. Accordingly,
we reverse, and remand for further proceedings.
Reversed and remanded for
further proceedings.
Stacy, J., not participating.
39
Jennifer T. v. Lindsay P., 298 Neb. 800, 906 N.W.2d 49 (2018).
40
Kelley v. Benchmark Homes, Inc., 250 Neb. 367, 550 N.W.2d 640 (1996),
disapproved on other grounds, Webb v. American Employers Group, 268
Neb. 473, 684 N.W.2d 33 (2004).
41
See id. | 01-04-2023 | 11-18-2022 |
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11/18/2022 01:07 AM CST
- 647 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
IN RE ESTATE OF ADELUNG
Cite as 312 Neb. 647
In re Estate of Madeline A.
Adelung, deceased.
Lynda Adelung Heiden, Personal Representative
of the Estate of Madeline A. Adelung,
deceased, appellant and cross-appellee,
v. Kent A. Adelung, appellee and
cross-appellant.
___ N.W.2d ___
Filed October 14, 2022. No. S-21-838.
1. Appeal and Error. The construction of a mandate issued by an appel-
late court presents a question of law.
2. Judgments: Appeal and Error. On questions of law, an appellate court
is obligated to reach a conclusion independent of the determination
reached by the court below.
3. Actions: Appeal and Error. The law-of-the-case doctrine reflects the
principle that an issue litigated and decided in one stage of a case should
not be relitigated at a later stage.
4. Appeal and Error. Under the law-of-the-case doctrine, an appellate
court’s holdings on issues presented to it conclusively settle all matters
ruled upon, either expressly or by necessary implication.
5. Judgments: Appeal and Error. The law-of-the-case doctrine applies
with greatest force when an appellate court remands a case to an inferior
tribunal. Upon remand, a district court may not render a judgment or
take action apart from that which the appellate court’s mandate directs
or permits.
6. Judgments: Waiver: Appeal and Error. Under the mandate branch
of the law-of-the-case doctrine, a decision made at a previous stage of
litigation, which could have been challenged in the ensuing appeal but
was not, becomes the law of the case; the parties are deemed to have
waived the right to challenge that decision. But an issue is not consid-
ered waived if a party did not have both an opportunity and an incentive
to raise it in a previous appeal.
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
IN RE ESTATE OF ADELUNG
Cite as 312 Neb. 647
Appeal from the County Court for Buffalo County: Gerald
R. Jorgensen, Jr., Judge. Affirmed.
Blake E. Johnson, of Bruning Law Group, for appellant.
Jared J. Krejci, of Smith, Johnson, Allen, Connick & Hansen,
for appellee.
Heavican, C.J., Cassel, Stacy, Papik, and Freudenberg,
JJ., and Noakes, District Judge.
Heavican, C.J.
INTRODUCTION
This case comes to us following our remand to the county
court for a redetermination of damages owed by the defendant.
At issue is whether the county court erred when it declined to
award prejudgment interest to the estate. The estate appeals.
We affirm.
BACKGROUND
This is the second time this court has been presented with an
appeal from the estate of Madeline A. Adelung (Estate). 1 In our
earlier case, Adelung’s son, Kent A. Adelung, appealed from
the decision of the county court finding him liable following
an action for an equitable accounting sought by the Estate’s
personal representative, Lynda Adelung Heinen, Madeline’s
daughter.
On appeal, we concluded that the Estate was barred by
the statute of limitations from recovering a portion of the
farm income it alleged that Kent had wrongfully collected.
We affirmed, as modified, the county court’s judgment and
remanded the cause to the county court with directions for the
court to calculate the judgment in conformity with our opinion.
Upon remand, the Estate sought prejudgment interest.
The county court noted that it had not previously ordered
1
See In re Estate of Adelung, 306 Neb. 646, 947 N.W.2d 269 (2020).
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Cite as 312 Neb. 647
prejudgment interest, that this court’s opinion had made no
mention of prejudgment interest, and that to award it would
“not [be] proper.” The Estate appeals, and Kent cross-appeals.
ASSIGNMENTS OF ERROR
The Estate assigns that the county court erred in not applying
prejudgment interest under Neb. Rev. Stat. § 45-104 (Reissue
2021) to the amount of the modified judgment.
On cross-appeal, Kent assigns that the county court erred
in not concluding that the Estate failed to adequately plead or
otherwise raise the issue of prejudgment interest and, as such,
did not have a substantive right to recover such interest.
STANDARD OF REVIEW
[1,2] The construction of a mandate issued by an appellate
court presents a question of law. 2 On questions of law, we are
obligated to reach a conclusion independent of the determina-
tion reached by the court below. 3
ANALYSIS
This case examines the intersection of the awarding of pre-
judgment interest and the law-of-the-case doctrine. Some back-
ground on both principles is helpful.
Statutory authority for the awarding of prejudgment interest
is separately found in Neb. Rev. Stat. § 45-103.02 (Reissue
2021) and § 45-104. We clarified in Weyh v. Gottsch 4 that
§§ 45-103.02 and 45-104 are
alternate and independent statutes authorizing the recovery
of prejudgment interest. In other words, the Legislature
has created three separate ways to recover prejudgment
interest, and none is preferred. Section 45-103.02(1)
authorizes the recovery of prejudgment interest on unliq-
uidated claims when the statutory preconditions are met,
2
County of Sarpy v. City of Gretna, 276 Neb. 520, 755 N.W.2d 376 (2008).
3
Id.
4
Weyh v. Gottsch, 303 Neb. 280, 313-14, 929 N.W.2d 40, 63 (2019).
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Cite as 312 Neb. 647
§ 45-103.02(2) authorizes the recovery of prejudgment
interest on liquidated claims, and § 45-104 authorizes the
recovery of prejudgment interest on four categories of
contract-based claims without regard to whether the claim
is liquidated or unliquidated.
[3-5] As noted, the law-of-the-case doctrine is also impli-
cated here. This doctrine reflects the principle that an issue
litigated and decided in one stage of a case should not be reliti-
gated at a later stage. 5 Under that doctrine, an appellate court’s
holdings on issues presented to it conclusively settle all matters
ruled upon, either expressly or by necessary implication. 6 The
doctrine applies with greatest force when an appellate court
remands a case to an inferior tribunal. 7 Upon remand, a district
court may not render a judgment or take action apart from that
which the appellate court’s mandate directs or permits. 8
[6] Under the mandate branch of the law-of-the-case doc-
trine, a decision made at a previous stage of litigation, which
could have been challenged in the ensuing appeal but was not,
becomes the law of the case; the parties are deemed to have
waived the right to challenge that decision. 9 But an issue is not
considered waived if a party did not have both an opportunity
and an incentive to raise it in a previous appeal. 10
The Nebraska Court of Appeals discussed the intersection
of prejudgment interest and the mandate branch of the law-of-
the-case doctrine in Valley Cty. Sch. Dist. 88-0005 v. Ericson
State Bank. 11 In that case, a bank (found liable below) appealed
from, among other things, the district court’s award of
5
deNourie & Yost Homes v. Frost, 295 Neb. 912, 893 N.W.2d 669 (2017).
6
Id.
7
Id.
8
Id.
9
Id.
10
Id.
11
Valley Cty. Sch. Dist. 88-0005 v. Ericson State Bank, 18 Neb. App. 624,
790 N.W.2d 462 (2010).
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prejudgment interest at a rate of 12 percent per annum. The
Court of Appeals affirmed. On remand, the district court
entered an order in conformity with the Court of Appeals’
opinion and awarded postjudgment interest at the same rate.
The bank again appealed. 12
In defending the district court’s award, the appellee con-
tended that the law-of-the-case doctrine operated to prevent
the bank from challenging the 12-percent rate applied to the
postjudgment amount. The Court of Appeals disagreed:
In Valley Cty. I . . . , we specifically stated that § 45-104
applied “[b]ecause there was no ‘otherwise agreed’ upon
rate for prejudgment interest” and that [the appellee] was
entitled to the 12–percent prejudgment interest until the
entry of judgment. Neither the district court’s judgment
nor our opinion stated that the 12–percent interest rate
would continue to be applied after entry of judgment;
thus, the [b]ank did not have a reason to raise the issue
of the appropriate postjudgment interest rate at that time.
Had the district court’s initial judgment expressly stated
a postjudgment interest rate, [the appellee’s] argument
would have had merit. But because the judgment was
silent on the matter of postjudgment interest, we reject
[the appellee’s] argument that the matter should have
been raised in the prior appeal. 13
Also relevant to our determination is Neb. Ct. R. Pldg.
§ 6-1108(a), which states:
A pleading which sets forth a claim for relief, whether an
original claim, counterclaim, cross-claim, or third-party
claim, shall contain (1) a caption, (2) a short and plain
statement of the claim showing that the pleader is entitled
to relief, and (3) a demand for judgment for the relief the
pleader seeks. Relief in the alternative or of several dif-
ferent types may be demanded. If the recovery of money
12
See id.
13
Id., 18 Neb. App. at 628-29, 790 N.W.2d at 466.
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be demanded, the amount of special damages shall be
stated but the amount of general damages shall not be
stated; and if interest thereon be claimed, the time from
which interest is to be computed shall also be stated.
(Emphasis supplied.)
In Albrecht v. Fettig, 14 the Court of Appeals discussed
whether the failure to request interest in a complaint precluded
a litigant from recovering interest, 15 noting that the purpose of
compliance with § 6-1108 was to provide notice of the relief
that the plaintiff was attempting to obtain. 16 In AVG Partners I,
this court expanded the Albrecht holding to note that “compli-
ance with § 6-1108(a) is not determinative where entitlement
to interest is based on statute and the adverse party had notice
and an opportunity to be heard prior to judgment.” 17 Based on
this, we concluded that although prejudgment interest was not
requested in the complaint, it was “the subject of extensive
argument prior to judgment” 18 and thus was recoverable.
The county court and the parties frame the issue presented
by this appeal primarily as one involving the law-of-the-case
doctrine. The parties ask us to determine whether the fact that
this court’s mandate failed to order prejudgment interest means
that to do so would be outside of that prior mandate.
Generally speaking, a lower court may do nothing other than
what a higher court has ordered it to do via the higher court’s
mandate. And in this case, we ordered the lower court to rede-
termine the damages award once we concluded that the statute
of limitations operated to prevent the Estate from recovering
some of the farm income that had been awarded to it by the
county court. This did not include interest.
14
Albrecht v. Fettig, 27 Neb. App. 371, 932 N.W.2d 331 (2019).
15
See AVG Partners I v. Genesis Health Clubs, 307 Neb. 47, 948 N.W.2d
212 (2020) (quoting Albrecht, supra note 14).
16
Id.
17
Id., 307 Neb. at 64, 948 N.W.2d at 230.
18
Id.
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As noted above, there are some instances where issues out-
side of the mandate may be raised on remand—namely, if there
was no opportunity or incentive to appeal from the issue now
raised. But we need not decide here whether the Estate should
have appealed from the county court’s failure to award interest
below. Rather, we find dispositive the Estate’s failure to seek
interest in its pleading or otherwise raise the issue of interest
prior to judgment.
The purpose behind compliance with § 6-1108 of the plead-
ing rules is to provide notice to other litigants that prejudgment
interest is at issue. If there was notice, the failure to comply
with § 6-1108 might be excusable. But here, there was no
compliance with § 6-1108, nor was there notice to Kent on the
issue of prejudgment interest prior to the entry of judgment
in the Estate’s favor. On these facts, we find no error in the
district court’s refusal to award interest on remand. Finding no
merit to the Estate’s assignment of error, albeit for a different
reason than that stated by the county court, we affirm. We need
not reach Kent’s assignment of error on cross-appeal.
CONCLUSION
The decision of the county court is affirmed.
Affirmed.
Miller-Lerman, J., participating on briefs.
Funke, J., not participating. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487039/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 01:07 AM CST
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REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
REO Enterprises, LLC, a Nebraska limited
liability company, appellant, v. Village
of Dorchester, a Nebraska political
subdivision, appellee.
___ N.W.2d ___
Filed November 4, 2022. No. S-21-752.
1. Summary Judgment: Appeal and Error. An appellate court will
affirm a lower court’s grant of summary judgment if the pleadings
and admitted evidence show that there is no genuine issue as to any
material facts or as to the ultimate inferences that may be drawn from
the facts and that the moving party is entitled to judgment as a matter
of law.
2. Constitutional Law: Ordinances. The constitutionality of an ordinance
presents a question of law.
3. Judgments: Appeal and Error. An appellate court independently
reviews questions of law decided by a lower court.
4. Administrative Law: Statutes: Appeal and Error. The meaning
and interpretation of statutes and regulations are questions of law for
which an appellate court has an obligation to reach an independent
conclusion irrespective of the decision made by the court below.
5. Appeal and Error. Plain error is error plainly evident from the record
and of such a nature that to leave it uncorrected would result in damage
to the integrity, reputation, or fairness of the judicial process.
6. Special Legislation. A legislative act constitutes special legislation if
(1) it creates an arbitrary and unreasonable method of classification or
(2) it creates a permanently closed class.
7. Special Legislation: Public Policy. To be valid, a legislative clas-
sification must be based upon some reason of public policy, some
substantial difference in circumstances that would naturally suggest
the justice or expediency of diverse legislation regarding the objects to
be classified.
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Cite as 312 Neb. 792
8. Special Legislation. Legislative classifications must be real and not
illusive; they cannot be based on distinctions without a substantial
difference.
9. ____. A legislative body’s distinctive treatment of a class is proper if
the class has some reasonable distinction from other subjects of a like
general character. And that distinction must bear some reasonable rela-
tion to the legitimate objectives and purposes of the legislative act.
Appeal from the District Court for Saline County: Vicky L.
Johnson, Judge. Affirmed.
Gregory C. Damman, of Blevens & Damman, for appellant.
Kelly R. Hoffschneider and Timothy J. Kubert, of
Hoffschneider Law, P.C., L.L.O., for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Per Curiam.
The Village of Dorchester, Nebraska, enacted an ordinance
providing that renters of property could receive utility services
from the village only if their landlord guaranteed that the land-
lord would pay any unpaid utility charges. REO Enterprises,
LLC (REO), an owner of rental property within the village,
filed an action seeking a declaration that the ordinance was
unenforceable for various reasons. The district court initially
granted the relief REO sought, declaring that the ordinance
violated the Equal Protection Clauses of the U.S. and Nebraska
Constitutions. In an appeal filed by the village, however, we
reversed the district court’s judgment on that question and
remanded the cause for the district court to consider REO’s
other claims. See REO Enters. v. Village of Dorchester, 306
Neb. 683, 947 N.W.2d 480 (2020) (REO I). On remand, the
district court found that the village was entitled to summary
judgment on each of REO’s other claims. The case now returns
to us, this time at the behest of REO. We find no error on the
part of the district court and therefore affirm.
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Cite as 312 Neb. 792
BACKGROUND
The Ordinance.
The village enacted the ordinance at issue in this appeal in
2017. The ordinance addresses the village’s provision of utility
services, including water, sewer, and electricity. The ordinance
requires that all residents of the village “subscribe to [the]
[v]illage utility services” and provides terms for billing, collec-
tion of bills, and discontinuance of service.
The ordinance also sets forth the process by which persons
may apply to receive utility services. Under the ordinance,
an application for utility services must be submitted to the
village clerk, who is to require payment of “a service deposit
and tap fees for water and sewer service.” Of particular rel-
evance to this appeal, the ordinance provides the following
with respect to applications for utility services filed by rent-
ers of property: “Before a tenant’s utility application will be
accepted, the landlord shall be required to sign an owner’s
consent form and agree to pay all unpaid utility charges for
his or her property.”
REO’s Complaint.
Several months after the ordinance was enacted, REO filed
a lawsuit against the village in which it asked the district
court to declare the ordinance unenforceable. In its complaint,
REO alleged that when one of its tenants, Ange Lara, applied
to receive utility services and paid the requested deposit, the
village clerk told her that she would not be provided with
such services until REO signed a guarantee as required by the
ordinance. According to the complaint, when REO informed
the village that it would not sign the guarantee, the village pro-
vided utility services to the property, but through an account
held by a member of REO rather than through an account
in Lara’s name. Although REO’s complaint named Lara as a
third-party defendant, nothing in our record indicates that Lara
has participated in the proceedings as a party.
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Cite as 312 Neb. 792
REO’s complaint alleged that the ordinance was unconsti-
tutional and in violation of state and federal statutes. REO
alleged that the ordinance violated the Equal Protection Clauses
of the U.S and Nebraska Constitutions, as well as article III,
§ 18, of the Nebraska Constitution. It also alleged that the
ordinance violated the federal Equal Credit Opportunity Act,
see 15 U.S.C. § 1691 et seq. (2018), and Nebraska’s Uniform
Residential Landlord and Tenant Act, see Neb. Rev. Stat.
§§ 76-1401 to 76-1449 (Reissue 2018 & Supp. 2021). REO
asked the district court to declare that the ordinance was void
and unenforceable on each of these grounds.
Summary Judgment Evidence.
REO and the village eventually filed cross-motions for sum-
mary judgment. At the summary judgment hearing, the district
court received an affidavit from the village clerk, Gloria Riley.
In her affidavit, Riley asserted that she was responsible for
managing utility accounts for the village. Riley stated that a
previous renter of the property REO rented to Lara failed to
pay a utility bill of over $500 and that the residency of that
former tenant was unknown. She also stated that the village
“has spent substantial resources in trying to locate former
residential tenant utilities customers that have left town with
unpaid utility account obligations” and that the village had
previously used collection agencies to assist in pursuing a
recovery for these unpaid bills, but that such agencies would
charge 50 percent of the amount collected. According to Riley,
the ordinance was adopted to “further the goal of collection
by reducing the possibility that [the village] will be faced
with the administrative expenses associated with repeatedly
resorting to cumbersome and expensive foreclosure or collec-
tion proceedings.”
The district court also received an affidavit of Lara. Lara’s
affidavit was consistent with the allegations in REO’s com-
plaint regarding the village’s response to Lara’s application
for utility services.
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Cite as 312 Neb. 792
Initial District Court Order
and First Appeal.
After the hearing on the motions for summary judgment,
the district court entered an order granting summary judgment
in favor of REO. In its order, the district court found that the
ordinance violated the Equal Protection Clauses of the U.S.
and Nebraska Constitutions. It reasoned that the ordinance
treated residential owners of property and residential tenants
differently and that there was no rational relationship between
the difference in treatment and the village’s interest in collect-
ing unpaid utility bills. The district court did not address the
other grounds REO offered in support of its request that the
ordinance be declared invalid.
The village appealed the district court’s decision, and we
reversed. We held that although the ordinance classified resi-
dential tenants and residential owners separately, the classifica-
tion was subject to and satisfied rational basis scrutiny and thus
did not violate the Equal Protection Clauses of the U.S. and
Nebraska Constitutions. We found that ensuring the collection
of utility bills was a plausible policy reason for the requirement
that renters obtain a landlord guarantee and that the differential
treatment of renters and owners was sufficiently related to the
goal of ensuring payment of utility bills so as not to render
the treatment arbitrary or irrational.
Proceedings on Remand.
After receiving and spreading our mandate in REO I, the
district court entered an order addressing REO’s other claims.
It found that the village was entitled to summary judgment
on each of those claims and thus granted the village’s motion
for summary judgment, overruled REO’s motion for summary
judgment, and dismissed the case.
REO timely appealed. We moved the case to our docket
on our own motion pursuant to Neb. Rev. Stat. § 24-1106(3)
(Cum. Supp. 2020).
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REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
ASSIGNMENTS OF ERROR
REO assigns that the district court erred by finding that
the ordinance (1) did not violate article III, § 18, of the
Nebraska Constitution, (2) did not violate the federal Equal
Credit Opportunity Act, and (3) was not void as against the
public policy of Nebraska. REO also assigns that the district
court committed plain error by finding that the village had
statutory authority to enact the ordinance.
STANDARD OF REVIEW
[1] An appellate court will affirm a lower court’s grant of
summary judgment if the pleadings and admitted evidence
show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts
and that the moving party is entitled to judgment as a matter of
law. D-CO, Inc. v. City of La Vista, 285 Neb. 676, 829 N.W.2d
105 (2013).
[2,3] The constitutionality of an ordinance presents a ques-
tion of law. Dowd Grain Co. v. County of Sarpy, 291 Neb.
620, 867 N.W.2d 599 (2015). An appellate court independently
reviews questions of law decided by a lower court. Id.
[4] The meaning and interpretation of statutes and regula-
tions are questions of law for which an appellate court has
an obligation to reach an independent conclusion irrespec-
tive of the decision made by the court below. In re App. No.
P-12.32 of Black Hills Neb. Gas, 311 Neb. 813, 976 N.W.2d
152 (2022).
[5] Plain error is error plainly evident from the record and
of such a nature that to leave it uncorrected would result in
damage to the integrity, reputation, or fairness of the judicial
process. North Star Mut. Ins. Co. v. Miller, 311 Neb. 941, 977
N.W.2d 195 (2022).
ANALYSIS
Special Legislation.
REO first claims that the district court should have declared
the ordinance unenforceable on the grounds that it violates
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Cite as 312 Neb. 792
article III, § 18, of the Nebraska Constitution. The text of
article III, § 18, prohibits “[t]he Legislature” from “pass[ing]
local or special laws” in a set of enumerated circumstances.
The section concludes, “In all other cases where a general law
can be made applicable, no special law shall be enacted.” Id.
We have described article III, § 18, as generally prohibiting
“special legislation.” Big John’s Billiards v. State, 288 Neb.
938, 944, 852 N.W.2d 727, 734 (2014). We have said that the
special legislation prohibition applies to municipal ordinances.
See, e.g., D-CO, Inc., supra.
[6] So what exactly is it that article III, § 18, prohibits? Our
precedent holds that a legislative act constitutes special legis-
lation if (1) it creates an arbitrary and unreasonable method
of classification or (2) it creates a permanently closed class.
D-CO, Inc., supra. REO’s sole argument is that the ordinance
creates an arbitrary and unreasonable classification, so we next
turn our attention to the tests we have developed to identify
such classifications.
[7-9] In order to withstand a special legislation challenge,
i.e., to be valid, a legislative classification must be based
upon some reason of public policy, some substantial difference
in circumstances that would naturally suggest the justice or
expediency of diverse legislation regarding the objects to be
classified. Id. Legislative classifications must be real and not
illusive; they cannot be based on distinctions without a sub-
stantial difference. Id. A legislative body’s distinctive treatment
of a class is proper if the class has some reasonable distinction
from other subjects of a like general character. Id. And that
distinction must bear some reasonable relation to the legitimate
objectives and purposes of the legislative act. Id.
REO argues that by requiring only renters’ applications for
utility services to be supported by the guarantee of a third
party, the ordinance treats renters differently than it treats
owners. And it argues that there is no substantial difference in
circumstances between renters applying for utility services and
owners doing the same that justifies the differential treatment.
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REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
REO observes that some renters may be very creditworthy
while some owners may have very poor credit, and thus argues
that requiring only renters’ applications to be supported by a
guarantee is arbitrary.
If the village was attempting to defend the ordinance based
on a claim about the relative creditworthiness of renters and
owners of property, REO’s argument might have some force.
But, in fact, the village does not claim that the ordinance
is justified based solely on a difference in creditworthiness
between those two groups. Instead, the village’s argument
and Riley’s affidavit focus on the time and expense associ-
ated with collecting unpaid utility bills from renters. As noted
above, Riley’s affidavit stated that the village had spent sub-
stantial resources trying to locate former renters of property
with unpaid utility bills and had resorted to using collection
agencies that would take half of any amount collected. The
ordinance’s requirement of a landlord guarantee, according to
Riley, was intended to minimize the time and expense associ-
ated with those efforts.
We agree with the village that there is a substantial difference
in circumstances between renters and owners as to the time and
expense that are likely necessary to collect unpaid utility bills.
On this point, we find our opinion in REO I instructive. In the
course of our equal protection analysis in that case, we found
compelling the village’s assertion that “administrative and col-
lection costs associated with unpaid utility bills are more likely
to increase when seeking payment for services provided to
tenants versus residential owners.” REO I, 306 Neb. 683, 693,
947 N.W.2d 480, 488 (2020). We observed that tenants are
connected to the property through only a lease agreement and
that their connection to the property thus ceases when they
are no longer acting under the agreement, while owners are
more “tied” to the serviced property and thus provide a “static
source” that can be more easily contacted and from which
collection can be more easily pursued. Id. at 693, 694, 947
N.W.2d at 488. We also noted that a landlord guarantee could
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REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
help the village minimize collection costs, because the guar-
antee provides another party to account for amounts due, but
concluded that “a third-party guarantee does not equally apply
to residential owners who do not have a landlord third-party
relationship and are already tied to the serviced propert y.” Id.
at 694, 947 N.W.2d at 488.
Although the foregoing analysis was conducted in the con-
text of an equal protection challenge in REO I, we find it also
supports the conclusion that there is a substantial difference
in circumstances between renters and owners that justifies the
ordinance’s differential treatment of the two groups. We have
previously acknowledged that special legislation analysis is
similar to an equal protection analysis and that, in some cases,
both issues can be decided on the same facts. See Hug v. City
of Omaha, 275 Neb. 820, 749 N.W.2d 884 (2008). As a result,
language normally applied to an equal protection analysis is
sometimes used to help explain the reasoning employed under
a special legislation analysis. Id. That is the case here.
We are not dissuaded from our conclusion that the ordinance
did not violate article III, § 18, by an alternative argument
raised by REO challenging the adequacy of Riley’s affidavit.
In support of this argument, REO compares Riley’s affidavit to
a commissioned study a municipality offered in defending an
ordinance regulating rental properties against a special legisla-
tion challenge in D-CO, Inc. v. City of La Vista, 285 Neb. 676,
829 N.W.2d 105 (2013). REO also contends that Riley’s affi-
davit failed to compare the resources the village had expended
pursuing unpaid utility bills of renters to unpaid utility bills
of property owners and failed to consider the effectiveness of
other means the village could have used to recover renters’
unpaid utility bills, such as requiring deposits or pursuing liens
imposed on the property.
We disagree with REO’s contention that Riley’s affidavit
was inadequate. Although the municipality in D-CO, Inc.,
supra, relied on a commissioned study, our opinion in that
case did not require that type of evidence in every special
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REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
legislation challenge. Moreover, in that case, we relied on
more than just the commissioned study to determine that there
were substantial differences in circumstances between rental
properties and owner-occupied properties that justified the
municipality’s rental property regulations. The study did not
specifically show that rental properties within the municipal-
ity were dilapidated, but we relied on evidence of complaints
the municipality received about the condition of some rental
properties and of code violations it had found in some rental
properties. This anecdotal evidence is not unlike the evidence
set forth in Riley’s affidavit.
We also disagree with REO that the village was required
to offer evidence comparing the resources it had expended
attempting to collect unpaid utility bills from renters as opposed
to owners or show that it had considered the effectiveness of
other potential means of pursuing renters’ unpaid utility bills.
REO’s argument that this information was required overlooks
aspects of our special legislation doctrine. Even assuming the
village had also invested significant time and money in pursu-
ing unpaid utility bills associated with owner-occupied proper-
ties, our special legislation jurisprudence would not preclude it
from attempting to minimize the resources it must expend to
pursue renters’ unpaid utility bills. As we said in D-CO, Inc.,
in response to an argument that there were also maintenance
problems associated with owner-occupied properties in the
relevant municipality, government entities are “not required to
solve every problem at once.” 285 Neb. at 685, 829 N.W.2d
at 112.
In addition, even if the village may have had other means
at its disposal to pursue renters’ unpaid utility bills, it does
not follow that the ordinance is prohibited special legisla-
tion. As we have explained, the special legislation inquiry
is focused on whether the distinctive treatment of classes is
based on a substantial difference in circumstances between
the classes that justifies the distinctive treatment. Because
we find that there was such a substantial difference here, we
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conclude that REO’s special legislation challenge to the ordi-
nance fails.
Equal Credit Opportunity Act.
We next consider REO’s contention that the ordinance is
unenforceable because it violates the federal Equal Credit
Opportunity Act (ECOA). The ECOA prohibits creditors from
discriminating against applicants for credit on various bases.
See 15 U.S.C. § 1691(a). REO’s argument that the ordinance
violates the ECOA is based on a regulation promulgated to
enforce that statute. The regulation REO relies upon provides
that creditors may not generally require “the signature of an
applicant’s spouse or other person” on a credit instrument “if
the applicant qualifies under the creditor’s standards of credit-
worthiness for the amount and terms of the credit requested.”
12 C.F.R. § 1002.7(d)(1) (2021). REO contends that when a
renter applies to receive utility services from the village, he or
she is applying for credit. And because the ordinance requires
that the renter’s application be supported by the guarantee of
his or her landlord without any consideration of the renter’s
creditworthiness, REO argues that the ordinance violates the
ECOA. As we will explain, however, it is not necessary for
us to determine whether the ordinance is inconsistent with
the ECOA, because REO was not entitled to seek relief under
that act.
REO claims that a provision of the ECOA, 15 U.S.C.
§ 1691e(c), authorized it to ask the district court to declare the
ordinance invalid. Section 1691e(c) of the ECOA provides that
“[u]pon application by an aggrieved applicant, the appropriate
United States district court or any other court of competent
jurisdiction may grant such equitable and declaratory relief as
is necessary to enforce the requirements imposed under this
subchapter.” REO focuses on the language authorizing courts
of competent jurisdiction to grant equitable and declaratory
relief, but it glosses over the fact that § 1691e(c) authorizes
only an “aggrieved applicant” to seek such relief.
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The ECOA defines an “applicant” as “any person who
applies to a creditor directly for an extension, renewal, or con-
tinuation of credit, or applies to a creditor indirectly by use of
an existing credit plan for an amount exceeding a previously
established credit limit.” 15 U.S.C. § 1691a(b). For present
purposes, we will assume for the sake of argument that when
a person applies to the village to receive utility services, he
or she is requesting an extension of credit for purposes of the
ECOA. Having made this assumption, we would have no dif-
ficulty in finding that a renter seeking utility services is an
“applicant” under the ECOA. But, even with that assumption,
it is not so clear that REO is an “applicant” for purposes of
the statute.
REO asserts that the ordinance violates the ECOA by
requiring REO to serve as a guarantor. At least two federal
courts of appeal have expressly held that, notwithstanding a
regulation of the Federal Reserve Bank providing that “the
term [applicant] includes guarantors,” see 12 C.F.R. § 202.2(e)
(2021), a guarantor is not an “applicant” under the ECOA.
The U.S. Court of Appeals for the Eighth Circuit reached that
conclusion in Hawkins v. Community Bank of Raymore, 761
F.3d 937 (8th Cir. 2014), affirmed by an equally divided court,
577 U.S. 495, 136 S. Ct. 1072, 194 L. Ed. 2d 163 (2016). It
observed that to qualify as an “applicant” under the definition
provided in the ECOA, a person must “apply” for, that is,
request, credit. It reasoned that a guarantor is not an “appli-
cant,” because a guarantor agrees to pay the debt of another in
the event of default, but does not itself request credit. As the
Eighth Circuit put it, “[a] guarantor engages in different con-
duct, receives different benefits, and exposes herself to differ-
ent legal consequences than does a credit applicant.” Hawkins,
761 F.3d at 942.
More recently, the U.S. Court of Appeals for the Eleventh
Circuit also concluded that a guarantor was not an “applicant”
under the ECOA. See Regions Bank v. Legal Outsource PA,
936 F.3d 1184 (11th Cir. 2019). Relying on a number of legal
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and other dictionaries, that court concluded that the ordinary
meaning of the term “applicant” under the ECOA is “one who
requests credit to benefit himself.” Regions Bank, 936 F.3d at
1191. The Eleventh Circuit concluded that a guarantor did not
fit within this definition, explaining that “[a]lthough a guaran-
tor makes a promise related to an applicant’s request for credit,
the guaranty is not itself a request for credit, and certainly not
a request for credit for the guarantor.” Id.
The U.S. Court of Appeals for the Seventh Circuit has also
expressed doubt about whether a guarantor qualifies as an
“applicant” under the ECOA in Moran Foods v. Mid-Atlantic
Market Development, 476 F.3d 436 (7th Cir. 2007). The court
ultimately decided that case on other grounds, but not before
observing that “there is nothing ambiguous about ‘applicant’
and no way to confuse an applicant with a guarantor.” Id.
at 441.
Although one other federal court of appeals has concluded
that for purposes of the ECOA, “applicant” could reasonably
be construed to include a guarantor, see RL BB Acquisition v.
Bridgemill Commons Dev. Group, 754 F.3d 380 (6th Cir. 2014),
we find the reasoning of the Seventh, Eighth, and Eleventh
Circuits persuasive. A guarantor may support an application
for credit, but, in our view, a guarantor does not itself apply
for credit and is thus not an “applicant” under the plain terms
of the ECOA.
Because REO did not qualify as an “applicant” under the
ECOA, it could not seek declaratory or equitable relief under
15 U.S.C. § 1691e(c). And, contrary to REO’s suggestion
otherwise, it could not obtain relief under the ECOA by nam-
ing Lara as a third-party defendant. As we have discussed,
§ 1691e(c) authorizes courts to grant relief to enforce the
ECOA “[u]pon application by an aggrieved applicant . . . .”
Even if Lara qualified as an “applicant” for credit under the
ECOA, she did not make an “application” to the district court
for relief. REO alone asked the district court to declare the
ordinance invalid.
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Because we find that REO was not entitled to seek relief
under the ECOA, we find no error in the district court’s entry
of summary judgment on REO’s claim that the ECOA rendered
the ordinance invalid.
Public Policy.
Next, we address REO’s argument that the district court
erred by rejecting REO’s claim that the ordinance violated
Nebraska public policy. REO alleged in its complaint and now
argues on appeal that the ordinance “violates public policy as
established by the Nebraska Uniform Residential Landlord
[and] Tenant Act.” Brief for appellant at 12. REO focuses on
a particular provision of the Uniform Residential Landlord and
Tenant Act, § 76-1416, which generally prohibits landlords
from demanding a security deposit exceeding 1 month’s rent.
REO argues that because state law caps the amount landlords
may demand as a security deposit, the ordinance cannot create
the potential for additional liability by requiring a landlord to
provide a guarantee in support of a tenant’s application for util-
ity services.
While REO clearly takes the position that the district court
should have declared the ordinance invalid given the statutory
limit on the amount landlords may require as a security deposit,
the precise legal theory it is relying on is less obvious. REO
claims that the ordinance is “void as against public policy.”
Brief for appellant at 26. The only case it relies on in support
of this argument is a New Jersey case that used that language
in finding a municipal ordinance unenforceable. See Economy
Enterprises, Inc. v. Township Committee, 104 N.J. Super. 373,
250 A.2d 139 (1969). REO does not, however, direct us to any
Nebraska authority holding that a municipal ordinance can be
“void as against public policy,” and we are not aware of any
such doctrine under Nebraska law.
Municipal ordinances can of course be preempted by state
law. See State ex rel. City of Alma v. Furnas Cty. Farms, 266
Neb. 558, 667 N.W.2d 512 (2003). This can occur in three
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different circumstances: (1) where the Legislature expressly
declares in explicit statutory language its intent to preempt
municipal ordinances, (2) where the Legislature’s intent to
preempt municipal ordinances may be inferred from a compre-
hensive scheme of legislation, and (3) where a municipal ordi-
nance actually conflicts with state law. See id. REO, however,
has not made a preemption argument of any kind, let alone
shown that the ordinance is preempted under the recognized
categories discussed above.
We find no error in the district court’s rejection of REO’s
claim that the ordinance violated Nebraska public policy.
Plain Error.
Finally, we come to REO’s argument that the district court
committed plain error. Here, REO contends that the village
lacked the statutory authority to enact the ordinance. And while
REO concedes that it did not raise this issue before the district
court, it asserts that the district court nonetheless plainly erred
by finding that the village had the statutory authority to enact
the ordinance. We disagree.
Plain error is error plainly evident from the record and
of such a nature that to leave it uncorrected would result in
damage to the integrity, reputation, or fairness of the judicial
process. North Star Mut. Ins. Co. v. Miller, 311 Neb. 941, 977
N.W.2d 195 (2022). While REO assigns that the district court
erred by finding that the village had the statutory authority to
enact the ordinance, the district court did not expressly con-
sider that issue. That is not surprising given REO’s concession
that it did not raise the issue of the village’s statutory authority
to enact the ordinance in the district court.
To the extent REO claims the district court committed plain
error by not finding that the village lacked statutory author-
ity, we would still disagree. As noted above, the district court
resolved the case on the parties’ cross-motions for summary
judgment. We have held, however, that a court may not enter a
summary judgment on an issue not presented by the pleadings.
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See, e.g., Green v. Box Butte General Hosp., 284 Neb. 243,
818 N.W.2d 589 (2012). Because the district court could not
properly enter summary judgment on an issue REO concedes
it did not raise in the district court, the district court obviously
did not commit plain error by not doing so.
CONCLUSION
We find no error in the district court’s entry of summary
judgment in favor of the village and against REO. Accordingly,
we affirm.
Affirmed.
Papik, J., concurring.
I agree with the majority opinion in all respects, including
its conclusion that under our current precedent, the ordinance
at issue does not qualify as special legislation prohibited by
article III, § 18, of the Nebraska Constitution. I write sepa-
rately, however, to suggest that certain aspects of our precedent
in this area may not be consistent with the text and original
meaning of that constitutional provision.
Application to Municipal Ordinances.
I have more than one concern with our current special leg-
islation precedent. The first is whether the limits on special
legislation expressed in article III, § 18, properly apply to
municipal ordinances like the one challenged in this case. This
court held that a municipal ordinance violated article III, § 18,
as early as 1964. See Midwest Employers Council, Inc. v. City
of Omaha, 177 Neb. 877, 131 N.W.2d 609 (1964). We have
since said on numerous occasions that article III, § 18, applies
to municipal ordinances. See, e.g., Dowd Grain Co. v. County
of Sarpy, 291 Neb. 620, 867 N.W.2d 599 (2015); D-CO, Inc. v.
City of La Vista, 285 Neb. 676, 829 N.W.2d 105 (2013). But,
as far as I can tell, we have never explored whether there is a
principled basis for interpreting the text of article III, § 18, to
do so. I am skeptical such a basis exists.
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Article III, § 18, provides that “[t]he Legislature shall not
pass local or special laws” in several enumerated circum-
stances. (Emphasis supplied.) After that list of enumerated
circumstances, article III, § 18, states as follows:
Provided, that notwithstanding any other provisions of
this Constitution, the Legislature shall have authority
to separately define and classify loans and installment
sales, to establish maximum rates within classifications
of loans or installment sales which it establishes, and to
regulate with respect thereto. In all other cases where a
general law can be made applicable, no special law shall
be enacted.
(Second emphasis supplied.)
Article III, § 18, thus contains three rules for three categories
of cases: (1) an absolute prohibition on local or special laws
in the specifically enumerated circumstances, (2) an explicit
authorization of certain special legislation regarding loans and
installment sales, and (3) for all other cases, a prohibition on
special laws if “a general law can be made applicable.” For
ease of reference, I will refer to these provisions respectively
as “the absolute prohibition,” “the loans and installment sales
exception,” and “the catchall prohibition.”
I can discern no textual basis for concluding that the abso-
lute prohibition applies to municipal ordinances. The text pro-
vides that only “the Legislature” shall not pass local or special
laws in the enumerated circumstances. No mention is made of
acts of other branches or levels of government.
As for the catchall prohibition, perhaps one could muster an
argument that it applies to municipal ordinances by emphasiz-
ing that the sentence in which it appears does not expressly
refer to the Legislature. But while the catchall prohibition
does not refer to any enacting authority, it immediately fol-
lows the absolute prohibition and the loans and installments
sales exception, both of which expressly refer only to the
Legislature. This context suggests to me that all of article
III, § 18, is aimed at laws passed by the Legislature. If that
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context were not enough, the placement of this constitutional
provision in article III, the article of the Nebraska Constitution
discussing the enactment of statewide legislation, provides
yet more evidence that article III, § 18, does not apply to
municipal ordinances. See, also, Robert D. Miewald et al., The
Nebraska State Constitution: A Reference Guide 156 (2d ed.
2009) (observing that text of article III, § 18, appears to limit
its application to Legislature).
I recognize that this court has held that another provi-
sion of the state Constitution that refers expressly only to the
Legislature—article III, § 19—nonetheless applies to political
subdivisions of the State. See Retired City Civ. Emp. Club of
Omaha v. City of Omaha Emp. Ret. Sys., 199 Neb. 507, 260
N.W.2d 472 (1977). In that case, we reasoned that to hold
otherwise would permit the State to evade this constitutional
restriction by creating a political subdivision and authoriz-
ing it to do what the Nebraska Constitution prohibited the
Legislature from doing.
Whatever the merits of that reasoning with respect to article
III, § 19, it seems a stretch to apply it to article III, § 18. In
addition to restricting the enactment of “special laws,” the
absolute prohibition of article III, § 18, forbids the enactment
of “local” laws on subjects including “[r]egulating [c]ounty
and [t]ownship offices”; “changing or amending the charter of
any [t]own, [c]ity, or [v]illage”; “[p]roviding for the bonding
of cities, towns, precincts, school districts or other munici-
palities”; and “[p]roviding for the management of [p]ublic
[s]chools.” If article III, § 18, applies to political subdivisions,
its terms would appear to prevent those political subdivisions
from governing themselves in several key areas. No such
problems arise if article III, § 18, is interpreted to apply only
to the Legislature.
Special Legislation Test.
I also have a more general concern about our special leg-
islation jurisprudence: I question whether the test we use to
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identify “special laws” is consistent with the original meaning
of that term.
Nebraska’s article III, § 18, is far from unique. Similar
provisions are found in the legislative articles of approx-
imately 30 other state constitutions. See Anthony Schutz,
State Constitutional Restrictions on Special Legislation as
Structural Restraints, 40 J. Legis. 39 (2013). A number of
jurists who have examined the history of such provisions have
concluded that the restrictions on “special laws” would have
been originally understood as restricting a then-common legis-
lative practice of passing legislation that, by its terms, applied
only to an individual person, corporation, or other entity.
See, Laurance B. VanMeter, Reconsideration of Kentucky’s
Prohibition of Special and Local Legislation, 109 Ky. L.J. 523,
524 (2021) (contending that original understanding of special
legislation prohibited by Kentucky constitution was legisla-
tion that “refer[red] only to a particular individual or entity”);
Schutz, 40 J. Legis. at 58 (contending that “the primary focus
of these provisions was on laws that identified an object and
singled it out for special treatment”); Robert M. Ireland, The
Problem of Local, Private, and Special Legislation in the
Nineteenth-Century United States, 46 Am. J. Legal Hist. 271
(2004). Under this conception, examples of special legislation
would be acts granting a legal remedy or benefit to a specifi-
cally identified party. See, also, Calloway Cty. Sheriff ’s Dep’t
v. Woodall, 607 S.W.3d 557, 572 (Ky. 2020) (concluding that
original understanding of local or special legislation is legisla-
tion that “applies exclusively to particular places or particu-
lar persons”).
If these scholars are correct about the original understand-
ing of the term “special laws,” our special legislation test
may be due for reconsideration. We have held that a legisla-
tive act will be found to constitute special legislation if it
creates an arbitrary and unreasonable method of classifica-
tion. See D-CO, Inc. v. City of La Vista, 285 Neb. 676, 829
N.W.2d 105 (2013). But a statute could create an unreasonable
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classification and be nothing like the type of individualized
statutes the scholars cited above contend were the original tar-
get of special legislation prohibitions. Taking this case as the
basis for an example, if a statute unreasonably or arbitrarily
treats property owners and property renters differently and
without sufficient justification, it would be special legislation
under our current precedent, but it is difficult to see how such
a statute looks anything like a law that singles out a specifi-
cally identified party for special treatment.
Instead of policing individualized legislation, it seems to
me that our current special legislation precedent’s focus on
the reasonableness of classifications provides an avenue for
parties to obtain something akin to heightened equal protec-
tion review. Our precedent says that to withstand a special
legislation challenge, a legislative classification “must rest
upon some reason of public policy, some substantial difference
in circumstances, which would naturally suggest the justice or
expediency of diverse legislation regarding the objects to be
classified.” Dowd Grain Co. v. County of Sarpy, 291 Neb. 620,
628, 867 N.W.2d 599, 606 (2015). To my ears, that sounds a
lot like the intermediate scrutiny test developed by the U.S.
Supreme Court under which certain types of classifications
“must serve important governmental objectives and must be
substantially related to achievement of those objectives.” See,
e.g., Friehe v. Schaad, 249 Neb. 825, 832, 545 N.W.2d 740,
746 (1996).
We have, I acknowledge, asserted that the focus of our spe-
cial legislation test is different from the tests used to evaluate
equal protection challenges. Specifically, we have said the
following:
The analysis under a special legislation inquiry focuses
on the Legislature’s purpose in creating the class and
asks if there is a substantial difference of circumstances
to suggest the expediency of diverse legislation. This
is different from an equal protection analysis under
which the state interest in legislation is compared to the
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statutory means selected by the Legislature to accomplish
that purpose.
Gourley v. Nebraska Methodist Health Sys., 265 Neb. 918, 939,
663 N.W.2d 43, 66 (2003).
With all due respect, I am not sure I grasp the difference the
foregoing quote purports to identify. Instead, I am sympathetic
to the view of a group of commentators who have called the
distinction identified above “somewhat fleeting.” Miewald et
al., supra at 159.
To the extent our special legislation jurisprudence allows
parties to obtain something like intermediate scrutiny equal
protection review by alleging that a classification is spe-
cial legislation, it is effectively a more expansive Equal
Protection Clause. Unless a legislative classification jeop-
ardizes the exercise of a fundamental right or categorizes
on the basis of an inherently suspect characteristic, an equal
protection challenge to that classification is analyzed using
the deferential rational basis standard. See REO Enters. v.
Village of Dorchester, 306 Neb. 683, 947 N.W.2d 480 (2020).
But this limitation does not apply to challenges brought to
legislation under article III, § 18: One need not allege the
jeopardization of a fundamental right or the use of a sus-
pect classification to trigger the arguably heightened review
required by our article III, § 18, precedent. It is not clear
to me, however, that the text or history of article III, § 18,
suggests that this provision should be policing the reason-
ableness of legislative classifications at all, let alone under a
heightened standard of scrutiny. See Schutz, 40 J. Legis. at
55 (“[t]he text of special-legislation provisions reveals little
in terms of a concern for substantive equality, whether it is
the minoritarian concerns of the mid- to late-1800s or some
broader notion of equality”).
Conclusion.
No party in this case asked us to reconsider whether article
III, § 18, properly applies to municipal ordinances. Neither
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were we asked to reconsider the tests we have developed to
identify special legislation under that constitutional provision.
In the absence of such arguments, the majority’s decision
to analyze this case under our current precedent makes per-
fect sense.
That said, this court has emphasized that the “main inquiry”
in interpreting the Nebraska Constitution is the original
meaning of its provisions. See State ex rel. State Railway
Commission v. Ramsey, 151 Neb. 333, 340, 37 N.W.2d 502,
507 (1949). We have also stressed the importance of adhering
to the text of constitutional provisions. See id. For the reasons
discussed in this concurrence, I believe our precedent under
article III, § 18, may not be entirely consistent with that pro-
vision’s original meaning and text. In an appropriate case, I
would be open to reconsidering that precedent. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487047/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 01:07 AM CST
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John Doe, appellant, v.
State of Nebraska et al., appellees.
___ N.W.2d ___
Filed October 21, 2022. No. S-21-472.
1. Tort Claims Act: Appeal and Error. Whether a complaint alleges a
cause of action under the State Tort Claims Act, or alleges a claim which
is precluded by an exemption under the State Tort Claims Act, presents
a question of law.
2. Jurisdiction. Subject matter jurisdiction is a question of law. When a
jurisdictional question does not involve a factual dispute, the issue is a
matter of law.
3. Judgments: Appeal and Error. An appellate court reviews questions of
law independently of the lower court’s conclusion.
4. Jurisdiction: Immunity: Appeal and Error. A state’s sovereign immu-
nity from suit is a matter of subject matter jurisdiction that an appellate
court cannot ignore.
5. Jurisdiction. Whether a court has subject matter jurisdiction is a thresh-
old issue that should be resolved prior to an examination of the merits.
6. Negligence: Liability: Public Officers and Employees. A state is not
liable to a person injured by the negligence of its employees, unless
there is a statute or constitutional provision permitting recovery.
7. Constitutional Law: Legislature: Immunity: Waiver. Nebraska’s
Constitution provides that “[t]he state may sue and be sued, and the
Legislature shall provide by law in what manner and in what courts
suits shall be brought.” But this constitutional provision is not self-
executing, and it requires legislative action to waive the State’s sover-
eign immunity.
8. Jurisdiction: Legislature: Immunity: Waiver. Absent legislative action
waiving sovereign immunity, a trial court lacks subject matter jurisdic-
tion over an action against the State.
9. Statutes: Immunity: Waiver. A waiver of sovereign immunity is found
only where stated by the most express language of a statute or by such
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overwhelming implication from the text as will allow no other reason-
able construction.
10. ____: ____: ____. Statutes purporting to waive the protection of sover-
eign immunity are to be strictly construed in favor of the sovereign and
against waiver.
11. Tort Claims Act: Legislature: Immunity: Waiver. Through the State
Tort Claims Act, the Legislature has waived the State’s sovereign immu-
nity with respect to some, but not all, types of tort claims.
12. Tort Claims Act: Immunity: Waiver. The definition of “tort claim” in
Neb. Rev. Stat. § 81-8,210(4) (Reissue 2014) fundamentally limits the
type of tort claims that are subject to the State Tort Claims Act’s limited
waiver of immunity.
13. Tort Claims Act: Legislature: Immunity: Waiver. Under Neb. Rev.
Stat. § 81-8,210(4) (Reissue 2014), the Legislature has waived the
State’s sovereign immunity for those tort claims that (1) seek money
damages only; (2) are on account of property damage, personal injury,
or death; (3) are caused by the negligent or wrongful act or omission of
a state employee acting within the scope of his or her office or employ-
ment; and (4) occur under circumstances in which a private person
would be liable to the claimant.
14. Tort Claims Act: Immunity: Waiver: Liability. Under the plain lan-
guage of Neb. Rev. Stat. §§ 81-8,210(4) and 81-8,215 (Reissue 2014),
the State Tort Claims Act’s limited waiver of sovereign immunity
applies only to tort claims for which a private person, under like circum-
stances, would be liable in tort to the plaintiff.
15. Tort Claims Act: Jurisdiction: Motions to Dismiss. Plaintiffs bringing
an action under the State Tort Claims Act must plausibly allege a “tort
claim” as that term is defined under the act, both to survive a motion
to dismiss for failure to state a claim and to establish subject matter
jurisdiction.
16. Tort Claims Act: Negligence: Proof. A negligence action brought
under the State Tort Claims Act has the same elements as a negligence
action brought against a private individual—a plaintiff must show a
legal duty owed by the defendant to the plaintiff, a breach of such duty,
causation, and damages.
17. Tort Claims Act: Jurisdiction: Negligence: Liability: Proof. To estab-
lish subject matter jurisdiction under the State Tort Claims Act, a plain-
tiff must plausibly allege a “tort claim” as defined under the act. That
requires, inter alia, plausibly alleging that the State, if a private person,
would be liable to the plaintiff for the negligent or wrongful act or omis-
sion under like circumstances.
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18. Statutes: Legislature: Intent: Torts: Liability. A court may determine
that a statute gives rise to a tort duty to act in the manner required by
the statute where (1) the statute is enacted to protect a class of persons
which includes the plaintiff, (2) the statute is intended to prevent the
particular injury that has been suffered, and (3) the statute is intended
by the Legislature to create a private liability as distinguished from one
of a public character.
19. Statutes: Legislature: Torts: Liability: Courts. Where the Legislature
has not by its express terms or by implication provided for civil tort
liability for failure to comply with a statute, under principles of judicial
restraint, it is prudent that courts not do so.
20. Statutes: Legislature: Intent: Torts: Courts. When considering
whether a statute gives rise to a tort duty, courts should consider the
express remedy, if any, imposed for violating the statute, and whether
such a remedy is inconsistent with a purported legislative intention to
create a tort duty.
21. Statutes: Torts: Liability. Neb. Rev. Stat. § 29-3523 (Cum. Supp.
2020) does not give rise to a legal duty that would subject a private
person to civil tort liability for failing to act in the manner prescribed by
statute.
22. Negligence. Nebraska does not recognize a common-law duty not to
disclose sealed criminal history information.
23. Appeal and Error. An appellate court is not obligated to engage in an
analysis that is not necessary to adjudicate the case and controversy
before it.
Appeal from the District Court for Lancaster County: Kevin
R. McManaman, Judge. Affirmed.
Zachary W. Lutz-Priefert and John A. McWilliams, of Gross
& Welch, P.C., L.L.O., for appellant.
Douglas J. Peterson, Attorney General, and James A.
Campbell, Solicitor General, for appellees.
Kevin Ruser and Ryan P. Sullivan, of University of Nebraska
Civil Clinical Law Program, and Deena Keilany and Alicia
Christensen, Senior Certified Law Students, for amicus curiae
Nebraska College of Law Civil Clinic.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
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Stacy, J.
Relying exclusively on the State Tort Claims Act (STCA), 1
John Doe filed suit against the State of Nebraska, the Nebraska
State Patrol (NSP), the Nebraska Department of Correctional
Services (DCS), and DCS director Scott Frakes, alleging they
negligently disclosed and reviewed his sealed criminal history
record information in violation of Neb. Rev. Stat. § 29-3523
(Cum. Supp. 2020). The district court dismissed the action on
a number of grounds, including that Doe’s claim was barred
by the doctrine of sovereign immunity. Doe appealed, and we
granted the appellees’ petition to bypass the Nebraska Court
of Appeals.
We affirm the dismissal of Doe’s tort action on sovereign
immunity grounds, but our reasoning differs somewhat from
that of the district court. We conclude that Doe has not alleged
a tort claim as that term is defined in the STCA, and the State
has therefore not waived its sovereign immunity with respect
to Doe’s claim.
I. BACKGROUND
Because this case was dismissed at the pleading stage, the
facts recited below are taken from the allegations of Doe’s
complaint and the attachments thereto. Doe was convicted of
a felony in 2000, and a few years later, he was convicted of a
misdemeanor. Sometime thereafter, Doe applied for pardons. In
2016, the Nebraska Board of Pardons granted his application
and issued pardons for both convictions.
After receiving the pardons, Doe filed a motion asking the
sentencing court to seal his criminal history record information
pursuant to § 29-3523(5). The court granted Doe’s motion and
sealed the criminal history record information relating to both
of his pardoned convictions. Because Doe’s negligence claim
is premised on alleged violations of § 29-3523, we provide
1
Neb. Rev. Stat. §§ 81-8,209 to 81-8,235 (Reissue 2014 & Cum. Supp.
2020).
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a brief overview of that statute now and address the relevant
statutory text in more detail later in our analysis.
Section 29-3523 authorizes a court to order the seal-
ing of criminal history record information under certain
circumstances, and it is part of the Security, Privacy, and
Dissemination of Criminal History Information Act (Criminal
History Act). 2 As relevant here, that act imposes certain obli-
gations on “[c]riminal justice agenc[ies]” 3 once “[c]riminal
history record information” 4 has been ordered sealed pursu-
ant to § 29-3523. Ordinarily, criminal history records are con-
sidered public records. 5 But in 2019, the Legislature amended
§ 29-3523 to provide that once a court has ordered criminal
history records to be sealed, they “are not part of the public
record and shall not be disseminated to persons other than
criminal justice agencies,” 6 except in certain limited circum-
stances. Moreover, § 29-3523 instructs that when responding
to a public inquiry about criminal history records which have
been sealed, a criminal justice agency “shall respond . . . in
the same manner as if there were no criminal history record
information and criminal history record information shall not
be disseminated to any person other than a criminal justice
agency.” 7 The statute also provides that in “any application
for employment . . . a person cannot be questioned with
respect to any offense for which the record is sealed” 8 and
2
See Neb. Rev. Stat. §29-3501 (Reissue 2016) (providing that Neb. Rev.
Stat. §§ 29-209, 29-210, 29-3501 to 29-3528, and 81-1423 (Reissue 2016
& Cum. Supp. 2020) “shall be known and may be cited as the Security,
Privacy, and Dissemination of Criminal History Information Act”).
3
See § 29-3509.
4
See § 29-3506.
5
See § 29-3520.
6
§ 29-3523(7).
7
§ 29-3523(1).
8
§ 29-3523(8).
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that if such an inquiry is made, the applicant may “respond
as if the offense never occurred.” 9
1. Doe Applies for Job With DCS
In September 2019, Doe applied for a job as a caseworker
at DCS. A question on the application form asked whether
Doe had a criminal history, and Doe responded, “[N]o.” DCS
interviewed Doe for the position, and thereafter, it requested
a criminal history background check as part of the applica-
tion process. According to the allegations of the complaint,
NSP wrongfully provided DCS with criminal history record
information that included Doe’s sealed records. Doe was sub-
sequently advised by DCS that he was not being hired for the
caseworker position due to his criminal history.
2. Doe Files Suit
In July 2020, Doe filed this negligence action in the district
court for Lancaster County against the State of Nebraska,
NSP, DCS, Frakes, and “Unknown Employees of the State
of Nebraska.” The district court permitted Doe to file the
complaint using a pseudonym, and he proceeds likewise on
appeal.
The complaint alleged a single cause of action against all
named defendants, described as “Negligent Disclosure and
Review of Sealed Records in Violation of Neb. Rev. Stat.
§ 29-3523.” Doe alleged that when DCS requested his criminal
history records, it was not acting in its capacity as a criminal
justice agency, but instead was making a public inquiry into
Doe’s criminal history. Doe alleged that in response to this
public inquiry, NSP “negligently disclosed” his sealed crimi-
nal history records to DCS in violation of § 29-3523. He also
alleged that DCS’ “consideration” of his sealed records was
negligent and a violation of § 29-3523. The complaint alleged
that this negligence “harmed” Doe and resulted in “lost income,
9
Id.
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and benefits, including retirement benefits which he would
have earned had he been employed by [DCS].” The complaint
prayed for monetary damages in an amount to be determined
at trial, an injunction prohibiting NSP from disclosing Doe’s
criminal history records “except where explicitly allowed by
statute,” and “expungement” of Doe’s criminal history records
“to prevent future harms and injustices.”
Doe did not serve the unknown defendants, and we do not
address them further. The remaining defendants were served,
and they responded as follows.
DCS and Frakes moved to dismiss Doe’s complaint on two
grounds: (1) The complaint failed to state a claim upon which
relief could be granted, and (2) the claim was barred by sover-
eign immunity. NSP did not join in the motion to dismiss and
instead filed an answer. NSP’s answer expressly denied that
it had disclosed Doe’s criminal history record information to
DCS, and it alleged, as affirmative defenses, the same grounds
on which the other defendants moved for dismissal.
At the hearing on the motion to dismiss, the parties pre-
sented only argument. DCS and Frakes argued that Doe’s com-
plaint failed to state a claim because it contained no factual
allegations showing they owed Doe a legal duty actionable
in tort. Alternatively, they argued that even if a legal duty
was owed, the discretionary function exemption to the STCA
applied and barred Doe’s tort claim. In response, Doe argued
that § 29-3523 created an actionable tort duty, and he argued
that the discretionary function exemption did not apply to bar
his claim because the Criminal History Act prescribed a spe-
cific course of conduct that DCS and Frakes were required to
follow regarding his sealed records.
(a) Claims Against DCS and Frakes Dismissed
In December 2020, the district court entered an order dis-
missing the claims against DCS and Frakes. The court’s order
recited various grounds for dismissal, but we recount only
those pertaining to jurisdiction.
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In that regard, the district court determined that Doe’s
tort claim against DCS and Frakes was essentially one for
common-law failure to hire and was barred by the STCA’s dis-
cretionary function exemption. 10 After dismissing the claims
against DCS and Frakes, the court, sua sponte, 11 directed the
remaining parties to brief two additional issues bearing on
its subject matter jurisdiction: (1) whether Doe pled a “tort
claim” as defined under the STCA and (2) whether a viola-
tion of § 29-3523 is actionable in tort. The court held a hear-
ing to take up these jurisdictional questions once the briefing
was complete.
At the hearing on jurisdiction, the State and NSP argued
the court lacked subject matter jurisdiction under the STCA
because Doe had not alleged a “[t]ort claim” as defined in
§ 81-8,210(4). In relevant part, that statute provides:
Tort claim means any claim against the State of Nebraska
for money only on account of damage to or loss of prop-
erty or on account of personal injury or death caused
by the negligent or wrongful act or omission of any
employee of the state, while acting within the scope of
his or her office or employment, under circumstances in
which the state, if a private person, would be liable to the
claimant for such damage, loss, injury, or death . . . . 12
The State and NSP argued that Doe had not alleged a “tort
claim” as defined under the STCA because (1) his claim was
not for money only, (2) he had not alleged a personal injury,
and (3) the alleged violation of § 29-3523 was not a claim for
which a private person could be liable under similar circum-
stances. Additionally, the State and NSP argued that under
10
See § 81-8,219(1).
11
See Moser v. State, 307 Neb. 18, 22, 948 N.W.2d 194, 199 (2020) (holding
State’s waiver of sovereign immunity under STCA is jurisdictional matter
that “a court may consider sua sponte”).
12
§ 81-8,210(4).
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the test articulated in Claypool v. Hibberd, 13 § 29-3523 did
not create an actionable tort duty which could support a claim
for negligence.
Doe disagreed. He argued the complaint sufficiently alleged
a plausible “tort claim” under the STCA because it sought
money damages, on account of a personal injury, caused by
the negligent dissemination and consideration of his sealed
criminal history records in violation of § 29-3523. Doe also
argued that § 29-3523 created a tort duty which applies to gov-
ernmental employees and private persons alike. Alternatively,
he argued that if the court did not agree § 29-3523 created a
tort duty, then it should find that Nebraska recognizes a general
common-law duty prohibiting the dissemination and consider-
ation of sealed criminal history records.
(b) Sua Sponte Dismissal for
Lack of Jurisdiction
After considering arguments of the parties, the court entered
an order dismissing Doe’s complaint, in its entirety, for lack of
subject matter jurisdiction. The court recited several reasons
why it lacked jurisdiction.
First, the court concluded that Doe had not pled a “tort
claim” under the STCA, reasoning primarily that Doe’s com-
plaint failed to allege a “personal injury” within the mean-
ing of § 81-8,210(4). Additionally, the court concluded that
the Legislature did not create a tort duty when it enacted
§ 29-3523 of the Criminal History Act, so the alleged viola-
tion of that statute did not present a tort claim for which the
State had waived immunity under the STCA. The court also
rejected Doe’s assertion that Nebraska recognized a common-
law duty prohibiting the dissemination of truthful information
about a person’s criminal history. Lastly, the court concluded
that to the extent Doe’s complaint sought injunctive relief
13
Claypool v. Hibberd, 261 Neb. 818, 626 N.W.2d 539 (2001).
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and “expungement” of his criminal records, those remedies
fell outside the STCA’s waiver of sovereign immunity. 14 The
court thus determined it lacked subject matter jurisdiction over
Doe’s claim under the STCA, and it dismissed the complaint in
its entirety on that basis.
Doe filed a timely appeal, and we granted the appellees’
petition to bypass. After oral argument before this court, we
requested supplemental briefing addressing whether, under
Nebraska tort law, a private person under like circumstances
would be liable to Doe. Supplemental briefs were received and
considered, and we discuss the parties’ jurisdictional arguments
later in our analysis.
II. ASSIGNMENTS OF ERROR
Doe assigns five errors which we consolidate and restate
into two: (1) The district court erred when it determined Doe
had not alleged a “tort claim” within the meaning of the STCA
and thus dismissed the complaint for lack of subject matter
jurisdiction, and (2) the district court erred when it determined
the discretionary function exemption applied to bar Doe’s
claim against DCS and Frakes.
In support of his first assignment of error, Doe presents sev-
eral arguments. First, he asserts that § 29-3523 of the Criminal
History Act created a tort duty to conform to the requirements
of the act and that the district court erred in concluding other-
wise. Alternatively, he argues Nebraska recognizes a common-
law duty to not disseminate or consider sealed criminal history
information. Next, he argues the complaint alleged a plausible
claim for personal injury, and the district court erred in con-
cluding otherwise. And finally, he argues the district court
14
See Zawaideh v. Nebraska Dept. of Health & Human Servs., 285 Neb. 48,
58, 825 N.W.2d 204, 213 (2013) (holding definition of tort claim under
STCA is for “‘money only’” and thus “exclude[s] nonmonetary claims,
such as actions for injunctive relief”).
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erred in concluding that the remedies of injunctive relief and
expungement are barred by sovereign immunity.
III. STANDARD OF REVIEW
[1] Whether a complaint alleges a cause of action under the
STCA, or alleges a claim which is precluded by an exemption
under the SCTA, presents a question of law. 15
[2] Subject matter jurisdiction is a question of law. 16 When
a jurisdictional question does not involve a factual dispute, the
issue is a matter of law. 17
[3] An appellate court reviews questions of law indepen-
dently of the lower court’s conclusion. 18
IV. ANALYSIS
1. Sovereign Immunity and
Subject Matter Jurisdiction
[4,5] A state’s sovereign immunity from suit is a matter
of subject matter jurisdiction that an appellate court cannot
ignore. 19 Whether a court has subject matter jurisdiction is a
threshold issue that should be resolved prior to an examination
of the merits. 20 We therefore begin our analysis by reviewing
familiar principles of sovereign immunity which bear on the
court’s subject matter jurisdiction in this case.
[6-8] Nebraska has long recognized the “‘rule that a state
is not liable to a person injured by the negligence of its
employees, unless there is a statute or constitutional provision
15
See, Williams v. State, 310 Neb. 588, 967 N.W.2d 677 (2021); Brown v.
State, 305 Neb. 111, 939 N.W.2d 354 (2020). Accord Edwards v. Douglas
County, 308 Neb. 259, 953 N.W.2d 744 (2021) (whether allegations of
complaint set forth claims which are precluded by exemptions under
Political Subdivisions Tort Claims Act presents question of law).
16
See id.
17
See id.
18
See id.
19
See Edwards, supra note 15.
20
Lambert v. Lincoln Public Schools, 306 Neb. 192, 945 N.W.2d 84 (2020).
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permitting recovery.’” 21 Nebraska’s Constitution provides that
“[t]he state may sue and be sued, and the Legislature shall
provide by law in what manner and in what courts suits
shall be brought.” 22 But this constitutional provision is not
self-executing, and it requires legislative action to waive the
State’s sovereign immunity. 23 Absent legislative action waiv-
ing sovereign immunity, a trial court lacks subject matter
jurisdiction over an action against the State. 24
[9,10] A waiver of sovereign immunity is found only where
stated by the most express language of a statute or by such
overwhelming implication from the text as will allow no other
reasonable construction. 25 Nebraska courts follow the rule that
statutes purporting to waive the protection of sovereign immu-
nity are to be strictly construed in favor of the sovereign and
against waiver. 26
Doe’s complaint relies exclusively on the STCA for jurisdic-
tion in this case. He alleged no other statutory basis for juris-
diction over his tort claim, and he argued no other statutory
basis for jurisdiction before the district court. We thus limit our
jurisdictional analysis to the STCA.
(a) STCA’s Limited Waiver
of Sovereign Immunity
[11] Under the plain language of the STCA, no tort claim
“shall be maintained against the state, any state agency, or any
employee of the state on any tort claim except to the extent,
and only to the extent, provided by the [STCA].” 27 We have
21
See Jill B. & Travis B. v. State, 297 Neb. 57, 66, 899 N.W.2d 241, 250
(2017).
22
Neb. Const. art. V, § 22.
23
See Jill B. & Travis B., supra note 21.
24
Burke v. Board of Trustees, 302 Neb. 494, 924 N.W.2d 304 (2019).
25
Edwards, supra note 15.
26
Id.
27
§ 81-8,209.
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recognized that through the STCA, the Legislature has waived
the State’s sovereign immunity with respect to some, but not
all, types of tort claims. 28
When considering whether a particular tort claim falls
within the STCA’s limited waiver of sovereign immunity, our
reported opinions often focus on the applicability of the statu-
tory exemptions set out in § 81-8,219. 29 This is because when
one of those exemptions applies, the tort claim is not one for
which the State has consented to be sued. 30 But, as we discuss
next, the STCA also contains another, more fundamental, limi-
tation on the waiver of sovereign immunity for tort claims—the
statutory definition of “tort claim.”
(i) Definition of “Tort Claim”
For purposes of the STCA, the Legislature has defined “tort
claim” in § 81-8,210(4). We quoted the relevant portions of
that definition earlier in this opinion, and we repeat it here for
convenience:
Tort claim means any claim against the State of Nebraska
for money only on account of damage to or loss of prop-
erty or on account of personal injury or death caused
by the negligent or wrongful act or omission of any
employee of the state, while acting within the scope of
his or her office or employment, under circumstances in
which the state, if a private person, would be liable to the
claimant for such damage, loss, injury, or death . . . . 31
[12,13] The STCA’s definition of “tort claim” fundamentally
limits the type of tort claims that are subject to the STCA’s
limited waiver of sovereign immunity. Under this statutory
28
See, Williams, supra note 15; Moser, supra note 11; Brown, supra note 15.
29
See, e.g., Wizinsky v. State, 308 Neb. 778, 957 N.W.2d 466 (2021) (discre
tionary function exemption); Moser, supra note 11 (analyzing applicability
of intentional tort exemption); Brown, supra note 15 (recreational activity
exemption); Zawaideh, supra note 14 (misrepresentation exemption).
30
See Edwards, supra note 15.
31
§ 81-8,210(4) (emphasis supplied).
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definition, the Legislature has waived the State’s sovereign
immunity for those tort claims that (1) seek money damages
only; (2) are on account of property damage, personal injury,
or death; (3) are caused by the negligent or wrongful act or
omission of a state employee acting within the scope of his or
her office or employment; and (4) occur under circumstances
in which a private person would be liable to the claimant.
On appeal, the appellees argue that the claim alleged in Doe’s
complaint failed to satisfy any of the definitional requirements
for a tort claim under § 81-8,210(4). But we do not address all
of the definitional requirements; instead, we focus our analy-
sis on the last requirement, which limits tort claims under the
STCA to those torts occurring under circumstances “in which
the state, if a private person, would be liable to the claimant.” 32
Similar language appears in § 81-8,215 of the STCA, which
sets out the general waiver of sovereign immunity and provides
that “[i]n all suits brought under the [STCA] the state shall be
liable in the same manner and to the same extent as a private
individual under like circumstances . . . .” Similar provisions
appear in the Political Subdivisions Tort Claims Act. 33 As
stated, our settled rules of statutory construction require that
we strictly construe these waivers of sovereign immunity in
favor of the sovereign.
The “private person” provision in § 81-8,210(4) and the
related “private individual” provision in § 81-8,215 have been
part of the STCA since its adoption in 1969. 34 This court long
ago recognized that through these statutory provisions, the
Legislature consented to tort “liability on the part of the State
under the same circumstances under which a private person
would be liable.” 35 Our opinions discussing the STCA routinely
32
§ 81-8,210(4).
33
See Neb. Rev. Stat. §§ 13-903(4) and 13-908 (Reissue 2012).
34
See §§ 81-8,210(4) and 81-8,215 (Cum. Supp. 1969).
35
Cortes v. State, 191 Neb. 795, 798, 218 N.W.2d 214, 216 (1974).
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recite the “private person” provisions, 36 but we have not previ-
ously addressed the jurisdictional import of such provisions on
the STCA’s waiver of immunity. This case affords an opportu-
nity to develop our case law on this jurisdictional issue.
In their supplemental briefing to this court, the parties agree
that under the plain language of §§ 81-8,210(4) and 81-8,215
(Reissue 2014), the Legislature’s waiver of the State’s sover-
eign immunity is limited to claims for which a private person
under like circumstances would be liable in tort to the claimant
under Nebraska law. Both parties point to a dearth of Nebraska
case law addressing this aspect of the STCA, and, as a result,
they devote considerable discussion to federal cases address-
ing similar “private person” provisions within the Federal Tort
Claims Act (FTCA). 37
The FTCA provides, in relevant part, that the “United States
shall be liable, respecting the provisions of this title relating to
tort claims, in the same manner and to the same extent as a pri-
vate individual under like circumstances . . . .” 38 Additionally,
§ 1346(b)(1) gives the federal district courts
36
See, e.g., Davis v. State, 297 Neb. 955, 970, 902 N.W.2d 165, 181 (2017)
(reciting both provisions and noting that “the state defendants could not
have committed the tortious acts set out in [plaintiff’s] complaint as
private individuals”). See, also, Moser, supra note 11, 307 Neb. at 23, 948
N.W.2d at 199 (“[a]s pertinent here, the STCA waives the State’s sovereign
immunity for tort claims against the State on account of personal injury
caused by the negligent or wrongful act or omission of any employee of
the State, while acting within the scope of his or her office or employment,
under circumstances in which the State, if a private person, would be liable
to the claimant for such injury”); Northland Ins. Co. v. State, 242 Neb.
10, 14, 492 N.W.2d 866, 869 (1992) (holding “an action for contribution
is covered under [the STCA], but only if a private person would be liable
to the claimant for the damage, loss, injury, or death”); Blitzkie v. State,
228 Neb. 409, 415, 422 N.W.2d 773, 777 (1988) (“[s]ubject to certain
exempted claims, the [STCA] provides for the State’s liability for its torts
the same as a private person may be liable for torts”).
37
See 28 U.S.C. §§ 1346(b) and 2671 to 2680 (2018).
38
§ 2674.
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exclusive jurisdiction of civil actions on claims against
the United States, for money damages, . . . for injury or
loss of property, or personal injury or death caused by the
negligent or wrongful act or omission of any employee
of the Government while acting within the scope of his
office or employment, under circumstances where the
United States, if a private person, would be liable to the
claimant in accordance with the law of the place where
the act or omission occurred.”
The U.S. Supreme Court has construed these federal statu-
tory provisions “to mean what they say, namely, that the
United States waives sovereign immunity ‘under circum-
stances’ where local law would make a ‘private person’ liable
in tort.” 39 The Supreme Court has referred to this as the
FTCA’s “‘private person’ standard,” 40 and other federal courts
have described it as the “private analogue” requirement of the
FTCA. 41 Regardless of nomenclature, federal courts have con-
sistently held that the private person requirement is jurisdic-
tional in nature and must be satisfied for the FTCA’s limited
waiver of sovereign immunity to apply. 42 As the U.S. Supreme
Court succinctly stated recently in Brownback v. King, 43 when
bringing a claim under the FTCA, “a plaintiff must plausi-
bly allege that ‘the United States, if a private person, would
be liable to the claimant’ under state law both to survive [a
39
United States v. Olson, 546 U.S. 43, 44, 126 S. Ct. 510, 163 L. Ed. 2d 306
(2005) (emphasis in original).
40
Id., 546 U.S. at 46.
41
See, e.g., Green Acres Enterprises, Inc. v. U.S., 418 F.3d 852, 855 (8th Cir.
2005). See, also, D.J.C.V. v. United States, No. 20 Civ. 5747, 2022 WL
1912254 (S.D.N.Y. June 3, 2022).
42
See, e.g., Smith v. U.S., 14 F.4th 1228 (11th Cir. 2021); Gutrejman v. U.S.,
527 F. Supp. 3d 1 (D.C. 2021); In re Marjory Stoneman Douglas High
School, 482 F. Supp. 3d 1273 (S.D. Fla. 2020); McGonagle v. U.S., 155 F.
Supp. 3d 130 (D. Mass. 2016).
43
Brownback v. King, ___ U.S. ___, 141 S. Ct. 740, 749, 209 L. Ed. 2d 33
(2021).
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motion to dismiss for failure to state a claim] and to establish
subject-matter jurisdiction.”
The Nebraska Legislature patterned the STCA after the
FTCA, 44 and the “private person” language under the STCA
largely mirrors the private person language under the FTCA.
Consequently, when discussing the jurisdictional impact of
the private person requirement under the STCA, both Doe
and the appellees argue in their supplemental briefing that the
jurisdictional reasoning of the federal courts, as it pertains to
the private person requirement under the FTCA, is instructive.
We generally agree, with the caveat that the federal courts do
not always adhere to the same rules of strict construction that
Nebraska courts follow when considering statutes that purport
to waive sovereign immunity. 45
[14,15] Considering the plain language of §§ 81-8,210(4)
and 81-8,215 under our settled rule of strict construction, we
now expressly recognize what has been the case since the
enactment of the STCA: The STCA’s limited waiver of sov-
ereign immunity applies only to tort claims for which a pri-
vate person, under like circumstances, would be liable in tort
to the plaintiff. This means that plaintiffs bringing an action
under the STCA must plausibly allege a “tort claim” as that
term is defined under the STCA, both to survive a motion to
dismiss for failure to state a claim and to establish subject mat-
ter jurisdiction.
[16,17] To clarify, it remains true as a general principle that
a negligence action brought under the STCA or the Political
Subdivisions Tort Claims Act 46 has the same elements as
a negligence action brought against a private individual—a
44
See Jill B. & Travis B., supra note 21.
45
See, e.g., Moser, supra note 11, 307 Neb. at 29, 948 N.W.2d at 202
(observing that U.S. Supreme Court “has not uniformly used the same
strict construction canon with respect to waivers of sovereign immunity”
that Nebraska follows).
46
Neb. Rev. Stat. § 13-901 et seq. (Reissue 2012 & Cum. Supp. 2020).
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plaintiff must show a legal duty owed by the defendant to
the plaintiff, a breach of such duty, causation, and damages. 47
However, to establish subject matter jurisdiction under the
STCA, a plaintiff must also plausibly allege a “tort claim” as
defined under the STCA. That requires, inter alia, plausibly
alleging that the State, if a private person, would be liable
to the plaintiff for the negligent or wrongful act or omission
under like circumstances.
(ii) Has Doe Alleged Tort Claim Under STCA?
The district court concluded that it lacked subject matter
jurisdiction over Doe’s action because he had not alleged a
“tort claim” as defined under the STCA. On appeal, the parties
present arguments going to each of the definitional require-
ments for a tort claim under § 81-8,210(4). However, because
we conclude the “private person” definitional requirement is
dispositive, we confine our analysis to that issue and do not
reach the parties’ other jurisdictional arguments. 48
(b) Private Person Analogue
We turn now to the dispositive jurisdictional issue in this
STCA appeal: whether Doe has alleged a tort claim for which
a private person, under like circumstances, would be liable.
In Doe’s complaint, all of the negligent or wrongful acts or
omissions relate to the defendants’ alleged failure to comply
with the provisions of § 29-3523. The jurisdictional question
under the STCA, then, is whether a private person under like
circumstances would be liable in tort for failing to comply with
§ 29-3523.
In his supplemental briefing, Doe argues that a private person
would be liable in tort for disseminating and considering his
47
See, e.g., Reiber v. County of Gage, 303 Neb. 325, 928 N.W.2d 916
(2019).
48
State v. Webb, 311 Neb. 694, 974 N.W.2d 317 (2022) (appellate court not
obligated to engage in analysis that is not necessary to adjudicate case and
controversy before it).
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sealed criminal history records under either of two theories.
His primary argument is that § 29-3523 creates a tort duty
that applies to private persons. Alternatively, he argues that
Nebraska law recognizes a common-law duty to not disclose
criminal history records. We address each argument below, but
first we recite the relevant text of § 29-3523.
Section 29-3523 provides:
(1) After . . . the granting of a motion [to seal criminal
history record information] under subsection (4), (5), or
(6) of this section, a criminal justice agency shall respond
to a public inquiry in the same manner as if there were
no criminal history record information and criminal his-
tory record information shall not be disseminated to any
person other than a criminal justice agency, except as pro-
vided in subsection (2) of this section or when the subject
of the record:
(a) Is currently the subject of prosecution or correc-
tional control as the result of a separate arrest;
(b) Is currently an announced candidate for or holder
of public office;
(c) Has made a notarized request for the release of such
record to a specific person; or
(d) Is kept unidentified, and the record is used for pur-
poses of surveying or summarizing individual or collec-
tive law enforcement agency activity or practices, or the
dissemination is requested consisting only of release of
criminal history record information showing (i) dates of
arrests, (ii) reasons for arrests, and (iii) the nature of the
dispositions including, but not limited to, reasons for not
prosecuting the case or cases.
(2) That part of criminal history record information
described in subsection (7) of this section may be dissem-
inated to individuals and agencies for the express purpose
of research, evaluative, or statistical activities pursuant to
an agreement with a criminal justice agency that specifi-
cally authorizes access to the information, limits the use
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of the information to research, evaluative, or statistical
activities, and ensures the confidentiality and security of
the information.
....
(5) Any person who has received a pardon may file a
motion with the sentencing court for an order to seal the
criminal history record information and any cases related
to such charges or conviction. Upon a finding that the
person received a pardon, the court shall grant the motion
and issue an order as provided in subsection (7) of this
section.
....
(7) Upon acquittal or entry of an order dismissing a
case described in subdivision (3)(c) of this section, or
after granting a motion under subsection (4), (5), or (6) of
this section, the court shall:
(a) Order that all records, including any information
or other data concerning any proceedings relating to the
case, including the arrest, taking into custody, petition,
complaint, indictment, information, trial, hearing, adjudi-
cation, correctional supervision, dismissal, or other dis-
position or sentence, are not part of the public record and
shall not be disseminated to persons other than criminal
justice agencies, except as provided in subsection (1) or
(2) of this section;
(b) Send notice of the order (i) to the Nebraska
Commission on Law Enforcement and Criminal Justice,
(ii) to the Nebraska State Patrol, and (iii) to law enforce-
ment agencies, county attorneys, and city attorneys refer-
enced in the court record;
(c) Order all parties notified under subdivision (7)(b)
of this section to seal all records pertaining to the case;
and
(d) If the case was transferred from one court to
another, send notice of the order to seal the record to the
transferring court.
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(8) In any application for employment, bonding,
license, education, or other right or privilege, any appear-
ance as a witness, or any other public inquiry, a person
cannot be questioned with respect to any offense for
which the record is sealed. If an inquiry is made in viola-
tion of this subsection, the person may respond as if the
offense never occurred.
(i) Does § 29-3523 Create Tort Duty?
As stated, Doe argues that § 29-3523 of the Criminal
History Act creates a tort duty to act in the manner required
by the statute, and he argues that such a duty is imposed on
governmental employees and private persons alike. The appel-
lees argue that § 29-3523 does not create a tort duty, and in any
event, the pertinent requirements of § 29-3523 are not directed
at private individuals.
[18] We have not yet had occasion to consider whether
§ 29-3523 gives rise to a tort duty. But in Claypool, we set out
the test for determining when a statute creates such a duty:
A court may determine that a statute gives rise to a tort
duty to act in the manner required by the statute where
[1] the statute is enacted to protect a class of persons
which includes the plaintiff, [2] the statute is intended to
prevent the particular injury that has been suffered, and
[3] the statute is intended by the Legislature to create
a private liability as distinguished from one of a public
character. 49
The appellees appear to concede that Doe, as someone
whose criminal history records have been sealed as a result of
pardons, is generally within the class of persons that § 29-3523
was enacted to protect. But they argue that under the third
Claypool factor, there is nothing to suggest the Legislature
intended § 29-3523 to create private tort liability. We agree.
[19,20] We have described the third Claypool factor as
“central to the analysis of whether the statute defines a duty in
49
Claypool, supra note 13, 261 Neb. at 825, 626 N.W.2d at 545.
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tort,” 50 and we have explained that “where the Legislature has
not by its express terms or by implication provided for civil
tort liability [for failure to comply with a statute], under prin-
ciples of judicial restraint, it is prudent that we not do so.” 51
Moreover, we have said that courts should consider the express
remedy, if any, imposed for violating the statute, and whether
such a remedy is “inconsistent with a purported legislative
intention to create a tort duty.” 52
The legislative purpose of the Criminal History Act is stated
in § 29-3502:
The purposes of [the Criminal History Act] are (1) to
control and coordinate criminal offender record keep-
ing within this state, (2) to establish more efficient and
uniform systems of criminal offender record keeping,
(3) to assure periodic audits of such record keeping
in order to determine compliance with sections 29-209,
29-210, 29-3501 to 29-3528, and 81-1423, (4) to estab-
lish a more effective administrative structure for the
protection of individual privacy in connection with such
record keeping, and (5) to preserve the principle of the
public’s right to know of the official actions of criminal
justice agencies.
It is apparent from the plain text of § 29-3502 that the pur-
poses of the Criminal History Act are primarily administrative
in nature; the act is aimed at ensuring uniformity, efficiency,
accuracy, and transparency in criminal history recordkeeping.
We see nothing in § 29-3502 which suggests the Legislature
intended the Criminal History Act to create a tort duty to act in
accordance with the statutory scheme.
Presumably recognizing that the legislative purpose recited
in § 29-3502 is of little help to his argument under the Claypool
50
Stonacek v. City of Lincoln, 279 Neb. 869, 880, 782 N.W.2d 900, 909
(2010).
51
Id.
52
Id. at 881, 782 N.W.2d at 910.
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factors, Doe asks us to focus more specifically on the provi-
sions of § 29-3523, which govern how sealed criminal history
records are to be handled. But the plain language of § 29-3523
does not expressly or impliedly create private tort liability
for failing to comply with the statutory provisions governing
sealed criminal history records. In fact, as we discuss next, the
Legislature has provided express statutory remedies for viola-
tions of the Criminal History Act which are inconsistent with a
purported legislative intent to create a private tort duty.
We identify two statutes providing express remedies for
violations of the Criminal History Act. Section 29-3527 estab-
lishes criminal liability for “[a]ny person” who commits certain
violations of the Criminal History Act, including the know-
ing dissemination of “nondisclosable criminal history record
information in violation of [the Criminal History Act].” 53
Additionally, § 29-3528 authorizes an aggrieved person to
compel governmental actors to comply with the requirements
of the Criminal History Act and provides:
Whenever any officer or employee of the state, its
agencies, or its political subdivisions, or whenever any
state agency or any political subdivision or its agencies
fails to comply with the requirements of [the Criminal
History Act] or of regulations lawfully adopted to imple-
ment [the Criminal History Act], any person aggrieved
may bring an action, including but not limited to an action
for mandamus, to compel compliance and such action
may be brought in the district court of any district in
which the records involved are located or in the district
court of Lancaster County. The commission may request
the Attorney General to bring such action.
53
See § 29-3527(1) through (3) (providing any person who permits
unauthorized direct access to criminal history information, who knowingly
fails to disseminate public criminal history information, or who knowingly
disseminates “nondisclosable criminal history record information” is guilty
of Class IV misdemeanor).
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Based on the express statutory remedies created by the
Legislature—one which imposes criminal penalties on any
person who violates the act, and another which authorizes
mandamus and similar actions against governmental actors
“to compel compliance” with the act—we cannot find that the
Legislature intended the Criminal History Act generally, or
§ 29-3523 specifically, to give rise to any tort duty, let alone a
duty that would apply to a private person. 54
[21] We thus reject Doe’s argument and hold that § 29-3523
does not give rise to a legal duty that would subject a private
person to civil tort liability for failing to act in the manner pre-
scribed by statute. But that does not end our analysis.
Although Doe’s complaint identifies § 29-3523 as the pri-
mary source of the alleged duty not to disclose or consider his
sealed criminal history records, he also argues that if the statute
does not give rise to a tort duty, then Nebraska recognizes a
common-law duty of reasonable care not to disclose crimi-
nal history records. The district court rejected this argument,
reasoning that Doe had provided “no authority for a common
law duty prohibiting the dissemination of truthful information
about a person’s criminal history” and concluding that “no
such duty exists.”
Doe has not assigned error to this aspect of the trial court’s
duty ruling. But in his supplemental briefing, he argues that
Nebraska common law provides a private analogue for the
negligence claims he alleged against the State. We consider this
argument next, and find it lacks merit.
(ii) Would Private Person Owe Common-Law
Duty Under Like Circumstances?
Doe argues that Nebraska law recognizes what he describes
as a common-law “duty to act with reasonable care when in
custody of sealed or sensitive information, the disclosure of
54
See Smith, supra note 42, 14 F.4th at 1232 (holding FTCA “does not cover
breaches of federal statutory or regulatory duties that do not apply to
private parties”).
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which would have a detrimental effect on the life and liveli-
hood of an individual.” 55 He directs us to no Nebraska case
recognizing such a common-law duty, and we find none.
Instead, Doe refers us to a case from 1994, Merrick v
Thomas, 56 which he argues recognized a general common-
law duty of reasonable care. In that case, the plaintiff sued
the sheriff under the Political Subdivisions Tort Claims Act,
alleging that the sheriff had a duty to score her admissions
test accurately and fairly and that he had breached that duty.
This court concluded the plaintiff’s complaint, liberally con-
strued, alleged sufficient facts to establish the sheriff “owed
her a duty to score her test with due care.” 57 In reaching this
conclusion, the Merrick court recited the general proposition
that “[a] common-law duty exists to use due care so as not to
negligently injure another person.” 58 Doe relies on this state-
ment in Merrick to argue that under Nebraska law, a private
person owes a general common-law duty of reasonable care
to others. But our more recent cases expressly disavow the
suggestion that Nebraska recognizes “a general duty of rea-
sonable care to all others at all times.” 59 Instead, since our
2010 decision in A.W. v. Lancaster Cty. Sch. Dist. 0001, 60
Nebraska has consistently followed the general duty frame-
work set out in § 7 of the Restatement (Third) of Torts. 61 The
duty principles recited in Merrick do not reflect current tort
law in Nebraska.
55
Brief for appellant at 22.
56
Merrick v. Thomas, 246 Neb. 658, 522 N.W.2d 402 (1994).
57
Id. at 662, 522 N.W.2d at 406.
58
Id. at 661, 522 N.W.2d at 406.
59
Bell v. Grow With Me Childcare & Preschool, 299 Neb. 136, 154, 907
N.W.2d 705, 718 (2018).
60
A.W. v. Lancaster Cty. Sch. Dist. 0001, 280 Neb. 205, 784 N.W.2d 907
(2010).
61
See Bell, supra note 59 (discussing 1 Restatement (Third) of Torts:
Liability for Physical and Emotional Harm § 7 (2010)).
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[22] We thus reject Doe’s suggestion that Nebraska’s
common-law recognizes a duty not to disclose sealed criminal
history information. Indeed, if such a common-law duty did
exist, it seems unlikely the Legislature would have amended
the Criminal History Act in 2019 to enact laws prohibiting the
dissemination of sealed criminal history record information
under certain circumstances.
(iii) No Private Analogue
For the above reasons, we conclude that Doe has failed
to establish that a private person would owe him a legal
duty under circumstances like those alleged in his complaint.
Without a legal duty, a private person could not be liable in
negligence under like circumstances. Stated differently, there is
no “private analogue” for his claim, and Doe has thus failed to
allege a tort claim under § 81-8,210(4) for which the State has
waived its sovereign immunity.
For the sake of completeness, however, we note that Doe’s
appellate briefing also argues that even if there is not a private
person analogue for his negligence claim under § 29-3523 or
Nebraska’s common law, there are other possible tort claims,
such as invasion of privacy or “Interference with Economic
Expectation,” 62 for which a private person may be liable. We
do not address these arguments, however, because Doe neither
pled such tort claims nor alleged conduct that would plausibly
support such tort claims. Instead, Doe’s complaint alleged a
negligence claim premised exclusively on conduct which he
says failed to comply with § 29-3523, and we have already
explained why no private analogue exists for that claim.
2. Doe’s Remaining Assignments
and Arguments
[23] Our conclusion that Doe has not alleged a tort claim
under the STCA for which the State has waived its sovereign
immunity makes it unnecessary to address any of his remain-
ing assignments of error. An appellate court is not obligated
62
Brief for appellant at 19.
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to engage in an analysis that is not necessary to adjudicate the
case and controversy before it. 63
Similarly, we do not address Doe’s argument, raised for the
first time in his reply brief, that even if the STCA’s limited
waiver of sovereign immunity does not apply to his claims,
the district court should have construed his tort action as one
to enforce compliance with the Criminal History Act under
§ 29-3528. Doe has not assigned this as error on appeal, 64
nor could he. His complaint relied exclusively on the STCA
for jurisdiction over his tort claim. The complaint neither ref-
erenced § 29-3528 nor alleged it as a possible jurisdictional
basis. The district court did not consider Doe’s unpled juris-
dictional theory, and we will not consider it for the first time
on appeal. 65
V. CONCLUSION
Because Doe has not shown that a private person would be
liable under Nebraska law for the allegedly tortious conduct
alleged in the complaint, the STCA’s limited waiver of sov-
ereign immunity does not apply. The district court therefore
correctly concluded that Doe has not alleged a “tort claim”
under the STCA for which the State has waived its sovereign
immunity. The district court’s dismissal of the complaint for
lack of subject matter jurisdiction was correct and is affirmed.
Affirmed.
63
Schmid v. Simmons, 311 Neb. 48, 970 N.W.2d 735 (2022).
64
See Adair Holdings v. Johnson, 304 Neb. 720, 936 N.W.2d 517 (2020)
(alleged error must be both assigned and argued to be addressed by
appellate court).
65
See Wisner v. Vandelay Investments, 300 Neb. 825, 841, 916 N.W.2d 698,
714 (2018) (“[a]n argument not presented to or decided by the trial court
is not appropriate for consideration on appeal”).
Cassel, J., concurring.
Our dissenting colleague relies upon a “broad interpretation”
endorsed by the U.S. Supreme Court in determining the reach
of the private person analogue in the Federal Tort Claims Act
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addressing liability of the national sovereign. But, as the major-
ity opinion makes clear, Nebraska adheres to strict construction
of waivers of sovereign immunity as to the state sovereign.
Thus, a “broad interpretation” is inconsistent with Nebraska
law. And because the district court’s subject matter jurisdiction
depended upon a waiver of sovereign immunity, this court was
not free to avoid the jurisdictional analysis. Judicial restraint
does not permit or justify judicial abdication.
Miller‑Lerman, J., concurring in part, and in part dissenting.
I respectfully concur in part, and in part dissent. I agree
with the majority that, given the remedies in the Security,
Privacy, and Dissemination of Criminal History Act (Act),
Neb. Rev. Stat. §§ 29‑209, 29‑210, 29‑3501 to 29‑3538, and
81‑1423 (Reissue 2016 & Cum. Supp. 2020), the responsi-
bilities of the Act do not create the duty element of the tort of
negligence and that therefore, Doe has failed to state a claim
for negligence under Neb. Rev. Stat. § 81-8,210(4) (Reissue
2014) of the State Tort Claims Act (STCA). But STCA permits
“tort claims” in addition to the tort claim of negligence. Other
actions which lie in tort can be brought, such as interference
with a business expectancy, which may be applicable here
based on the events giving rise to the complaint. Doe should
be permitted to amend. Further, albeit recast by the majority as
a failure of the State to waive immunity, the majority affirmed
the district court’s order, which concluded that there was a fail-
ure of subject matter jurisdiction. Not every failing is a juris-
dictional defect. I dissent from these rulings. I see the case as
a simple matter of failure to state a claim for negligence, and
the district court should permit Doe leave to attempt to replead
another tort.
The alleged facts are not repeated here. In summary, Doe
alleged that notwithstanding the fact that Doe’s criminal record
was sealed under § 29-3523(5), and after Doe’s job interview,
the Nebraska State Patrol improperly transmitted the records
identified as “Sealed Info” to the Department of Correctional
Services and its director, Scott Frakes, in connection with
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Doe’s application for employment. Frakes acknowledged that
the department should not have considered Doe’s sealed record
in connection with its rejection of Doe’s job application. Doe
alleged negligence under STCA.
According to the Act, among the objectives of sealing crim-
inal records is “the protection of individual privacy.” See
§ 29-3502. Following a pardon, and sealing of a person’s
records, the aim of the Act is to keep records private and
protect the pardoned individual from harm due to improper
dissemination and reliance on the sealed criminal record. The
statutory remedies for failure to abide by the Act are provided
by §§ 29-3527 and 29-3528 and include criminal liability and
mandamus. See State ex rel. Rhiley v. Nebraska State Patrol,
301 Neb. 241, 917 N.W.2d 903 (2018) (stating sovereign
immunity does not bar mandamus under § 29-3528 against
public officer). Because the Legislature has already provided
explicit remedies to enforce the Act, it would be inconsistent
for the court to create a separate private cause of action for
negligence, based on a breach of the responsibilities described
in the Act. This conclusion is similar to this court’s analysis
in Stonacek v. City of Lincoln, 279 Neb. 869, 782 N.W.2d 900
(2010). By this reasoning, I concur with the majority’s conclu-
sion that the Act does not create a duty in negligence or a cause
of action for negligence.
At this point, the analysis of whether Doe alleged a cause
of action for negligence under STCA is complete, and in my
view, the majority’s analysis of the private person analogue
and its segue into sovereign immunity are unnecessary and
not consistent with the widespread jurisprudence in this area.
In my view, firstly, the analysis improperly casts the issue as
jurisdictional, and secondly, the majority misreads the federal
jurisprudence as requiring a too exacting private equivalence
instead of an analogue.
I see a pleading failure, but unlike the majority, I do not
see a jurisdictional failure. There is no dispute that the district
court has subject matter jurisdiction to entertain an STCA
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action. Just because Doe did not allege a viable negligence
“[t]ort claim,” see § 81-8,210(4), for the particular tort of neg-
ligence does not bar him from attempting to plead another tort
under STCA. In my view, the defect in the complaint identified
by the trial court and this appellate court is not incurable as a
matter of law. As I have observed in the past, not every failing
is jurisdictional and we should be careful with our invocation
of the concept of jurisdiction. State v. Crawford, 291 Neb.
362, 865 N.W.2d 360 (2015), disapproved on other grounds,
State v. Burries, 310 Neb. 688, 969 N.W.2d 96 (2022). See
State v. Ryan, 287 Neb. 938, 845 N.W.2d 287 (2014), disap-
proved on other grounds, State v. Allen, 301 Neb. 560, 919
N.W.2d 500 (2018). See, also, Akutowicz v. U.S., 859 F.2d
1122 (2d Cir. 1988) (holding that where plaintiff has not satis-
fied private analogue requirement, plaintiff has failed to state
cause of action under Federal Tort Claims Act). But see Geico
General Ins. Co. v. U.S., 581 F. Supp. 3d 847 (E.D. Ky. 2022)
(stating because plaintiff failed to plead analogue facts suf-
ficient to state plausible claim under Federal Tort Claims Act,
court lacked jurisdiction). In my view, we should not recast an
inartful pleading as a jurisdictional defect merely to provide a
vehicle to dismiss. I dissent from this approach of the major-
ity opinion.
As I have urged, discussion of the doctrine of a private
person analogue is not necessary to the disposition of this
case, and I would exercise judicial restraint in this regard. Just
because the court can write about private person analogue does
not mean it should. To the extent dicta by the majority consid-
ers the private person analogue, I disagree with the majority’s
analysis that the analogue must be so precise.
As the majority notes, STCA is patterned after the Federal
Tort Claims Act (hereinafter FTCA), see 28 U.S.C. § 2680(h)
(2018), which to some extent, we follow. Compare Moser
v. State, 307 Neb. 18, 948 N.W.2d 194 (2020). FTCA’s pri-
vate person analogue is found at 28 U.S.C. § 1346 (2018).
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Nebraska’s private person analogue is found at § 81-8,210(4),
which provides:
Tort claim means any claim against the State of Nebraska
for money only on account of damage to or loss of prop-
erty or on account of personal injury or death caused
by the negligent or wrongful act or omission of any
employee of the state, while acting within the scope of
his or her office or employment, under circumstances in
which the state, if a private person, would be liable to the
claimant for such damage, loss, injury, or death . . . .
In evaluating whether a private person analogue exists
for the plaintiff’s federal tort claim, the U.S. Supreme
Court has stated that the State is not immune from suit
solely because it was engaged in a uniquely governmental
function. See, United States v. Olson, 546 U.S. 43, 126
S. Ct. 510, 163 L. Ed. 2d 306 (2005); Rayonier, Inc. v.
United States, 352 U.S. 315, 77 S. Ct. 374, 1 L. Ed. 2d
354 (1957); Indian Towing Co. v. United States, 350 U.S.
61, 76 S. Ct. 122, 100 L. Ed. 48 (1955). A court applying
the private person standard is not restricted to “narrow”
inquiries into the same circumstances, but must look fur-
ther afield. United States v. Olson, 546 U.S. at 46.
The U.S. Supreme Court declared that it “would be attribut-
ing bizarre motives to Congress . . . to hold that it was predi-
cating liability on such a completely fortuitous circumstance—
the presence or absence of identical private activity.” Indian
Towing Co. v. United States, 350 U.S. at 67. The U.S. Supreme
Court found no evidence in FTCA that Congress “intended to
draw distinctions so finespun and capricious as to be almost
inescapable of being held in the mind for adequate formula-
tion.” Indian Towing Co. v. United States, 350 U.S. at 68.
It has been observed that FTCA’s private person analogue
provision, § 1346, has been given
generous development by the Supreme Court. [FTCA]
is given a broad interpretation to effectuate the legisla-
tive aim of putting citizen and national sovereign in tort
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claims suits on a footing of equality as between private
parties within that state. Nice pieces of casuistry and
hypersensitive legalisms are avoided.
Roelofs v. United States, 501 F.2d 87, 92 (5th Cir. 1974). These
authorities illustrate why the majority has too narrowly applied
the private person analogue and why I dissent from such nar-
row understanding in this and future cases.
Turning to the complaint, Doe alleged a violation of the
responsibilities outlined in the Act by the State Patrol, Frakes,
and the Department of Correctional Services. According to the
allegations, Doe suffered the financial harm of being rejected
for a job as a result of state actors’ wrongful conducts, i.e.,
by both the improper dissemination of his sealed record and
the subsequent knowing reliance on the sealed record. I read
the events giving rise to the complaint as potentially involv-
ing tortious interference with Doe’s business expectancy or
another tort. See Denali Real Estate v. Denali Custom Builders,
302 Neb. 984, 926 N.W.2d 610 (2019) (setting forth ele-
ments of interference with business relationship or expec-
tancy). Employing the “broad interpretation” of the private
person analogue endorsed by the federal courts, see Roelofs v.
United States, 501 F.2d at 92, Doe has alleged a “[t]ort claim”
on account of the “wrongful act or omission of any employee
of the state, while acting within the scope of his or her office
or employment, under circumstances in which the state, if a
private person, would be liable to the claimant for such dam-
age, loss, injury or death . . . .” § 81-8,210(4). So, although I
think it unnecessary to engage in the private person analogue
exercise, were I to do so, I would find that Doe had alleged
facts which may indicate the existence of the private analogue
tort of interference with a business expectancy and thus should
be permitted to amend his pleading to attempt to make such
“tort claim” more explicit.
For the foregoing reasons, I concur in part, and in part
dissent. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487061/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 01:08 AM CST
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State of Nebraska, appellee, v.
Christina M. Greer, appellant.
___ N.W.2d ___
Filed September 2, 2022. No. S-21-601.
1. Jury Instructions: Appeal and Error. Whether a jury instruction is
correct is a question of law, regarding which an appellate court is obli-
gated to reach a conclusion independent of the determination reached
by the trial court.
2. Trial: Expert Witnesses: Appeal and Error. An appellate court reviews
the record de novo to determine whether a trial court has abdicated its
gatekeeping function when admitting expert testimony.
3. ____: ____: ____. When the trial court has not abdicated its gatekeeping
function when admitting expert testimony, an appellate court reviews
the trial court’s decision to admit or exclude the evidence for an abuse
of discretion.
4. Sentences: Appeal and Error. A sentence imposed within the statutory
limits will not be disturbed on appeal in the absence of an abuse of dis-
cretion by the trial court.
5. Judges: Words and Phrases. A judicial abuse of discretion exists
only when the reasons or rulings of a trial judge are clearly untenable,
unfairly depriving a litigant of a substantial right and denying a just
result in matters submitted for disposition.
6. Jury Instructions: Appeal and Error. Jury instructions are subject
to harmless error review, and an erroneous jury instruction requires
reversal only if the error adversely affects the substantial rights of the
complaining party.
7. Jury Instructions: Proof: Appeal and Error. In an appeal based upon
a claim of an erroneous jury instruction, the appellant has the burden
to show that the questioned instruction was prejudicial or otherwise
adversely affected a substantial right of the appellant.
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8. Rules of Evidence: Expert Witnesses. Four preliminary questions
must be answered in order to determine whether an expert’s testi-
mony is admissible: (1) whether the witness qualifies as an expert
pursuant to Neb. Rev. Stat. § 27-702 (Reissue 2016); (2) whether
the expert’s testimony is relevant; (3) whether the expert’s testimony
will assist the trier of fact to understand the evidence or determine
a controverted factual issue; and (4) whether the expert’s testimony,
even though relevant and admissible, should be excluded in light of
Neb. Rev. Stat. § 27-403 (Reissue 2016) because its probative value
is substantially outweighed by the danger of unfair prejudice or other
considerations.
9. Trial: Expert Witnesses. A trial court acts as a gatekeeper to ensure
the evidentiary relevance and reliability of an expert’s opinion, and this
gatekeeping function entails a preliminary assessment whether the rea-
soning or methodology underlying the testimony is valid and whether
that reasoning or methodology properly can be applied to the facts
in issue.
10. ____: ____. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S.
579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993), does not create a special
analysis for answering questions about the admissibility of all expert
testimony. Not every attack on expert testimony amounts to a Daubert
claim. If a witness is not offering opinion testimony, that witness’ testi-
mony is not subject to inquiry pursuant to Daubert.
11. Sentences: Appeal and Error. When sentences imposed within stat-
utory limits are alleged on appeal to be excessive, the appellate
court must determine whether the sentencing court abused its discre-
tion in considering well-established factors and any applicable legal
principles.
12. Judges: Words and Phrases. A judicial abuse of discretion exists only
when a trial court’s decision is based upon reasons that are untenable
or unreasonable or if its action is clearly against justice or conscience,
reason, and evidence.
13. Sentences. When imposing a sentence, a sentencing judge should con-
sider the defendant’s (1) age, (2) mentality, (3) education and experi-
ence, (4) social and cultural background, (5) past criminal record or
record of law-abiding conduct, and (6) motivation for the offense, as
well as (7) the nature of the offense and (8) the amount of violence
involved in the commission of the crime.
14. ____. The sentencing court is not limited to any mathematically applied
set of factors, but the appropriateness of the sentence is necessarily a
subjective judgment that includes the sentencing judge’s observations
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of the defendant’s demeanor and attitude and all the facts and circum-
stances surrounding the defendant’s life.
15. ____. It is within the discretion of the trial court to direct that sen-
tences imposed for separate crimes be served consecutively. The test
of whether consecutive sentences may be imposed under two or more
counts charging separate offenses, arising out of the same transaction or
the same chain of events, is whether the offense charged in one count
involves any different elements than an offense charged in another
count. The test is whether some additional evidence is required to prove
one of the other offenses.
Appeal from the District Court for Sarpy County: George
A. Thompson, Judge. Affirmed.
Thomas P. Strigenz, Sarpy County Public Defender, for
appellant.
Douglas J. Peterson, Attorney General, and Melissa R.
Vincent for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Heavican, C.J.
INTRODUCTION
The defendant, Christina M. Greer, was charged with 13
counts in four separate cases, all relating to allegations of
sexual assault of a child. Greer was convicted of 11 of those
counts and sentenced to an aggregate sentence of 64 to 102
years’ imprisonment. Greer appeals. We affirm.
BACKGROUND
Charges Against Greer.
Greer was charged in four separate cases. In the first case,
she was originally charged with one count of first degree sex-
ual assault of W.F. (also known as A.F.), a 13-year-old boy who
was friends with Greer’s 11-year-old daughter. That charge was
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later amended to one count of first degree sexual assault of a
child and two counts of witness tampering.
In the second case, Greer was charged with three counts of
first degree sexual assault of a child, J.H., a 13-year-old boy
who was friends with Greer’s 9-year-old son. In the third case,
Greer was charged with six counts of intentional child abuse of
A.F. and J.H.; of Greer’s daughter; and of A.R., A.J., and C.P.,
identified as friends of Greer’s daughter. In the fourth case,
Greer was charged with child enticement of P.M., a 13-year-old
boy who attended school with Greer’s daughter.
These four cases were consolidated for trial on January 21,
2021.
Pretrial Motions.
Greer was first charged in March 2018, but did not come to
trial until March 2, 2021. Since that time, Greer has had three
attorneys: appointed counsel; retained counsel; and at trial, the
Sarpy County public defender, who was appointed on April 2,
2020, and represents Greer in this appeal.
As relevant to this appeal, the primary reason for the delay
in Greer’s trial was various motions filed by the State under
Neb. Rev. Stat. § 27-404 (Reissue 2016) (other bad acts) and
Neb. Rev. Stat. § 27-414 (Reissue 2016) (prior sexual con-
duct). Generally, the State sought to introduce evidence that
Greer (1) had engaged in uncharged sex acts with other chil-
dren, (2) had engaged in uncharged sex acts with already iden-
tified victims, and (3) was “grooming” the children through the
supplying of alcohol and marijuana edibles. In support of its
contention that evidence relating to Greer’s grooming of chil-
dren who came to her home, the State offered the testimony of
Colleen Brazil, the forensic interview program manager at a
child advocacy center.
The first such motion regarding §§ 27-404 and 27-414 was
filed on December 26, 2018. At a hearing on February 7, 2019,
Brazil testified about the concept of “grooming” and the behav-
iors it encompasses. Greer’s daughter and J.H. testified about
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Greer’s conduct in the cases wherein each was a named victim.
The State’s motion was granted on March 1.
On August 6, 2019, Greer sought a motion in limine to
prevent the State from mentioning or using the term “groom-
ing” without the court’s permission, as it was a “term of art
that requires expert testimony.” On August 7, the district court
granted the State’s motion to continue and noted that it would
take up the motions in limine at a later hearing. The district
court held a hearing on Greer’s motions in limine on March 3,
2020, and denied the motions, noting that it had addressed the
issue in various § 27-404 hearings.
Brazil’s Testimony.
Trial began on March 2, 2021. On March 3, Greer filed
a motion seeking an order to strike Brazil as an expert wit-
ness, as well as to strike her testimony regarding grooming,
because such theories violated standards set forth in Daubert
v. Merrell Dow Pharmaceuticals, Inc., 1 and Schafersman v.
Agland Coop. 2
The State called Brazil to testify on March 4, 2021. Greer
objected when the State asked Brazil if she was familiar with
the term “grooming.” The district court initially indicated
that “grooming” was not an appropriate topic for a Daubert
hearing and that Brazil was an expert in the field of child
advocacy. But the district court ultimately agreed to hold a
Daubert hearing.
At that hearing, Brazil once again testified on the concept
of grooming. Brazil also testified that she knew very little
about the facts of Greer’s case and that she would not offer
an opinion as to whether Greer’s alleged victims were, in fact,
groomed by Greer. The State also offered three court opinions
and an article about grooming.
1
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct.
2786, 125 L. Ed. 2d 469 (1993).
2
Schafersman v. Agland Coop, 262 Neb. 215, 631 N.W.2d 862 (2001).
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In ruling for the State, the court indicated that it did not
think Daubert should apply, but that the Nebraska Court of
Appeals’ opinion in State v. Edwards 3 held that Daubert did
apply. The district court explicitly noted it believed that the
difference between the Edwards case and Greer’s situation
was based on the fact that the expert in Edwards specifically
opined that the defendant in that case had engaged in groom-
ing. The district court found that Brazil was an expert and
allowed her to testify, but noted that the State should not
stray into questions about whether Greer’s actions amounted
to grooming.
When Greer’s counsel sought to clarify the grounds of the
court’s ruling, the court explained that it was ruling that Brazil
was a qualified expert, that grooming was part of her expertise,
that there was sufficient peer review on the topic of grooming,
and that the evidence was more probative than prejudicial, but
that it also believed Daubert did not apply because Brazil was
not opining on whether Greer’s conduct amounted to groom-
ing. Brazil then testified at trial, subject to Greer’s continu-
ing objection.
The jury ultimately found Greer guilty of counts 1 through
3 and 5 through 12, and not guilty of counts 4 (sexual assault
of a child) and 13 (child enticement). Greer was sentenced to
a total of 64 to 102 years’ imprisonment, or 25 to 40 years’ for
the three counts of first degree sexual assault of a child, 2 to 3
years’ imprisonment on the six counts of child abuse, and 1 to
2 years’ imprisonment on the two counts of witness tampering.
The sentences were ordered to be served consecutively, except
that the 25-to-40-year sentence on count 6 was ordered to run
concurrent to Greer’s other sentences.
Jury Instructions.
Prior to closing arguments, the district court instructed the
jury, then took a brief recess. After the recess, the jury was
3
State v. Edwards, 28 Neb. App. 893, 949 N.W.2d 799 (2020).
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informed that instruction No. 4, the definition of the term
“penetration,” while taken from the Nebraska pattern jury
instructions, 4 was incomplete. As such, over Greer’s objection,
the instruction was revised to mirror the pattern instruction and
was read again to the jury.
Greer appeals from her convictions and sentences.
ASSIGNMENTS OF ERROR
Greer assigns, restated, that the district court erred in (1) the
procedure utilized in instructing the jury as to the definitions
included in instruction No. 4, specifically of the term “penetra-
tion”; (2) allowing Brazil to testify as an expert on the issue of
grooming; and (3) imposing excessive sentences.
STANDARD OF REVIEW
[1] Whether a jury instruction is correct is a question of
law, regarding which an appellate court is obligated to reach
a conclusion independent of the determination reached by the
trial court. 5
[2,3] An appellate court reviews the record de novo to
determine whether a trial court has abdicated its gatekeeping
function when admitting expert testimony. 6 When the trial
court has not abdicated its gatekeeping function, an appellate
court reviews the trial court’s decision to admit or exclude the
evidence for an abuse of discretion. 7
[4,5] A sentence imposed within the statutory limits will
not be disturbed on appeal in the absence of an abuse of
discretion by the trial court. 8 A judicial abuse of discre-
tion exists only when the reasons or rulings of a trial judge
are clearly untenable, unfairly depriving a litigant of a
4
NJI2d Crim. 4.6.
5
State v. Pope, 305 Neb. 912, 943 N.W.2d 294 (2020).
6
See Hemsley v. Langdon, 299 Neb. 464, 909 N.W.2d 59 (2018).
7
See id.
8
State v. Blake, 310 Neb. 769, 969 N.W.2d 399 (2022).
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substantial right and denying a just result in matters sub
mitted for disposition. 9
ANALYSIS
Jury Instructions.
Greer first assigns that the district court erred in instruct-
ing the jury when it initially read an incomplete version of
instruction No. 4, then later read the complete version of that
same instruction. Greer asserts that the second reading of that
particular instruction, which included the definition of the term
“penetration,” was prejudicial to her because it emphasized
penetration to the jury in a case where she had strongly denied
committing an act of penetration. Greer suggests that at a mini-
mum, the district court ought to have read again all instruc-
tions in order to de-emphasize any one instruction.
[6,7] Jury instructions are subject to harmless error review,
and an erroneous jury instruction requires reversal only if the
error adversely affects the substantial rights of the complain-
ing party. 10 In an appeal based upon a claim of an erroneous
jury instruction, the appellant has the burden to show that the
questioned instruction was prejudicial or otherwise adversely
affected a substantial right of the appellant. 11
We find Greer’s arguments on appeal unpersuasive. We
first observe that the only instruction in our record relevant
to this assignment of error is the complete instruction No. 4,
read to the jury upon the court’s realization that the initial
instruction No. 4 was incomplete and later sent back with
the jury for its use during deliberations. Greer had the bur-
den to show that she was prejudiced by the court’s giving of
the original instruction. Yet Greer has provided no record of
what that initial, incomplete instruction contained. We can-
not determine whether Greer was prejudiced by the second
9
Id.
10
State v. Dady, 304 Neb. 649, 936 N.W.2d 486 (2019).
11
State v. Bao, 263 Neb. 439, 640 N.W.2d 405 (2002).
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reading of the instruction if we do not know the full contents
of the first instruction.
And even if we could proceed based on our limited knowl-
edge of the contents of the incomplete instruction, we would
still conclude that Greer has failed to meet her burden to show
that the instruction procedure followed was prejudicial. First,
the cases upon which Greer relies—State v. Abram 12 and State
v. Claycamp 13—are distinguishable.
In Abram, the written jury instruction, which was not
objected to by the defendant or the State, read in relevant part
that “‘[t]he fact that the [d]efendant did not testify must be
considered by you as an admission of guilt . . . .’” 14 Copies of
the instruction containing this plainly incorrect language were
provided to the members of the jury to use while deliberating.
However, in orally instructing the jury, the court stated that
“‘[t]he fact that the [d]efendant did not testify must not be
considered by you as an admission of guilt . . . .’” 15 In other
words, the correct version of the instruction was read to the
jury, but the incorrect language was provided to the jury in
written form.
We held in Abram that this was not structural error, but sub-
ject to harmless error analysis. We concluded that even though
the correct language was actually read to the jury, the error was
not harmless. In so concluding, we reasoned that the incorrect
instructions were emphasized by virtue of having been written
and available to the jury during its deliberations.
In Claycamp, the defendant raised a defense of self-defense
at trial. At the conclusion of evidence, the court read to the jury
its instructions. The State and the defense then made closing
arguments. In response to some comments made by the State
in its argument, the court admonished the jury that it was
12
State v. Abram, 284 Neb. 55, 815 N.W.2d 897 (2012).
13
State v. Claycamp, 14 Neb. App. 675, 714 N.W.2d 455 (2006).
14
State v. Abram, supra note 12, 284 Neb. at 60, 815 N.W.2d at 903.
15
Id.
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“‘not to consider any sort of [the victim’s] conduct or the
consequences of his conduct. This is about the defendant . .
. .’” 16 The Court of Appeals noted that the admonishment to
the jury was contradictory to the earlier instructions regarding
the defendant’s defense of self-defense. The Court of Appeals
applied a harmless error standard and concluded that the error
was not harmless and that reversal was warranted.
Unlike Abram and Claycamp, where the instruction provided
was inconsistent with other instructions, was incorrect, or both,
here, there is no suggestion that the initial part of instruction
No. 4 read to the jury was incorrect—only that it was incom-
plete. This is reflected in the exchange between the court and
counsel when the court explained that it would be adding to
the instruction and reading it again. In fact, as we have noted
above, this record does not even include the language origi-
nally read to the jury—whether it be the original instruction the
court read from or a transcript of the court’s verbal instruction
as it would appear in the bill of exceptions.
In this case, we apply a harmless error standard and decline
to find any. First, this court lacks a complete record. Moreover,
there is no allegation that the initial instruction as read to the
jury was incorrect, but only that it was incomplete. Nor is there
any allegation that the final instruction read to the jury and sent
back with the jury during its deliberations was incorrect. We
note Greer’s argument that the reading again of the definition
of penetration emphasized that concept to the jury. However,
we conclude that it is not possible to determine whether any
alleged emphasis would have helped or harmed Greer, espe-
cially where Greer has directed us to no authority on point.
Greer has failed to meet her burden to show that she was
prejudiced by the procedure followed by the district court with
respect to instruction No. 4. As such, we find no merit to this
assignment of error.
16
State v. Claycamp, supra note 13, 14 Neb. App. at 680, 714 N.W.2d at
459.
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Brazil’s Testimony.
In Greer’s second assignment of error, she assigns that the
district court erred in allowing Brazil to testify as an expert
on the issue of grooming. We construe Greer’s brief to argue
that the district court did not “adequately demonstrate specific
findings on the record that it had performed its duty as a gate-
keeper to find her as an expert on the issues of grooming.” 17
Greer further asserts that “grooming [was not] a scientifically
valid methodology.” 18
[8] Neb. Rev. Stat. § 27-702 (Reissue 2016) provides that
“[i]f scientific, technical, or other specialized knowledge will
assist the trier of fact to understand the evidence or to deter-
mine a fact in issue, a witness qualified as an expert by knowl-
edge, skill, experience, training, or education, may testify
thereto in the form of an opinion or otherwise.” Four prelimi-
nary questions must be answered in order to determine whether
an expert’s testimony is admissible: (1) whether the witness
qualifies as an expert pursuant to § 27-702; (2) whether the
expert’s testimony is relevant; (3) whether the expert’s testi-
mony will assist the trier of fact to understand the evidence
or determine a controverted factual issue; and (4) whether the
expert’s testimony, even though relevant and admissible, should
be excluded in light of Neb. Rev. Stat. § 27-403 (Reissue 2016)
because its probative value is substantially outweighed by the
danger of unfair prejudice or other considerations. 19
[9,10] Under our Daubert 20 and Schafersman 21 jurispru-
dence, a “trial court acts as a gatekeeper to ensure the evi-
dentiary relevance and reliability of an expert’s opinion,” and
this gatekeeping function “entails a preliminary assessment
17
Brief for appellant at 22.
18
Id.
19
City of Lincoln v. Realty Trust Group, 270 Neb. 587, 705 N.W.2d 432
(2005).
20
Daubert v. Merrell Dow Pharmaceuticals, Inc., supra note 1.
21
Schafersman v. Agland Coop, supra note 2.
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whether the reasoning or methodology underlying the tes-
timony is valid and whether that reasoning or methodology
properly can be applied to the facts in issue.” 22 Still, “Daubert
does not create a special analysis for answering questions about
the admissibility of all expert testimony. Not every attack on
expert testimony amounts to a Daubert claim. If a witness is
not offering opinion testimony, that witness’ testimony is not
subject to inquiry pursuant to Daubert.” 23
Finally, we have noted that
courts need not reinvent the wheel each time that special-
ized evidence is adduced. The proponent need not contin-
uously go through the exercise of re-proving reliability of
the same evidence in every case. Instead, once a Nebraska
trial court has actually examined and assessed the reli-
ability of a particular scientific wheel under Daubert, and
its determination has been affirmed on appeal, then other
courts may simply take judicial notice and ride behind.
In such cases, the proponent establishes a prima facie
case of reliability by relying on precedent, and the burden
shifts to the opponent to show that recent developments
raise doubts about the validity of previously relied-upon
theories or techniques. 24
We find no merit to Greer’s arguments on appeal. First, we
agree with the district court that Daubert was inapplicable
in this case. As noted above, our case law is clear that not
every instance of expert testimony is a Daubert issue. In this
case, prior to testifying, Brazil indicated that she did not have
any particular knowledge about Greer or the alleged victims
in this case and that she was not prepared to testify as to
whether Greer’s conduct qualified as grooming. And indeed,
22
State v. Robinson, 272 Neb. 582, 618, 724 N.W.2d 35, 68 (2006), abro
gated on other grounds, State v. Thorpe, 280 Neb. 11, 783 N.W.2d 749
(2010).
23
State v. Schreiner, 276 Neb. 393, 405, 754 N.W.2d 742, 754 (2008).
24
State v. Casillas, 279 Neb. 820, 838, 782 N.W.2d 882, 898 (2010).
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her testimony was in conformity with her testimony at pre-
trial hearings—at no point did she offer any opinion about
Greer’s conduct.
Moreover, even if we were to conclude that Daubert was
applicable, a decision we need not reach here, the record shows
that the district court held a Daubert hearing. At that hearing,
Brazil testified to her many years of experience in conducting
and monitoring forensic interviews of child sexual assault vic-
tims, including attending and teaching seminars on that topic.
We find no abuse of discretion in the district court’s conclu-
sion, set out in the record, that Brazil qualified as an expert and
that her testimony was admissible.
We note also the confusion that seems to have resulted from
the Court of Appeals’ opinion in Edwards, which we find dis-
tinguishable and inapplicable. 25 The district court concluded
the factor that made Daubert an issue in Edwards was that
the pediatrician who testified regarding grooming in that case
testified the defendant’s actions were, in fact, grooming. The
distinction noted by the district court is in keeping with our
case law as set out above and is consistent with our conclusion
in this case. We further note that to the extent that Edwards
could be read to categorically reject such testimony, it is
disapproved.
There is no merit to Greer’s assignment of error regarding
Brazil’s testimony.
Excessive Sentences.
Finally, Greer assigns that the sentences imposed upon her
were excessive. As an initial matter, we note that all of Greer’s
sentences were within statutory limits and that the record
shows the court considered Greer’s presentence investigation
and all of the relevant factors as set forth in case law.
Instead, Greer primarily takes issue with the consecutive
nature of her sentences:
25
State v. Edwards, supra note 3.
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The record reflects that counts 7 [through] 12 all arose
out of the same transactions and series of events. The
State agrees with this assertion as it filed a motion to
consolidate stating the same. . . . Because child abuse
allegations all arose out of the same times as count 1, they
therefore should be concurrent with each other as well as
to count 1.
Additionally, counts 5 and 6 should be concurrent with
one another as they are the same victim and are part of
the same series and chain of events. Finally, the evidence
shows that counts 2 and 3 all arose out of the same series
of transactions.
It is logical that the charges should be served
concurrently. 26
[11,12] When sentences imposed within statutory limits are
alleged on appeal to be excessive, the appellate court must
determine whether the sentencing court abused its discretion in
considering well-established factors and any applicable legal
principles. 27 A judicial abuse of discretion exists only when a
trial court’s decision is based upon reasons that are untenable
or unreasonable or if its action is clearly against justice or con-
science, reason, and evidence. 28
[13,14] When imposing a sentence, a sentencing judge
should consider the defendant’s (1) age, (2) mentality, (3)
education and experience, (4) social and cultural background,
(5) past criminal record or record of law-abiding conduct,
and (6) motivation for the offense, as well as (7) the nature
of the offense and (8) the amount of violence involved in
the commission of the crime. 29 The sentencing court is not
limited to any mathematically applied set of factors, but the
26
Brief for appellant at 26.
27
State v. Blake, supra note 8.
28
Id.
29
Id.
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appropriateness of the sentence is necessarily a subjective
judgment that includes the sentencing judge’s observations of
the defendant’s demeanor and attitude and all the facts and
circumstances surrounding the defendant’s life. 30
[15] It is within the discretion of the trial court to direct
that sentences imposed for separate crimes be served consecu
tively. 31 The test of whether consecutive sentences may be
imposed under two or more counts charging separate offenses,
arising out of the same transaction or the same chain of events,
is whether the offense charged in one count involves any dif-
ferent elements than an offense charged in another count. The
test is whether some additional evidence is required to prove
one of the other offenses. 32
We turn first to Greer’s contention that her sentence on
count 5 (first degree sexual assault of a child—J.H.) should
run concurrent to her sentence on count 6 (also first degree
sexual assault of a child—J.H.). We observe that, in fact, her
sentence on count 4 was ordered to be served concurrent to
the remainder of her sentences. As such, there is no merit to
this assertion.
Greer also argues that the child abuse counts against her all
arose out of the same transactions and series of events. But
while they involve the same general conduct on Greer’s part,
they also involve six different children and the State had to
separately prove the elements of child abuse as to each of the
children in order to obtain guilty verdicts.
Greer additionally argues that the child abuse counts arose
from the same set of facts as count 1 (first degree sexual
assault of a child—A.F.), and so, the sentences for child abuse
should run concurrently. But the elements the State had to
prove for child abuse are distinct from those for first degree
30
Id.
31
State v. Andersen, 238 Neb. 32, 468 N.W.2d 617 (1991).
32
Id.
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sexual assault of a child. We find no abuse of discretion in the
district court’s order sentencing Greer consecutively for any of
these convictions.
Finally, Greer argues that the tampering with a witness
counts arise from the same series of transactions. Again, as
to these counts, the State had to prove the elements of those
crimes as occurring on different occasions, and thus, different
evidence was required.
Because all of the counts required the proving of different
elements or different evidence, there was no abuse of discre-
tion in the district court’s sentences. There is no merit to this
assignment of error.
CONCLUSION
The district court’s judgments and convictions are affirmed.
Affirmed. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487054/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 01:08 AM CST
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SCALISE V. DAVIS
Cite as 312 Neb. 518
Nicholas N. Scalise, appellant, v.
Jeffrey L. Davis and the Sarpy County
Sheriff’s Office, appellees.
___ N.W.2d___
Filed September 30, 2022. No. S-21-031.
1. Courts: Appeal and Error. In an appeal from the county court general
civil docket, the district court acts as an intermediate appellate court and
not as a trial court.
2. ____: ____. Both the district court and a higher appellate court gener-
ally review appeals from the county court for error appearing on the
record.
3. Judgments: Appeal and Error. When reviewing a judgment for errors
appearing on the record, an appellate court’s inquiry is whether the deci-
sion conforms to the law, is supported by competent evidence, and is
neither arbitrary, capricious, nor unreasonable.
4. Appeal and Error. An appellate court independently reviews questions
of law in appeals from the county court.
5. Statutes: Appeal and Error. Statutory interpretation presents a ques-
tion of law, for which an appellate court has an obligation to reach an
independent conclusion irrespective of the determination made by the
court below.
6. Misdemeanors. For purposes of 18 U.S.C. § 921(a)(33)(A) (2018), a
misdemeanor crime of domestic violence is a misdemeanor offense that
(1) has, as an element, the use of force and (2) is committed by a person
who has a specified domestic relationship with the victim.
7. Statutes: Words and Phrases. A divisible statute is a statute that sets
out one or more elements of the offense in the alternative.
8. Criminal Law: Statutes: Convictions. The circumstance-specific
approach applies where the underlying statute refers to specific circum-
stances rather than to generic crimes and allows a court to look beyond
the elements of the prior offense and consider the facts and circum-
stances underlying an offender’s conviction.
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Appeal from the District Court for Sarpy County, Stefanie
A. Martinez, Judge, on appeal thereto from the County
Court for Sarpy County, Todd J. Hutton, Judge. Judgment of
District Court affirmed.
Hugh I. Abrahamson, of Abrahamson Law Office, and
Phillip G. Wright for appellant.
No appearance for appellees.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Funke, J.
INTRODUCTION
In 2020, the Sarpy County, Nebraska, sheriff’s office denied
Nicholas N. Scalise’s application for a certificate to possess a
handgun. In doing so, the sheriff determined that Scalise’s prior
conviction for third degree assault qualified as a “misdemeanor
crime of domestic violence” under 18 U.S.C. § 922(g)(9)
(2018). Scalise filed a handgun appeal with the county court,
arguing that he had never been convicted of a crime of domes-
tic violence. The county court denied Scalise’s relief, as did
the district court on appeal. For reasons set forth herein, we
affirm the order of the district court, affirming the order of the
county court.
BACKGROUND
In 2018, Scalise was arrested and charged with strangulation
from an incident arising out of an argument with the victim.
Pursuant to a plea agreement, an amended criminal complaint
was filed, which charged Scalise with third degree assault, a
Class I misdemeanor, and alleged that Scalise “did intention-
ally, knowingly or recklessly cause bodily injury to, and/or
did threaten [the victim] in a menacing manner, in violation
of Section 28-310(1).” Scalise pled guilty to the amended
complaint and was sentenced to a term of probation. After
successfully completing probation in 2020, Scalise attempted
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to purchase a handgun, but was advised by the retailer that
he needed to obtain a permit from the Sarpy County sher-
iff’s office.
The Sarpy County sheriff’s office denied Scalise’s appli-
cation for a handgun certificate pursuant to Neb. Rev. Stat.
§ 69-2404 (Reissue 2016) and 18 U.S.C. 922(g)(9), finding
that Scalise’s conviction for third degree assault met the cri-
teria for domestic violence under federal law. Scalise then
filed an appeal pursuant to Neb. Rev. Stat. § 69-2406 (Reissue
2016) in the county court for Sarpy County, asserting that he
had never been convicted of domestic violence or a crime of
domestic violence.
At the hearing before the county court, the sheriff’s office
offered exhibit 1, which contained the following documents: the
amended complaint charging Scalise with third degree assault,
the order placing Scalise on probation, Scalise’s request for sat-
isfactory discharge from probation, the order releasing Scalise
from probation, incident reports from the Papillion, Nebraska,
police department, and the victim/witness statement.
Scalise offered exhibits 2, 3, and 4, which consisted of
the criminal complaint charging him with strangulation; the
amended complaint charging him with third degree assault; the
journal entry and order showing his entry of a guilty plea to
the amended charge; the complete transcript from the January
24, 2019, sentencing hearing; the order placing him on proba-
tion; his request for satisfactory discharge from probation; the
order releasing him from probation; the sheriff’s denial of his
application for a handgun certificate; and a copy of his hand-
gun appeal.
After the hearing, the county court issued an order deny-
ing the appeal and finding that the sheriff’s office acted in
accordance with state and federal law. In its order, the court
explained that § 922(g)(9) “prohibits any person who has been
convicted in any court of a misdemeanor crime of domestic
violence to . . . possess in or affecting commerce, any firearm
or ammunition.”
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In discussing what constitutes a domestic violence convic-
tion, the county court looked to the U.S. Supreme Court’s
opinion in United States v. Hayes, 1 which found that a domes-
tic relationship need not be a defining element of the predi-
cate offense under consideration when evaluating whether a
handgun certificate can properly be issued. Because Scalise
was convicted of third degree assault, which is a misdemeanor
under Neb. Rev. Stat. § 28-310 (Reissue 2016) that contains
elements of “[i]ntentionally, knowingly, or recklessly caus[ing]
bodily injury to another person” or “threatens another in a
menacing manner,” and because the adduced evidence showed
that Scalise and the victim of the assault were in a domestic
relationship, the court found the restrictions established by
§ 922(g)(9) apply to Scalise.
Scalise appealed to the district court, which entered an
opinion and order affirming the county court’s order and con-
cluding that the restrictions established by § 922(g)(9) apply
to Scalise, resulting in his ineligibility to obtain a handgun
certificate.
Scalise timely appealed, but the sheriff’s office declined to
file a brief in this appeal. We moved this case to our docket on
our own motion.
ASSIGNMENTS OF ERROR
Scalise assigns, consolidated, that the district court erred in
affirming the county court’s finding that Scalise’s third degree
assault conviction qualified as a predicate offense for the pur-
pose of a federal prohibition on firearms under § 922(g)(9).
Scalise also argues the court erred in failing to advise him that
if convicted, he would lose the right to bear arms. Scalise fur-
ther makes a number of constitutional arguments pertaining to
the Second Amendment to the U.S. Constitution, double jeop-
ardy, and due process.
1
United States v. Hayes, 555 U.S. 415, 129 S. Ct. 1079, 172 L. Ed. 2d 816
(2009).
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STANDARD OF REVIEW
[1-3] In an appeal from the county court general civil
docket, the district court acts as an intermediate appellate court
and not as a trial court. 2 Both the district court and a higher
appellate court generally review appeals from the county court
for error appearing on the record. 3 When reviewing a judgment
for errors appearing on the record, an appellate court’s inquiry
is whether the decision conforms to the law, is supported by
competent evidence, and is neither arbitrary, capricious, nor
unreasonable. 4
[4,5] We independently review questions of law in appeals
from the county court. 5 Statutory interpretation presents a
question of law, for which an appellate court has an obligation
to reach an independent conclusion irrespective of the determi-
nation made by the court below. 6
ANALYSIS
Applicable Federal Law
Scalise applied for his handgun certificate under § 69-2404.
However, § 69-2404 states that an applicant cannot obtain a
handgun certificate if the applicant is prohibited from pur-
chasing or possessing a handgun by § 922. Section 922(g)(9)
makes it unlawful for any person who has been convicted of a
“misdemeanor crime of domestic violence” to possess a fire-
arm. Under 18 U.S.C. § 921(a)(33)(A) (2018), the term “mis-
demeanor crime of domestic violence” means an offense that
(i) is a misdemeanor under Federal, State, or Tribal
law; and
(ii) has, as an element, the use or attempted use of
physical force, or the threatened use of a deadly weapon,
2
See In re Conservatorship of Mosel, 234 Neb. 86, 449 N.W.2d 220 (1989).
3
State v. Avey, 288 Neb. 233, 846 N.W.2d 662 (2014).
4
Id.
5
Id.
6
State v. Beitel, 296 Neb. 781, 895 N.W.2d 710 (2017).
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committed by a current or former spouse, parent, or
guardian of the victim, . . . by a person who is cohabiting
with or has cohabited with the victim as a spouse, parent,
or guardian, or by a person similarly situated to a spouse,
parent, or guardian of the victim.
[6] In Hayes, the U.S. Supreme Court simplified this
definition and determined that the most sensible reading of
§ 921(a)(33)(A) defines the term “misdemeanor crime of
domestic violence” as a misdemeanor offense that “(1) ‘has,
as an element, the use [of force],’ and (2) is committed by
a person who has a specified domestic relationship with the
victim.” 7 The Court emphasized that such definition does not
require the specified domestic relationship to be an element of
the predicate-offense statute. 8
In United States v. Castleman, 9 the U.S. Supreme Court
articulated the definition of the phrase “use of physical force”
for purposes of § 921(a)(33)(A). In Castleman, the appellant
pled guilty to “‘intentionally or knowingly caus[ing] bodily
injury’” to the mother of his child, in violation of Tennessee
state law. In a subsequent prosecution for being a prohib-
ited person in possession of a firearm, the appellant argued
his Tennessee conviction did not qualify as a “misdemeanor
crime of domestic violence” under § 922(g)(9), because it did
not have, as an element, the use of physical force. The U.S.
Supreme Court disagreed and held that the Tennessee statute
under which the appellant was convicted defined three types
of assault, one of which was “‘[i]ntentionally, knowingly or
recklessly caus[ing] bodily injury to another.’” 10 The Court
concluded that the appellant’s conviction qualified as a “‘mis-
demeanor crime of domestic violence’” because the appellant
7
Hayes, supra note 1, 555 U.S. at 426.
8
Id.
9
United States v. Castleman, 572 U.S. 157, 159, 134 S. Ct. 1405, 188 L.
Ed. 2d 426 (2014).
10
Id., 572 U.S. at 168 (quoting Tenn. Code Ann. § 39-13-101 (2006)).
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pleaded guilty to having “‘intentionally or knowingly cause[d]
bodily injury’” to the mother of his child and because the
knowing or intentional causation of bodily injury necessarily
involves the use of force. 11
Then, in Voisine v. United States, 12 the U.S. Supreme Court
extended the definition of the phrase “misdemeanor crime of
domestic violence” to include misdemeanor assault statutes
covering reckless conduct. In doing so, the Voisine Court held
that a statute which prohibits the reckless causing of bodily
injury also has, as an element, the use of physical force.
As such, in determining whether an applicant is prohibited
from possessing a firearm, a court must consider whether the
predicate conviction involved the use of force and whether the
offender and the victim were involved in a domestic relation-
ship. In making these determinations, a court is limited as to
what evidence can be considered.
Approaches
Federal courts have outlined three separate approaches a
court may employ in determining if a prior conviction qualifies
as a predicate offense to trigger a federal consequence. First,
the U.S. Supreme Court has developed and refined a method-
ology referred to as the “categorical approach” to determine
whether a person’s prior state conviction qualifies as a generic
federal offense described in the relevant statute. 13
Under the categorical approach, a court must determine only
whether the defendant was convicted under a criminal statute
11
Id., 572 U.S. at 169.
12
Voisine v. United States, 579 U.S. 686, 136 S. Ct. 2272, 195 L. Ed. 2d 736
(2016).
13
See, Gonzales v. Duenas-Alvarez, 549 U.S. 183, 127 S. Ct. 815, 166
L. Ed. 2d 683 (2007) (considering generic federal offenses for purposes
of immigration law); Taylor v. United States, 495 U.S. 575, 110 S. Ct.
2143, 109 L. Ed. 2d 607 (1990) (considering generic federal offenses for
purposes of Armed Career Criminal Act of 1984). See, also, Orellana v.
Mayorkas, 6 F.4th 1034 (9th Cir. 2021).
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that categorically matches the generic federal offense, without
considering the particular facts underlying the defendant’s con-
viction. 14 In doing so, the court considers only the statutory
language of the criminal statute of conviction and the generic
federal offense, and may not consider any evidence relating to
the defendant’s conduct. 15
[7] However, for the limited purpose of “help[ing to] imple-
ment the categorical approach,” the U.S. Supreme Court has
recognized a narrow range of cases in which courts may apply
a different approach: the modified categorical approach. 16
Courts may use the modified categorical approach only where
the criminal statute of conviction is divisible. 17 A divisible
statute is a statute that sets out one or more elements of the
offense in the alternative. 18
Under this approach, a court must determine “‘which of
the [alternative] statutory offenses . . . formed the basis of
the defendant’s conviction.’” 19 To make this determination,
a court may look to only a narrow category of documents,
colloquially known as Shepard documents, 20 such as “‘the
indictment or information and jury instructions or, if a guilty
plea is at issue, . . . the plea agreement, plea colloquy or some
comparable judicial record of the factual basis for the plea.’” 21
However, a court may not look at other evidence, such as
14
Orellana, supra note 13 (citing Taylor, supra note 13).
15
Id.
16
Descamps v. United States, 570 U.S. 254, 263, 133 S. Ct. 2276, 186 L. Ed.
2d 438 (2013).
17
Id.
18
Descamps, supra note 16.
19
Orellana, supra note 13, 6 F.4th at 1039 (quoting Descamps, supra note
16).
20
Shepard v. United States, 544 U.S. 13, 125 S. Ct. 1254, 161 L. Ed. 2d 205
(2005).
21
Orellana, supra note 13, 6 F.4th at 1040 (quoting Nijhawan v. Holder, 557
U.S. 29, 129 S. Ct. 2294, 174 L. Ed. 2d 22 (2009)).
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police reports or victim statements, to determine what crime
the defendant actually committed, because such review would
amount to a collateral trial and raise concerns pertaining to the
Sixth Amendment to the U.S. Constitution. 22
[8] More recently, in Nijhawan v. Holder, 23 the U.S.
Supreme court recognized a third approach: the “‘circum-
stance-specific’” approach. Such approach applies where the
underlying statute refers to specific circumstances, rather than
to generic crimes. This approach allows a court to look beyond
the elements of the prior offense and consider the “facts and
circumstances underlying an offender’s conviction.” 24 One
indication that a statute refers to specific circumstances rather
than to generic crimes is statutory language focusing on
“the conduct involved ‘in’” rather than “the elements of ” an
offense. 25 For example, the Nijhawan Court stated that the
Immigration and Nationality Act provides for the deporta-
tion of any alien convicted of an aggravated felony. Under
this act, the definition of “‘aggravated felony’” includes “‘an
offense that . . . involves fraud or deceit in which the loss
to the victim or victims exceeds $10,000.’” 26 In Nijhawan,
the U.S. Supreme Court determined that this particular pro-
vision in the Immigration and Nationality Act invoked the
circumstance-specific approach because the words “in which”
could refer to “the conduct involved ‘in’ the commission
of the offense of conviction, rather than to the elements of
the offense.” 27
A statute may also present a hybrid situation in which one
section of the statute is governed by one approach, while
22
See Orellana, supra note 13 (citing Shepard, supra note 20).
23
Nijhawan, supra note 21, 557 U.S. at 34.
24
Id. Accord U.S. v. White, 782 F.3d 1118 (10th Cir. 2015).
25
Nijhawan, supra note 21, 557 U.S. at 39. See, also, Bogle v. Garland, 21
F.4th 637 (9th Cir. 2021).
26
Nijhawan, supra note 21, 557 U.S. at 32.
27
Id., 557 U.S. at 39 (emphasis omitted).
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another is subject to a different approach. For example,
although not expressly stated, it appears that the Hayes Court
employed a hybrid approach by applying the circumstance-spe-
cific approach to the specific domestic relationship requirement
and the categorical approach to the “use of physical force”
requirement. 28
Further, in U.S. v. Doss, 29 the Ninth Circuit analyzed 18
U.S.C. § 3559(e)(1) (2018), which delineates federal sentenc-
ing guidelines for repeat sex offenders and provides for a man-
datory minimum life sentence for certain federal sex offenses
if the defendant has a “prior sex conviction in which a minor
was the victim.” Relying on the U.S. Supreme Court’s rea-
soning in Nijhawan, the Doss court concluded that § 3559(e)
presents a hybrid situation because while the phrase “a prior
sex offense conviction” requires application of the categorical
approach, the phrase “in which a minor was the victim” calls
for application of the circumstance-specific approach.
Thus, like § 3559(e), § 921(a)(33)(A)(ii) also implicates
the hybrid approach employed in Hayes and Doss. Here, as
mentioned earlier, § 921(a)(3)(A)(ii) can be broken into two
parts. One provision requires that the predicate offense be
committed by a current or former spouse, parent, or guard-
ian of the victim, by a person with whom the victim shares a
child in common, by a person who is cohabiting with or has
cohabited with the victim as a spouse, parent, or guardian, or
by a person similarly situated to a spouse, parent, or guardian
of the victim. Federal circuit courts generally agree that Hayes
can be construed as using a circumstance-specific approach to
28
See United States v. Hayes, supra note 1. See, also, U.S. v. Price, 777
F.3d 700 (4th Cir. 2015) (stating that Hayes Court reasoned that legislative
history supported use of factual analysis on specific issue of domestic
relationship); U.S. v. Gonzalez-Medina, 757 F.3d 425 (5th Cir. 2014)
(characterizing Hayes as holding that domestic relationship requirement
need not be element of predicate statute of conviction and could be
determined under circumstance-specific approach).
29
U.S. v. Doss, 630 F.3d 1181 (9th Cir. 2011).
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determine the existence of the specified domestic relationship
as required by § 921(a)(33)(A)(ii). In reaching these conclu-
sions, federal circuit courts considered the statutory language
(“committed by”), the broad Congressional purpose of the
law, and the fact that only one-third of states had criminal
statutes that specifically proscribed domestic violence when
the provision was enacted. 30
By contrast, the other provision in § 921(a)(3)(A)(ii) requires
that the predicate offense has, as an element, “the use or
attempted use of physical force.” Although the Hayes court
employed the categorical approach to the second provision,
such approach is not appropriate here, because § 28-310(1) is
a divisible statute.
Under § 28-310(1), a person commits third degree assault
under two enumerated alternatives: “(a) Intentionally, know-
ingly, or recklessly causes bodily injury to another person;
or (b) [t]hreatens another in a menacing manner.” Because
§ 28-310(1) sets out one or more elements of the offense in the
alternative, the statute is a divisible statute. Though a convic-
tion secured under alternative (a) may trigger the prohibition
on firearms under federal law, a conviction under alternative
(b) will not.
As such, when considering an appeal from the denial of
an application for a handgun certificate, Nebraska courts
should employ the circumstance-specific approach to the
specified domestic relationship requirement, but employ the
modified categorical approach to the “use of physical force”
requirement.
Application
In this matter, Scalise’s primary argument is that his third
degree assault conviction under § 28-310 does not qualify as a
misdemeanor crime of domestic violence because he was not
convicted of domestic assault under Neb. Rev. Stat. § 28-323
30
Gonzalez-Medina, supra note 28 (citing Hayes, supra note 1).
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(Reissue 2016) and because the sentencing court did not make
a finding of a domestic relationship.
In making this argument, Scalise fails to appreciate that
§ 921(a)(33)(A)(ii)’s definition of the phrase “misdemeanor
crime of domestic violence” does not require that the predicate
conviction be one of domestic assault or domestic violence.
Rather, the federal statute simply requires that the predicate
conviction have, as an element, the use of physical force and
be committed by a person who has a specified domestic rela-
tionship with the victim. 31 As such, a conviction under either
§ 28-310 or § 28-323 can satisfy the definition of a misde-
meanor crime of domestic violence depending on the circum-
stances of the offense. Further, to the extent Scalise argues that
§ 28-310 does not have a domestic relationship element, such
argument is negated by the fact that the circumstance-specific
approach, applicable to the domestic relationship requirement
of § 921(a)(33)(A)(ii), allows us to look beyond the elements
of § 28-310.
Specifically, the circumstance-specific approach allows this
court to go beyond the limited universe of Shepard docu-
ments 32 and to the facts and circumstances underlying Scalise’s
conviction for third degree assault. 33 Contrary to Scalise’s
claim that the evidence does not establish a domestic relation-
ship between himself and the victim, the police department’s
incident report, as well as the victim/witness statement, estab-
lishes that Scalise and the victim were in a dating relationship
for approximately 5 years, which included cohabitation for a
period of time.
Additionally, Scalise’s reliance on the definition of “intimate
partner” in § 28-323(8) to support his argument is misplaced
and erroneous. Section 28-323(8) states:
31
See Hayes, supra note 1.
32
Shepard, supra note 20.
33
See Lindo v. Secretary, U.S. Department of Homeland Security, 766 Fed.
Appx. 897 (11th Cir. 2019). See, also, Nijhawan, supra note 21.
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For purposes of this section, intimate partner means
a spouse; a former spouse; persons who have a child
in common whether or not they have been married or
lived together at any time; and persons who are or were
involved in a dating relationship. For purposes of this
subsection, dating relationship means frequent, intimate
associations primarily characterized by the expectation of
affectional or sexual involvement, but does not include
a casual relationship or an ordinary association between
persons in a business or social context.
(Emphasis supplied.) It is clear that § 28-323(8)’s definition
of “intimate partner” is for purposes of that particular statute
and has no bearing on our analysis under § 921(a)(33)(A)(ii).
Thus, the district court properly found that Scalise’s conviction
satisfies the domestic relationship requirement of § 921(a)(33).
This assignment of error is without merit.
In regard to the “use of physical force” requirement, Scalise
assigns that the “trial court failed to determine if [his] simple
assault conviction contained the necessary elements of know-
ingly or recklessly causing bodily injury.” However, in his
brief, he makes no arguments regarding this assigned error.
Instead, he focuses on the alleged errors as to his relation-
ship with the victim. In order to be considered by an appellate
court, an alleged error must be both specifically assigned and
specifically argued in the brief of the party asserting the error. 34
Accordingly, we will not address this argument.
Notice Requirement
Scalise further contends that the county court failed to give
him notice that his conviction could prevent him from pos-
sessing a handgun in the future as required by Neb. Rev. Stat.
§ 29-2291(1) (Reissue 2016). Section 29-2291(1) provides:
When sentencing a person convicted of a misdemeanor
crime of domestic violence as defined in 18 U.S.C.
34
Humphrey v. Smith, 311 Neb. 632, 974 N.W.2d 293 (2022).
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921(a)(33), as such section existed on July 18, 2008,
the court shall provide written or oral notification to the
defendant that it may be a violation of federal law for the
individual: To ship or transport in interstate or foreign
commerce, or possess in or affecting commerce, any fire-
arm or ammunition; or to receive any firearm or ammuni-
tion which has been shipped or transported in interstate or
foreign commerce.
The record before us clearly shows that the court gave
Scalise the requisite advisement pursuant to § 29-2291. As
such, this assignment of error is meritless.
Remaining Assignments of Error
Lastly, as previously mentioned, Scalise assigned as error
a number of constitutional arguments concerning the Second
Amendment, double jeopardy, and due process. We decline
to address these assignments of error because neither the
county court nor the district court addressed Scalise’s constitu-
tional claims. A constitutional issue not presented to or passed
upon by the trial court is not appropriate for consideration
on appeal. 35
CONCLUSION
For the foregoing reasons, the district court did not err
in affirming the county court’s denial of Scalise’s handgun
appeal.
Affirmed.
35
State v. Boche, 294 Neb. 912, 885 N.W.2d 523 (2016).
Stacy, J., concurring.
The majority opinion provides much‑needed guidance on the
requirement in Neb. Rev. Stat. § 69‑2404 (Reissue 2016) that
applicants who are “prohibited from purchasing or possess-
ing a handgun by 18 U.S.C. 922” shall not receive a handgun
certificate. I agree in all respects with the majority’s analysis
and disposition, but write separately to highlight some of the
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procedural questions that remain unanswered in appeals from
the denial of handgun certificates.
This appeal is authorized by Neb. Rev. Stat. § 69‑2406
(Reissue 2016), which provides, in full:
Any person who is denied a certificate, whose certifi-
cate is revoked, or who has not been issued a certificate
upon expiration of the three‑day period may appeal
within ten days of receipt of the denial or revocation to
the county court of the county of the applicant’s place
of residence. The applicant shall file with the court the
specific reasons for the denial or revocation by the chief
of police or sheriff and a filing fee of ten dollars in
lieu of any other filing fee required by law. The court
shall issue its decision within thirty days of the filing of
the appeal.
Although this statute affords individuals the right to appeal to
the county court from the denial or revocation of a handgun
certificate, it is largely silent on the procedure for such an
appeal. Who are the parties of record in such an appeal? Must
the chief of police or sheriff be served with a notice of the
appeal? What does the appellate record consist of and who has
the responsibility to prepare it? Is it appropriate to hold an evi-
dentiary hearing before the county court? Is the decision of the
chief of police or sheriff reviewed by the county court de novo,
reviewed for errors appearing on the record, or reviewed for an
abuse of discretion? What relief is the county court authorized
to order? 1 These procedural questions are not addressed in
§ 69‑2406, and they are not adequately addressed in any other
statute setting out default appeal procedures.
Neb. Rev. Stat. § 25‑1937 (Reissue 2016) addresses the
default procedure for appeals “[w]hen the Legislature enacts
1
Compare Neb. Rev. Stat. § 84‑917 (Reissue 2016) (providing that in
appeals under Administrative Procedure Act district court “may affirm,
reverse, or modify the decision of the agency or remand the case for
further proceedings”).
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a law providing for an appeal without providing the procedure
therefor . . . .” It provides that “the procedure for appeal to the
district court shall be the same as for appeals from the county
court to the district court in civil actions” and states that in
such appeals, “[t]rial in the district court shall be de novo upon
the issues made up by the pleadings in the district court.” 2
But § 25‑1937 does not describe the appellate procedure or
standard of review for appeals that are to be initiated in county
court, as set forth in § 69‑2406.
Neb. Rev. Stat. § 25‑2701 (Reissue 2016) provides a proce-
dure for county courts to follow when no other specific proce-
dure has been enumerated by the Legislature. It provides:
All provisions in the codes of . . . civil procedure govern-
ing actions and proceedings in the district court not in
conflict with statutes specifically governing procedure in
county courts and related to matters for which no specific
provisions have been made for county courts shall govern
and apply to all actions and proceedings in the county
court. 3
While helpful, § 25‑2701 does not fill the procedural void
created by § 69‑2406. This is so because the statutory proce-
dures for appeals before the district court either conflict with
the limited statutory procedures announced in § 69‑2406 4 or
do not fit the statutory scheme described by § 69‑2406, under
2
§ 25‑1937.
3
§ 25‑2701.
4
Compare § 69‑2406 (providing that applicant has 10 days to appeal from
decision or revocation and must “file with the court the specific reasons
for the denial or revocation,” as well as pay filing fee of $10) with Neb.
Rev. Stat. § 25‑2729 (Cum. Supp. 2020) (providing that appealing party
has 30 days after entry of county court judgment or final order to file
notice of appeal with clerk of county court and deposit docket fee), Neb.
Rev. Stat. § 25‑2733 (Reissue 2016) (providing that “the district court
shall review the case for error appearing on the record made in the county
court”), and § 25‑1937 (providing that “[t]rial in the district court shall be
de novo upon the issues made up by the pleadings in the district court”)
(emphasis supplied).
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which there is no judgment or final order from which to appeal.
Under the existing provisions of § 69‑2406, it is not even clear
whether the county court has a record to review beyond the
applicant’s description of the “specific reasons for the denial or
revocation by the chief of police or sheriff.” 5
Section 69‑2406 was intended to give applicants an expe-
dited appeal process when a handgun certificate is denied or
revoked by the chief of police or the sheriff. But until the
Legislature establishes a clear statutory procedure to govern
such appeals, there will be continued uncertainty and a lack of
uniformity in how these appeals are processed and resolved in
the county courts.
Cassel, J., joins in this concurrence.
5
See § 69‑2406. But, see, 272 Neb. Admin. Code, ch. 22, § 006.03 (2022)
(“[t]he agency to which an application was made will preserve evidence
of the reason(s) for denial or revocation for at least 30 days, should the
applicant appeal the denial or revocation”). Cf. Neb. Rev. Stat. § 69‑2414
(prescribing procedure for applicants denied right to purchase or receive
handgun to petition Nebraska State Patrol requesting “amendment of the
record pertaining to him or her”). | 01-04-2023 | 11-18-2022 |
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11/18/2022 01:08 AM CST
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MID AMERICA AGRI PRODS. v. PERKINS CTY. BD. OF EQUAL.
Cite as 312 Neb. 341
Mid America Agri Products/Wheatland
Industries LLC, appellant, v.
Perkins County Board of
Equalization, appellee.
___ N.W.2d ___
Filed August 26, 2022. No. S-21-944.
1. Taxation: Judgments: Appeal and Error. Appellate courts review
decisions rendered by the Tax Equalization and Review Commission for
errors appearing on the record.
2. Judgments: Appeal and Error. When reviewing a judgment for errors
appearing on the record, an appellate court’s inquiry is whether the deci-
sion conforms to the law, is supported by competent evidence, and is
neither arbitrary, capricious, nor unreasonable.
3. Taxation: Appeal and Error. Questions of law arising during appellate
review of the Tax Equalization and Review Commission’s decisions are
reviewed de novo on the record.
4. Statutes. Statutory interpretation presents a question of law.
5. Administrative Law: Statutes. Agency regulations properly adopted
and filed with the Secretary of State of Nebraska have the effect of
statutory law.
6. Taxation: Property: Valuation: Statutes: Time: Dismissal and
Nonsuit. When a protest of property valuation is not timely filed on or
before June 30 as required under Neb. Rev. Stat. § 77-1502(1) (Reissue
2018), the county board of equalization lacks statutory authority to
review and decide the merits of the protest, and it does not have statu-
tory authority to do anything other than dismiss the protest.
7. Courts: Words and Phrases. A court generally does not read the use of
the terms “must” and “shall” as permissive rather than mandatory.
8. Taxation: Property: Valuation: Time: Appeal and Error. When a
county board of equalization lacks authority to review and decide a
protest of property valuation on the merits because the protest was not
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timely filed, the Tax Equalization and Review Commission likewise
lacks authority to review the merits of the protest.
Appeal from the Tax Equalization and Review Commission.
Affirmed.
Frederick D. Stehlik and Zachary W. Lutz-Priefert, of Gross,
Welch, Marks & Clare, P.C., L.L.O., for appellant.
Timothy L. Moll, of Rembolt Ludtke, L.L.P., for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Miller-Lerman, J.
NATURE OF CASE
The Perkins County Board of Equalization (the Board) dis-
missed the 2021 property valuation protest of Mid America
Agri Products/Wheatland Industries LLC (Wheatland) because
it was not timely filed. The Tax Equalization and Review
Commission (TERC) affirmed the dismissal. Wheatland
appeals. Wheatland argues that the statutory deadline for
filing a protest may be waived by a board of equalization
and that the Board waived the deadline in this case because
it allegedly accepted the protest and heard argument on the
merits of the protest. We affirm TERC’s order which affirmed
the dismissal.
STATEMENT OF FACTS
Wheatland owns a parcel of real estate in Perkins County.
The Perkins County assessor changed the valuation of the
property for the 2018 tax year and again for the 2019 tax year,
and each of these years the assessor sent Wheatland a notice
of valuation change. Wheatland filed timely protests to the
valuations for both 2018 and 2019. The valuation for the 2019
tax year was $13,385,246.
For the 2020 tax year, the assessor did not change the valu-
ation of the property and therefore did not send Wheatland a
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Cite as 312 Neb. 341
notice of valuation change. However, Wheatland filed a timely
protest to the 2020 valuation. The Board denied Wheatland’s
protests for the 2018, 2019, and 2020 tax years. Wheatland
appealed the denials to TERC, and those appeals were still
pending at the time of the dismissal of the 2021 protest at
issue in this appeal.
For the 2021 tax year, the assessor again maintained the
valuation of Wheatland’s property from 2019 and 2020. The
assessor therefore did not send a notice of valuation change.
On July 1, 2021, Wheatland’s attorney hand delivered a prop-
erty valuation protest form to the Perkins County clerk. The
clerk received the protest on that date, but on July 2, the clerk
sent a letter to Wheatland informing it that it had missed the
June 30 deadline to file a protest and that therefore, the protest
would not be heard by the Board. The Board maintains that
the 2021 protest was automatically dismissed by operation
of law.
Notwithstanding the clerk’s letter, Wheatland’s attorney
attended the July 19, 2021, meeting of the Board. Wheatland
asserts that despite claiming that its protest was not timely,
the Board discussed Wheatland’s protest of the 2021 valua-
tion at the July 19 meeting. To the contrary, the Board asserts
that it did not discuss the 2021 valuation, but, instead, that
it discussed a TERC hearing that had been held on July
12 concerning Wheatland’s appeals of the 2018, 2019, and
2020 valuations.
Wheatland appealed to TERC and claimed that the asses-
sor’s failure to give notice prevented Wheatland from timely
filing its protest. TERC thereafter entered an order to show
cause and notice of hearing in which it ordered that a “hear-
ing must be held to determine whether [TERC] has jurisdic-
tion over this matter.” TERC set a hearing date and stated
that the hearing would only address the jurisdictional issue
and that a separate hearing on the valuation of the property
would be scheduled at a later date if TERC determined it
had jurisdiction.
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MID AMERICA AGRI PRODS. v. PERKINS CTY. BD. OF EQUAL.
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After the hearing, TERC filed an “Order for Dismissal” on
October 27, 2021. TERC began its analysis by citing Neb.
Rev. Stat. § 77-5013(1) (Reissue 2018), which provides the
requirements for TERC to obtain exclusive jurisdiction over an
appeal. TERC further stated it could not “acquire jurisdiction
over an issue if the body from which the appeal is taken had no
jurisdiction of the subject matter.”
Turning to the timeliness of Wheatland’s protest, TERC
rejected Wheatland’s contention to the effect that it could not
timely file its protest because the assessor failed to provide
notice of the 2021 valuation. TERC stated that the assessor
was not required to send Wheatland a notice for the tax year
2021 because the assessed valuation of Wheatland’s property
was not changed from the prior year. See Neb. Rev. Stat.
§ 77-1315(2) (Reissue 2018).
TERC stated that a statutory remedy existed to challenge a
property’s assessment, and it cited Neb. Rev. Stat. § 77-1502(1)
(Reissue 2018), which provides that “[p]rotests regarding real
property shall be signed and filed . . . on or before June 30.”
TERC also noted 350 Neb. Admin. Code, ch. 10, § 003.03A
(2014), which provides in part that “[i]f the protest is not
timely filed, it will automatically be dismissed.”
In its order, TERC stated that Wheatland did not file its
protest on or before June 30, 2021, and that Wheatland did
not dispute that its filing on July 1 was late. TERC noted that
Wheatland nevertheless argued that the Board “waived any
issues concerning the timeliness of the protest by ‘accepting’
the protest.” Wheatland asserted that the Board accepted the
protest when the clerk received the protest that its attorney had
hand delivered on July 1 and told the attorney the date that
the Board would hold a hearing on protests. Wheatland also
asserted that the Board discussed Wheatland’s protest at the
July 19 hearing. TERC noted in its order that witnesses dis-
agreed as to whether Wheatland’s protest of the 2021 valuation
was discussed at the Board’s hearing and that two members
of the Board attested they had discussed Wheatland’s appeals
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of the 2018, 2019, and 2020 valuations but had not discussed
the 2021 valuation. TERC stated that a preponderance of the
evidence did not support a finding that the Board had con-
sidered Wheatland’s protest of the 2021 valuation. But TERC
determined that whether or not the Board had considered the
protest, TERC consistently applied the rule that subject matter
jurisdiction may not be created by waiver, estoppel, consent,
or conduct of the parties. TERC further stated that equitable
estoppel was not normally applied in administrative proceed-
ings, that TERC did not have equitable power, and that even if
it had equitable power, the statutes regarding protests provided
an adequate remedy at law.
In its order, TERC concluded that the Board correctly dis-
missed Wheatland’s protest because the protest was not timely
filed. TERC cited Village at North Platte v. Lincoln Cty. Bd. of
Equal., 292 Neb. 533, 873 N.W.2d 201 (2016), for the proposi-
tion that when a statute requires a county board of equalization
to dismiss a protest, the county board does not have authority
to do anything except dismiss the protest. TERC further stated
that “[w]hen a county board correctly dismisses a protest
because it lacked statutory authority to hear the protest on the
merits, [TERC] should decline to reach the merits of the appeal
and affirm the dismissal of the county board.” TERC therefore
affirmed the Board’s dismissal of the protest and dismissed
Wheatland’s appeal with prejudice.
Wheatland appeals TERC’s order.
ASSIGNMENT OF ERROR
Wheatland claims, restated, that TERC erred when it
affirmed the Board’s dismissal of Wheatland’s protest because
the 2021 protest had not been timely filed.
STANDARDS OF REVIEW
[1,2] Appellate courts review decisions rendered by TERC
for errors appearing on the record. Betty L. Green Living Trust
v. Morrill Cty. Bd. of Equal., 299 Neb. 933, 911 N.W.2d 551
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(2018). When reviewing a judgment for errors appearing on
the record, an appellate court’s inquiry is whether the decision
conforms to the law, is supported by competent evidence, and
is neither arbitrary, capricious, nor unreasonable. Id.
[3,4] Questions of law arising during appellate review of
TERC’s decisions are reviewed de novo on the record. Id.
Statutory interpretation presents a question of law. County of
Webster v. Nebraska Tax Equal. & Rev. Comm., 296 Neb. 751,
896 N.W.2d 887 (2017).
ANALYSIS
Wheatland claims that TERC erred when it affirmed the
Board’s dismissal of Wheatland’s protest because the filing
of the protest was late. Wheatland argues that its filing of the
protest on July 1, 2021, did not deprive the Board of authority
to consider the protest because the June 30 deadline set forth
in § 77-1502(1) is merely “an administrative timeline which
an administrative agency has the ability to waive.” Brief for
appellant at 9. Wheatland further argues that the Board waived
the June 30 requirement, because it accepted the protest and
heard argument on the protest, and that therefore, TERC had
jurisdiction to review the valuation on its merits. We disagree
with Wheatland’s contention that the June 30 requirement may
be waived, and we conclude that because the Board did not
err when it dismissed the protest, TERC did not err when it
affirmed the dismissal.
In its order, TERC relied largely on Village at North Platte
v. Lincoln Cty. Bd. of Equal., 292 Neb. 533, 873 N.W.2d 201
(2016). In Village at North Platte, the taxpayer filed a protest
that did not meet a requirement of § 77-1502(2) because it
did not include “a statement of the reason or reasons why the
requested change [in valuation] should be made.” We noted
that § 77-1502(2) provided that if a protest failed to “contain
or have attached the statement of the reason or reasons for the
protest . . . the protest shall be dismissed by the county board
of equalization.” We determined in Village at North Platte
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that because the taxpayer failed to include a statement of
reason or reasons, the board in that case “did not have [statu-
tory] authority to do anything other than dismiss the protest.”
292 Neb. at 540, 873 N.W.2d at 206. We further reasoned in
Village at North Platte that because the board “lacked author-
ity to hear the taxpayer’s . . . protest on the merits of the
valuation, TERC likewise lacked authority to do so.” 292 Neb.
at 541, 873 N.W.2d at 207. We concluded that the board in
Village at North Platte “lacked statutory authority to take any
other action” than to dismiss the protest and that therefore,
TERC “correctly declined to reach the merits of the appeal
regarding the property’s value.” 292 Neb. at 542, 873 N.W.2d
at 208.
[5] In the present case, Wheatland failed to meet the require-
ment in § 77-1502(1) that a protest “regarding real property
shall be signed and filed . . . on or before June 30.” Unlike
§ 77-1502(2) with regard to the required statement of reason or
reasons at issue in Village at North Platte, § 77-1502(1) does
not specifically state that a protest that fails to meet the June
30 filing requirement must be dismissed by the county board of
equalization. However, as TERC noted in its order, the applica-
ble regulation, § 003.03A, provides in part that “[i]f the protest
is not timely filed, it will automatically be dismissed.” Agency
regulations properly adopted and filed with the Secretary of
State of Nebraska have the effect of statutory law. Ash Grove
Cement Co. v. Nebraska Dept. of Rev., 306 Neb. 947, 947
N.W.2d 731 (2020).
[6] We determine that our reasoning in Village at North
Platte regarding the statutory requirements in § 77-1502
logically applies to the statutory requirement that a protest
must be filed on or before June 30. Section 77-1502 pro-
vides the statutory authority for a county board of equaliza-
tion to review and decide protests, and the requirements of
the statute must be met in order for a board to exercise that
authority. Section 77-1502 requires that a protest must be
filed on or before June 30 in order for a board to exercise the
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authority. Furthermore, the applicable regulation, § 003.03A,
specifically provides that a protest that is not timely filed will
“automatically be dismissed.” Therefore, when a protest of
property valuation is not timely filed on or before June 30,
the county board of equalization lacks statutory authority to
review and decide the merits of the protest, and it does not
have statutory authority to do anything other than dismiss
the protest.
Wheatland argues in this case that the Board could, and did,
waive the June 30 requirement when it allegedly accepted the
protest and heard argument on the protest. We note that TERC
stated that the preponderance of the evidence did not support
Wheatland’s assertion that the Board heard argument on the
protest; instead, two Board members attested that the Board
discussed Wheatland’s appeals to TERC of prior years’ valua-
tions but did not discuss the protest of the 2021 valuation. With
regard to Wheatland’s assertion that the Board accepted the
protest, we note that after receiving the protest from Wheatland
on July 1, the clerk sent a letter the next day stating that the
protest was late and would not be heard.
[7] TERC found that the Board did not “waive” the filing
deadline, and such filing is supported by the record. However,
whether or not the Board attempted to waive the June 30
requirement in this case, the Board did not have authority to
do so. Wheatland argues that “shall” as used in § 77-1502(1)
indicates merely a directory, rather than a mandatory, require-
ment and that as such, the requirement may be waived. We
disagree. We have stated that we generally do not read the use
of the terms “must” and “shall” as permissive rather than man-
datory. See, Williams v. Williams, 311 Neb. 772, 975 N.W.2d
523 (2022); Karo v. NAU Country Ins. Co., 297 Neb. 798, 901
N.W.2d 689 (2017). The requirement in § 77-1502(1) that the
protest “shall” be filed on or before June 30 is mandatory,
and timely filing is required in order to give the Board statu-
tory authority to consider a protest. The mandatory nature of
this requirement is bolstered by the regulation, § 003.03A,
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requiring that if the protest is not timely filed, the protest is
automatically dismissed.
[8] Because the Board was required to dismiss the pro-
test, we determine that it was proper for TERC to affirm
the Board’s dismissal of Wheatland’s protest. Similar to our
reasoning in Village at North Platte v. Lincoln Cty. Bd. of
Equal., 292 Neb. 533, 873 N.W.2d 201 (2016), we conclude
that when a county board of equalization lacks authority to
review and decide a protest of property valuation on the mer-
its because the protest was not timely filed, TERC likewise
lacks authority to review the merits of the protest. Because a
county board of equalization lacks statutory authority to take
any other action than to dismiss a protest that is not timely
filed, TERC, as it did in this case, should decline to reach the
merits of the appeal of a proper dismissal and instead should
affirm the dismissal.
Although we read TERC’s order as affirming the Board’s
dismissal of the protest, there is language in TERC’s order
referring to “jurisdiction” and stating that the appeal must be
dismissed for lack of jurisdiction. We noted similar references
to jurisdiction in Village at North Platte; we recognized that
TERC’s jurisdiction over an appeal is derived from § 77-5013,
which we described as providing that
TERC obtains exclusive jurisdiction over an appeal when:
(1) TERC has the power or authority to hear the appeal;
(2) the appeal is timely filed; (3) the filing fee, if applica-
ble, is timely received and thereafter paid; and (4) a copy
of the decision, order, determination, or action appealed
from, . . . is timely filed.
292 Neb. at 540, 873 N.W.2d at 206-07. We further observed
in Village at North Platte that § 77-5013(1) provides that
“‘[o]nly the requirements of this subsection shall be deemed
jurisdictional’” and that TERC “has the power and duty to hear
and determine appeals of any decision of any county board of
equalization” so long as jurisdictional requirements are met.
292 Neb. at 540, 873 N.W.2d at 207. See, similarly, Karo v.
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NAU Country Ins. Co., 297 Neb. at 810, 901 N.W.2d at 697,
698 (noting distinction between “jurisdictional” and “‘claim-
processing rules’”).
In Village at North Platte, we acknowledged the proposi-
tion that if the court from which an appeal was taken lacked
jurisdiction, then the appellate court acquires no jurisdiction,
and we determined that a “comparable rule” was applicable
with regard to appeals to TERC from decisions of boards of
equalization. 292 Neb. at 541, 873 N.W.2d at 207. We stated
that when a board of equalization lacks authority to hear a
protest on the merits, TERC likewise lacks authority to do
so. In the present case, although it made references to “juris-
diction,” TERC properly recognized that because the Board
lacked statutory authority to review Wheatland’s protest on
the merits, TERC also lacked authority to review the merits
of the protest. TERC therefore properly affirmed the Board’s
dismissal of the protest.
CONCLUSION
The Board properly dismissed Wheatland’s protest of the
2021 property valuation because the protest was filed after the
statutory June 30 deadline, and we therefore affirm TERC’s
order which affirmed the Board’s dismissal of Wheatland’s
2021 protest.
Affirmed. | 01-04-2023 | 11-18-2022 |
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11/18/2022 01:07 AM CST
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STATE V. VANDERFORD
Cite as 312 Neb. 580
State of Nebraska, appellee, v.
Christine E. Vanderford, appellant.
___ N.W.2d ___
Filed October 14, 2022. No. S-20-849.
1. Trial: Convictions: Evidence: Appeal and Error. An appellate court
will sustain a conviction in a bench trial of a criminal case if the prop-
erly admitted evidence, viewed and construed most favorably to the
State, is sufficient to support that conviction. In making this determina-
tion, an appellate court does not resolve conflicts in the evidence, pass
on the credibility of witnesses, evaluate explanations, or reweigh the
evidence presented, because these are within a fact finder’s province for
disposition. Instead, the relevant question is whether, after viewing the
evidence in the light most favorable to the prosecution, any rational trier
of fact could have found the essential elements of the crime beyond a
reasonable doubt.
2. Statutes: Appeal and Error. Statutory interpretation presents a ques-
tion of law, for which an appellate court has an obligation to reach an
independent conclusion irrespective of the decision made by the court
below.
3. Statutes. Statutory analysis begins with the text.
4. Statutes: Appeal and Error. Statutory language is to be given its plain
and ordinary meaning, and an appellate court will not resort to inter-
pretation to ascertain the meaning of statutory words which are plain,
direct, and unambiguous.
5. Statutes. It is not within the province of the courts to read meaning
into a statute that is not there or to read anything direct and plain out of
a statute.
6. Statutes: Legislature: Intent. Components of a series or collection of
statutes pertaining to a certain subject matter may be conjunctively con-
sidered and construed to determine the intent of the Legislature so that
different provisions of an act are consistent, harmonious, and sensible.
7. Criminal Law: Statutes. Penal statutes must be strictly construed and
are considered in the context of the object sought to be accomplished,
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the evils and mischiefs sought to be remedied, and the purpose sought
to be served. A penal statute will not be applied to situations or parties
not fairly or clearly within its provisions.
8. ____: ____. To determine the elements of a crime, courts look to the text
of the enacting statute.
9. Criminal Law: Intent: Words and Phrases. A person commits the
crime of exploiting a vulnerable adult under Neb. Rev. Stat. § 28-386
(Reissue 2016) by knowingly and intentionally engaging in an act which
causes or permits a “vulnerable adult,” as that term is defined in Neb.
Rev. Stat. § 28-371 (Reissue 2016), to be subjected to “exploitation,” as
that term is defined in Neb. Rev. Stat. § 28-358 (Reissue 2016).
10. Criminal Law: Statutes: Words and Phrases. Although the statutory
definition of exploitation in Neb. Rev. Stat. § 28-358 (Reissue 2016) is
broad enough to encompass what might generally be described as finan-
cial exploitation, it is by no means limited to only financial crimes.
11. Appeal and Error. An appellate court is not obligated to engage in an
analysis that is not necessary to adjudicate the case and controversy
before it.
12. ____. An alleged error must be both specifically assigned and specifi-
cally argued in the brief of the party asserting the error to be considered
by an appellate court.
13. Convictions. A conviction on one count cannot be overturned merely
because it is inconsistent with the fact finder’s decision not to convict
on another count.
14. Criminal Law: Trial: Judges. A trial judge sitting without a jury is not
required to articulate findings of fact or conclusions of law in crimi-
nal cases.
15. Trial. In civil cases, parties may ask a court to make specific findings
under Neb. Rev. Stat. § 25-1127 (Reissue 2016), but that statute has no
application to criminal proceedings.
Appeal from the District Court for Lancaster County:
Robert R. Otte, Judge. Affirmed.
Robert B. Creager, of Anderson, Creager & Wittstruck, P.C.,
for appellant.
Douglas J. Peterson, Attorney General, and Melissa R.
Vincent for appellant.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
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Stacy, J.
Following a bench trial, Christine E. Vanderford was found
guilty of exploiting a vulnerable adult, in violation of Neb. Rev.
Stat. § 28-386 (Reissue 2016). The district court sentenced her
to 5 years’ probation. Vanderford appeals, and we affirm.
I. BACKGROUND
At the time of the events giving rise to the criminal charges
in this case, Vanderford was a licensed attorney in Lincoln,
Nebraska. On December 5, 2019, she was charged with exploi-
tation of a vulnerable adult (a Class IIIA felony) and theft by
deception, $5,000 or more (a Class IIA felony). The State later
amended the theft charge to theft by unlawful taking, $5,000 or
more (a Class IIA felony).
As relevant to the exploitation charge, the information
alleged that Vanderford “on, about, or between July 8, 2014
and February 28, 2018, in the County of Lancaster and State
of Nebraska, then and there being, through a knowing and
intentional act, did cause or permit a vulnerable adult or senior
adult to be exploited.” The exploitation charges were based
on Vanderford’s conduct while serving as a court-appointed
coguardian for J.R.K., an adult woman with disabilities, and
simultaneously serving as cotrustee of a special needs trust
established for J.R.K.’s benefit.
Vanderford entered not guilty pleas and waived her right to
a jury trial. A bench trial was held over the course of several
days, and both parties adduced evidence. We summarize that
evidence in the next section, to the extent necessary to address
the assignments of error raised on appeal.
1. Evidence Adduced at Trial
(a) J.R.K.
J.R.K. is an adult woman with mental disabilities. Due
to these disabilities, she receives Social Security disability
income and qualifies for Medicaid benefits, including voca-
tional and residential services. During the relevant time peri-
ods, J.R.K. lived with, and was assisted in her daily activities
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by, an “extended family home provider” (EFH), who was paid
a daily contract rate by the State of Nebraska. J.R.K. also
earned income from working part-time jobs.
(b) J.R.K.’s Guardianship,
Conservatorship, and Trusts
In 2006, J.R.K. moved to Nebraska to live with her mother
and stepfather (the Krotzes). That same year, the Krotzes
hired Vanderford to set up a guardianship and conservator-
ship for J.R.K., and both were established in the county court
for Lancaster County. The Krotzes were appointed to serve as
J.R.K.’s coconservators and coguardians.
In 2011, J.R.K.’s biological father died and J.R.K. received
an inheritance. The Krotzes hired Vanderford to set up a trust
designed to allow J.R.K. to keep her inheritance without losing
her government benefits. Vanderford established an “irrevo-
cable supplemental needs trust” for J.R.K.’s benefit, with the
Krotzes serving as cotrustees. After the irrevocable supple-
mental needs trust was established, J.R.K.’s conservatorship
was terminated, but the guardianship continued.
About 2 years later, Vanderford assisted the Krotzes in cre-
ating a second trust for J.R.K.’s benefit. Vanderford created
a “self-settled special needs trust” (SSSNT), and its stated
purpose was “to supplement, but not replace any benefits
or assistance of any Federal or State governmental entity
to which Beneficiary may be eligible or which Beneficiary
may be receiving.” The Krotzes were named as cotrustees of
the SSSNT, and Vanderford was named as alternate succes-
sor trustee.
(c) Vanderford Appointed J.R.K.’s Coguardian
and Begins Handling J.R.K.’s Finances
In 2014, J.R.K.’s mother died. J.R.K.’s stepfather did not
want to handle the guardianship responsibilities alone, and
he asked Vanderford to serve as J.R.K.’s coguardian and
to assume primary handling of J.R.K.’s financial affairs.
Vanderford agreed, but told the stepfather that because she
had a solo legal practice, she may need to charge her regular
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hourly legal rate for services provided to J.R.K. during busi-
ness hours. The stepfather agreed to such a billing arrange-
ment, assuming it would be “an infrequent thing,” because the
EFH was primarily responsible for taking J.R.K. to medical
and dental appointments and driving her on excursions during
the day. There was no evidence that the guardianship court
was made aware of, or approved of, the billing arrangement
proposed by Vanderford.
In July 2014, the county court appointed Vanderford to
serve as J.R.K.’s coguardian. The letters of guardianship con-
tained the following admonishment in bold and underlined
typeface:
You shall not pay compensation to yourself or your
attorney from assets or income of your ward/incapaci-
tated person . . . without first giving notice to inter-
ested persons and obtaining an order of the court. The
order may be entered without a hearing if all inter-
ested person have waived notice or have executed their
written consent to the fee.
In addition to this admonishment on compensation, the letters of
guardianship required Vanderford to file, annually, “a complete
accounting of your administration of the ward’s . . . money,
assets, possessions or income (including social security or other
benefits) if you have possession of such.” 1
Several months after Vanderford was appointed as J.R.K.’s
coguardian, the SSSNT was amended to make Vanderford a
cotrustee. From that point on, Vanderford established a close
relationship with J.R.K., who grew to consider Vanderford
her “best friend.” The record shows the two exchanged hun-
dreds of text messages, went to movies and baseball games
together, attended J.R.K.’s therapy and medical appointments
together, and went on trips together. Vanderford characterized
1
See Neb. Rev. Stat. § 30-2628(6) (Reissue 2016) (“[a] guardian is required
to report the condition of his or her ward and of the estate which has been
subject to the guardian’s possession or control, at least every year and as
required by the court or court rule”).
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her relationship with J.R.K. as that of “proxy mother” and
testified that she was asked to assume such a role by J.R.K.’s
mother before she died. 2
(d) Vanderford Becomes Cosigner
on J.R.K.’s Accounts
Before Vanderford began managing J.R.K.’s finances, three
accounts had been set up for J.R.K.’s benefit. One account was
described as J.R.K.’s guardianship account, another was an
investment account associated with the SSSNT, and the third
was an account associated with the irrevocable supplemental
needs trust. After Vanderford was appointed coguardian and
named cotrustee of the SSSNT, she became an authorized
cosigner on J.R.K.’s accounts.
In addition, Vanderford opened three new accounts for
J.R.K. at the same bank where Vanderford kept her business
and personal accounts. One of the new accounts was desig-
nated as a guardianship account for J.R.K. and was funded
primarily by J.R.K.’s Social Security income. Another account
was designated as a “special needs trust” account, although the
evidence showed it was operated as an ordinary bank account.
The third account was designated as a “debit card account,”
which J.R.K. was also authorized to use subject to daily spend-
ing limits; this account was funded in part by J.R.K.’s wages,
gifts, and transfers from other accounts maintained for J.R.K’s
benefit.
The evidence showed that from November 2015 forward,
all of J.R.K.’s accounts—both old and new—were managed
primarily by Vanderford. However, when Vanderford filed
her annual guardianship accountings in 2016 and 2017, she
included only the accounts designated as J.R.K.’s guardianship
accounts; Vanderford did not report or provide an accounting
for any of the other accounts maintained for J.R.K.’s benefit
over which Vanderford had control.
2
Brief for appellant at 7.
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(e) Vanderford’s Financial Difficulties
The evidence was undisputed that while Vanderford was
serving as coguardian for J.R.K. and as cotrustee of the SSSNT,
she was experiencing significant financial problems within her
law practice. When the financial problems persisted into 2016,
Vanderford hired a business consultant to advise her.
After a review, the consultant identified significant financial
issues within the firm. She noted that Vanderford pulled “exor-
bitant amounts of money out of the business for personal spend-
ing without regard to payroll or other overhead.” The firm did
not have enough money to “make ends meet,” and employees’
paychecks were “bouncing.” According to the consultant, these
financial issues stemmed in part from the fact that Vanderford
was “constantly distracted,” “rarely complete[d] work in a
timely manner,” and had “no consistent follow through as far
as entering time to be billed.” It was the consultant’s opinion
that Vanderford tracked her billable time “by her calendar,”
“via emails,” or just “in her head.” After months of working
unsuccessfully to correct these financial issues, the consultant
terminated the relationship with Vanderford’s firm.
(f) Investigations
In early 2017, the EFH working with J.R.K. became sus-
picious when she learned that the money in one of J.R.K.’s
accounts was being rapidly depleted. The EFH reported her
concerns to her supervisor, 3 and an Adult Protective Services
investigator was assigned to look into the matter.
The investigator met with J.R.K., after which she reviewed
J.R.K.’s guardianship records, bank records, and J.R.K.’s indi-
vidual service plan at the Department of Health and Human
Services. The investigator discovered that Vanderford had
been transferring money between J.R.K.’s accounts and mak-
ing payments to herself out of J.R.K.’s accounts. The guard-
ianship court was notified of the Adult Protective Services
3
See Neb. Rev. Stat. § 28-372 (Reissue 2016) (setting out reporting require-
ments for suspected abuse, neglect, or exploitation of vulnerable adult).
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investigation; eventually, Vanderford and J.R.K.’s stepfather
agreed to step down as J.R.K.’s coguardians, and a successor
guardian was appointed for J.R.K. in early 2018.
In March 2018, Adult Protective Services completed its
investigation and concluded that J.R.K. was being financially
exploited by Vanderford. Adult Protective Services turned its
findings over to the Lincoln Police Department, and an offi-
cer assigned to the department’s technical investigations unit
looked into the matter further. His investigation revealed that
while serving as J.R.K.’s coguardian and cotrustee of the
SSSNT, Vanderford made multiple payments to herself out of
J.R.K.’s accounts without court approval. Vanderford claimed
those payments were meant to compensate her for various legal
and personal services she performed for J.R.K. and for various
services performed by Vanderford’s paralegal. Almost all of the
services were billed at Vanderford’s hourly legal rate of $215
or at her paralegal’s hourly rate. Although the investigator was
not able to locate an invoice for every payment to Vanderford,
he was able to match up some payments with invoices prepared
by Vanderford’s law firm.
The invoices in our record show extensive billing by
Vanderford for services related to J.R.K. Many of the billing
entries were for nonlegal services related to J.R.K.’s personal
care and maintenance, including invoices for communicat-
ing with J.R.K., accompanying J.R.K. to counseling sessions
and medical appointments, and meeting with others regarding
J.R.K.’s behaviors, needs, and benefits. Examples of such bill-
ings include:
••A charge of $5,805 for 27 hours of work, described on the
invoice as:
[C]ounselor meeting attendance (6 meetings) to help
address [J.R.K.’s] behavior issues, doctors appointments
(arranging them and attending) including her medical
review nurse, Michelle Lemon, and tweaking medica-
tion type and dosage, attending IPP meetings (semi and
annual, including travel to and back, approximately 2
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hours each), working with [J.R.K.’s] EFH’s regarding
[J.R.K.’s] behaviors . . . , meetings with Richard and/or
Richard and EFH to coordinate [J.R.K.’s] needs; inter-
viewing ILC at meeting with ILC to see if [J.R.K.] needs
work transferred from Vital
••A charge of $9,083.75 for 42.25 hours of work, described on
the invoice as:
[I]nvolvement with email communication regarding
[J.R.K.]; 169 Emails not yet invoiced to [J.R.K.] for
2015 and 2016 regarding her care, filing for her Medicaid
renewable, taking care of her tax situation, oversight on
guardianship paperwork for 2015 - through 9/20/2016
••A charge of $1,935 for 9 hours of work, described on the
invoice as:
Preparation of Trip to Florida; take [J.R.K.] to Omaha for
TSA PreCheck; take [J.R.K.] again after first trip didn’t
yield results
••A charge of $1,612.50 for 7.50 hours of work, described on
the invoice as:
[T]ravel to get [J.R.K.] to take her to work; travel to get
[J.R.K.] to take her to dental appointment that was can-
celled, travel to take [J.R.K.] to go to Verizon to buy new
phone and spend time getting new phone set up; addi-
tional time with [J.R.K.’s] phone at Verizon to straighten
out billing issues.
As the above billings suggest, J.R.K. took a trip to Florida
in 2017. Vanderford accompanied J.R.K. on that trip, after
which she paid herself $4,000 from one of J.R.K.’s accounts.
Although no invoice was located for this payment, the memo-
randum line on the check reads: “Florida $500 day per diem/
8 days.”
When paying these invoices, Vanderford regularly used
checks from J.R.K’s various accounts and made them out to
herself or her law firm. On at least one occasion, Vanderford
caused J.R.K.’s account to incur an overdraft fee after writing
a check to herself which did not clear. On another occasion,
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Vanderford transferred funds from one of J.R.K.’s accounts
directly into Vanderford’s personal checking account which,
prior to the transfer, was overdrawn.
According to the investigator’s findings, Vanderford made
16 payments to herself from J.R.K.’s various accounts totaling
$65,258.89. The record shows that Vanderford made most, if
not all, of these payments to herself without seeking or obtain-
ing prior court approval.
2. Verdict
In September 2020, the district court announced its verdict
in open court. On count 1, exploitation of a vulnerable adult,
the court recited that the State had proved all material ele-
ments of the crime beyond a reasonable doubt, and it found
Vanderford guilty. In a written verdict entered the same day,
the court expressly found the State had proved beyond a rea-
sonable doubt:
1. That J.R.K. was a vulnerable adult, and
2. That [Vanderford] did cause or permit or subject
J.R.K[.], to exploitation, and
3. That [Vanderford] did so knowingly and intention-
ally, and
4. That the actions of [Vanderford] took place on or
about or between July 8, 2014, and February 28, 2018, in
Lancaster County, Nebraska.
The written verdict also stated that the court, in reaching its
verdict, used the definition of “[v]ulnerable adult” appearing
in Neb. Rev. Stat. § 28-371 (Reissue 2016), the definition of
“[s]ubstantial mental impairment” appearing in Neb. Rev. Stat.
§ 28-369 (Reissue 2016), and the definition of “[e]xploitation”
appearing in Neb. Rev. Stat. § 28-358 (Reissue 2016). We
address these statutory definitions later in our analysis.
On count 2, theft by unlawful taking in the amount of
$5,000 or more, the court found Vanderford not guilty. The
court set the matter for sentencing and ordered a presentence
investigation.
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3. Posttrial Motion and Sentencing
Vanderford filed a timely motion for new trial under Neb.
Rev. Stat. § 29-2101 (Reissue 2016), asserting, among other
things, that her acquittal on the theft charge was inconsistent
with her conviction for exploitation and that the evidence was
insufficient to support the conviction. The court overruled the
motion for new trial and sentenced Vanderford to 5 years’
probation. Vanderford filed this timely appeal, represented by
trial counsel.
II. ASSIGNMENTS OF ERROR
Vanderford assigns, reordered and rephrased, that the dis-
trict court erred in convicting her of exploiting a vulnerable
adult, because (1) the definition of exploitation necessarily
requires proof of a financial crime and the State failed to
prove a financial crime; (2) there was insufficient evidence
that it was “wrongful or unauthorized” 4 for Vanderford to pay
herself from J.R.K.’s accounts; (3) the State failed to prove
that Vanderford acted with sufficient mens rea to support the
offense of exploiting a vulnerable adult, because such a con-
viction cannot be “based upon negligence or a mere breach of
a fiduciary duty”; (4) the guilty verdict on count 1 was incon-
sistent with the acquittal on count 2; (5) sentencing remarks by
the court contradict the guilty verdict; and (6) the district court
failed to make sufficient conclusions of law when rendering
its verdict.
III. STANDARD OF REVIEW
[1] An appellate court will sustain a conviction in a bench
trial of a criminal case if the properly admitted evidence,
viewed and construed most favorably to the State, is sufficient
to support that conviction. 5 In making this determination, an
appellate court does not resolve conflicts in the evidence,
pass on the credibility of witnesses, evaluate explanations, or
4
§ 28-358.
5
State v. Taylor, 310 Neb. 376, 966 N.W.2d 510 (2021).
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reweigh the evidence presented, because these are within a fact
finder’s province for disposition. 6 Instead, the relevant ques-
tion is whether, after viewing the evidence in the light most
favorable to the prosecution, any rational trier of fact could
have found the essential elements of the crime beyond a rea-
sonable doubt. 7
[2] Statutory interpretation presents a question of law, for
which an appellate court has an obligation to reach an inde-
pendent conclusion irrespective of the decision made by the
court below. 8
IV. ANALYSIS
1. Proving Exploitation of Vulnerable Adult
Several of Vanderford’s arguments on appeal challenge
whether the district court correctly identified the material ele-
ments that the State needed to prove in order to convict her of
the crime of exploiting a vulnerable adult. Her other arguments
are generally aimed at challenging the sufficiency of the evi-
dence to support her conviction. To address these arguments,
we begin by interpreting the statutes setting forth the material
elements of the crime for which Vanderford was convicted—
exploitation of a vulnerable adult.
[3-7] Statutory analysis begins with the text. 9 Statutory lan-
guage is to be given its plain and ordinary meaning, and an
appellate court will not resort to interpretation to ascertain the
meaning of statutory words which are plain, direct, and unam-
biguous. 10 Similarly, it is not within the province of the courts
to read meaning into a statute that is not there or to read any-
thing direct and plain out of a statute. 11 Components of a series
6
Id.
7
Id.
8
State v. Chase, 310 Neb. 160, 964 N.W.2d 254 (2021).
9
Taylor, supra note 5.
10
State v. Knight, 311 Neb. 485, 973 N.W.2d 356 (2022).
11
Id.
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or collection of statutes pertaining to a certain subject matter
may be conjunctively considered and construed to determine
the intent of the Legislature so that different provisions of an
act are consistent, harmonious, and sensible. 12 Penal statutes
must be strictly construed and are considered in the context of
the object sought to be accomplished, the evils and mischiefs
sought to be remedied, and the purpose sought to be served. 13
A penal statute will not be applied to situations or parties not
fairly or clearly within its provisions. 14
[8] To determine the elements of a crime, we look to the
text of the enacting statute. 15 The crime of exploiting a vulner-
able adult is contained within the Adult Protective Services
Act (APSA). 16 Determining the elements of that crime requires
consideration of several statutes within the APSA.
The APSA criminalizes the knowing and intentional exploi-
tation of a vulnerable adult in § 28-386, which provides, in
relevant part:
(1) A person commits knowing and intentional . . .
exploitation of a vulnerable adult or senior adult if he or
she through a knowing and intentional act causes or per-
mits a vulnerable adult or senior adult to be:
....
(d) Exploited.
....
(2) Knowing and intentional . . . exploitation of a vul-
nerable adult or senior adult is a Class IIIA felony.
For purposes of the APSA, a “[v]ulnerable adult” is defined in
§ 28-371 as “any person eighteen years of age or older who has
a substantial mental or functional impairment or for whom a
12
State v. Hofmann, 310 Neb. 609, 967 N.W.2d 435 (2021).
13
Id.
14
Id.
15
State v. Grutell, 305 Neb. 843, 943 N.W.2d 258 (2020).
16
See Neb. Rev. Stat. §§ 28-348 to 28-387 (Reissue 2016 & Cum. Supp.
2020).
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guardian or conservator has been appointed under the Nebraska
Probate Code.”
The term “exploitation” for purposes of the APSA is
defined in § 28-358. When the APSA was first enacted in
1988, exploitation was defined as “the taking of property of
a vulnerable adult by means of undue influence, breach of
a fiduciary relationship, deception, or extortion or by any
unlawful means.” 17 Effective July 19, 2012, the Legislature
amended the definition of “exploitation” to mean “the taking
of property of a vulnerable adult by any person by means of
undue influence, breach of a fiduciary relationship, deception,
or extortion or by any unlawful means.” 18 And in 2016, the
statutory definition of “exploitation” was amended again. 19 It
currently provides:
Exploitation means the wrongful or unauthorized tak-
ing, withholding, appropriation, conversion, control, or
use of money, funds, securities, assets, or any other prop-
erty of a vulnerable adult or senior adult by any person by
means of undue influence, breach of a fiduciary relation-
ship, deception, extortion, intimidation, force or threat of
force, isolation, or any unlawful means or by the breach
of a fiduciary duty by the guardian, conservator, agent
under a power of attorney, trustee, or any other fiduciary
of a vulnerable adult or senior adult. 20
This expanded definition of exploitation has been in effect
since April 19, 2016. We note that the information charging
Vanderford with intentional or knowing exploitation of a vul-
nerable adult alleged a timeframe from July 8, 2014, through
February 28, 2018, so both the 2012 and the 2016 statutory
definitions of exploitation are potentially relevant.
17
See 1988 Neb. Laws, L.B. 463, § 11, codified at § 28-358 (Reissue 1995).
18
See 2012 Neb. Laws, L.B. 1051, § 6 (emphasis supplied), codified at
§ 28-358 (Cum. Supp. 2012).
19
See 2016 Neb. Laws, L.B. 934, § 4, codified at § 28-358 (Reissue 2016).
20
§ 28-358.
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[9] Reading §§ 28-386, 28-371, and 28-358 together, it is
clear that a person commits the crime of exploiting a vulner-
able adult by knowingly and intentionally engaging in an act
which causes or permits a “vulnerable adult,” as that term is
defined in § 28-371, to be subjected to “exploitation,” as that
term is defined in § 28-358.
In this appeal, Vanderford asserts that to prove the elements
of exploitation of a vulnerable adult, the State must necessarily
prove “a financial crime against a vulnerable adult.” 21 More
specifically, Vanderford asserts that “[t]he offense of exploita-
tion is a financial crime, that requires [proof of] an underlying
theft or wrongful or [un]authorized taking.” 22 She argues that
the court erred in failing to find the same. Vanderford does not
explain what, precisely, she means by a “financial crime,” but
regardless, we think her argument oversimplifies the current
statutory scheme.
The current definition of “exploitation” lists six proscribed
acts: the wrongful or unauthorized “taking,” “withholding,”
“appropriation,” “conversion,” “control,” or “use” of prop-
erty belonging to the vulnerable adult or senior adult. And
it describes five categories of property: “money,” “funds,”
“securities,” “assets,” or “any other property of a vulnerable
adult or senior adult.” Most of these categories can fairly be
characterized as financial in nature, but the catchall category
of “any other property” is broad enough to encompass both
real property and personal property. Finally, the definition of
exploitation lists the means by which the proscribed acts must
be accomplished by the perpetrator, and those means are not
restricted to financial scenarios. Rather, the possible means
include: “undue influence,” “breach of a fiduciary relation-
ship,” “deception,” “extortion,” “intimidation,” “force or threat
of force,” “isolation,” “any unlawful means,” or by “the breach
of a fiduciary duty by the guardian, conservator, agent under a
21
Brief for appellant at 12.
22
Id. at 8.
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power of attorney, trustee, or any other fiduciary of a vulner-
able adult or senior adult.”
[10] As such, under the current definition of “exploitation,”
there are a myriad of different ways to commit the crime of
exploiting a vulnerable adult. And although the statutory defini-
tion of exploitation in § 28-358 is broad enough to encompass
what might generally be described as financial exploitation, it
is by no means limited to only financial crimes. We therefore
reject, as impermissibly narrow, Vanderford’s contention that
proving the crime of exploitation necessarily requires proof of
a financial crime.
We likewise reject Vanderford’s suggestion that the district
court erred when it recited the material elements of exploita-
tion of a vulnerable adult. With respect to count 1, the court
recited in its written verdict that the State had the burden to
prove each of the following elements beyond a reasonable
doubt: (1) that J.R.K. was a vulnerable adult as defined in
§§ 28-371 and 28-369; (2) that Vanderford knowingly and
intentionally caused or permitted J.R.K. to be exploited as
defined in § 28-358; and (3) that Vanderford did so on, about,
or between the dates of July 8, 2014, and February 28, 2018,
in Lancaster County. We find that the court’s order correctly
recited the material elements which the State was required to
prove beyond a reasonable doubt on the charge of exploitation
of a vulnerable adult.
With these material elements in mind, and considering the
evidence in the light most favorable to the State, we next
consider whether the evidence was insufficient to convict
Vanderford of exploiting a vulnerable adult.
Most of the pertinent evidence was undisputed. Vanderford
does not dispute that J.R.K. is a vulnerable adult. She admits
that “there was a fiduciary relationship between Vanderford
and J.R.K.,” and she admits that she owed J.R.K. a fiduciary
duty as her court-appointed coguardian and as cotrustee of
the SSSNT established for J.R.K.’s benefit during the relevant
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timeframe. 23 She also admits that during the relevant time
period, she billed J.R.K. for personal services at the hourly rate
she used for legal work, and then paid herself from J.R.K.’s
accounts without requesting or obtaining approval from the
guardianship court.
The letters of guardianship, as well as the order appoint-
ing Vanderford to serve as coguardian, expressly prohibited
Vanderford from paying compensation to herself from J.R.K.’s
assets or income without first obtaining an order of the court.
The evidence showed that Vanderford regularly disregarded
this requirement. She knowingly and intentionally used her
position as coguardian and cotrustee to repeatedly compensate
herself from accounts established for J.R.K. over which she
had control, and she did so without seeking or obtaining court
approval. And despite managing multiple accounts containing
J.R.K’s money, assets, and income, Vanderford did not pro-
vide the guardianship court with a complete accounting of her
administration of those accounts. Whether or not Vanderford
was deliberately attempting to hide her conduct from the guard-
ianship court, this improper exercise of power was wrongful
and unauthorized under the letters of guardianship, as well as
the order appointing Vanderford to serve as coguardian, and
resulted in a breach of the fiduciary duty Vanderford owed to
J.R.K. as her court-appointed guardian.
As such, a rational trier of fact could have found that
Vanderford’s knowing and intentional conduct in compensat-
ing herself from J.R.K.’s accounts, without obtaining prior
court approval, caused or permitted J.R.K. to be exploited as
that term is defined in § 28-358. The evidence supports the
conclusion that Vanderford’s intentional conduct resulted in the
wrongful or unauthorized taking, appropriation, conversion, or
use of J.R.K.’s money, funds, or assets, and that Vanderford
did so either by means of the breach of a fiduciary relation-
ship or by the breach of a fiduciary duty as J.R.K.’s guardian.
23
See brief for appellant at 22.
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And, for the sake of completeness, we note that the evidence
is sufficient under both the current definition of exploita-
tion in § 28-358 and the definition in effect before the 2016
amendments.
[11] The State also argues that Vanderford committed other
wrongful and unauthorized acts which amounted to exploita-
tion of a vulnerable adult. But ultimately, we need not address
those arguments. We have already determined that a rational
trier of fact could have found the essential elements of the
crime beyond a reasonable doubt, 24 and it is unnecessary to dis-
cuss all the possible ways in which the evidence might support
a finding of exploitation. An appellate court is not obligated
to engage in an analysis that is not necessary to adjudicate the
case and controversy before it. 25
2. Vanderford’s Arguments Challenging
Sufficiency of Evidence
Vanderford presents four arguments challenging the suffi-
ciency of the evidence to support her conviction for exploiting
a vulnerable adult. We address each argument in turn and find
all to be meritless.
(a) Consent of J.R.K.’s Stepfather
First, Vanderford argues the evidence does not support a
finding that her conduct was “wrongful or unauthorized.” She
points to evidence that J.R.K.’s stepfather and coguardian
agreed early on that Vanderford could charge her regular hourly
legal rate for providing guardianship services and that he “was
aware of and approved of what Vanderford was doing.” 26
[12] Vanderford’s brief also broadly states that “[t]he evi-
dence established that [she] was permitted or authorized by the
24
See Taylor, supra note 5.
25
Gonzales v. Nebraska Pediatric Practice, 308 Neb. 571, 955 N.W.2d 696
(2021).
26
Brief for appellant at 14.
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Trust instruments to pay herself for legal services and for per-
sonal services she provided to J.R.K.” 27 But Vanderford neither
describes nor explains which trust terms she is relying on for
this statement. 28 Nor does she present any argument explaining
how or why the trust instruments in this case authorized her to
compensate herself from J.R.K.’s assets without seeking prior
approval from the guardianship court. Because an alleged error
must be both specifically assigned and specifically argued in
the brief of the party asserting the error to be considered by an
appellate court, 29 we do not consider Vanderford’s unsupported
assertion that the trust instruments authorized her conduct.
Further, we soundly reject Vanderford’s suggestion that
the coguardian’s apparent knowledge and tacit approval of
her conduct in compensating herself from J.R.K.’s accounts
without obtaining prior court approval has any bearing on
whether her conduct was wrongful and unauthorized. It is
undisputed that during the entire time Vanderford was paying
herself from J.R.K.’s assets, she was serving as J.R.K.’s court-
appointed guardian and was subject to the express admonish-
ment that “You shall not pay compensation to yourself or
your attorney from assets or income of your ward/inca-
pacitated person . . . without first . . . obtaining an order
of the court.” This admonition could not have been more
clear, and it contained no exceptions. Absent court approval,
Vanderford’s conduct in paying herself from J.R.K.’s assets
was wrongful and unauthorized, and the coguardian’s tacit
approval of such conduct is immaterial. Her argument in this
regard is meritless.
27
Id. at 13.
28
See Neb. Ct. R. App. P. § 2-109(D)(1)(g) (rev. 2022) (“[e]ach and
every recitation of fact, whether in the statement of facts or elsewhere
in the brief, shall be annotated to the record in the manner set forth in
§ 2-109(C)”).
29
State v. Malone, 308 Neb. 929, 957 N.W.2d 892 (2021), modified on
denial of rehearing 309 Neb. 399, 959 N.W.2d 818.
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(b) Acquittal on Theft Charge
Next, Vanderford argues that her acquittal on the charge of
theft by unlawful taking in the amount of $5,000 or more com-
pels the conclusion that the evidence was insufficient to con-
vict her of exploitation of a vulnerable adult. She contends the
verdicts are inconsistent and “do not square with each other,
nor with the facts of the case.” 30 There are two problems with
her argument.
First, the statutory elements to prove theft by unlawful tak-
ing are not the same as the elements to prove exploitation of
a vulnerable adult. 31 The crimes are separate and distinct. 32
Vanderford’s acquittal on the theft charge does not suggest
the evidence was somehow insufficient to convict her of the
exploitation charge.
[13] Moreover, a conviction on one count cannot be over-
turned merely because it is inconsistent with the fact finder’s
decision not to convict on another count. 33 Vanderford cannot
successfully challenge her conviction for exploitation of a vul-
nerable adult by arguing that it is inconsistent with the court’s
decision to acquit her of theft by unlawful taking in the amount
of $5,000 or more.
(c) Mens Rea
Vanderford also argues that the State failed to prove she
acted with sufficient mens rea or criminal intent to support
the felony offense of exploiting a vulnerable adult. As we
understand her argument, she does not dispute that her conduct
amounted to a breach of duty, but she argues that “for a breach
30
Brief for appellant at 14.
31
Compare Neb. Rev. Stat. § 28-511 (Reissue 2016) (statute defining theft
by unlawful taking) with §§ 28-386 and 28-358 (statutes defining exploita-
tion of vulnerable adult).
32
See, e.g., State v. Dehning, 296 Neb. 537, 894 N.W.2d 331 (2017) (defend
ant convicted of theft by unlawful taking and exploiting vulnerable adult
arising from same set of facts).
33
See State v. Briggs, 303 Neb. 352, 929 N.W.2d 65 (2019).
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of [fiduciary] duty to be criminal, the breach must be more
than an act of simple negligence.” 34 In other words, she claims
that “§§28-386 and [28-]358 cannot be interpreted to punish
a simple breach of fiduciary duty (negligence) as a felony.” 35
But § 28-386 does not punish a simple breach of fiduciary
duty. It criminalizes a “knowing and intentional act [that]
causes or permits a vulnerable adult or senior adult to be . . .
exploited.” 36 The breach of fiduciary relationship or duty is not
the required mens rea for the crime; it is just one of several
means by which to accomplish a “wrongful or unauthorized
taking, withholding, appropriation, conversion, control, or use
of money, funds, securities, assets, or any other property” of a
vulnerable adult or senior adult, and thus satisfy the definition
of “exploitation” under § 28-358.
Here, the evidence was sufficient to show beyond a reason-
able doubt that Vanderford’s knowing and intentional con-
duct in compensating herself from J.R.K.’s accounts, without
obtaining prior court approval, caused or permitted J.R.K. to
be exploited as that term is defined in § 28-358. There is no
merit to Vanderford’s suggestion that the State failed to prove
the requisite criminal intent to convict her of exploiting a vul-
nerable adult.
(d) Judge’s Sentencing Remarks
Vanderford asserts that remarks made by the trial court
during sentencing contradict or undermine the written guilty
verdict and require that the conviction be vacated. Before
addressing this assertion, we summarize the pertinent sentenc-
ing remarks.
After hearing allocution, but before imposing sentence, the
judge recounted some of the evidence presented at trial. In doing
so, the judge highlighted the evidence regarding the reporting
failures, accounting irregularities, billing irregularities, and
34
Brief for appellant at 22.
35
Id. at 21.
36
§ 28-386.
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overdraft fees. He then said to Vanderford, “[Y]ou were at a
time in your life, I believe, where you weren’t running your
law practice as one might have expected. I think that’s just
so clear.” The judge then said, “[O]verall, I don’t believe that
there was the kind of financial exploitation — meaning, money
wrongfully taken from the trust [—] that maybe the State
does,” adding, “I don’t think it is possible to go through the
pennies and figure [it] out.”
Relying on these statements, Vanderford now argues that
her conviction should be vacated because “the Court’s own
words at sentencing established that the Court was clearly
wrong” 37 in finding her guilty of exploiting a vulnerable adult.
We disagree.
We see nothing about the court’s sentencing remarks, under-
stood in context, which contradicts, undermines, or calls into
doubt its prior verdict finding that Vanderford was guilty of
exploiting a vulnerable adult. We do not understand the court’s
remarks to suggest it was equivocating on that conviction in
any way. Rather, it appears the court was merely noting that it
did not necessarily agree with the State’s position regarding the
total sum of money that was wrongfully taken by Vanderford
while serving as J.R.K.’s guardian. Such an observation may
have been intended to explain why the court thought a sen-
tence of probation was appropriate for the Class IIIA felony
offense, or it may have been intended as an explanation for
why Vanderford was acquitted on the theft charge. Either way,
the statement had no impact on the conviction for exploiting a
vulnerable adult. We reject Vanderford’s claim that the sentenc-
ing remarks provide a basis to challenge the conviction.
3. Specific Conclusions of Law
Vanderford’s final argument on appeal is that the district
court “erred in failing to make sufficient conclusions of law
to support its guilty verdict.” Before addressing Vanderford’s
argument, we provide some additional background.
37
Brief for appellant at 21.
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(a) Additional Facts
At the pretrial hearing during which Vanderford waived
her right to jury trial, Vanderford’s counsel brought up what
he described at the time as “proposals” for waiving jury
under which the court would “make some particular findings,
mostly conclusions of law.” The State expressed no objec-
tion to defense counsel’s proposal, and after some additional
discussion with counsel, the court indicated it was willing to
issue a written order “specify[ing] the material elements of the
offenses . . . like a jury instruction would set out the material
elements of the offense.” After this discussion, Vanderford
waived her right to jury trial, confirming on the record that she
understood her right to a jury trial, that she had conferred with
her counsel regarding that right, and that she was waiving that
right freely and voluntarily. The court accepted Vanderford’s
waiver and set the matter for a bench trial.
(b) Vanderford’s Argument
On appeal, Vanderford assigns that the court erred by “failing
to make sufficient conclusions of law to support its guilty ver-
dict as required by the express conditions of [Vanderford’s] jury
waiver.” During oral argument before this court, Vanderford’s
counsel described Vanderford’s jury waiver as “conditional”
and argued that if the court had not been willing to make spe-
cific written conclusions of law, Vanderford would “never have
waived jury.” As we will explain, this assignment of error has
no merit.
We begin by rejecting Vanderford’s suggestion that her
jury waiver decision was expressly conditioned on the court’s
agreement to make written conclusions of law. Vanderford
states that she “contemplated a jury waiver to focus on the
legal issues as to . . . the essential elements of the exploitation
offense and what mens rea or criminal intent element had to be
proven as to that charge.” 38 We understand this to suggest that
Vanderford and her counsel thought there would be a tactical
38
Id. at 15.
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advantage to trying the case to the court because, unlike a jury
verdict, the court may be willing to make specific findings of
fact and conclusions of law that could help Vanderford focus
the issues on appeal. But we see nothing in the record suggest-
ing that Vanderford’s jury waiver was in any way conditional.
Despite Vanderford’s characterization, we are aware of no
statute or case law in Nebraska authorizing a defendant to
make a “conditional jury waiver” or authorizing a court to
accept one. But we see plenty of reasons for trial courts to be
especially cautious about making any statement or agreement
that might be perceived as inducing a defendant to waive a
constitutional right.
In People v. Collins, 39 for example, the California Supreme
Court found that a criminal defendant’s waiver of the right to
jury trial was invalid because, prior to accepting the waiver, the
trial court had informed the defendant that he would receive
some unspecified benefit if he waived a jury trial. On appeal,
the defendant argued the trial court’s statement amounted to
an improper inducement to waive the right to jury, and the
California Supreme Court agreed. It reasoned that “after hav-
ing been advised by the trial court that he would receive some
benefit of an undetermined nature to be determined by the
court at a later time, the defendant no longer could be said to
have voluntarily relinquished his right to jury trial.” 40 Thus,
even though the waiver colloquy was otherwise proper and
thorough, the trial court was found to have “acted in a manner
that was at odds with its judicial obligation to remain neutral
39
People v. Collins, 26 Cal. 4th 297, 27 P.3d 726, 109 Cal. Rptr. 2d 836
(2001). See, also, 6 Wayne R. LaFave et al., Criminal Procedure § 22.1(h)
at 41-42 (4th ed. 2015) (“[s]ometimes a ‘jury waiver agreement,’ expressly
assuring the defendant of certain punishment concessions . . . is unobjec-
tionable so long as the negotiations were with the prosecutor rather than
the trial judge”).
40
Collins, supra note 39, 26 Cal. 4th at 311, 27 P.3d at 736, 109 Cal. Rptr.
2d at 847.
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and detached in evaluating the voluntariness of the waiver,” 41
and the defendant’s conviction was reversed.
Notably, Vanderford has not assigned or argued that her
decision to waive jury was improperly induced or should
be deemed invalid. But even if she had, we see nothing in
the record suggesting that the court did, or said, anything to
induce Vanderford to waive her right to a jury trial or acted
in a manner inconsistent with its judicial obligation to remain
neutral and detached in evaluating the voluntariness of any
jury waiver. To the contrary, it was Vanderford’s counsel who
first asked whether the court would make written conclusions
of law. After clarifying the nature of defense counsel’s request
and confirming the State had no objection, the court agreed
to make written conclusions of law, which it had discretion
to do.
The crux of Vanderford’s argument is not that there was
something improper about the court’s willingness to make writ-
ten conclusions of law, but, rather, that the court’s conclusions
were insufficient. We disagree. As we read the trial court’s
written verdict, it made all of the findings and conclusions of
law requested by the defense and discussed by the parties dur-
ing the pretrial hearing. It identified the material elements of
the charge on which Vanderford was convicted, and it made
an express finding that the State had proved each material
element beyond a reasonable doubt. To the extent Vanderford
complains on appeal that the written verdict did not “define
the proper mens rea element of that offense” or “explain the
Court’s interpretation of the statute,” her arguments are simply
not supported by the record. 42
[14,15] More important, we question whether the failure to
make factual findings and conclusions of law could ever result
in reversible error in a case such as this. Although criminal
trial courts have discretion to make specific findings of fact
41
Id. at 309, 27 P.3d at 734, 109 Cal. Rptr. 2d at 845.
42
See brief for appellant at 16.
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and conclusions of law in criminal cases tried to the bench,
the law does not compel it. In Nebraska, a trial judge sitting
without a jury is not required to articulate findings of fact or
conclusions of law in criminal cases. 43 In civil cases, parties
may ask a court to make specific findings under Neb. Rev.
Stat. § 25-1127 (Reissue 2016), but we have been clear that
§ 25-1127 has “‘no application to criminal proceedings.’” 44
So, although defendants are free to ask courts to make specific
findings or conclusions of law in criminal bench trials, they are
not entitled to compel such findings or conclusions as a mat-
ter of law, because they are discretionary. So even if the trial
court’s conclusions of law were not as detailed as Vanderford
would have liked, that does not provide a basis for revers-
ible error.
V. CONCLUSION
The State proved beyond a reasonable doubt that Vanderford,
while serving as a court-appointed guardian for a vulner-
able adult, knowingly and intentionally caused her ward to be
exploited in violation of § 28-386. Finding no merit to any of
the assignments of error raised on appeal, we affirm the judg-
ment of the district court.
Affirmed.
43
State v. Franklin, 241 Neb. 579, 489 N.W.2d 552 (1992). See, also, State
v. Cowan, 204 Neb. 708, 711, 285 N.W.2d 113, 115 (1979) (“[t]here is no
rule of law which requires the trial judge, acting as the trier of fact in a
criminal case, to make any special findings of fact”).
44
Franklin, supra note 43, 241 Neb. at 587, 489 N.W.2d at 557, quoting
State v. Lozano, 209 Neb. 772, 311 N.W.2d 529 (1981). See, also, State
v. Dake, 247 Neb. 579, 582, 529 N.W.2d 46, 48 (1995) (explaining that
§ 25-1127 “does not apply to criminal cases”). | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487058/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 01:08 AM CST
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DIETZEL ENTERS. V. J. A. WEVER CONSTR.
Cite as 312 Neb. 426
Dietzel Enterprises, Inc., appellant, v.
J. A. Wever Construction, L.L.C., appellee.
___ N.W.2d ___
Filed September 16, 2022. No. S-21-106.
1. Breach of Contract: Damages. A suit for damages arising from a
breach of contract presents an action at law.
2. Judgments: Appeal and Error. In a bench trial of a law action, a trial
court’s factual findings have the effect of a jury verdict and will not be
set aside on appeal unless clearly wrong.
3. ____: ____. After a bench trial of a law action, an appellate court does
not reweigh evidence, but considers the evidence in the light most
favorable to the successful party and resolves evidentiary conflicts in
favor of the successful party.
4. Damages: Appeal and Error. The amount of damages to be awarded is
a determination solely for the fact finder, and its action in this respect
will not be disturbed on appeal if it is supported by evidence and bears
a reasonable relationship to the elements of the damages proved.
5. Fraud. In determining whether an individual reasonably relied on a
misrepresentation, courts consider the totality of the circumstances,
including the nature of the transaction; the form and materiality of the
representation; the relationship of the parties; the respective intelli-
gence, experience, age, and mental and physical condition of the parties;
and their respective knowledge and means of knowledge.
6. Negligence: Fraud. In both negligent and fraudulent misrepresentation
cases, whether the plaintiff exercised ordinary prudence is relevant to
whether the plaintiff justifiably relied on the misrepresentation when the
means of discovering the truth was in the plaintiff’s hands.
7. Contracts. In order for the implied covenant of good faith and fair deal-
ing to apply, there must be in existence a legally enforceable contrac-
tual agreement.
8. Contracts: Parties. The implied covenant of good faith and fair deal-
ing exists in every contract and requires that none of the parties do
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anything which will injure the right of another party to receive the
benefit of the contract.
9. ____: ____. The nature and extent of an implied covenant of good faith
and fair dealing are measured in a particular contract by the justifiable
expectations of the parties. Where one party acts arbitrarily, capri-
ciously, or unreasonably, that conduct exceeds the justifiable expecta-
tions of the second party.
10. Contracts. The question of a party’s good faith in the performance of a
contract is a question of fact.
11. Breach of Contract: Words and Phrases. A material breach is a failure
to do something that is so fundamental to a contract that the failure to
perform that obligation defeats the essential purpose of the contract or
makes it impossible for the other party to perform under the contract.
12. Breach of Contract. A material breach will excuse the nonbreaching
party from its performance of the contract.
13. ____. Whether or not a breach is material and important is a question
of degree which must be answered by weighing the consequences of the
breach in light of the actual custom of persons in the performance of
contracts similar to the one involved in the specific case.
14. Damages: Evidence. Evidence of damages must be sufficient to enable
the trier of fact to estimate actual damages with a reasonable degree of
certainty and exactness.
15. Damages: Evidence: Proof. Proof of damages to a mathematical cer-
tainty is not required; however, a plaintiff’s burden of offering evidence
sufficient to prove damages cannot be sustained by evidence which is
speculative and conjectural.
16. Breach of Contract: Damages. In a breach of contract case, the ulti-
mate objective of a damages award is to put the injured party in the
same position the injured party would have occupied if the contract had
been performed, that is, to make the injured party whole.
17. Damages: Proof. A claim for lost profits must be supported by some
financial data which permit an estimate of the actual loss to be made
with reasonable certitude and exactness.
Appeal from the District Court for Douglas County: James
M. Masteller, Judge. Affirmed in part, and in part reversed
and remanded with directions.
Patrick T. Vint and Todd W. Weidemann, of Woods &
Aitken, L.L.P., for appellant.
Zachary W. Lutz-Priefert and Frederick D. Stehlik, of Gross,
Welch, Marks & Clare, for appellee.
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Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Papik, J.
J. A. Wever Construction, L.L.C. (Wever), contracted with
Dietzel Enterprises, Inc. (Dietzel), to perform excavation work
for the construction of a transmission line. While Wever and
Dietzel do not agree on who is to blame, all agree that the proj-
ect did not go well. Dietzel eventually abandoned the project
before its work was done. Unsurprisingly, litigation followed.
Dietzel filed a lawsuit asserting various claims against Wever,
and Wever asserted a breach of contract counterclaim against
Dietzel. Following a bench trial, the district court found that
Dietzel was the first party to materially breach the contract and
awarded Wever damages. From this judgment, Dietzel appeals,
arguing that the district court erred in its rejection of some of
its claims, in its finding that Dietzel was not entitled to suspend
its performance on the project, and in its damages award. We
find that the evidence in the record did not support the entirety
of the damages award to Wever but that the district court did
not otherwise err. Accordingly, we affirm in part, and in part
reverse and remand with directions.
I. BACKGROUND
The setting for this case is the construction site for a trans-
mission line in Maryland owned by Baltimore Gas & Electric
(BG&E). MasTec North America, Inc. (MasTec), was the proj-
ect’s general contractor. Wever and Dietzel, two Nebraska
companies, worked as subcontractors on the project. MasTec
subcontracted with Wever to lay certain concrete foundations
for the line, and Wever subcontracted with Dietzel to excavate
the holes where the foundations would be laid.
The parties experienced difficulties from the start. Work was
to begin on the project in April 2015, but Dietzel was unable to
arrive at the jobsite at the time directed by MasTec. To avoid a
delay, the parties agreed that Wever would rent equipment and
begin the excavation process until Dietzel could arrive.
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After Dietzel arrived, more problems arose. Dietzel had
difficulty performing the excavations, and the project began
to fall behind schedule. Wever’s witnesses at trial generally
blamed Dietzel employees’ allegedly poor excavation strategy
as the cause of the problems and delays. Dietzel’s witnesses
blamed the jobsite conditions, including the presence of alleg-
edly “undrillable” rock. Dietzel contended that before it sub-
mitted its bid, Wever led it to believe that no such rock would
be present.
Dietzel later became concerned that it was not being paid
for the time and materials it was expending on the project. Of
particular concern was whether it would receive payment for
change orders it submitted to Wever for the excavation of hard
rock it contended was not covered by the contract. Under the
contract, however, Wever was not obligated to make payments
to Dietzel unless and until it received payment from MasTec,
and there was evidence that MasTec was slow to pay bills sub-
mitted by Wever.
This all came to a head in the fall of 2015. At that time,
Dietzel requested assurance from Wever that Wever was seek-
ing payment of its change orders from MasTec and that Dietzel
would be paid for those change orders. Approximately 2 weeks
later, Dietzel abandoned the project.
Dietzel later filed this lawsuit alleging claims of breach of
contract, unjust enrichment, negligent misrepresentation, and
breach of the implied covenant of good faith and fair dealing.
Wever filed a breach of contract counterclaim.
Following a bench trial, the district court issued a writ-
ten order. The district court found that Dietzel committed the
first material breach of the contract when it abandoned the
project, and it awarded Wever $2,758,250.47 in damages for
that breach. It found in favor of Wever on Dietzel’s claims of
negligent misrepresentation and breach of the implied cov-
enant of good faith and fair dealing, but found that Wever had
been unjustly enriched in the amount of $328,507, because it
received a payment from MasTec for Dietzel’s work but had
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not passed that payment on to Dietzel. After offsetting the
amounts, the district court determined Wever was entitled to
judgment in the amount of $2,429,743.47. Dietzel appealed,
and we moved this case to our docket on our own motion.
Additional relevant background is provided in the analysis
section below.
II. ASSIGNMENTS OF ERROR
Dietzel assigns, renumbered and restated, that the district
court erred (1) by finding that Wever was not liable for neg-
ligent misrepresentation, (2) by finding that Wever was not
liable for a breach of the implied covenant of good faith
and fair dealing, (3) by finding that Dietzel did not have the
right to stop performance of the contract on the grounds that
Wever failed to provide adequate assurances of payment, (4)
by finding that Wever’s failure to make a timely payment was
not a material breach of contract, and (5) in its calculation
of damages.
III. STANDARD OF REVIEW
[1] A suit for damages arising from a breach of contract
presents an action at law. Goes v. Vogler, 304 Neb. 848, 937
N.W.2d 190 (2020).
[2,3] In a bench trial of a law action, a trial court’s factual
findings have the effect of a jury verdict and will not be set
aside on appeal unless clearly wrong. McGill Restoration v.
Lion Place Condo. Assn., 309 Neb. 202, 959 N.W.2d 251
(2021). After a bench trial of a law action, an appellate court
does not reweigh evidence, but considers the evidence in the
light most favorable to the successful party and resolves evi-
dentiary conflicts in favor of the successful party. Id.
[4] The amount of damages to be awarded is a determina-
tion solely for the fact finder, and its action in this respect will
not be disturbed on appeal if it is supported by evidence and
bears a reasonable relationship to the elements of the damages
proved. Funk v. Lincoln-Lancaster Cty. Crime Stoppers, 294
Neb. 715, 885 N.W.2d 1 (2016).
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IV. ANALYSIS
We address each of Dietzel’s assignments of error below.
We take the assignments up in the chronological order of the
underlying facts.
1. Negligent Misrepresentation
(a) Additional Background
Dietzel claims that it came to be involved in the transmis-
sion line project as a result of a misrepresentation by Wever.
The alleged misrepresentation occurred in January 2015. At
that time, Joshua Dezort, acting on behalf of Wever, sent an
email to Brandon Kreiling, the operations manager for Dietzel.
Kreiling had been involved with estimating projects for Dietzel
since 2008 and, at the time, managed Dietzel’s submission of
bids for potential projects. The email sought a bid from Dietzel
for excavation work.
Dezort’s email stated:
Graceton Tline just north of Baltimore. Transmission
line runs from Bel Air to Pylesville. 82 Drilled pier. There
will be an outage so no energized lines overhead. Work
would start end of Feb. Top 4˝ is loose running around
5 to 7 blows. Then increases about 30 blow from 7´ to
20´. 20´ plus runs around 50 blows with some holes a 90
blows down 30´. There is an adder for rock excavation
if required. The rock is Schist, which is sheet like rock
consisting of mud and clay. Let me know if you are good
with $1000 per cubic yard for rock excavation if required.
There is 15 holes that you will hit rock on. On the sched-
ule it shows depth of rock and depth of hole.
Within 30 minutes of this email, Dezort sent Kreiling a
geotechnical report. The geotechnical report provided details
about small test holes drilled in the area of the jobsite.
Thirteen test holes had a notation of “auger refusal,” which
indicated that when the test hole was being drilled, the device
used to drill the test hole hit something that prevented it from
going any deeper. Kreiling testified that “auger refusal” could
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have been caused by encountering rocks that were small in
comparison to the excavating equipment, by a rock shelf,
or by full rock. The geotechnical report also indicated that
“[v]ery hard materials were encountered in . . . 19 of the 31
borings at depths ranging from 13.5 to 33.5 feet below the
existing ground surface.”
The geotechnical report also had a section titled “Regional
Geology.” This section stated:
[T]he project area is underlain by residual soils derived
primarily from the in-situ weathering of the underly-
ing bedrock (Wissahickon Formation) and several of its
members in this portion of the county, which include
the Lower Peltic Schist, and Boulder Gneiss, which are
comprised primarily of a fine to medium grained chlorite,
muscovite schist with zones of quartzite, metagraywacke,
and gneiss. A small portion of the transmission align-
ment also appears to be underlain by rocks associated
with the Ultramafic and Gabbroic Rock, comprised of
metagabbros, talcs, serpentinites, actinolite schists.
Dezort testified that metagraywacke is “a type of quartz
schist rock,” that gneiss is “similar to schist, but . . . much
harder and more compressed over time,” and that “muscovite
schist with zones of quartzite” would mean that there would
be a possibility of hitting quartz. Kreiling admitted that the
geotechnical report was the best source of information about
subsurface conditions and that it was available to him when he
formulated Dietzel’s bid.
Dietzel submitted a bid to Wever to perform the excavation
work for $722,000 and estimated that it would be able to com-
plete the work in 100 days. Wever accepted Dietzel’s bid.
When Dietzel began its excavation work, it discovered
granite and quartz. According to Dietzel, this was contrary to
a sentence in Dezort’s initial email stating that the rock would
be “[s]chist, [a] sheet like rock consisting of mud and clay.”
Dietzel’s president, Andrew Dietzel, alleged at trial that the
hard rock Dietzel encountered was “undrillable” and that if he
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had known the project was going to require the excavation of
granite and quartz, Dietzel would not have submitted a bid.
Kreiling also testified that, based on Dezort’s representation
that the rock was schist, he bid the job believing that any rock
encountered would “break up well” and be easily excavated.
Based on this information, Dietzel asserted a claim of neg-
ligent misrepresentation. The district court rejected the claim,
finding that Dietzel did not justifiably rely on the representa-
tion in Dezort’s email.
(b) Analysis
Dietzel contends that the district court erred in finding that
it did not justifiably rely on Dezort’s representation and that
it proved all other elements of its negligent misrepresentation
claim. We focus on the issue of justifiable reliance, because we
find it resolves Dietzel’s argument.
[5,6] In order to prevail on a claim of negligent misrepre-
sentation, the plaintiff must prove justifiable reliance on the
alleged misrepresentation. See, e.g., Lucky 7 v. THT Realty,
278 Neb. 997, 775 N.W.2d 671 (2009). In determining whether
an individual reasonably relied on a misrepresentation, courts
consider the totality of the circumstances, including the nature
of the transaction; the form and materiality of the representa-
tion; the relationship of the parties; the respective intelligence,
experience, age, and mental and physical condition of the par-
ties; and their respective knowledge and means of knowledge.
Nathan v. McDermott, 306 Neb. 216, 945 N.W.2d 92 (2020). In
both negligent and fraudulent misrepresentation cases, whether
the plaintiff exercised ordinary prudence is relevant to whether
the plaintiff justifiably relied on the misrepresentation when
the means of discovering the truth was in the plaintiff’s hands.
Id. We have treated the question of whether a plaintiff jus-
tifiably relied on a representation as a question of fact. See
Lucky 7, supra.
Dietzel contends that the statement in Dezort’s email regard-
ing schist was a positive statement of fact and that thus, under
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our law, Dietzel was justified in relying upon it and had no
obligation to further investigate it. In support of this conten-
tion, Dietzel correctly points out that we have said that a
plaintiff is justified in relying upon a positive statement of fact
if an investigation would be required to discover its truth. See
Nathan, supra. We have stated, however, that this is a “general
rule.” Lucky 7, 278 Neb. at 1003, 775 N.W.2d at 676. Accord
Omaha Nat. Bank v. Manufacturers Life Ins. Co., 213 Neb.
873, 332 N.W.2d 196 (1983). And we have also made clear that
this principle does not permit a plaintiff to focus exclusively on
an alleged misrepresentation and ignore other information in its
possession. See Lucky 7, supra.
Here, Kreiling claims to have understood Dezort’s email
to represent that the only rock Dietzel would encounter in its
excavation would be schist, a “sheet like rock consisting of
mud and clay.” Significant evidence, however, suggested that
Dietzel was not justified in relying on such an understanding.
The alleged misrepresentation appears in a terse email intro-
ducing the idea of Dietzel’s submitting a bid on the project. In
that email, Dezort did not specifically state that the only rock
in the area would be schist or otherwise indicate that the area
would not have other rock that was more difficult to drill. In
addition, shortly after sending the introductory email, Dezort
sent the geotechnical report, which contained detailed and
more technical information. Kreiling, who had years of experi-
ence reviewing such information and submitting bids, admitted
that this additional information was the best source of informa-
tion regarding subsurface conditions. This information reported
the “auger refusal” that occurred during testing and the discov-
ery of “[v]ery hard materials” in a number of locations. It also
listed various types of rock found in the area, which Dezort
testified indicated the presence of rock that was “much harder
[than] schist,” as well as quartz. Viewing all this evidence in
the light most favorable to Wever, we cannot conclude that the
district court clearly erred by finding that Dietzel did not estab-
lish justifiable reliance.
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2. Good Faith and Fair Dealing
(a) Additional Background
Dietzel also contends that Wever is liable for failing to
take certain actions shortly after it began work on the proj-
ect. Wever arrived at the project site in early April 2015, but
Dietzel was unable to begin work at that time. To avoid fall-
ing behind schedule, the parties agreed that Wever would rent
equipment and begin to perform a portion of the excavation
work for which Dietzel had submitted a bid.
Wever began excavation work at a location provided by
MasTec, but it soon encountered materials that were too hard
for it to excavate. Wever responded by moving to another
location where Wever did not encounter the same difficulties.
Wever did not, however, inform Dietzel about the hard rock
discovered in its initial excavation work.
When Dietzel arrived at the scene several weeks later, it was
directed to begin excavating in the area where Wever encoun-
tered hard rock. Like Wever, Dietzel encountered hard rock
that was difficult to excavate.
Dietzel alleged that Wever’s failure to disclose that it had
discovered hard rock was a breach of its implied covenant
of good faith and fair dealing. The district court rejected
the claim, reasoning that Wever was not obligated to inform
Dietzel about the hard rock, because the existence of hard
rock was something Dietzel should have contemplated given
the information that was available to it at the time it submitted
its bid.
(b) Analysis
Dietzel contends that the district court erred by finding that
Wever did not breach the implied covenant of good faith and
fair dealing. Relying again on the reference in Dezort’s email
to schist, Dietzel contends that Wever was obligated to inform
Dietzel about the hard rock. When it did not, Dietzel sub-
mits, Wever breached the implied covenant of good faith and
fair dealing.
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[7] We note that at the time Wever initially discovered hard
rock in early April 2015, the parties’ subcontract had not been
executed. The subcontract was dated April 24, 2015. Dietzel
apparently takes the position that Wever’s implied duty of
good faith and fair dealing arose prior to the execution of the
subcontract. We have said that in order for the covenant of
good faith and fair dealing to apply, there must be in existence
a legally enforceable contractual agreement. Acklie v. Greater
Omaha Packing Co., 306 Neb. 108, 944 N.W.2d 297 (2020).
At least one court has expressly held that the duty of good
faith and fair dealing is not imposed until an agreement has
been reached and that a plaintiff must rely on other theories of
recovery for alleged deception prior to a contract being formed.
See Husman, Inc. v. Triton Coal Co., 809 P.2d 796 (Wyo.
1991). We nonetheless assume for the purpose of our analysis
that Wever was bound by the covenant of good faith and fair
dealing when it discovered the hard rock.
[8-10] The implied covenant of good faith and fair dealing
exists in every contract and requires that none of the parties do
anything which will injure the right of another party to receive
the benefit of the contract. In re Application of Northeast Neb.
Pub. Power Dist., 300 Neb. 237, 912 N.W.2d 884 (2018). The
nature and extent of an implied covenant of good faith and fair
dealing are measured in a particular contract by the justifiable
expectations of the parties. Id. Where one party acts arbitrarily,
capriciously, or unreasonably, that conduct exceeds the justifi-
able expectations of the second party. Id. The question of a
party’s good faith in the performance of a contract is a question
of fact. Spanish Oaks v. Hy-Vee, 265 Neb. 133, 655 N.W.2d
390 (2003).
We find no clear error in the district court’s conclusion that
Wever did not breach the implied covenant of good faith and
fair dealing. For reasons we have already explained, the dis-
trict court did not clearly err by finding that Dietzel could not
justifiably rely on Dezort’s email to believe that only schist
would be encountered in the excavation. The same evidence
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that supports that conclusion supports a conclusion that Wever
did not breach the implied covenant of good faith and fair
dealing. If Dietzel could not justifiably rely on Dezort’s email
to believe the work involved only schist, we do not see how it
could justifiably expect to be informed if Wever encountered
rock other than schist, nor do we see how Wever could be said
to have acted arbitrarily, capriciously, or unreasonably by not
disclosing that information.
3. Adequate Assurances
(a) Additional Background
Dietzel’s next two assignments of error pertain to its conten-
tion that when it abandoned the project in October 2015, it was
legally entitled to do so. In order to discuss these assignments
of error, it is necessary to set forth a fairly detailed discussion
of the way in which parties on the project were paid.
The parties entered into what they refer to as a “paid-when-
paid” contract. The phrase “paid-when-paid” refers to the fact
that Wever was contractually required to make payment to
Dietzel only after it received payment from MasTec. The con-
tract provided that Wever was to make payment within 7 days
of receiving payment from MasTec.
Dietzel sent Wever two types of invoices. One type sought
“progress payments” under the contract—the payment Dietzel
was owed for the percentage of work it had completed from its
scope of work. The other sought payment of “change orders”—
a request for payment for additional work Dietzel claimed was
not covered by the contract. Wever was then expected to sub-
mit these requests for payment, with a contractually authorized
markup, to MasTec.
Dietzel submitted an invoice to Wever dated July 1, 2015,
for progress payments for April, May, and June. Wever sent
checks to Dietzel for progress payments in July, August, and
September: It sent Dietzel a check for $41,706 dated July 17,
2015; a check for $68,708 dated August 10, 2015; and a check
for $15,143.06 dated September 30, 2015. Kathryn Hisel, the
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chief financial officer of Wever, testified that it often took
MasTec 60 to 90 days after Wever sent a bill to send a payment
to Wever.
Dietzel submitted its first change order for excavating hard
rock on July 19, 2015. The change order sought payment of
$328,507.
The owner of Wever, James Wever, testified that he attended
a meeting in late July 2015 in which the change order was dis-
cussed. James Wever testified that Andrew Dietzel and repre-
sentatives of BG&E and MasTec were also present. According
to James Wever, BG&E and MasTec did not commit to paying
the change order, but did agree to review it and provide them
with an answer “at a later time.”
Dietzel employees made inquiries with Wever regarding the
status of the change order after it was submitted. On August
6, 2015, a Dietzel employee emailed Dayna Wever, Wever’s
president, and asked about the change order. Dayna Wever
responded:
[T]he rock change order is out if [sic] our hands and is on
the table with Mas[T]ec and BG[&]E. Change orders are
not paid until approved by owner. We will pay you when
and if we are paid. . . . As I told Andrew [Dietzel] in our
phone conversation last week, I am emailing and asking
about it everyday [sic] and when we hear something I will
definitely pass it on to you!!
On August 14, 2015, Dietzel submitted a second change
order for excavating hard rock, requesting an additional
$73,943.
Hisel and Dezort testified that Dietzel’s change orders were
submitted to MasTec. Dezort testified that when a change
order was pending, Wever would “keep on asking [about] the
status of that change order during the duration of the project.”
Andrew Dietzel acknowledged during his testimony that no
one at Wever ever disputed his change order requests, indi-
cated that they were rejecting a change order request, or stated
that they would not pursue the change orders.
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At some point, BG&E clarified that it would not grant
Dietzel’s change orders related to rock excavation until 288
cubic yards of rock had been excavated. On September 7,
2015, Andrew Dietzel communicated to Wever by email that,
unless its change orders were granted, Dietzel would not
excavate where it had encountered hard rock. In response,
Wever sent a letter explaining it had “pursued a change order
with MasTec and BG[&]E on [Dietzel’s] behalf”; that pursu-
ant to the subcontract, it would pay Dietzel only if it first
received payment; and that MasTec and BG&E had denied the
change order request until 288 cubic yards of rock had been
excavated.
On September 24, 2015, Dietzel sent a letter requesting that
Wever provide assurance within 7 days that it was “pursuing
Dietzel’s claims for outstanding progress payments and change
orders” and that it would “receive payment of these outstanding
amounts.” On September 25, Dayna Wever forwarded Andrew
Dietzel an email from a representative of MasTec. The MasTec
representative had asked in his email, “Which foundations hit
undrillable rock?” Andrew Dietzel responded with information
about the specific foundations.
On October 5, 2015, Dietzel abandoned the project. Andrew
Dietzel sent Dayna Wever a letter explaining Dietzel’s decision
to leave. Among the reasons he cited were Wever’s failure to
provide assurances of payment and failure to provide docu-
mentation that it was “prosecuting Dietzel’s claims.” Based on
these failures and others, Andrew Dietzel wrote, Dietzel con-
sidered Wever in material breach of the contract. The district
court found that Dietzel committed the first material breach of
the contract when it abandoned the project.
(b) Analysis
Dietzel argues that the district court erred by finding
that it committed the first material breach of the contract.
Dietzel contends that when it did not receive adequate assur-
ance that Wever was pursuing its change order requests with
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MasTec and that Wever would pay Dietzel for its change
order requests, Dietzel had the right to suspend contractual
performance.
Dietzel cites the Restatement (Second) of Contracts § 251
(1981) to argue that it had the right to request assurance
of Wever’s performance of the subcontract and that because
Wever did not provide such adequate assurance within a rea-
sonable time, Dietzel was permitted to treat the failure as a
repudiation of the subcontract. While this court has not yet
adopted § 251 of the Restatement, see McKinnis Roofing v.
Hicks, 282 Neb. 34, 803 N.W.2d 414 (2011), we need not
decide whether to adopt it here, because, even if we were to
adopt it, Dietzel cannot show that it would apply.
Section 251 states:
(1) Where reasonable grounds arise to believe that
the obligor will commit a breach by non-performance
that would of itself give the obligee a claim for damages
for total breach under § 243, the obligee may demand
adequate assurance of due performance and may, if rea-
sonable, suspend any performance for which he has not
already received the agreed exchange until he receives
such assurance.
(2) The obligee may treat as a repudiation the obligor’s
failure to provide within a reasonable time such assurance
of due performance as is adequate in the circumstances of
the particular case.
Restatement (Second) of Contracts § 251 at 276-77.
Dietzel argues that Wever was obligated to assure it that it
was “prosecuting” Dietzel’s change orders with MasTec and
that it would pay Dietzel for its change orders. But Wever
would have such an obligation under § 251 only if Dietzel had
“reasonable grounds . . . to believe” that Wever would “com-
mit a breach by non-performance.” Viewing the evidence in
the light most favorable to Wever, we cannot say that Dietzel
had reasonable grounds to believe that Wever was or would be
committing a breach.
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Significant evidence was introduced at trial showing that
Dietzel did not have reasonable grounds to believe that Wever
was not pursuing payment of the change orders. Wever employ-
ees testified that Dietzel’s change orders were submitted to
MasTec. Andrew Dietzel acknowledged that no one at Wever
suggested otherwise. Beyond that, there was testimony that
Andrew Dietzel was present at a meeting with James Wever
and representatives from BG&E and MasTec in which the first
change order was discussed. Further, Dayna Wever’s email to
a Dietzel employee stated that Dayna Wever was repeatedly
asking MasTec about it and she had told Andrew Dietzel as
much. Finally, the September 9, 2015, letter informed Dietzel
that Wever had “pursued a change order with MasTec and
BG[&]E on your behalf.”
Faced with all this evidence that Wever was submitting its
change orders and pressing MasTec to approve them, Dietzel
focuses on the September 25, 2015, email Dayna Wever for-
warded to Andrew Dietzel, in which a MasTec representa-
tive asked, “[w]hich foundations hit undrillable rock?” Dietzel
argues that this email shows that Wever had not been submit-
ting its change orders because the MasTec representative did
not know that Dietzel had been excavating undrillable rock.
This does not strike us as a likely interpretation, let alone the
only reasonable one. Taken at face value, the question simply
sought clarification on which foundations were at issue.
Based on the evidence that Wever was consistently com-
municating that the change orders were being pursued, as
well as the evidence that Dietzel had actual knowledge that
the July 2015 change order was submitted, Dietzel did not
have reasonable grounds to believe that Wever had or would
breach any obligation with respect to the pursuit of Dietzel’s
change orders.
We also conclude that at the time of its September 24, 2015,
letter requesting assurances, Dietzel did not have reasonable
grounds to believe that Wever would breach the subcontract
by not making payment on its change orders. Here, it was not
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enough for Dietzel to show that it had a reason to believe that
it might not receive payment for all the change orders it sub-
mitted. Rather, Dietzel must have had reasonable grounds to
believe that Wever would breach the subcontract by not pay-
ing its change orders. See Restatement (Second) of Contracts
§ 251 at 276 (obligation to provide assurance applies “[w]here
reasonable grounds arise to believe that the obligor will com-
mit a breach by non-performance”). This distinction is relevant
because of the paid-when-paid clause. Because the subcontract
obligated Wever to make payment only if it received pay-
ment from MasTec, Dietzel must show that it had reasonable
grounds to believe that Wever might receive payment from
MasTec on a Dietzel change order and refuse to pass along
payment to Dietzel. The evidence does not support a finding
that Dietzel had reasonable grounds to believe this. At the time
that the request for assurances was made, Wever had timely
made contractually obligated payments to Dietzel, and Dietzel
does not direct us to anything in the record suggesting that it
would not do so in the future.
4. Material Breach
(a) Additional Background
In addition to its adequate assurances theory, Dietzel con-
tends that it was also legally entitled to abandon the project
on October 5, 2015, because Wever had materially breached
the contract. Its claim of material breach rests on Wever’s
receipt of a payment from MasTec on September 22 and fail-
ure to make payment to Dietzel for the portion to which it was
entitled by September 29, as required by the paid-when-paid
clause.
There appears to be no dispute that Wever did, in fact,
receive payment from MasTec on September 22, 2015. On
September 30, Dayna Wever emailed Andrew Dietzel stating
that Wever had received a payment from MasTec and would
be sending Dietzel its contractually required portion promptly.
The district court found that Dietzel received the check for
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$15,143.06 on October 6, which was 1 day after it abandoned
the jobsite.
The district court determined that because the payment was
not made by the time required by the subcontract, Wever com-
mitted a breach. The district court concluded, however, that
the breach was not material and that thus, Dietzel’s nonper
formance of the contract was not excused.
(b) Analysis
[11,12] Dietzel argues that the district court erred when
it found that Wever’s untimely payment was not a material
breach of the subcontract. A material breach is a failure to do
something that is so fundamental to a contract that the failure
to perform that obligation defeats the essential purpose of the
contract or makes it impossible for the other party to perform
under the contract. Siouxland Ethanol v. Sebade Bros., 290
Neb. 230, 859 N.W.2d 586 (2015). A material breach will
excuse the nonbreaching party from its performance of the
contract. Id. Unless there is only one reasonable conclusion
regarding the issue, in which case a court decides the issue as
a matter of law, whether a breach was material is a question of
fact. See id.
We understand Dietzel to primarily argue that any delayed
payment to a construction contractor is a material breach as a
matter of law. Dietzel claims that because timely payment to
a contractor is critical to the contractor’s ability to cover its
expenses and continue working, delayed payments are always
material breaches. We are not persuaded.
[13] We have said that whether or not a breach is mate-
rial and important is a question of degree which must be
answered by weighing the consequences of the breach in
light of the actual custom of persons in the performance of
contracts similar to the one involved in the specific case.
Siouxland Ethanol, supra. A test that considers the degree
and consequences of the breach does not lend itself to the
kind of bright-line rule Dietzel asks us to adopt. Furthermore,
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this does not appear to be the prevailing rule in construction
law. A construction law treatise relied on by Dietzel states,
“Nonpayment [of a construction contractor] for limited periods
or in insignificant amounts, while annoying, rarely are deemed
to constitute material breaches.” 5 Philip L. Bruner & Patrick
J. O’Connor, Jr., Bruner and O’Connor on Construction Law,
§ 18:26 at 959 (2002). A case Dietzel cites similarly disavows
the “suggest[ion] that every delay in payment will justify a
contractor in terminating performance under an installment
contract.” Zulla Steel, Inc. v. A & M Gregos, Inc., 174 N.J.
Super. 124, 132, 415 A.2d 1183, 1187 (1980).
Dietzel nonetheless maintains that under Nebraska law,
delayed payments to contractors are material breaches. In sup-
port of this argument, Dietzel relies on a fairly recent case,
Goes v. Vogler, 304 Neb. 848, 937 N.W.2d 190 (2020), and
a very old one, Howard County v. Pesha, 103 Neb. 296, 172
N.W. 55 (1919). While Goes affirmed a district court’s find-
ing that a particular nonpayment to a contractor was material,
we did not hold that all such delayed payments are material.
As for Howard County, in that case, this court did find that a
county’s failure to pay a contractor as required by the contract
entitled the contractor to suspend performance. And, to be fair,
the court quoted some language from other jurisdictions that
could be read to suggest that the failure to make payments to
a contractor as required justifies the contractor in abandon-
ing the work. That said, in more than a century since Howard
County was published, we do not appear to have ever cited
the case in a published decision and the idea that any delay
in paying a construction contractor is a material breach as a
matter of law is inconsistent with our material breach juris-
prudence. To the extent Howard County suggests otherwise, it
is disapproved.
Of course, none of this precluded Dietzel from contend-
ing that, under the circumstances of this case, Wever’s delay
in payment amounted to a material breach. The district court
rejected that argument, however, and therefore, we may reverse
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its factual determination only if we find that it was clearly
wrong. We do not believe it was. When Dietzel abandoned the
project, the payment was about a week late, but Wever had
communicated to Dietzel 1 day after the payment was due that
it would be forthcoming. That is the only evidence we have
of Wever’s making a late payment under the contract. Further,
Dietzel does not contend that Wever ultimately paid less than
the amount due, and the amount paid was relatively small in
comparison to the overall value of the contract. Neither does
Dietzel direct us to any specific evidence in the record that
without this payment, it would have been unable to continue
its work.
For the reasons provided above, we find the district court
did not err in concluding that Dietzel committed the first mate-
rial breach of the parties’ contract.
5. Damages
(a) Additional Background
Wever relied on testimony from Hisel in an attempt to prove
damages for Dietzel’s alleged breach of contract. Hisel testi-
fied about several expenses Wever incurred in the course of the
transmission line project. For each such expense, she identified
a specific amount for which Wever was claiming damages. She
testified that she arrived at those amounts by taking expenses
Wever incurred and increasing them by 15 percent pursuant
to a contractual term which permitted Wever to add a markup
to expenses incurred by Dietzel. With respect to most of the
expenses she testified to, Hisel testified that they were costs
Wever incurred after Dietzel had left the job. She admitted,
however, that some of the expenses Wever incurred prior to
Dietzel’s departure.
In addition to expenses incurred by Wever, Hisel briefly
testified that as a result of Dietzel’s actions, Wever lost the
ability to complete a segment of the transmission line project
and that, as a result, Wever lost $1,795,317. She testified that
number “was what [the lost segment] was supposed to be, our
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gross proceeds.” She did not further explain how the number
was calculated. Hisel also testified that her calculations did not
include an amount for the loss of future work with MasTec,
because there was “no way to give that an actual number.”
The district court received a spreadsheet summarizing Hisel’s
testimony regarding the damages sought by Wever. The spread-
sheet included expenses Wever incurred, as well as a line item
for “Lost Revenue” for the “Lost Segment” of the project in
the amount of $1,795,317. Those items totaled $4,263,479.99.
On cross-examination, the district court received into evi-
dence several invoices corresponding to Wever’s claimed dam-
ages. These exhibits showed some additional expenses ref-
erenced by Hisel were incurred before Dietzel abandoned
the jobsite. Hisel also admitted on cross-examination that
the invoices demonstrated that when she had increased the
expenses to account for the contractual markup, she had erro-
neously increased the expenses by 20 percent rather than 15
percent. Additional details about the evidence related to dam-
ages are incorporated in the analysis below.
The district court found that Wever was entitled to damages
that resulted from Dietzel’s materially breaching the contract
when it abandoned the jobsite. It stated that it found that
Dietzel’s abandonment resulted in damages to Wever, includ-
ing the loss of a portion of the project. It acknowledged that
evidence and testimony at trial revealed calculation errors in
Wever’s claimed damages, but found that Wever proved dam-
ages proximately caused by Dietzel’s breach in the amount of
$2,758,250.47. The district court specifically stated that this
damages amount was for damages caused by Dietzel’s aban-
doning the project.
The district court also noted an argument from Wever that
it suffered damages in the form of lost profits from jobs that
it could have otherwise completed while it was completing
this project and from future work with MasTec. The district
court then stated, “The Court finds that Wever failed to prove
its claims for lost profit related to future MasTec jobs or
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other lost profit as proximately caused by Dietzel’s breach
of contract.”
The district court offset its damages award to Wever by
$328,507, an amount it found Wever had been unjustly enriched
by Dietzel. After including the offset, it found that Wever was
entitled to $2,429,743.47. Wever does not challenge the unjust
enrichment damages on appeal.
(b) Analysis
Dietzel argues that even if the district court did not err in
finding it liable for breach of contract, it erred in its calcula-
tion of Wever’s damages. It argues that the evidence does not
support the amount of damages awarded by the district court.
Before addressing Dietzel’s arguments, we briefly review the
governing legal standards.
[14,15] We have said that “damages, like any other element
of the plaintiff’s [cause of action], must be pled and proved and
that the burden is on the plaintiff to offer evidence sufficient
to prove the plaintiff’s alleged damages.” Pan v. IOC Realty
Specialist, 301 Neb. 256, 276, 918 N.W.2d 273, 291 (2018).
Evidence of damages must be sufficient to enable the trier of
fact to estimate actual damages with a reasonable degree of
certainty and exactness. Id. Proof of damages to a mathemati-
cal certainty is not required; however, a plaintiff’s burden of
offering evidence sufficient to prove damages cannot be sus-
tained by evidence which is speculative and conjectural. Id.
Although the standard of review on appeal for the amount of
damages is generally deferential to the trier of fact, the ques-
tion of whether the evidence of damages is reasonably certain
is a question of law. See, id. (damages award “will not be dis-
turbed on appeal if it is supported by evidence and bears a rea-
sonable relationship to the elements of the damages proved”);
Pribil v. Koinzan, 266 Neb. 222, 227, 665 N.W.2d 567, 572
(2003) (“[w]e have consistently framed the question whether
the evidence of damages is ‘reasonably certain’ as a question
of law . . .”).
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(i) Expenses Incurred Before
Dietzel Abandoned Jobsite
Dietzel argues that a number of the expenses Hisel testified
to cannot support the district court’s damages award because
the evidence shows that they were incurred prior to Dietzel’s
abandonment of the project. Dietzel argues that the following
expenses fall into that category: expenses associated with the
rental and delivery of an auger; the rental, delivery, repair, and
return of a “Watson” drill; the rental of a hammer drill and
compressor; “slurry”; and a lump sum requested for miscella-
neous equipment Wever rented from United Rentals; as well as
various expenses from Greene Construction.
We agree with Dietzel as to the auger delivery, Watson
drill delivery and repair, hammer drill and compressor, and
slurry, because the undisputed evidence showed those were
expenses Wever incurred before Dietzel abandoned the jobsite.
As for the other expenses, invoices received by the district
court show that an identifiable portion of the expenses were
incurred after Dietzel departed. We find that the evidence
would thus support an award of damages for those identifiable
portions. Adjusting for Hisel’s calculation error on the contrac-
tual markup, we find that the evidence would support award-
ing Wever $4,443.60 for the return of the Watson drill, $1,886
for the expenses from Greene Construction, and $5,942.63 for
the auger rental.
This leaves the costs for renting the Watson drill and the
miscellaneous rentals from United Rentals. We find the evi-
dence for these two expenses suffer from the same deficiency:
The finder of fact would have been forced to speculate as to
what amount of the requested damages were incurred after
Dietzel abandoned the jobsite.
On the Watson drill, the record is inadequate to determine
with reasonable certainty what portion of the damages were
related to the drill and Dietzel’s abandonment of the jobsite.
Although the record includes invoices for those months after
Dietzel’s departure, the invoices list a single price for the
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Watson drill and a “2012 John Deere 350G-LC Excavator.”
The record is devoid of any references to whether or not this
additional excavator was somehow connected to the Watson
drill, whether it was necessary to perform work Dietzel would
have performed after Dietzel abandoned the jobsite, or what
portion of the invoices could be attributed to the Watson drill.
Without such evidence, the finder of fact would be left to
only speculate about what damages would be appropriate to
award to Wever for the rental of the Watson drill.
As for the rental expenses from United Rentals, the extent
of Hisel’s testimony on those expenses was that they were
incurred “when we started having to rent more support stuff
to perform their scope” and that Wever began to incur the
expenses in August 2015, which was prior to Dietzel’s leaving
the project. Hisel did not identify what equipment was rented,
for how long Wever rented it, or if all of the equipment was
rented for the same period of time. We find no basis in the
evidence by which to estimate what portion of these expenses
were incurred after Dietzel abandoned the jobsite. Thus, we
find that the record does not support awarding Wever damages
for equipment rented from United Rentals.
(ii) “SR-80” Drill
Wever presented evidence that it excavated holes after
Dietzel’s departure using a rented “SR-80” drill (SR-80). Hisel
testified that expenses for the SR-80 after Dietzel left the job-
site amounted to $418,382.62. Dietzel argues that the damages
for the SR-80 are unrelated to Dietzel’s abandonment of the
jobsite. Here, Dietzel presents several points, and we address
them in turn.
Dietzel argues that the SR-80 costs are unrelated to Dietzel’s
abandonment of the jobsite. It contends that MasTec reim-
bursed Wever for some of the expenses associated with the
SR-80 and that the SR-80 was not within Dietzel’s scope of
work. We disagree. Hisel testified that the only damages she
requested for the SR-80 were not reimbursed by MasTec. She
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also testified that Wever used the SR-80 to excavate holes
after Dietzel abandoned the jobsite. Dietzel also argues that
invoices received into evidence demonstrate that Wever rented
the SR-80 prior to Dietzel’s departure. There are invoices
indicating as much, but Hisel testified that she had identified
expenses Wever incurred after Dietzel’s abandonment.
Finding no merit to Dietzel’s arguments specific to the
SR-80, we find that the record provided competent evidence
by which to conclude that Wever had been damaged by the
continued use of the SR-80 after Dietzel abandoned the job-
site. However, because Hisel acknowledged that the requested
amount incorrectly added a 20-percent markup rather than one
of 15 percent, we adjust the amount for which the evidence
supported a damages award accordingly. We find that the evi-
dence would support an award of $400,950.01 for expenses
associated with the SR-80.
(iii) Operators and Administrative Expenses
Wever requested $538,162.50 in damages for what it
labeled “Operators Expense” and $234,000 for administrative
expenses. Hisel testified that the first category was determined
by multiplying 7,174.5 hours by a billed rate of $75 per hour.
Hisel testified that this expense was for the additional time “it
took [for Wever employees] to run a drill rig” after Dietzel
abandoned the jobsite. She also said that she was “trying to
recoup[]” money Wever spent on additional hotels, per diems,
rental pickups, and other miscellaneous expenses. She testified
that the administrative expenses were calculated by multiplying
3,120 hours by a billed rate of $75 per hour. Hisel testified that
this expense reflected the additional time Dezort and Dayna
Wever spent at the jobsite and that she and other “coordina-
tors” spent managing the project.
Hisel testified that in using the $75 per hour rate, she “was
just trying to use a medium range cost that could . . . easily be
backed up between the hourly wages and the per diem and the
hotels and meals.” She testified that Wever billed at $110 per
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hour for their superintendents’ time and “about $85” per hour
for its laborers’ time.
Dezort testified that Wever originally planned on a crew
of eight people for the project. He also testified that Wever
“ended up sticking probably about 3 of our crews on this job”
and “the job ended up taking about 6 months longer than it
should have.” Earlier, Dezort had testified that “[f]or smaller
jobs, [Wever] ran about five crews, five guys per crew.”
Dietzel argues that awarding Wever damages for operators
and administrative expenses requested by Wever would have
been clear error, because the evidence was speculative and
conjectural. Viewing the evidence in the light most favorable
to the Wever, we disagree.
Hisel’s testimony about the additional work completed by
Wever employees and how she arrived at $75 per hour, if cred-
ited, would provide the finder of fact a reasonably certain basis
to determine that Wever was damaged and the extent of those
damages. Dezort’s testimony about the additional man-hours
required by Wever employees further supported the existence
and scope of the damages. We conclude that the amounts
requested for operators and administrative expenses, in the
amounts of $538,162.50 and $234,000, respectively, were sup-
ported by the evidence. These amounts were not affected by
Hisel’s calculation error for other damages requested, so these
amounts remain unaltered.
(iv) Auger Purchase
Hisel testified that Wever was forced to purchase an auger
after Dietzel abandoned the jobsite and requested damages in
the amount of $33,391.78. Dietzel argues that awarding Wever
damages for this auger would be clear error, because Wever
can still use the auger.
We find there was sufficient evidence to support an award
of damages for this expense. Wever offered evidence that it
was forced to purchase the auger because Dietzel abandoned
the jobsite. Hisel testified that Wever rented equipment unless
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it could not do so. Although Hisel acknowledged that Wever
still owns the auger, nothing in the record suggests that Wever
would have purchased the auger at a later date if it had not
been forced to do so by Dietzel’s abandonment of the job-
site. Accounting for Hisel’s calculation error, we find that the
record would support $32,000.46 in damages for the purchase
of the auger.
(v) Remaining Items
Dietzel concedes that Wever presented sufficient evidence
regarding several expenses that were attributable to Dietzel’s
abandonment of the jobsite, including costs associated with
an “IMT” drill, moving drill rigs, and “[d]rilling [m]ud.”
Accounting for Hisel’s calculation error, we find the evidence
supported a damages award for these expenses in the amount
of $217,229.73.
Hisel also testified regarding a number of other expenses to
which Dietzel does not present specific arguments on appeal.
Therefore, we presume that the record contained adequate sup-
port for the district court to award Wever damages for those
items. See Nathan v. McDermott, 306 Neb. 216, 945 N.W.2d
92 (2020) (to be considered by appellate court, alleged error
must be both specifically assigned and specifically argued in
brief of party asserting error). These items include expenses for
equipment from Jeffrey Machine, “Vac Trucks,” “Frac Tanks,”
steel casing, concrete, and “Teeth.” Accounting for Hisel’s cal-
culation error, these expenses amount to $308,289.10.
(vi) Lost Revenue
Hisel briefly testified that Wever lost $1,795,317 in “gross
proceeds” because, as a result of Dietzel’s breach, it was not
permitted to complete its work on a segment of the project.
Wever’s damages spreadsheet also listed this amount as “Lost
Revenue.”
Dietzel argues that the district court specifically found that
Wever was not entitled to any recovery for the lost segment
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of the project. It is not so clear to us that is the case. Dietzel
points to the language quoted above in which the district court
stated that Wever “failed to prove its claims for lost profit
related to future MasTec jobs or other lost profit as proxi-
mately caused by Dietzel’s breach of contract.” That language,
however, immediately follows a reference to Wever’s claims
for lost profits from future work with MasTec or other work it
could have completed while finishing this project. Even so, we
agree with Dietzel that the evidence did not support an award
of damages for the segment of the project Wever was not able
to complete.
[16] Hisel asserted in her testimony that if Dietzel’s breach
had not caused Wever to lose a segment of the project,
Wever’s “gross proceeds” or “lost revenue” would have been
$1,795,317. Wever was not entitled to an award of damages for
lost revenue. In a breach of contract case, the ultimate objec-
tive of a damages award is to put the injured party in the same
position the injured party would have occupied if the contract
had been performed, that is, to make the injured party whole.
TNT Cattle Co. v. Fife, 304 Neb. 890, 937 N.W.2d 811 (2020).
An award of lost revenue, however, would have made Wever
more than whole, because it would not account for the addi-
tional expenses Wever would have incurred to complete the
work for which it would have received the lost revenue.
[17] A party can, with adequate evidence, recover lost prof-
its. See, e.g., Aon Consulting v. Midlands Fin. Benefits, 275
Neb. 642, 748 N.W.2d 626 (2008). Here, however, Wever’s
evidence was not adequate. Hisel did not provide any mean-
ingful explanation as to how the $1,795,317 figure for “gross
proceeds” was calculated, let alone what Wever’s expenses
likely would have been to earn those proceeds. A claim for lost
profits must be supported by some financial data which permit
an estimate of the actual loss to be made with reasonable certi-
tude and exactness. World Radio Labs. v. Coopers & Lybrand,
251 Neb. 261, 557 N.W.2d 1 (1996). We note that even Wever
appears to recognize the frailty of its claim for an award of
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damages for lost revenue associated with the lost segment of
the project. On redirect, Wever’s counsel asked Hisel what
Wever’s recovery would be if the lost revenue evidence was
completely deficient, and on appeal, Wever does not attempt
to argue that its evidence supported an award for lost revenue
associated with the lost segment of the project.
(vii) Summary
Considering each of the above, we find that viewing the evi-
dence in the light most favorable to Wever, the record would
support awarding Wever damages for the following expenses in
the following dollar amounts:
Item Amount
Operator’s Expense $ 538,162.50
Administrative Expense 234,000.00
SR-80 400,950.01
Watson Drill Return 4,443.60
Greene Construction 1,886.00
90˝ Auger Rental 5,942.63
90˝ Auger Purchase 32,000.46
IMT Drill 185,769.85
Moving Drill Rigs 27,370.00
Drilling Mud 4,089.88
Jeffrey Machine 42,006.96
Vac Trucks 98,673.11
Frac Tanks 17,940.59
Steel Casing 66,936.13
355.89 CY Concrete 80,626.88
Teeth 2,105.43
TOTAL $1,742,904.03
Because the evidence would not support the entirety of
the damages awarded by the district court, we must reverse
that portion of the judgment and remand the cause to the dis-
trict court with directions to enter judgment in the amount of
$1,742,904.03.
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V. CONCLUSION
We find that the district court did not err by rejecting
Dietzel’s claims of negligent misrepresentation and breach
of the implied covenant of good faith and fair dealing. We
likewise find no error in the district court’s conclusions that
Dietzel was not entitled to suspend contractual performance
due to Wever’s failure to provide adequate assurances and that
Dietzel committed the first material breach of the contract.
Because, however, we find that the evidence did not sup-
port the entirety of the damages awarded by the district court,
we reverse the district court’s damages award and remand the
cause to the district court with directions to enter judgment
against Dietzel and in favor of Wever on Wever’s breach of
contract claim in the amount of $1,742,904.03 and, taking
into account the offset for Wever’s unjust enrichment liabil-
ity, to order that Dietzel is liable to Wever in the amount of
$1,414,397.03. In all other respects, the judgment of the dis-
trict court is affirmed.
Affirmed in part, and in part reversed
and remanded with directions. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487070/ | In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-22-00171-CV
__________________
IN THE INTEREST OF H.M.R.J.
__________________________________________________________________
On Appeal from the County Court at Law
Orange County, Texas
Trial Cause No. C210006-D
__________________________________________________________________
MEMORANDUM OPINION
Following a bench trial, the trial court found: (1) that Mother
endangered H.M.R.J., her then fifteen-month-old daughter and the
subject of this suit; (2) that Mother failed to comply with the trial court’s
order specifying the actions Mother was required to take before the trial
court would require the [Department] to return the child to Mother; and
(3) that terminating Mother’s parent-child relationship with H.M.R.J. is
in H.M.R.J.’s best interest. 1 Relying on these findings, the trial court
1Tex. Fam. Code Ann. § 161.001(b)(1)(E), (O), (b)(2).
1
signed a judgment terminating Mother’s relationship with H.M.R.J.2
Mother timely appealed from the judgment. In three issues, Mother
argues the evidence is insufficient to support the trial court’s findings
terminating her relationship with H.M.R.J., whom we will call Sara in
the appeal. 3 But we conclude the evidence is legally and factually
sufficient to support the trial court’s findings for the reasons explained
below. So we will affirm.
Background
Before addressing Mother’s arguments as she presents them in her
brief, we discuss the background that led to the Department filing the
case and the trial. In our discussion, however, the evidence is presented
in the light favoring the trial court’s findings. 4 To begin, we start with
the Department’s suit to terminate Mother’s parent-child relationship
2The trial court also terminated Father’s parent-child relationship
with H.M.R.J. after Father signed an affidavit of relinquishment. Father
did not appeal from the trial court’s order.
3We use pseudonyms for the names of the minor and members of
her family to protect Sara’s identity. Tex. R. App. P. 9.8 (allowing courts
to protect the identities of minors in parental-rights termination cases).
We further note the Department sued Father in this suit, and the trial
court terminated his relationship with Sara. Father, however, did not
appeal.
4In re J.O.A., 283 S.W.3d 336, 344-45 (Tex. 2009) (citing In re J.F.C.,
96 S.W.3d 256, 266 (Tex. 2002)).
2
with Sara, filed in January 2021. The petition is supported by an affidavit
signed by Kaitlin Clark, an investigator employed by the Department.
Clark’s affidavit states that the day after Sara was born, the Department
received a report alleging Mother was neglectful in supervising Sara.
In her affidavit, Clark describes that Mother and Father have an
extensive history with the Department, which dates to 2013. When the
Department sued and asked the court to place Sara in its custody, Mother
had already been involved with the Department in cases arising from her
neglectful care of her first three children. These earlier cases were
resolved in 2018, when Mother signed affidavits and voluntarily
relinquished her parental rights to these children when the trial court
signed orders terminating Mother’s rights to them. When the trial court
terminated Mother’s rights to her other children in 2018, Mother’s other
children were then ten, four, and one-year old. That said, evidence of how
Mother cared for her first three children is evidence the trial court heard
and could consider as relevant to how Mother would care for Sara if Sara
were to be returned to her should Mother’s past patterns of conduct
continue.
3
Mother’s history of neglect caring for her children is tied to her
history with issues involving her mental health combined with a history
of her use of illicit drugs. Clark’s affidavit revealed that when the
Department learned of Sara’s birth, it was aware of Mother’s pre-existing
history tied to her use of synthetic marijuana, negligent supervision of
her other children, and her failure to provide her other children a
suitable, safe place to live.
Based on the allegations in the Department petition and Clark’s
supporting affidavit, the trial court named the Department as Sara’s
temporary managing conservator. When the hospital discharged Sara,
the Department placed her in foster care. In a subsequent adversarial
hearing, the trial court ordered Mother to comply with the requirements
of a family service plan. Under the plan, the Department’s initial goal
was to reunite Sara with her mother. The initial plan the Department
filed with the trial court—a plan dated February 2021—required Mother
to complete several tasks. Among other requirements, the tasks the trial
court ordered Mother to complete included: (1) maintaining a safe, stable,
and appropriate home environment free from illegal drugs and violence,
(2) attending and completing a drug and alcohol assessment, (3)
4
submitting to alcohol and drug assessments, and (4) participating in and
completing a mental health assessment to address her mental health. By
May 2021, however, the Department changed the primary goal of the
family service plan from family reunification to unrelated adoption.
The trial court called the case to trial in May 2022. Nine witnesses
testified in the trial: (1) Mother; (2) the Department’s investigator,
Kaitlin Clark; (3) a psychologist, Dr. Nisha Amin; (4) a Child Protective
Services caseworker assigned to Sara’s case between September 2021
and December 2021, Randi Frazee; (5) a licensed professional counselor
who saw Mother in counseling, Ann Williams; (6) the Child Protective
Services caseworker assigned to Sara’s case as of April 2021, Beth Green;
(7) the CASA volunteer in Sara’s case, who testified that, in her opinion,
it was in Sara’s best interest for the court to terminate Mother’s and
Father’s parental rights; (8) one of Sara’s foster parents, who described
Sara’s medical problems, how those problems were being addressed while
Sara was in foster care, what a typical day of Sara’s life was like in the
foster home, and that Sara’s foster parents wanted the trial court to
terminate Mother’s and Father’s rights so they could adopt Sara; and (9)
Sara’s other foster parent, who gave similar testimony.
5
In general, the evidence in the trial shows that around 30 weeks
into Mother’s pregnancy, or about seven weeks before Sara was fully
developed, Sara was born. At birth, Sara weighed less than 3 pounds.
Sara couldn’t breathe or feed without assistance when she was born.
Along with those problems, Sara was diagnosed with having a hole in her
heart. Sara remained hospitalized for two months before she was
discharged.
In January 2021, the Department sued Mother and Father and
asked the trial court to remove Sara from her parents’ custody and name
the Department as Sara’s temporary sole managing conservator. In the
suit, the Department sought to reunify Sara with her parents. But the
Department also alleged that if reunification was not possible, it
requested that the court terminate Sarah’s relationship with her parents.
The affidavit Clark signed to support the Department’s petition for
removal was admitted without objection in the trial. Her affidavit
includes evidence addressing deficiencies in Mother’s ability to properly
supervise and provide Sara with a safe home. For instance, Clark’s
affidavit reveals that between 2013 and 2016, the Department required
Mother to complete services with the Department to improve her
6
parenting skills on three separate occasions after the Department
determined that Mother’s use of synthetic marijuana combined with the
conditions Mother and her children were living in were dangerous to
Mother’s first three children, yet Mother didn’t correct these problems,
and instead she chose to voluntarily relinquish her rights. Clark’s
affidavit shows that Mother attended family-based-safety programs in
2015 and 2016. Still, even after attending these classes and completing
these programs, Mother’s first two children—both girls, one age six and
the other not yet three-years old—were found beside a feeder road next
to an interstate highway without an adult. Clark’s affidavit goes on to
state that in 2017, these same two children told an adult that Father
(who is the stepfather to Mother’s first two children) had sexually abused
them. They also claimed that Mother knew they were being abused. So
in 2017, the Department filed suit to terminate Mother’s parental rights
to these two girls, their biological father’s rights to them, and then later
filed a suit to terminate Mother’s parental rights to Mother’s and Father’s
son, who in 2017 when the suit was filed was not yet one year old. As
previously mentioned, Mother resolved these cases by signing affidavits
7
voluntarily relinquishing her rights. Father resolved the case involving
his son by signing an affidavit voluntarily relinquishing his rights.
The trial court also heard testimony that shortly after Sara was
born, Mother told an investigator in a meeting that Mother “denied any
drug use.” Mother also told the investigator she spoke to that she was not
currently being treated for any conditions related to her mental health,
and that she had discontinued medications she used for the mental
condition after learning she was pregnant. But that was not the only
evidence admitted in the trial relevant to whether Mother used drugs
while pregnant with Sara. The trial court saw a report during the trial
that in June 2021, Mother told a psychologist she had abused “drugs for
eleven years on and off[,] but stated she has been sober for one year as of
May 28, 2020.” Mother told the same psychologist she was diagnosed by
a mental health professional she saw when she was sixteen “with bipolar
disorder, schizophrenia, depression and anxiety[,]” but “[s]he has not
seen one since.” The report was admitted into evidence during the trial.
Given Mother’s history with the Department, the Department
asked Mother to submit to further drug testing. Drug screens performed
on hair and urine samples Mother submitted in response to the
8
Department’s request were negative. Still, the Department questioned
whether Mother was still using synthetic marijuana because it is difficult
according to the Department’s investigators to detect synthetic
marijuana on tests. The Department’s investigators also continued to
question Mother’s ability to safely care for a child given her history with
the Department.
As for Mother’s home, Mother told the investigator she spoke to at
the hospital that the house where she planned to take Sara was “not
ready, as there is no electrical wiring in the home.” In January 2021,
Clark went to Mother’s home to assess its condition. At trial, Clark
described what she discovered:
There was a lack of electricity and plumbing in the home.
There were soft spots on the floor where I was told not to walk
for fear of falling through the floor. There w[ere] choking
hazards throughout the home; uncleanliness. There was a
large dog in the home. There was garbage in areas where
garbage should not be. There were a multitude of safety
concerns in the home.
Clark took photographs, and the photos were admitted into evidence in
the trial. According to Clark, the conditions she found in Mother’s home
in the inspection were like those the Department found when the
9
Department had investigated Mother’s other cases, cases that ended with
orders terminating Mother’s parental rights to her other children.
The trial court also heard evidence that were Sara to be returned
to Mother’s custody, Father (who had been accused by Mother’s first two
children of sexual abuse) might have access to Sara, as Mother and
Father were still married. Mother denied that she and Father still had a
relationship, but she didn’t deny they were still married. She explained
she had not gotten a divorce because she didn’t have money to get one.
Beth Green—a Child Protective Services caseworker who worked on
Sara’s case for about three months—testified that Mother doesn’t “seem
to understand the concern” created by the choices Mother has made more
than once to live with men who have a history of sexually abusing
children.
The trial court also considered the reports and the testimony of
several expert witnesses in the trial. Dr. Amin, a psychologist, was the
Department’s primary expert. She testified that she assessed Mother in
2015 after the Department took Mother’s children into custody from her
that year. The trial court admitted Dr. Amin’s 2015 report into evidence
during the trial. In 2015, Dr. Amin’s diagnostic impressions of Mother
10
included bipolar I disorder, attention-deficit/hyperactivity disorder,
generalized anxiety disorder, substance use disorder (severe in remission
as self-reported), alcohol use disorder (moderate in remission as self-
reported), cannabis use disorder (severe in remission as self-reported),
and dependent personality disorder with schizoid personality features.
In her 2015 report, Dr. Amin recommended that Mother “will need to
ascertain a sponsor and develop a structured regimen which will foster a
sober lifestyle through further education and counseling.” The report also
notes that Mother “admittedly has not been consistent with treatment in
the past (and admittedly would not have sought out the treatment on her
accord, given her self-medication through drug and alcohol abuse) and
therefore on-going psychiatric treatment will be crucial.” Dr. Amin
recommended “psychopharmacological intervention[,]” and she noted
Mother “has a limited understanding of how drug and alcohol abuse
impacts children and the family system short and long-term[.]”
During the trial, Dr. Amin explained she reviewed her report and
the report of Dr. Meier. Dr. Amin testified she didn’t find “much of an
inconsistency” between the findings she included in the 2015 report and
what Dr. Meir included in the report he prepared after he saw and
11
evaluated Mother in 2021. And Dr. Amin testified that, based on her 2015
and his 2021 report, it didn’t appear that Mother, between 2015 and
2021, had adequately addressed the mental health issues she had
identified in her 2015 report. According to Dr. Amin, that’s because
“Mother doesn’t recognize her own mental health problems, so she
ha[s]n’t seen a psychiatrist.” And Dr. Amin explained that if Mother’s
past patterns of behavior remain constant and continue to prevent her
from addressing her psychological issues, a problem exists with Mother’s
“ability to be an effective parent.” Relying on what Mother reported to
Dr. Meier about when she quit using drugs, Dr. Amin testified that
Mother used illicit drugs when she was pregnant with Sara. According to
Dr. Amin, Mother’s use of drugs in the pregnancy “endangered the
physical or emotional wellbeing of that child.” Dr. Amin also testified she
doesn’t believe Mother has the ability to effectively parent Sara to age
18.
Dr. Robert Meier, a psychologist who evaluated Mother in June
2021, didn’t testify in the trial. The Department, however, offered and
the trial court admitted Dr. Meier’s six-page report of the psychological
evaluation he prepared after seeing and testing Mother in 2021. Dr.
12
Meier’s report reflects Mother told him she has a history of “abusing
drugs for eleven years on and off[,]” but that “she has been sober for one
year as of May 28, 2020.” Based on Mother’s history, Dr. Meier reported
that Mother has a history of using marijuana, synthetic marijuana, and
amphetamines. Mother also told Dr. Meier that when she was sixteen,
she saw a mental health professional, who diagnosed her with “bipolar
disorder, schizophrenia, depression and anxiety.” However, she also told
Dr. Meier she had not seen another mental health professional since she
was sixteen. Dr. Meier diagnosed Mother with obsessive compulsive
disorder and anxiety, with considerations that include somatization
disorder, somatic pain disorder, hypochondriasis, dissociative disorder,
and personality disorder. He recommended that Mother be referred to a
psychiatrist and evaluated for psychotropic medications.
Georgia Williams, a licensed professional counselor who saw
Mother several times between June and September 2021, also testified
in the trial. Williams testified that Mother told her that her drug of choice
was synthetic marijuana, but she also told her that she had “used meth
for the prior year.” According to what Mother to Williams, Father in the
summer of 2021 was “living on the street and still using drugs[.]” And
13
even though Williams reported that Mother was attending substance
abuse meetings online, Williams testified that Mother minimized her
addiction in their meetings, as Mother “seemed to just not understand
the seriousness of [ ] staying clean.” Williams said that when she last saw
Mother in September 2021, Mother had still not gotten a sponsor in her
drug support group. Williams explained Mother didn’t demonstrate a
seriousness about her addiction when she was in counseling, nor did
Mother exhibit an ability to maintain a stable job.
The CASA assigned to Sara’s case testified she didn’t think Sara’s
current living arrangements with her foster parents “could get any
better.” The CASA further testified it wasn’t in Sara’s best interest to
remove Sara from her foster home. And the CASA testified no concerns
existed about the foster home based on the CASA’s visits there, as Sara
is “getting everything she needs” in the home.
The CASA also described what she saw when she went to Mother’s
home in December 2021. According to the CASA, she “was bitten by flees
upon arriving there.” In the room where Sara was to live, the CASA said,
“there was a rat situation, so [Mother] just closed the door because she
couldn’t seem to get rid of it.” The CASA testified you could see through
14
the vent on the floor “down to the ground” in the bedroom where Mother
said Sara would live. The CASA also described concerns with the flooring
in the bedroom, explaining she was concerned with its condition because
it looked as if “there was something crawling through it.” The CASA
testified that in April 2022, she made an unannounced visit to Mother’s
home to “see how [Mother] lives on a regular basis.” Mother was not
home. But the CASA testified the outside of the home showed “a lot of
deterioration[.]” There were bags of trash stored under the house,
insulation hanging from the house on both sides, a broken window, and
grass around the house growing up to three feet high. The CASA sent
Mother a text, explaining she was waiting for her. The CASA testified
she waited for Mother for hours, but Mother didn’t come home before the
CASA gave up.
Mother is the only witness her attorney called to present Mother’s
defense. When she testified, she denied using drugs while she was
pregnant with Sara. She said this case is different than the ones
involving her other children because unlike what she did then, she “bent
over backwards to complete [her] services” this time and had done all she
could financially and physically do to fix her home to provide Sara an
15
appropriate place to live. Mother testified the utility services are now
hooked up to her home. She said she has had electrical power there since
April 2021. Mother also denied she was planning to bring Sara home from
the hospital to the home inspected by the Department and the CASA.
Instead, she said she was planning to take Sara to her mother and her
grandmother’s home, a home she described as a “stone throw away from
[her] home.” Mother was cross-examined about her plans for Sara if the
court returned Sara to her. Mother responded:
A. My daily plan for my daughter? What, wake up in the
morning, have breakfast, or I mean?
Q. . . . So what is your daily plan for her? Have you thought
about it? What is it?
A. For her to be a kid.
Then when Mother’s attorney asked her what her daily plan for Sara was
throughout the day, she said:
A. Wake up in the morning, of course early because I wake
up early every day; breakfast, and if she’s in daycare take her
to daycare, but if she’s not in daycare we would play for a little
bit. If she’s not walking yet, maybe teach her how to walk a
little bit and work on that. I like to read to her because she
likes to sit there and help me turn the pages, which is the most
adorable thing ever. Maybe nap time, wake up and have a
snack, or maybe even a snack before nap time; depends on
how cranky she is. And then when she gets up, do it all over
again. Bath time and bed.
16
Mother also addressed the progress she said she had made handling
her addiction since Sara’s birth. She claimed that recently, she had
obtained a sponsor in her Narcotics Anonymous group. Mother also
claimed to have recently seen a psychiatrist. But Mother didn’t say whom
the psychiatrist she saw was, and she didn’t introduce the psychiatrist’s
records or the psychiatrist’s bill as evidence in the trial. According to
Mother, the psychiatrist did not prescribe any medications in the visit. 5
Mother also testified that several months before the trial, she
obtained counseling with another licensed professional counselor,
Virginia Manning. Mother testified that Manning “made [her] see what
I was doing wrong and helped me fix myself so I can be a better person
for my daughter.” The Department offered and the trial court admitted
Manning’s records into evidence in the trial. They show Mother saw
Manning six times, ending in February 2022. According to Manning’s last
report, Mother made “progress on treatment plan goals and objectives[,]”
which were (1) stabilizing and reducing presenting symptoms, (2)
improving symptoms of depression, stress, and anxiety, (3) reducing
5Mother also didn’t put any medical records into evidence, including
the records of a psychiatrist or any pharmacies.
17
unhealthy interpersonal relationships, and (4) developing healthy
decision-making skills. Mother testified she had completed parenting
classes and attended virtual Narcotics Anonymous and Alcoholics
Anonymous meetings, describing them as positive. That said, Mother
testified she was still working on her first step of a twelve-step recovery
program in Narcotics Anonymous, which Mother described as the step
that involved realizing “why you were an addict and how.”
Mother described the jobs she’s held since Sara was born and how
she has managed to pay her bills. According to Mother, she has been
current on her bills for the past year. 6 All of the jobs Mother described
were short term. Mother worked cleaning houses, as a delivery driver,
and at call centers. Mother also testified she makes money by selling her
plasma as much as two times a week.
Mother described her decision-making skills as better now than
when Sara was born. She explained she would be willing to complete
more services with Manning, should the court consider a monitored
return in lieu of terminating her right to Sara. Mother testified she now
6Mother didn’t produce any documents to support her testimony
that she had been employed.
18
has a sense of self-respect, which she didn’t have before she went to
counseling. Mother explained:
It’s things that I didn’t ever really pay attention to before, but
in my defense[,] I was in a very bad addiction when I picked
my paramours before, and that was just - - My relationships
were devastating because I didn’t pay attention. I didn’t have
self-worth back then, self-respect.
When the trial ended, the trial court terminated Mother’s parent-
child relationship with Sara. In relevant part, the trial court found in its
order terminating Mother’s rights found (1) that Mother engaged in
conduct or knowingly placed Sara with persons who engaged in conduct
which endangered her physical or emotional well-being, and (2) that
Mother failed to comply with the provisions of her court ordered family
service plan. 7 The trial court also found that terminating Mother’s
parental rights to Sara is in Sara’s best interest. 8 Mother timely
appealed.
7See Tex. Fam. Code Ann. § 161.001(b)(1)(E), (O). As previously
mentioned, Father’s parental rights to Sara were terminated in the same
order.
8Id. § 161.001(b)(2).
19
Standard of Review
A trial court’s findings terminating the parent-child relationship
must be supported by clear and convincing evidence. 9 To be clear and
convincing, the evidence “must produce in the mind of the trier of fact a
firm belief or conviction as to the truth of the allegations sought to be
established.” 10
In conducting a legal sufficiency review, we consider the evidence
in the light most favorable to the finding, indulging every inference that
would support it, while disregarding all evidence a reasonable factfinder
could reject. 11 And we sustain the challenge only if the factfinder could
not form a firm belief or conviction about the truth of the allegation.12 In
contrast, when reviewing a factual sufficiency challenge, we consider and
weigh all the evidence, including disputed and conflicting evidence.13 And
we set aside the finding only if “the disputed evidence that a reasonable
factfinder could not have credited in favor of the finding is so significant
9Id. § 161.001(b).
10Id. § 101.007; see also In re J.L., 163 S.W.3d 79, 84 (Tex. 2005)
(cleaned up).
11In re J.F.C., 96 S.W.3d at 266.
12Id.
13In re J.O.A., 283 S.W.3d at 345.
20
that a factfinder could not reasonably have formed a firm belief or
conviction” about the truth of the allegation. 14
In cases tried to the bench, the trial court, acting as the factfinder,
decides which witnesses were credible, how to weigh their testimony, and
resolves any inconsistencies or conflicts in the testimony. 15 Here, the trial
court found Mother endangered Sara, as it relied in part on subsection E
to terminate Mother’s parent-child relationship in its order. Since
proving a parent incurred a subsection E finding in a prior suit to
terminate the parent-child relationship of another child would authorize
a trial court to terminate a parent’s rights to other children in other suits
without requiring further proof, we review the trial court’s subsection E
finding before reaching Mother’s argument that the evidence is
insufficient to support the trial court’s finding that she failed to comply
with the requirements of her to court-ordered family service plan. 16 That
said, in our review, “[a]ll evidentiary standards, including clear and
14J.F.C.,96 S.W.3d at 267.
15Inthe Int. of D.P., No. 09-22-00048-CV, 2022 Tex. App. LEXIS
5279, at *24 (Tex. App.—Beaumont July 28, 2022, pet. denied).
16See In the Int. of N.G., 577 S.W.3d 230, 235-236 (Tex. 2019) (per
curiam).
21
convincing evidence, recognize the relevance of circumstantial
evidence.” 17
Analysis
In issue one, Mother argues the evidence is legally and factually
insufficient to support the trial court’s “conduct endangerment” findings.
Under subsection E, the Department had the burden to prove, by clear
and convincing evidence, that Mother engaged in conduct or knowingly
placed Sara with persons who engaged in conduct that endangered her
physical or emotional well-being. 18 Under E, the term endanger means
“expose to loss or injury; to jeopardize.” 19 Generally, a parent who
subjects a child to a life of uncertainty and instability has engaged in
conduct that endangers their child’s physical and emotional well-being.20
That said, proof of endangerment requires “more than a threat of
metaphysical injury or the possible ill effects of a less-than-ideal family
environment[,]” yet “it is not necessary that the conduct be directed at
re Lipsky, 460 S.W.3d 579, 589 (Tex. 2015).
17In
18SeeTex. Fam. Code Ann. § 161.001(b)(1)(E).
19In re J.F.-G., 627 S.W.3d 304, 312 (Tex. 2021) (quoting
“endanger,” WEBSTER’S NEW TWENTIETH CENTURY DICTIONARY OF THE
ENGLISH LANGUAGE 599 (1976)).
20See In re J.O.A., 283 S.W.3d at 345 n.4.
22
the child or that the child actually suffers an injury.”21 Rather,
endangering a child based on a parent’s conduct means “to expose a child
to loss or injury or to jeopardize a child’s emotional or physical health.”22
And the parent’s endangering conduct need not occur in the child’s
presence, so conduct relevant to a factfinder’s decision may include
conduct the parent directed at another child, whether that conduct
occurred before or after the child the subject of the Department suit was
born. 23 Generally, from evidence of a parent’s past conduct showing the
parent subject a child to a life of uncertainty and instability, a factfinder
may infer that the parent will continue to engage in the conduct and the
same conduct will endanger another child’s physical and emotional safety
and well-being.24
Here, the evidence shows Mother has a decade-long history of
abusing illegal substances, substances that range from meth to
21Tex. Dep’t of Human Servs. v. Boyd, 727 S.W.2d 531, 533 (Tex.
1987).
22In re M.C., 917 S.W.2d 268, 269 (Tex. 1996).
23See J.O.A., 283 S.W.3d at 345; In the Int. of B.P., No. 09-22-00031-
CV, 2022 Tex. App. LEXIS 4277, at *25 (Tex. App.—Beaumont June 23,
2022, no pet. h.).
24J.O.A., 283 S.W.3d at 345 n.4; In the Int. of D.P., 2022 Tex. App.
LEXIS 5279, at *25.
23
marijuana and to synthetic marijuana. To be sure, Mother claimed to
have gained control of her addiction in the months leading up to the trial.
And to Mother’s credit, the drug tests the Department obtained during
the pendency of the suit involving Sara were negative. Yet while Mother
denied using illegal drugs while pregnant with Sara, the record contains
evidence to the contrary. Specifically, based on the history Mother gave
to Dr. Meier, Mother dated her sobriety as beginning on May 28, 2020.
Dr. Amin relied on that report to infer that Mother had used drugs for a
short period after she became pregnant. 25 As the factfinder in the trial,
the trial court had the right to “believe one witness and disbelieve others”
in resolving the conflicts in the testimony. 26
To be sure, regardless of Mother’s use of drugs during Sara’s
pregnancy, Mother in her own words described her past use of drugs as
a “very bad addiction.” Mother acknowledged she only recently became
aware of the seriousness of how her addiction was affecting her ability to
parent a child, explaining Virginia Manning opened her eyes to the
25The evidence before the trial court
shows Sara was born when she
was 30-weeks old, so there is an eight-day period after Mother became
pregnant during which the trial court could have inferred that Mother
was using her drug of choice, synthetic marijuana.
26McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex. 1986).
24
seriousness of her problem in counseling despite the evidence she has
seen health-care professionals for drug-related problems who have told
her to take her addiction seriously since at least 2015.
In deciding whether Mother engaged in a deliberate course of
conduct that endangered Sara, the trial court was not required to ignore
Mother’s decade-long history of using drugs. As the factfinder, the trial
court was not required to believe Mother’s testimony suggesting she has
recently gained control over her addiction. Instead, from the evidence
admitted in the trial, the trial court could reasonably form a firm belief
or conviction that Mother’s underlying mental health issues and her
addiction with illegal drugs created a condition that endangered Sara if
the court returned Sara to Mother’s care. And it was reasonable for the
trial court to infer that the stress and anxiety underlying Mother’s
addiction would be aggravated should Mother be faced with the added
stress and financial burden of raising a child. Given the relatively short
duration of Mother’s claim of sobriety when compared to Mother’s history
of drug abuse, her admitted addiction, and the lack of evidence that
Mother successfully completed a drug rehabilitation program, the trial
court could have reasonably formed a firm belief or conviction that
25
Mother’s use of illegal substances was a condition that endangered Sara
and that it justified granting the Department’s request to terminate
Mother’s parental rights. 27
We conclude the evidence allowed the trial court, acting reasonably,
to form a firm conviction or belief that Mother’s drug addiction creates a
condition that endangers Sara’s physical and emotional well-being.28 We
overrule Mother’s first issue. 29
Best-Interest Finding
In issue three, Mother argues the evidence admitted in the trial is
legally and factually insufficient to support the trial court’s best-interest
finding. 30 With respect to the child’s best interest, there is a “strong
presumption that the best interest of a child is served by keeping the
27See In re J.O.A. 283 S.W.3d at 346; In the Int. of J.O., No. 09-16-
00485-CV, 2017 Tex. App. LEXIS 5011, at *5-6 (Tex. App.—Beaumont
June 1, 2017, pet. denied) (mem. op.).
28Id.
29Because we have found the evidence sufficient to support the
subsection E finding, we need not address Mother’s second issue, which
challenges the trial court’s finding that Mother failed to comply with the
requirements of her court-ordered, family service plan. See Tex. R. App.
P. 47.1.
30Tex. Fam. Code Ann. § 161.001(b)(2).
26
child with the parent.” 31 But it is equally presumed that “the prompt and
permanent placement of the child in a safe environment is . . . in the
child’s best interest.” 32 In reviewing a trial court’s best-interest finding,
we consider the nine non-exhaustive factors identified in Holley v.
Adams. 33
In a best-interest analysis, courts focus on the best interest of the
child, not the best interest of the parent. 34 Often, the evidence supporting
the grounds the Department relied on to terminate a parent’s rights
under section 161.001(b)(1) is also evidence that may support a trial
31In re R.R., 209 S.W.3d 112, 116 (Tex. 2006); see Tex. Fam. Code
Ann. § 153.131(b).
32Tex. Fam. Code Ann. § 263.307(a).
33In Holley, the Texas Supreme Court applied these factors when
reviewing a best-interest finding:
• the child’s desires;
• the child’s emotional and physical needs, now and in the future;
• the emotional and physical danger to the child, now and in the
future;
• the parenting abilities of the parties seeking custody;
• the programs available to assist the parties seeking custody;
• the plans for the child by the parties seeking custody;
• the stability of the home or the proposed placement;
• the parent’s acts or omissions that reveal the existing parent-
child relationship is improper; and
• any excuse for the parent’s acts or omission
Holley v. Adams, 544 S.W.2d 367, 371-72 (Tex. 1976).
34Dupree v. Tex. Dep’t of Protective & Regulatory Servs., 907 S.W.2d
81, 86 (Tex. App.—Dallas 1995, no writ).
27
court’s best-interest finding. 35 Thus, the Department need not
necessarily present evidence on each Holley factor, and the absence of
evidence on one or more factors does not prevent the factfinder from
forming a strong conviction that terminating the parent-child
relationship is in the child’s best interest, particularly when the evidence
shows the parent engaged in conduct that endangered the child. 36
The trial court heard testimony that Sara is thriving in her foster
home. She has foster parents who are meeting her physical and her
emotional needs. The foster parents testified they want to adopt Sara.
The Department’s witnesses, the CASA, and the foster parents’
testimony all supports the trial court’s finding that terminating Mother’s
parental rights is in Sara’s best interest since terminating Mother’s
relationship offers Sara a prompt and permanent placement in a safe
home with parents capable of taking care of her needs.
Mother asked the trial court to return Sara to her on a monitored
basis as an option to terminating her parental rights. Mother testified
she is sober, no longer has a boyfriend since she and Father split up, is
35In re E.C.R., 402 S.W.3d 239, 249 (Tex. 2013).
36In re C.H., 89 S.W.3d 17, 27 (Tex. 2002).
28
planning to divorce Father, and is capable of providing Sara with a safe
and stable home. Mother also testified that when she was working, her
grandmother could help her with Sara, should she need assistance. Yet
the grandmother didn’t testify in the trial, so Mother was essentially
asking the trial court to take her word for it that the grandmother was
both willing and capable of helping her raise a child. On the other hand,
Mother admitted she didn’t know the names of the doctors who were
treating Sara for the variety of medical issues that are related to Sara’s
being born premature. The trial court also heard testimony that Mother
has delayed getting surgery care for a medical problem of her own and
testimony questioning whether Mother would take Sara to the various
out-of-town health-care providers she currently sees.
A parent’s past conduct is relevant to a trial court’s decision about
what is in a child’s best interest. 37 As already discussed, the trial court
heard evidence that Mother had drug abuse and mental health issues
that continued even after she gave up her first three children and was
counseled about the seriousness of her addiction. Given Mother’s
historical use of illegal drugs when compared to the length of time Mother
37Id. at 27-28.
29
admitted she gained the awareness that her problem was serious, the
trial court could reasonably infer that even if now in temporary remission
Mother’s addiction creates a condition that makes terminating Mother’s
parental rights so that Sara may be promptly and permanently placed in
a safe home where her needs are being met in her best interest.38 We
overrule Mother’s third issue.
Conclusion
We conclude that legally and factually sufficient evidence supports
the trial court’s endangerment and best-interest findings. For the
reasons explained above, the trial court’s judgment is
AFFIRMED.
_________________________
HOLLIS HORTON
Justice
Submitted September 20, 2022
Opinion Delivered November 17, 2022
Before Golemon, C.J., Kreger and Horton, JJ.
38In the Int. of J.O., 2017 Tex. App. LEXIS 5011, at *9.
30 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487078/ | In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-22-00100-CV
__________________
AMBER RENEE FENNEL, Appellant
V.
TOM ALAN FENNEL, Appellee
__________________________________________________________________
On Appeal from the 410th District Court
Montgomery County, Texas
Trial Cause No. 21-04-05951-CV
__________________________________________________________________
MEMORANDUM OPINION
Amber Renee Fennel, appellant, filed an unopposed motion to dismiss this
appeal. See Tex. R. App. P. 42.1(a)(1). Appellant filed the motion before the
appellate court issued a decision in the appeal. We grant the motion and dismiss the
appeal. See Tex. R. App. P. 43.2(f).
APPEAL DISMISSED.
PER CURIAM
Submitted on November 16, 2022
Opinion Delivered November 17, 2022
Before Golemon, C.J., Horton and Johnson, JJ.
1 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487074/ | In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-20-00287-CV
__________________
MICHELE DIBASSIE, Appellant
V.
DAMON DIBASSIE, Appellee
__________________________________________________________________
On Appeal from the 418th District Court
Montgomery County, Texas
Trial Cause No. 19-01-00879-CV
__________________________________________________________________
MEMORANDUM OPINION
This is an appeal from a final decree of divorce. Appellant Michele DiBassie
contends the trial court abused its discretion in making a disproportionate division
of property in favor of appellee Damon DiBassie. Michele argues the trial court erred
by awarding Damon property and assets that belonged to Structural Concrete
Systems, LLC (“SCS”), a separate legal entity; crediting her with the value of real
property that had been gifted to their daughter; and entering a judgment against her.
Michele also argues the trial court erred by relying on findings of fact that are based
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on insufficient evidence and not supported by the record. We affirm the trial court’s
judgment.
BACKGROUND
Michele and Damon married in 1993 and started SCS in 2001. In 2019,
Damon sued Michele seeking a divorce. In his Petition, Damon claimed the marriage
had become insupportable due to discord or a conflict in personalities that destroyed
the legitimate ends of their marriage. In his Second Amended Petition for Divorce,
Damon added SCS as a Co-Respondent, 1 and he requested that the trial court divide
the marital estate in a just and right manner. Damon also requested that the trial court
award him a disproportionate share of the parties’ estate for the following reasons:
fault in the breakup of the marriage; benefits the innocent spouse may have derived
from the continuation of the marriage; disparity of earning power of the spouses and
their ability to support themselves; community indebtedness and liabilities; tax
consequences of the division of property; business opportunities of the spouses; need
for future support; nature of the property in the division; wasting of community
assets; reimbursement; attorney’s fees to be paid; and actual and constructive fraud
committed by Michele.
Damon further alleged that both he and Michele have separate estates and
requested the trial court to confirm his separate property and reimburse his separate
1Structural Concrete Systems, LLC is not a party to this appeal.
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estate for funds or assets expended by his separate estate for the benefit of Michele’s
separate estate. Damon requested that the trial court reimburse the community estate
for funds and or assets expended by the community estate for payment of unsecured
liabilities of Michele’s separate estate and for the value of community time, toil,
talent, and effort expended by Michele to benefit or enhance her separate estate.
Damon alleged that SCS was the alter ego of Michele and acted solely as a conduit
for the performance of Michele and her business. Damon explained that he owned
49% of SCS and Michele owned 51%, and SCS holds both his and Michele’s
property either on deposit, in safekeeping, in safe deposit boxes, or in a trust or
fiduciary capacity.
In his Third Amended Petition, Damon alleged Michele was guilty of
committing constructive fraud and breaching the fiduciary duty she owed him during
their marriage. Damon also alleged that Michele wasted, spent, and/or disposed of
his share of the community property without his knowledge or consent, and she
misused and misapplied community property, money, and assets. Damon requested
the trial court to calculate the value by which the community estate was depleted as
a result of Michele’s fraud, calculate and determine the amount of the reconstituted
estate, divide the value of the reconstituted estate between the parties in a manner
the trial court deemed just and right, and grant legal and equitable relief to
accomplish a just and right division, including a money judgment against Michele.
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Damon also requested relief from Michele as the majority shareholder of SCS
and claimed Michele tortiously interfered with his relations with SCS and
improperly withdrew him as a member of SCS and from SCS’s bank accounts.
Damon explained that Michele’s actions terminated his reasonable expectation to
continue his business relationship with Michele and SCS and caused him damages.
Damon alleged that Michele committed fraud on the community and breached her
fiduciary duty by attempting to withdraw him as a member of SCS, and if the trial
court found his withdrawal was valid, Damon argued that Michele committed breach
of contract by failing to pay him a distribution as required by SCS’s Regulations.
Damon requested attorney’s fees and an accounting and appraisal of SCS’s fair
market value. Damon also alleged a claim for conversion, pled that the restraints in
the alleged Employment Agreement and SCS’s Regulations violated the Texas
Business and Commerce Code and were unenforceable, and sought actual and
exemplary damages.
Damon filed a First Supplemental Petition to Petitioner’s Third Amended
Petition for Divorce alleging that Michele misappropriated funds by purchasing a
home in Galveston (“Galveston Home”) with community funds and putting the title
in their daughter’s name. Damon asked the trial court to impress a constructive trust
on the Galveston Home and award it to him. Damon filed a Fourth Amended Petition
for Divorce, alleging, among other things, that because he never signed or agreed to
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SCS’s Regulations, the Regulations do not bind him or govern SCS or Michele’s
attempt to withdraw him from SCS. Damon also requested declaratory relief,
including declarations that SCS’s Regulations, the 2018 document withdrawing him
from SCS, and the Employment, Noncompetition, and Confidentiality Agreement
were invalid.
Michele filed a Third Amended Counter-Petition for Divorce and alleged that
Damon committed fraud on the community estate, breached his fiduciary duty, and
wasted community property. Michele asked the trial court to award her a
disproportionate share of the community estate, reconstitute the community estate,
confirm her separate property, award her a money judgment for damages on her
independent tort claims, and award her attorney’s fees, expenses, and costs. In
response, Damon filed a Revised Fourth Amended Petition for Divorce to address
Michele’s new claims.
During the pendency of the divorce, Michele filed for bankruptcy, and the
divorce proceeding was removed to United States Bankruptcy Court for the Southern
District of Texas and then remanded back to the state court for the disposition on its
merits. In its Order Granting Damon’s Motion for Abstention and Remand, the
bankruptcy court found that forum shopping was an issue in Michele’s bankruptcy
case because the removal of a property division incident to a divorce to a Federal
Bankruptcy Court is not a normal or typical occurrence. After the divorce proceeding
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was remanded back to state court, the trial court conducted a bench trial. The issues
contested in the appeal hinge largely on whether the final judgment represents a fair
division of the parties’ marital estate. We discuss the testimony of the witnesses
relevant to the parties’ arguments raised in their appellate briefs.
Michele testified she and Damon were married in 1993 and have one adult
daughter who resides in Galveston. They ceased to live together in November 2018.
Michele explained that in December 2001, she and Damon started SCS, a
commercial construction company engaged in concrete repair organized as a limited
liability company, with a principal place of business in Houston, Texas, and they
were the only managing members. Prior to working for SCS, Michele worked for
her family business, as a legal secretary in the concrete industry, and as a database
manager. Michele testified that she completed some college but does not have a
degree or any licenses or certificates.
Michele testified that Daniel Hoffman, an accountant and attorney, drafted
SCS’s Regulations in 2002. Michele testified that she had Damon’s consent to cut
and paste a copy of his electronic signature on the Regulations. Michele explained
that the Regulations provided that, unless otherwise agreed by unanimous decision
of all members, a member could be withdrawn from SCS upon filing a voluntary
bankruptcy petition, dying, being adjudicated incompetent, filing a dissolution of a
certificate by a corporation, distributing an estate’s entire interest in the company,
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or upon the affirmative vote of a majority of the remaining members. Michele agreed
that the Regulations did not provide for the withdrawal of a member based on a
criminal conviction. Michele also explained that upon withdrawal, the member is
entitled to a distribution of the fair market value of the member’s interest to be
determined by an agreement of the members or by an appraiser if the members
cannot agree. Michele testified that the Regulations Hoffman prepared did not
contain any noncompete, non-solicitation, or confidentiality clauses.
Michele testified about a second set of regulations that also contained
electronic signatures and included (1) an additional withdrawal provision, providing
for withdrawal upon the occurrence of being adjudicated guilty of any criminal
offense and (2) a different determination of the fair market value of the member’s
interest being based upon actual assets of the company. Michele did not know why
there were two signed versions of the regulations and claimed that she did not add
the provision or know who had done so. Michele agreed that in 2009, she had
included Hoffman’s original version of SCS’s Regulations with an application for
woman business entity owned status with the city of Austin.
Michele also testified about the Employment Noncompetition and
Confidentiality Agreement, which was dated December 2001. Michele testified the
agreement was created in 2010 and backdated to SCS’s date of inception because of
an appeal with the City of Houston concerning SCS’s entity status. Michele
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explained that she received the form for the agreement from an unknown attorney,
modified the form to include SCS and Damon, and cut and pasted Damon’s
electronic signature on the agreement with his permission. Michele testified that in
addition to other things, the noncompetition agreement prohibited Damon from
competing with SCS. When asked what consideration Damon received for signing
the agreement, Michele explained that SCS’s certification was granted, but she later
testified that in addition to Damon’s member interest in SCS, he received a $60,000
yearly salary as consideration, which was to be paid at the end of every month that
SCS had a positive cash flow. Michele testified that the agreement also contained a
provision that an employee may be terminated for having a conviction of or entering
a plea of nolo contendere to a charge of a felony or misdemeanor involving moral
turpitude. Michele agreed that prior to 2010, the year Michele testified the agreement
was created, Damon had been convicted of driving while intoxicated.
Michele explained that after Damon was in jail in September and October of
2018, he returned to work in November and left SCS on December 1, 2018. Michele
testified that she withdrew Damon from being a member of SCS in December 2018,
because he tried to withdraw money from SCS’s bank account, shut down SCS’s
online profile, and cancelled her business debit card. Michele explained that the
Withdrawal was signed on January 7, 2019, but she backdated the date on the
Withdrawal to be effective the day he left SCS. Michele testified that between
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December 1, 2018 and January 7, 2019 she moved money out of SCS’s account so
Damon could not withdraw any money. Michele explained that she used the criminal
provision in the second set of regulations to withdraw Damon as a member. Michele
also explained that between December 1 and January 7, she did not inform Damon
she had withdrawn him as a member of SCS, and she did not pay Damon for the
value of his interest in SCS as specified by the Regulations. Michele testified that
they attended mediation and agreed to have SCS valuated by Jeannie McClure, and
Michele provided the financial statements, tax returns, and general ledger.
Michele testified that on June 19, 2019, her accountant rendered SCS’s
financial statements for the period ending December 31, 2018, and she assumed
McClure had the financial statement to perform her valuation but admitted that
McClure may not have had the document because her original valuation was
performed on June 30, 2019. Michele testified that the 2018 financial statements
show the members’ equity was $2,469,486, and a member’s bonus of $928,866 was
taken to receive a tax reduction. After paying taxes on the bonus, she redeposited the
money into SCS’s account. Michele explained it was “just an accounting action[,]”
and she never discussed it with Damon, and at the end of 2018, it appeared that she
and Damon had taken $1,154,586 in distributions. Michele also explained that SCS’s
statements of cash flow shows SCS had $2,117,505 in investment account
receivables in three Merrill Lynch accounts and that there was a decrease of
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$1,833,078, but she was not sure where that number came from. Michele testified
that she provided information to the accountant showing that going into 2019, SCS
had a backlog of $1,000,000 and estimated revenues of $2,017,604 from additional
contracts to be performed in January 2019. Michele explained that she never
presented financial statements that were materially misleading. Michele testified that
SCS’s 2018 tax return shows it had $3.2 million in ordinary business income, which
differs from SCS’s 2018 financial statements.
Regarding SCS’s financial statement dated June 30, 2019, Michele agreed that
the accountant included a statement that “‘[m]anagement has elected to omit
substantially all the Disclosures and statements of cash flows required by accounting
principles generally accepted in the United States of America.’” Michele testified
that she did not understand what that statement meant and claims she did not omit
anything. Michele explained that the June 30 balance sheet was based on the period
of December 31, 2018 through June 30, 2019, which was after Damon took a
$1,000,000 distribution from his Merrill Lynch account, and the balance sheet
showed $2,290,565 in member equity and $1,080,372 in the investment accounts.
Michele did not know why the member equity on December 31, 2018, which was
$2,469,000, had only decreased to $2,290,565 as of June 30, 2019, despite Damon
having taken his $1,000,000 distribution. Michele testified she guessed Damon
received the partial distribution of $956,711; however, she did not know who
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received the $514,686 member distribution without looking at the supporting
documents, but she claimed she took distributions to pay Damon’s bills. Michele
explained that Damon’s $1,000,000 was pledged to SCS, and after he took his
distribution, SCS’s balance sheet showed that amount as a loss, which affected
SCS’s bonding capacity.
Michele also testified about SCS’s financial statement for December 31, 2019,
which had not been finalized as of August 2020, because they were still working on
the numbers concerning the property and equipment on the balance sheet. Michele
explained she had never really worried about the balance sheet’s accuracy, but they
needed to perform inventories to get an accurate number for the bonding company.
Michele testified that she had produced SCS’s general ledger as of December 31,
2019, in a pdf format. Michele explained that the general ledger shows she received
a paycheck on December 28, 2018 for $318,342, but she claimed it went into petty
cash and back into her member’s contribution account to pay wages. Michele did
not know why the ledger showed her member’s capital contribution account received
an uncashed paycheck marked petty cash for $532,789.63 on that same date. Michele
explained that the capital contribution was not split between her and Damon’s capital
accounts because it “wasn’t a real paycheck. It was just in order to get over the
threshold for the tax deduction.” Michele also explained that on December 3, 2018,
she moved $275,700 from SCS to the DiBassie Leasing account so Damon would
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not deplete the account. Michele testified that she did not know why the funds she
transferred to DiBassie Leasing flowed through Damon’s member capital account,
but she claimed it was perhaps to pay for the Bobcat. Michele testified that Damon’s
Merrill Lynch member account was solely in his name and she had a similar account
in her name that contained $1,056,384.53 as of December 31, 2018, and both
accounts were set up when they started their divorce proceeding. Michele explained
that in 2019, $2,274,452 in total distributions went out, and Damon only received
the $1,000,000 distribution when he left SCS. Michele testified that the other
distributions are not entirely hers, and she takes out $27,000 per month for payroll.
Michele further testified that she filed for bankruptcy in May 2020, and in her
bankruptcy schedule she claimed the Richards property that she and Damon owned
was valued at $800,000, but the land only appraised for $150,000. Michele testified
that she listed herself as the 100% owner of SCS because she believed she had paid
Damon for his 49% interest when he took his $1,000,000 distribution that was listed
as an asset on SCS’s balance sheet. Michele explained that she listed SCS’s value as
$457,000, which was the cash in the company, excluded any accounts receivables,
and added the value of all the equipment and assets that were in their personal names
to their community property. Michele also omitted other assets, including their wine
collection, gun safe, and fifth wheel. Michele further testified that they paid
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$90,312.50 for their Houston Oaks membership to celebrate Damon’s birthday, and
she used distributions from SCS to pay for bills from Houston Oaks.
In July 2019, Michele used proceeds from her individual Merrill Lynch
account to purchase their daughter a home for $279,361, and she testified that she
did not discuss the purchase with Damon when she made it. Michele explained that
she also transferred money from her individual Merrill Lynch account to SCS’s
checking account to pay business expenses, and she transferred money out of SCS’s
checking account into her personal account to pay her personal expenses. Michele
testified that in 2019, she spent approximately $60,000 traveling to France, Spain,
and Africa, and she gave money to a relative. Michele also testified that between
January 2019 and June 2020 she “possibly” spent $137,319.19 on travel expenses.
In 2020, Michele paid $60,000 cash for her daughter’s car using money from SCS,
and Damon agreed to the purchase. In her bankruptcy filings, Michele disclosed that
in 2019, she received $415,129 in distribution from SCS, which included the money
to purchase her daughter’s home. Michele’s inventory included her valuations for
their community property, and she valued SCS at $1.39 million, which included the
prefab building valued at $130,238.
Michele explained that she sought to remove the divorce proceeding and
protective orders to bankruptcy court, but the bankruptcy court granted Damon’s
motions to dismiss her bankruptcy and remanded the cases back to state court.
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Michele agreed that the bankruptcy court found that forum shopping was an issue in
her case, but she claimed she filed bankruptcy because of attorney’s fees. Michele
testified that she was still in bankruptcy because the court vacated its dismissal order,
but Damon had filed another motion to dismiss. Michele explained that she paid her
divorce attorney with her salary from SCS and member distributions.
Michele testified that their home on Imperial Oak (“the Imperial Oak
property”) sits on two lots totaling four acres, and SCS is located in a trailer or prefab
office on their property behind the home. Michele explained they owned a total of
ten acres, which included adjacent land known as the Country Pines property.
Michele testified that the Imperial Oaks property appraised for $555,000, and the
Country Pines property appraised for $158,000. Michele testified that on December
1, Damon came to the Imperial Oak property and removed property from SCS.
Michele explained that Damon took, among other things, the Kubota UTV, lawn
mower, Kubota lawn tractor, his truck, and tools. Michele explained that the Kubota
tractor was in Damon’s name as well as all the vehicles SCS uses, and she did not
know if the Kubota UTV was in Damon’s name. Michele also testified that she
purchased the Cashel Glen property two years prior to marrying Damon, and during
the marriage, she made approximately $70,000 in payments on the property, which
was paid off two years prior to trial.
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Michele explained that she had pled cruelty in the divorce due to suffering
physical, mental, and sexual abuse by Damon. Michele further explained that
Damon’s alcohol and drug problems created a volatile marriage and affected SCS’s
business. Michele also testified that Damon cheated on her in 2017 and 2018.
Damon testified that he did not approve or consent to Michele’s spending,
including her buying their daughter a new car. Damon testified that his inventory
shows the value of his estate. Damon further testified that his proposed division of
property valued the Richards property at $190,000, which included the $75,000 steel
structure that had been erected since he had valued the property at the appraised
value of $130,000 on his inventory. Damon explained that he paid $52,000 for his
fifth wheel trailer that is three years old. Damon requested that the trial court award
him the Imperial Oaks property, the Richards property, and the Country Pines
property. Damon also testified he did not approve the purchase of the Galveston
home, and he asked the court to either impose a constructive trust on the home or
consider it as part of his waste claim. Damon explained that he was concerned about
the trial court awarding him a personal judgment against Michele because she could
discharge it in her bankruptcy, and he requested that any judgment be against SCS.
Damon testified he noticed several issues when he reviewed SCS’s 2019
general ledger that Michele provided. Damon explained that fraudulent costs had
been added to at least seven jobs to make it appear that the profits were lower and to
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devalue the company. Damon had requested the native form of SCS’s Quickbooks
to reconcile the jobs, but Michele filed bankruptcy and the trial court halted its
proceeding. Damon testified that he was also unable to depose Chris Reeves, one of
SCS’s managers, about excessive bonuses and cash Michele gave him in 2019.
Damon testified that he believed Michele fraudulently filed bankruptcy after
spending excessively and that he had to pay approximately $75,000 in attorney’s
fees to have his divorce case remanded back to state court.
Damon explained that he alleged a breach of contract claim against Michele
for using false documents to withdraw him from SCS and for failing to pay him for
his portion of SCS. Damon testified that he did not receive any money from SCS in
2019 or 2020, but he had $968,815.88 in January 2019, $560,000 in January 2020,
and had spent nearly $1,000,000 in twenty months. Damon explained that since he
filed for divorce, he had spent, among other amounts, over $33,000 in travel, $8,000
in liquor stores, $20,000 on his girlfriend’s eye surgery, $45,000 on a tractor, several
hundred thousand dollars on improvements to the Richards property, accounting
expenses on his new business, and he bought a Harley Davidson. Damon testified
that he also sold an airplane.
Damon testified that in 2019, Michele took $1,600,000 in distributions from
SCS plus her salary and cash she wasted, and in 2020, she spent more than $500,000.
Damon explained that Michele spent approximately $315,000 on the Galveston
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home and over $130,000 in travel expenses from January 2019 to June 2020 for her
and their daughter. Damon also explained that Michele failed to cooperate with the
litigation and discovery requests and filed bankruptcy, and her behavior hindered the
process, caused him to incur excess attorney’s fees, and resulted in Michele
wastefully spending money on attorney’s fees. Damon testified that SCS’s June 2020
financials show approximately $2,900,000 of backlogs of contracts, but Michele
failed to provide documentation of that amount.
Damon explained that he has a Bachelor of Science in psychology with a
minor in history, and he went to school to be a general contractor. Damon also
explained that his work history includes forensic investigations and knowledge of
structural repair for concrete structures. Damon testified that he provided the
industry knowledge to perform SCS’s work and shared his knowledge with SCS’s
employees. Damon further testified that when he filed for divorce he alleged cruel
treatment because Michele told him she had all the books and records, she would
ruin him, and make sure he never worked again.
Damon explained that in 2017, he got his third DWI, pled guilty in August
2018, and served sixty days in county jail. Damon testified that he was working for
SCS in 2018, and he did not receive actual notice about his removal until he went to
Chase bank to get statements for the divorce. Damon further testified that he never
transferred money out of the Chase account. Damon explained that he never signed
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SCS’s Regulations or gave Michele approval to use his signature on the Regulations
that would allow his removal for a criminal charge or conviction. Damon testified
that he found two sets of regulations on his computer’s hard drive, and the 2018
version contained the criminal kick-out language, but the 2001 or 2002 version did
not. Damon also explained that he never saw, signed, or authorized Michele to sign
a document that would prevent him from competing or soliciting business or clients,
and he never received a $60,000 salary from SCS as compensation for signing the
alleged noncompete agreement. Damon testified that the noncompete employment
agreement indicates it was created in 2001, but it contains the Imperial Oaks
property’s address, which they acquired in 2008. Damon further testified that he
gave the computer hard drive to Aaron Hughes, a forensic computer specialist.
Damon requested a disproportionate share of the community estate because
Michele caused him to incur increased attorney’s fees and she committed fraud by
alleging that he signed “some document, kicking me out [sic] my own company and
taking over the bank accounts and spending money the way she has.” Damon
explained the whole process has been hindered and his attorney never got SCS’s true
Quickbook records. Damon testified that there has been a disparity in earning power
because in 2019 and 2020 he had no income. Damon explained that he created
Technical Structural Repair Group, LLC (“TSR”) and is waiting until the divorce is
finalized to start conducting business, but he needs money to reestablish himself.
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Damon explained that he had lost his earning capacity due to the alleged noncompete
agreement and because Michele had badmouthed him in the industry. Damon
requested that the court impose a judgment against SCS to equalize the division of
the money he is owed for the value of SCS. Damon also testified that he is unable to
pay his attorney’s fees, which exceed $450,000. Damon explained that he made
multiple attempts to mediate and settle the case. Damon testified that Michele
breached her fiduciary duty to him as a member of SCS by copying and pasting his
name on documents, spending excessively, purchasing their daughter a home
without his knowledge, and failing to provide discovery and turn over SCS’s
Quickbooks in native form.
McClure, a CPA who specializes in business valuation and certified forensics,
testified that she was jointly appointed as a business valuation expert to assess the
fair market value of SCS. McClure testified that she prepared her original report on
June 30, 2019 and a supplemental report, which contains her most recent valuation,
on December 31, 2019. McClure concluded that SCS’s fair market equity value was
$1,390,000 as of December 31, 2019. McClure testified that Michele’s commitment
of working capital was approximately $1,080,000 on June 30, 2019, $440,000 on
December 31, 2019, and “just south of $40,000[]” on June 30, 2020. McClure
explained that working capital is an important element of her valuation, and the
reduction was not a withdrawal of funds from SCS but a withdrawal from Michele’s
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personal brokerage account. McClure also explained that having the December 31,
2019 financials could have made a difference in her report.
Robert Vega, the manager of a computer technology store, testified that his
staff copied the hard drive of the computer Damon took from the marital home.
Aaron Hughes, a forensic analyst of electronic devices, testified that he was provided
sample copies of SCS’s original Regulations, the altered regulations, and an external
hard drive and was asked to identify various versions of the sample documents on
the hard drive. Hughes testified that SCS’s original Regulations were created on
January 4, 2002 and did not contain the criminal kick-out, noncompete, or the non-
solicitation language. Hughes explained that the altered document containing the
criminal kick-out, noncompete, and non-solicitation language was created on August
30, 2018, and stored in a folder titled “divorce[.]”
James Hamon, a certified real estate appraiser, testified that he appraised the
Imperial Oaks property, the Country Pines property, and the Richards property.
Hamon testified that the value of the Country Pines property is $158,000, excluding
the mobile home and storage containers. Hamon testified that the value of the
Imperial Oaks property is $555,000, which included all improvements fixated on the
property. Hamon explained that the workshop on the Imperial Oaks property was
assessed at $20,000.
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John Baggett testified that he met Damon and Michele at the Houston Oaks
country club, had known them for approximately three years, and traveled with them
to Italy twice. Baggett explained that Damon did not have a reputation of being a
belligerent, abusive drunk, but was a “social drinker, like anybody else.” Baggett
also explained that he never saw Damon get violent or upset or hear about him
having bad behavior at Houston Oaks. Baggett testified that he lives at Houston
Oaks, and he was upset about Damon being removed from the club. Baggett further
testified that on one occasion he witnessed Michele being verbally abusive and
shouting very loudly with expletives at an unknown man. Steve Winter, another
member of Houston Oaks, testified that he knew Michele and Damon from the club
and had traveled with them. Winter explained that he never saw Damon be a
belligerent drunk, act unruly at the club, or be abusive.
The trial court granted the parties a divorce based on the grounds of
insupportability. The trial court awarded Damon the following property: Imperial
Oaks home and property excluding the shop, the Richards property; Country Pines
lot excluding mobile home and containers; Merrill Lynch account ending in 450;
Merrill Lynch account ending in 551; Chase account for TRS ending in 0066; Chase
account for TRS ending in 2903; Merrill Lynch SEP account ending in 284;
ownership of the limited liability company known as TSR and all assets and debts
of TSR; 2018 GMC Denali; 2018 Ram 3500; 2015 Harley Davidson; 2011 Kubota
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UTV; 2018 fifth wheel; 2018 Kubota lawnmower; 2019 John Deer Tractor; Kubota
M-56 with equipment; prefab office trailer; 2019 Harley Davidson; golf cart at
Richards property; 2011 Club car golf cart; Kubota M1489; proceeds from the
airplane sale; jewelry and personal effects in his possession; gun safe and guns;
personal property in his possession; one half or copies of all pictures; J.J. Watt
helmet; tools; pressure washer; car accessories, motorcycle gear and equipment;
military stuff; nail puller; weighs and weight bench equipment; scuba diving gear;
tanks and helmets; his college books; clothes and suits; and his U of H ring, diamond
ring, and any other jewelry belonging to him in Michele’s possession. The trial court
ordered Damon to pay the debt associated with his awarded property, one-half of the
parties’ 2019 IRS tax liability, and the following debts: American Express account
ending in 3006; American Express account ending in 2004; Capital One account
ending in 2069 or 2096; Chase account ending in 3909; Chase account ending in
4862; American Express account ending in 2005; and American Express account in
the name of TSR ending in 3003.
The trial court awarded Michele the following property: any interest the
community estate may have in the Galveston home; Chase account ending in 0140;
Merrill Lynch account ending in 367; Chase account ending in 8250; the business
known as SCS; all assets and debts of that business; Merrill Lynch SEP account
ending in 283; 2014 Tesla; any interest the community estate has in daughter’s car;
22
golf cart at Galveston home; two Arabian horses; 2017 Toro lawn tractor; 2004
Alumacraft boat, trailer, and motor; 2005 Premier pontoon boat, trailer, and motor;
all wine in her possession that was previously in the cellar of Houston Oaks; her
jewelry and personal effects in her possession; the Houston Oaks membership; and
any personal property in her possession not awarded to Damon. The trial court
ordered Michele to pay the debt on the American Express account ending in 4004
and a $300,000 judgment with interest to Damon to equalize the division of the
marital estate and found the division of the marital estate to be just and fair. The trial
court also confirmed the Cashel Glen property as Michele’s separate property. The
trial court stated, “I’m not awarding the assets and debts of the business. I’m
awarding the ownership of the business to wife.”
Damon filed a Motion for Clarification on the Trial Court’s Ruling, seeking
among other things, whether the prefab office building the trial court awarded to him
was the same mobile home awarded to Michele and whether the trial court awarded
either party to pay their attorney’s fees. Michele filed a response to Damon’s motion,
arguing, among other things, that certain property the trial court awarded Damon
belonged to SCS and should have been awarded to her. The Final Decree of Divorce
incorporated the trial court’s oral pronouncement and ordered Michele to pay one-
half of the parties’ 2019 IRS tax liability and SCS’s attorney’s fees and for each
party to pay their own attorney’s fees.
23
Michele filed a Request for Findings of Fact and Conclusions of law. The trial
court issued Findings of Fact and Conclusions of Law. The trial court found, among
other things, that Michele’s removal of the divorce case and both parties’
Applications for Protective Orders to bankruptcy court was done to avoid the
jurisdiction of the divorce court and forum shop and caused unnecessary expense
and attorney’s fees; Michele used community funds to gift her daughter the
Galveston Home without Damon’s consent or agreement; Michele’s trial testimony
was not credible; Damon did not sign or consent to a noncompete agreement,
nondisclosure agreement, or a non-solicitation agreement; and both parties
committed waste during the pendency of the divorce. The trial court found that it
considered the following factors in making a just and right division: fault in the
breakup; relative education of the spouses; disparity in incomes, earning capacities,
or business skills; relative age and physical condition of the parties; other financial
obligations including attorney’s fees; size of any separate estate; whether any
particular piece of property has a unique benefit to one party; any gifts between the
spouses as well as excessive gifts to children; tax consequences of assets; Michele
having committed fraud on the community during the marriage; each party’s
behavior during the divorce; source of assets used to acquire the community estate;
attorney’s fees Michele spent to remove the divorce and protective order cases to
bankruptcy court and her attempt to prevent those cases from being returned to state
24
court; attorney’s fees Michele spent to prosecute the divorce case and her actions
which resulted in increased fees; Michele’s failure to attend the last day of trial and
submit to further cross-examination; wasting of community assets by both parties;
Michele’s breach of fiduciary duty; the spouse’s earning power and business
opportunities; attorney’s fees paid and to be paid; and Damon’s need for future
support.
The trial court’s findings of fact include the value of any cash, real property,
financial accounts, business interest, motor vehicles, household effects, clothing, and
judgments the parties were awarded as well as the value of any liabilities or
reimbursement they were ordered to pay. The trial court found the division of
community property and liabilities is a just and right division, resulting in slightly
above 50% of the community estate being awarded to Damon and slightly below
50% being awarded to Michele. The trial court also found that part of the just and
right division of assets and liabilities of the marriage included awarding Damon a
$300,000 judgment with interest against Michele. The trial court further found that
the community estate was entitled to reimbursement of $30,000 from Michele for
funds spent to benefit Michele’s separate estate. The trial court denied Michele’s
Motion for New Trial or Alternatively Motion to Modify, Correct or Reform Final
Decree of Divorce.
25
ANALYSIS
In six issues on appeal, Michele complains that the trial court made an unequal
division of the community estate in Damon’s favor. Michele challenges the trial
court’s findings supporting the division of the community estate, arguing that there
is either no evidence or insufficient evidence to support the trial court’s findings that
she (1) gifted the Galveston home without Damon’s consent; (2) committed fraud
on the community during the marriage; (3) breached her fiduciary duty; (4) removed
the divorce and protective order cases to bankruptcy court and attempted to prevent
the case from being returned to state court to avoid the divorce court’s jurisdiction
and forum shop; (5) caused increased attorney’s fees; and (6) that Damon needed
future support and did not sign or consent to a nondisclosure agreement.
We review a trial court’s division of community property for an abuse of
discretion. See Murff v. Murff, 615 S.W.2d 696, 698 (Tex. 1981). The test for abuse
of discretion is whether the trial court acted arbitrarily or unreasonably, or whether
it acted without reference to any guiding rules or principles. See Downer v.
Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). The law requires
an equitable, not an equal, division of the community estate. See Tex. Fam. Code
Ann. § 7.001; Bradshaw v. Bradshaw, 555 S.W.3d 539, 546 (Tex. 2018) (Devine,
J., concurring); In re Marriage of Harrison, 557 S.W.3d 99, 140 (Tex. App—
Houston [14th Dist.] 2018, pet. denied). A trial court does not abuse its discretion if
26
there is some evidence of a substantive and probative character to support the
division. See Butnaru v. Ford Motor Co., 84 S.W.3d 198, 211 (Tex. 2002).
In a bench trial, the judge is the factfinder and the sole judge of the credibility
of the witnesses and weight to be given their testimony. See Murff, 615 S.W.2d at
700; Zagorski v. Zagorski, 116 S.W.3d 309, 318 (Tex. App.—Houston [14th Dist.]
2003, pet. denied). To determine whether the trial court divided the community
estate in a “just and right” manner, we must have the trial court’s findings of the
value of those assets. Harrison, 557 S.W.3d at 141. Michele’s complaints concern
whether legally and factually sufficient evidence supports the trial court’s findings.
“When a party attacks the legal sufficiency of an adverse finding on an issue on
which [she] has the burden of proof, [she] must demonstrate on appeal that the
evidence establishes, as a matter of law, all vital facts in support of the issue.” Dow
Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001) (citing Sterner v. Marathon
Oil Co., 767 S.W.2d 686, 690 (Tex. 1989)); see Danner v. Danner, No. 09-18-
00385-CV, 2020 WL 6325725, at *5 (Tex. App. Beaumont Oct. 29, 2020, 2018, pet.
denied) (mem op.). In our review of a finding challenged for legal sufficiency, we
consider the evidence “in the light most favorable to the verdict and indulge every
reasonable inference that would support” the challenged finding. City of Keller v.
Wilson, 168 S.W.3d 802, 822 (Tex. 2005). “But if the evidence allows only one
inference,” we may not disregard the evidence when deciding whether legally
27
sufficient evidence supports the finding the appellant has challenged in her appeal.
Id. As applied to Michele’s appeal, the standard of review requires that we disregard
evidence that contradicts the trial court’s finding that Michele challenges unless the
trial court, based on the evidence, only had one choice–to find in Michele’s favor on
the findings she challenges in her appeal. See Kroger Tex. Ltd. P’ship v. Suberu, 216
S.W.3d 788, 793 (Tex. 2006).
We review the trial court’s findings of fact for factual sufficiency of the
evidence under the same legal standards as applied to review jury verdicts for factual
sufficiency of the evidence. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996). When
a party attacks the factual sufficiency of the evidence on an issue on which she had
the burden of proof, “she must demonstrate on appeal that the adverse finding is
against the great weight and preponderance of the evidence.” Dow Chem. Co., 46
S.W.3d at 242. In a factual sufficiency review, we examine all the evidence and view
it in a neutral light. See id. But unless the evidence is so weak or the trial court’s
finding is clearly wrong and unjust given the great weight and preponderance of the
evidence, we cannot set the finding the appellant challenges aside when resolving
the appeal. Id. In other words, we cannot substitute our judgment for the factfinder’s
if the evidence supports the challenged finding. See In re H.R.M., 209 S.W.3d 105,
108 (Tex. 2006) (discussing factual sufficiency); see also In re J.L., 163 S.W.3d 79,
86–87 (Tex. 2005) (discussing legal sufficiency).
28
When dividing a couple’s marital estate, trial courts have a statutory duty to
“order a division of the estate of the parties in a matter that the court deems just and
right, having due regard for the rights of each party and any children of the
marriage.” Tex. Fam. Code Ann. § 7.001. Trial courts may consider several factors
in dividing a marital estate, including the disparity of incomes and parties’ earning
capacities, the benefits that a spouse would have derived from the marriage had it
continued, each spouse’s “business opportunities, education, relative physical
conditions, relative financial condition and obligations, disparity of ages, size of
separate estates, and the nature of the property.” Murff, 615 S.W.2d at 699. When
the appellant complains the trial court abused its discretion because it did not fairly
divide the couple’s estate, we will not overturn the trial court’s division of the
property if the record contains some evidence of a substantive and probative
character supporting it. Hinton v. Burns, 433 S.W.3d 189, 193 (Tex. App.—Dallas
2014, no pet.) (citing Moroch v. Collins, 174 S.W.3d 849, 857 (Tex. App.—Dallas
2005, pet. denied)).
In family law cases, the abuse-of-discretion standard overlaps with the
traditional legal and factual sufficiency standards of review, and legal and factual
sufficiency issues are not independent grounds asserting error but are factors
relevant to the appellate court’s evaluation of whether an abuse of discretion
occurred. Hinton, 433 S.W.3d at 193; Moroch, 174 S.W.3d at 857; see also In re
29
A.B.P., 291 S.W.3d 91, 95 (Tex. App.—Dallas 2009, no pet.) (discussing standard).
To decide whether an abuse of discretion occurred, we consider whether the trial
court (1) had sufficient evidence to exercise its discretion and (2) erred in that
discretion. Hinton, 433 S.W.3d at 193–94; In re A.B.P., 291 S.W.3d at 95. The first
prong of this two-part test focuses on whether the ruling the trial court made is
supported by sufficient evidence. Hinton, 433 S.W.3d at 194; Moroch, 174 S.W.3d
at 857. In a case in which some evidence supports the trial court’s ruling, the second
part of the test requires the appellate court to determine whether that evidence, after
considering the elicited evidence, shows the ruling the trial court made is one that is
reasonable. Hinton, 433 S.W.3d at 194; Moroch, 174 S.W.3d at 857. We review the
record in the light most favorable to the trial court’s judgment to determine whether
some evidence supports it, and we will uphold the judgment on any legal theory that
finds support in the evidence. Harrison, 557 S.W.3d at 131.
In issue one, Michele argues the trial court erred by awarding Damon property
and assets that belonged to SCS because the Texas Business Organizations Act
prohibits the trial court from transferring or interfering with the property rights of a
limited liability company. See Tex. Bus. Orgs. Code Ann. § 101.106(b). In issue
two, Michele complains that the trial court’s erroneous award of SCS’s equipment
to Damon substantially diminished SCS’s value because SCS did not have the
necessary machinery, equipment, and tools to bid or work on any projects. Michele
30
argues the trial court’s finding that these assets did not belong to SCS is contrary to
Damon’s testimony, lacks evidentiary support, and is so against the overwhelming
weight of the evidence as to be manifestly unfair. Michele contends the evidence
shows the assets belong to SCS and should have been included in the trial court’s
award of SCS to her.
When the characterization of property is at issue in a divorce proceeding, the
trial court is required to presume that any property possessed by either spouse during
the marriage is community property. Moroch, 174 S.W.3d at 856; In re Marriage of
Collier, 419 S.W.3d 390, 402–03 (Tex. App.—Amarillo 2011, no pet.). To
overcome the community presumption, a spouse claiming the specific property is
not part of the community must trace the property and establish the time and means
by which the spouse obtained possession of the property. In re Marriage of Collier,
419 S.W.3d at 403.
SCS is a limited liability company, and as such, is a legal entity separate from
its members. See Sherman v. Boston, 486 S.W.3d 88, 94 (Tex. App.—Houston [14th
Dist.] 2016, pet. denied). Damon, as a member of SCS, does not have an interest in
any specific property of the company. See Tex. Bus. Orgs. Code Ann. § 101.106(b).
Property owned by a limited liability company is neither community property nor
the separate property of its members. See id. § 101.106(a)–(a-1); Mandell v.
Mandell, 310 S.W.3d 531, 539 (Tex. App.—Fort Worth 2010, pet. denied). The
31
business property that is subject to division in a divorce is the interest in the limited
liability company and not the company’s specific assets. Tex. Bus. Orgs. Code Ann.
§ 101.106(a-1) (noting membership interest may be community property), (b) (LLC
member does not have interest in any specific company property); In re Marriage of
Collier, 419 S.W.3d at 403. Additionally, property acquired on the credit of the
community is community property. In re Marriage of Collier, 419 S.W.3d at 403
(citation omitted).
Michele contends the trial court erred by including the following SCS
property in the community estate: the Kubota M56 front loader tractor, Kubota
M1489 front loader tractor, all tools, 2018 GMC Denali pickup, 2018 Dodge Ram
3500 pickup, 2011 Kubota UTV, 2018 Kubota lawnmower, 2019 John Deere tractor,
2011 golf cart, scuba diving gear, and proceeds from the sale of the airplane. Michele
argues that SCS’s financial statements and tax return show the machinery and
equipment awarded to Damon were assets of SCS, and McClure’s report shows her
valuation of SCS was based on SCS’s property.
SCS’s financial statements do not specifically identify any machinery or
equipment, and the tax return’s depreciation and amortization report only identifies
a 2018 GMC Sierra as a vehicle used more than 50% in a qualified business use.
Michele’s Inventory and Proposed Division of Property identified the following
property as subject to division: proceeds from the sale of the airplane, 2019 John
32
Deere tractor, 2018 GMC Denali pickup, 2018 Dodge Ram 3500 pickup, Kubota
lawnmower, 2011 Kubota UTV, and golf cart. Damon’s inventory and Amended
Proposed Division lists the Galveston home as community property as well as the
2018 GMC Denali pickup, 2018 Dodge Ram 3500 pickup, 2011 Kubota UTV, 2018
Kubota lawnmower, 2019 John Deere tractor, M56 Kubota, 2011 golf cart, Kubota
1489 front loader tractor, and proceeds from the sale of the airplane. Damon’s
inventory also lists SCS’s business interests, which includes multiple vehicles,
equipment, and tools.
During trial, Michele explained that in her bankruptcy she listed SCS’s value
as $457,000, which was the cash in the company, excluded any accounts receivables,
and added the value of all SCS’s equipment and assets, which were in their personal
names, to their community property. Michele testified Damon took the Kubota UTV,
lawn mower, Kubota lawn tractor, his truck, and tools, and she explained that the
Kubota tractor and all the vehicles SCS uses were in Damon’s name, but she did not
know if the Kubota UTV was in his name. Although Michele argues McClure listed
and valued SCS’s machinery, equipment, furniture, fixtures, vehicles, and leasehold
improvements in determining the fair market value of SCS and noted that valuation
was based on tangible assets, McClure’s report does not list the specific machinery
and equipment she considered in her valuation. Additionally, McClure’s valuation
notes that it is based on tangible assets and assumes that all necessary fixed assets
33
are included in the transaction, but she states she made no attempt to verify title or
status of ownership to the assets.
Damon explained he sold the airplane about a year before the trial because it
required expensive avionic upgrades, and there were costs associated with the sale,
which included hanger fees and maintenance. Damon testified that he would like to
have his personal tools that he left at the Imperial Oaks Property, and he valued the
tools at approximately $1,500. Damon also testified that he had to purchase new
tools and equipment. Damon further testified that he has underwater diving gear and
suits that are his personal items even though he also used the gear for work.
Based on our review of the record, Michele failed to offer evidence regarding
the means by which the parties obtained possession of the airplane, vehicles,
equipment, and tools she complains about. See In re Marriage of Collier, 419
S.W.3d at 404. Consequently, we conclude that Michele failed to meet the burden
of overcoming the statutory presumption that the complained of property possessed
during the marriage was community property. See id.; Moroch, 174 S.W.3d at 855.
Additionally, the parties’ inventories and proposed division of property
characterized the property as community property. Based on the record before us,
we conclude the trial court did not abuse its discretion by awarding the complained
of assets to Damon because there is some evidence of a substantive and probative
character to support the division and based on that evidence, the trial court’s decision
34
was reasonable. See Butnaru, 84 S.W.3d at 211; Murff, 615 S.W.2d at 698; Hinton,
433 S.W.3d at 193. We overrule issues one and two.
In issue three, Michele complains the trial court erred by attributing the value
of the Galveston Home to her because she and Damon gifted that real property to
their daughter. Michele complains the trial court could not award the Galveston
Home to her because it was not her separate property or part of the community estate,
and the trial court erred by including the $280,000 purchase price on her side of the
property division ledger. Michele argues the trial court’s mischaracterization of the
Galveston Home as community property materially affected the just and right
division of the community estate. Michele further argues that Damon offered no
evidence to overcome the presumption of the property being a gift to their daughter.
The record shows that during trial, Michele’s attorney agreed that the
$280,000 for the Galveston Home should be included as one of Michele’s assets in
the property division, and her inventory and proposed division of property includes
the Galveston Home as community property that should be awarded to her. Damon’s
Inventory and Amended Proposed Division also lists the Galveston Home as
community property. The evidence before the trial court also showed that in 2019,
Damon received $968,816 in distributions from SCS and Michele received
$1,587,432 in distributions, which included $279,362 for the purchase of the
Galveston Home. Also, in her bankruptcy filing, Michele disclosed that in 2019, she
35
received $415,129 in distributions from SCS, which included the money to purchase
the Galveston Home.
Michele testified that when she purchased the Galveston Home in July 2019,
she did not discuss the purchase with Damon. Damon testified that he did not
approve the purchase of the Galveston Home, and he asked the trial court to either
impose a constructive trust on the home or consider it as part of his waste claim.
While Michele testified that she used proceeds from her individual Merrill Lynch
account to purchase the Galveston Home, she also testified that she transferred
money from her individual Merrill Lynch account into SCS’s checking and then into
her personal account to pay her personal expenses.
The trial court found that during the marriage, Michele used community funds
to gift their daughter the Galveston Home without Damon’s consent or agreement
and that the transfer did not benefit the community estate. The trial court also found
Michele’s trial testimony was not credible and considered that Michele committed
fraud on the community during the marriage. As the sole judge of the credibility of
the witnesses and weight to be given their testimony, the trial court was free to
disbelieve Michele’s testimony regarding her purchase of the Galveston Home. See
Murff, 615 S.W.2d at 700. We conclude the trial court did not abuse its discretion by
including the Galveston Home in the division of the community estate and awarding
Michele the Galveston Home because there is some evidence of a substantive and
36
probative character to support the division and based on that evidence, the trial
court’s decision was reasonable. See Butnaru, 84 S.W.3d at 211; Murff, 615 S.W.2d
at 698; Hinton, 433 S.W.3d at 193. We overrule issue three.
In issue four, Michele argues the trial court erred by entering a judgment
against her for $300,000 to equalize the division of community assets because the
trial court had already made an unequal division in Damon’s favor. Michele
contends the $300,000 judgment against her was detrimental and had no
justification. Michele explained that Damon alleged she committed fraud on the
community by purchasing the Galveston Home, but she argues that the evidence
does not support the trial court’s finding that she committed actual fraud on the
community. Michele also argues there is no evidence of fraud by her or that she
breached her fiduciary duty to the community.
“A fiduciary duty exists between a husband and a wife as the community
property controlled by each spouse.” Puntarelli v. Peterson, 405 S.W.3d 131, 137
(Tex. App.—Houston [1st Dist.] 2013, no pet.); Zieba v. Martin, 928 S.W.2d 782,
789 (Tex. App.—Houston [14th Dist.] 1996, no writ) (op. on reh’g). Each spouse
owns an undivided one-half interest in all community assets and funds regardless of
which spouse has control, and a relationship of trust and confidence exists which
requires that a spouse’s disposition of community property be fair to the other
spouse. Massey v. Massey, 807 S.W.2d 391, 401–02 (Tex. App.—Houston [1st
37
Dist.] 1991, writ denied). The managing spouse has the burden to prove that her
disposition of community property was fair, and the trial court may consider a
spouse’s disposition when making a just and right division. Slicker v. Slicker, 464
S.W.3d 850, 861–62 (Tex. App.—Dallas 2015, no pet.); Massey, 807 S.W.2d at 402
(citations omitted).
A claim that a spouse committed fraud on the community must be asserted for
consideration in the trial court’s just and right division of the community estate. Chu
v. Hong, 249 S.W.3d 441, 444–45 (Tex. 2008). The evidence presented regarding
fraud on the community is relevant to the property division, and the trial court may
consider a wrong by one spouse to justify an unequal division of property. See
Schlueter v. Schlueter, 975 S.W.2d 584, 588 (Tex. 1998) (citation omitted);
Markowitz v. Markowitz, 118 S.W.3d 82, 90–91 (Tex. App.—Houston [14th Dist.]
2003, pet. denied) (plurality on reh’g). Fraud is presumed when one spouse disposes
of the other spouse’s interest in community property without the other spouse’s
knowledge or consent. Cantu v. Cantu, 556 S.W.3d 420, 427 (Tex. App.—Houston
[14th Dist.] 2018, no pet.). The presumption can arise by evidence of specific
transfers or gifts of community assets outside of the community and by evidence that
community funds are unaccounted for by the spouse in control of those funds. Id.
Once the presumption arises, the burden of proof shifts to the disposing spouse to
prove the fairness of the disposition of the other spouse’s one-half community
38
ownership. Id.; Puntarelli, 405 S.W.3d at 138. While a spouse may make moderate
gifts for just causes to persons outside the community, an excessive gift may be set
aside as a constructive fraud on the other spouse, and no dishonesty of purpose or
intent to deceive is required to establish constructive fraud. Puntarelli, 405 S.W.3d
at 138–39; Mazique v. Mazique, 742 S.W.2d 805, 808 (Tex. App.—Houston [1st
Dist.] 1987, no writ).
When the trial court makes a finding of fraud, it must determine the value by
which the community estate was depleted as a result of the fraud on the community
and the amount of the reconstituted estate. Tex. Fam. Code Ann. § 7.009(b); Cantu,
556 S.W.3d at 427. The reconstituted estate is the total value of the community estate
that would have existed had the fraud not occurred. Tex. Fam. Code Ann. § 7.009(a).
A trial court can achieve a just and right division of the community estate by
awarding a disproportionate share of the remaining community assets to the wronged
spouse or by awarding a money judgment to the wronged spouse against the spouse
who committed fraud, or a combination of both. Id. § 7.009(c); see Murff, 615
S.W.2d at 699.
In his First Supplemental Petition to Petitioner’s Third Amended Petition for
Divorce, Damon alleged that during the divorce proceeding and in violation of the
Montgomery County’s First Amended Standing Order Regarding Children, Pets,
Property and Conduct of the Parties, Michele breached her fiduciary duty and
39
committed fraud by purchasing the Galveston Home in their daughter’s name with
community property funds. During trial, Michele testified that when she purchased
the Galveston Home for $279,361, she did not discuss the purchase with Damon,
and Damon testified that he did not approve the purchase of the Galveston Home.
Michele testified that she did not know she was under standing orders from
Montgomery County when she made the purchase. Michele also testified that she
paid the expenses on the home, and the property taxes were paid directly by SCS
and written off as a distribution. Damon testified that Michele spent approximately
$315,000 on the Galveston Home’s purchase, improvements, and maintenance.
As the factfinder, the trial court had the exclusive right to exercise its
discretion by believing that Michele did not have Damon’s knowledge or consent to
use community property to purchase the Galveston Home. See Murff, 615 S.W.2d at
700. We conclude the evidence does not conclusively establish that as the managing
spouse, Michele purchased the Galveston home with Damon’s knowledge or consent
or that the evidence the trial court relied on to conclude Michele did not have
Damon’s knowledge or consent is so weak it is outweighed by the greater weight
and preponderance of the evidence admitted at trial. See Dow Chem. Co., 46 S.W.3d
at 242. We further conclude the evidence does not conclusively establish that
Michele disposed of community property in a manner that is fair to Damon or that
the evidence the trial court relied on to conclude Michele did not dispose of
40
community property in a manner that was fair to Damon is so weak it is outweighed
by the greater weight and preponderance of the evidence admitted at trial. See id.;
see also Slicker, 464 S.W.3d at 862; Massey, 807 S.W.2d at 401.
In making a just and right division, the trial court could have considered the
evidence that was presented showing that Michele committed fraud on the
community and breached her fiduciary duty, and after accounting for the $300,000
judgment, the trial court then awarded Damon slightly more than 50% of the
community estate. We conclude the trial court did not abuse its discretion by finding
that part of the just and right division included awarding Damon a $300,000
judgment with interest against Michele because there is some evidence of a
substantive and probative character to support the division and based on that
evidence, the trial court’s decision was reasonable. See Butnaru, 84 S.W.3d at 211;
Murff, 615 S.W.2d at 698; Hinton, 433 S.W.3d at 193. We overrule issue four.
In issue five, Michele contends the trial court abused its discretion by entering
an unfair division of property in Damon’s favor. Michele explained that she had less
education, work experience, earning capacity, and business experience than Damon,
and as the innocent spouse, she would have received substantially greater benefits
had the marriage continued. Michele also explained that she suffered Damon’s
emotional and physical abuse, tolerated his alcoholic rages, and was the victim of
41
his adultery and intentional acts to damage SCS. Michele maintains that the trial
court failed to divide the marital estate in a just and right manner.
During the trial, the trial court considered evidence about the non-exclusive
factors that a judge is to consider in determining a just and fair property division,
including fault in the breakup; the spouses’ education and work experience; their
earning capacities, business experience, and business opportunities; their age and
health; the current disparity in their income; the nature of the community property;
the size of the separate estate; and the benefit the spouse not at fault would have
received had the marriage continued. See Murff, 615 S.W.2d at 698; Villalpando v.
Villalpando, 480 S.W.3d 801, 807 (Tex. App.—Houston [14th Dist.] 2015, no pet.)
(citation omitted). The judge had the opportunity to see both parties testify and to
judge their credibility, and the judge found Michele’s testimony was not credible.
Under these circumstances, we conclude the trial court did not abuse its
discretion in awarding Damon a disproportionate share of the community estate
because the trial court had sufficient information to exercise its discretion and did
not divide the community estate in a manner that is manifestly unjust or unfair. See
Murff, 615 S.W.2d at 698–99; Villalpando, 480 S.W.3d at 807. We overrule issue
five.
In issue six, Michele challenges the trial court’s findings concerning the
division of the community estate, alleging there is legally and factually insufficient
42
evidence to support the findings. Michele argues the evidence does not support the
trial court’s finding that Damon needed future support because he left the marriage
with over $1,075,000 from his Merrill Lynch account, set up a competing business,
and had years of experience in the concrete renovation and construction business. In
making its determination of a just and right division, the trial court found that it
considered Damon’s need for future support. We focus on the whether the trial
court’s finding was reasonable based on the evidence admitted at trial. As the party
who complains about the adverse finding, Michele must establish that either the
evidence in the trial court conclusively established Damon did not need future
support, or that the evidence the trial court relied on to conclude Damon needed
future support is so weak it is outweighed by the greater weight and preponderance
of the evidence admitted at trial. See Danner, 2020 WL 6325725, at *5, 7.
The trial court heard evidence that there had been a disparity in earning power,
and that in 2019 and 2020, Damon had no income. The trial court heard Damon
testify that although he created TSR, he had to wait until the divorce was finalized
to conduct business because of the alleged noncompete agreement. The trial court
also considered Damon’s testimony that he needed money to reestablish himself
because he lost his earning capacity due to the alleged noncompete agreement and
because Michele had “badmouthed” him in the industry. We conclude the is legally
and factually sufficient. The evidence does not conclusively establish that Damon
43
did not need future support and the evidence the trial court relied on to conclude that
Damon’s needs for future support was a factor in making a just and right division is
not so weak that it is outweighed by the greater weight and preponderance of the
evidence admitted at trial. See id.
Michele also complains about the trial court’s findings that her removal of the
divorce and protective order cases to bankruptcy court and her attempt to prevent
the cases from being returned to state court was done to avoid the divorce court’s
jurisdiction and forum shop and caused the parties to expend unnecessary expenses
and attorney’s fees. Michele argues she was justified in filing bankruptcy, and
Damon presented no evidence she was forum shopping or attempting to avoid
discovery.
Damon testified that he believed Michele fraudulently filed bankruptcy after
spending excessively and that he had to pay approximately $75,000 in attorney’s
fees to have his divorce case remanded back to state court. He also explained that
Michele failed to cooperate with the litigation and discovery requests before filing
bankruptcy, and her behavior hindered the process and caused him to incur excess
attorney’s fees. The trial court considered evidence that the bankruptcy court found
that forum shopping was an issue in Michele’s bankruptcy case because the removal
of a property division incident to a divorce to a Federal Bankruptcy Court was not a
normal or typical occurrence. Michele agreed that the bankruptcy court found that
44
forum shopping was an issue but claimed she filed bankruptcy because she tried to
stop Damon’s attorney from getting attorney’s fees. Michele testified that she filed
bankruptcy before she had to turn over the native Quickbooks and before two SCS
employees could be deposed. Michele also testified that she filed a motion for
reconsideration of the remand order, which was denied.
We conclude the evidence does not conclusively establish that Michele’s
removal of the divorce and protective order cases to bankruptcy court and her
attempt to prevent the cases from being returned to state court was not done to avoid
the divorce court’s jurisdiction and forum shop and did not result in unnecessary
expenses and attorney’s fees. See id. We further conclude that the evidence the trial
court relied on to conclude that Michele’s removal to bankruptcy court and her
attempt to prevent the cases from being returned were factors in making a just and
right division is not so weak it is outweighed by the greater weight and
preponderance of the evidence admitted at trial. See id.
Michele challenges the trial court’s finding that Damon did not sign or consent
to a nondisclosure of SCS’s confidential information. Michele testified that she had
Damon’s consent to cut and paste a copy of his electronic signature on the
Regulations Hoffman prepared, which did not contain any noncompete, non-
solicitation, or confidentiality clauses.Michele also testified that she created the
Employment Noncompetition and Confidentiality Agreement in 2010 and backdated
45
it to 2001, and she cut and pasted Damon’s electronic signature on the agreement
with his permission. Michele explained that in addition to Damon’s 49%-member
interest in SCS, he received a $60,000 yearly salary as consideration for signing the
agreement.
Damon explained that he never saw, signed, or authorized Michele to sign a
document that would prevent him from competing or soliciting business or clients,
and he never received a $60,000 salary from SCS as compensation for signing the
alleged noncompete agreement. Damon testified that the noncompete agreement
indicates it was created in 2001, but it contains the Imperial Oaks property’s address,
which they acquired in 2008. Damon explained he would never have signed the
agreement because it made no sense when he provided the knowledge and
experience to SCS. Hughes testified that SCS’s original Regulations that were
created in 2002 did not contain noncompete or the non-solicitation language and that
the altered document containing the noncompete and non-solicitation language was
created in 2018 and stored in a folder titled “divorce[.]”
As the factfinder, the trial court had the exclusive right to exercise its
discretion by believing Damon’s testimony that he never signed the agreement. See
Murff, 615 S.W.2d at 700. We conclude the evidence does not conclusively establish
that Damon signed the agreement or that the evidence the trial court relied on to
conclude Damon did not sign or consent to the agreement is so weak it is outweighed
46
by the greater weight and preponderance of the evidence admitted at trial. See Dow
Chem. Co., 46 S.W.3d at 242. On appeal, Michele argues that Damon’s consent is
irrelevant because he has a common law duty of nondisclosure. Based on our review
of the record, this argument is not preserved for our review because Michele did not
make the argument at trial. See Tex. R. App. P. 33.1.
Michele also challenges the trial court’s findings that she committed fraud on
the community during the marriage and breached her fiduciary duty. We have
already explained in issue four that the evidence was sufficient to support the trial
court’s findings that Michele committed fraud on the community and breached her
fiduciary duty by using community funds to purchase the Galveston Home without
Damon’s knowledge or consent and that by doing so, she did not dispose of
community property in a manner that was fair to Damon. We overrule issue six.
Having overruled each of Michele’s issues, we affirm the trial court’s judgment.
AFFIRMED.
_________________________
W. SCOTT GOLEMON
Chief Justice
Submitted on June 16, 2022
Opinion Delivered November 17, 2022
Before Golemon, C.J., Kreger and Johnson, JJ.
47 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487076/ | In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-22-00053-CV
__________________
DEBORAH ROSE EEZZUDUEMHOI, PLLC D/B/A/ SOUTHEAST
TEXAS OPTHALMOLOGY THE GLAUCOMA CENTER AND
DEBORAH ROSE EEZZUDUEMHOI, Appellants
V.
PHILLIS DELLI, Appellee
________________________________________________________________
On Appeal from the 172nd District Court
Jefferson County, Texas
Trial Cause No. E-208,175
__________________________________________________________________
MEMORANDUM OPINION
The Texas Medical Liability Act (“TMLA”) requires plaintiffs asserting a
health care liability claim to serve each defendant with an “adequate” expert report
or face dismissal of their claim. Tex. Civ. Prac. & Rem. Code Ann. § 74.351. In this
interlocutory appeal, Appellants Deborah Rose Eezzuduemhoi (“Dr.
Eezzuduemhoi”) and Deborah Rose Eezzuduemhoi, PLLC d/b/a Southeast Texas
Ophthalmology The Glaucoma Center (“The Glaucoma Center”) (collectively
1
“Defendants” or “Appellants”) argue that the trial court abused its discretion by
denying their TMLA motion to dismiss. The Defendants contend the expert’s report
is not adequate because it is speculative, fails to consider what condition Appellee
Phillis Delli’s (“Appellee,” “Plaintiff,” or “Phillis”) eyes would be in without the
surgery, contains conclusory statements and no more than ipse dixit, and only
addresses the alleged injury to Phillis’s 1 left eye, rather than the “ultimate injury”
which Plaintiff contends she received to both eyes. Because we cannot say the trial
court abused its discretion in denying the motion to dismiss, we must affirm.
The Original Petition
Phillis Delli filed her Original Petition on August 19, 2021, naming Dr.
Eezzuduemhoi and The Glaucoma Center as defendants. Delli alleged that she went
to The Glaucoma Center on April 26, 2019 for a consultation for cataract surgery
and complaints about vision difficulties and problems with glare from headlights
when driving at night. The petition alleged that Dr. Eezzuduemhoi performed
cataract extraction with intraocular lens implant of the left eye on August 26, 2019,
and the surgery was complicated “by a posterior capsule rent with vitreous loss[,]”
and a “+21.00 D anterior chamber intraocular lens (ACIOL) was placed.” In follow-
1
Phillis Delli died shortly after filing this suit, and her daughter Billie Delli
continues to prosecute the lawsuit as executrix of Phillis’s estate. The claims against
the Defendants are for negligence, they relate to complications from eye surgery,
and the appellate record contains no allegation that Phillis’s death was related to the
surgery or treatment provided by the Defendants.
2
up visits over the next two months, Delli received four prescriptions and was
diagnosed with left eye corneal edema and left eye ocular hypertension, with a plan
ultimately to replace the ACIOL with a different lens implant.
On November 4, 2019, Phillis underwent ACIOL “explantation” at The
Medical Center of Southeast Texas and a “3-piece Alcon Lens Model mn60ac” was
inserted. At follow-up visits over the next month, she complained of foreign body
sensation in her left eye, and she was told that an anterior vitrectomy of the left eye
was necessary due to vitreous in the anterior chamber.
Phillis underwent a third eye surgery performed by Dr. Eezzuduemhoi on
December 9, 2019. The next day, Phillis presented with anterior vitrectomy of the
left eye, and she was instructed to continue her medications. At follow-up visits the
following month, she stated that her vision seemed to be getting worse, and on
January 27, 2020, Dr. Eezzuduemhoi told Phillis there was nothing more the doctor
could do for her, and the doctor continued two of Phillis’s prescriptions.
On February 5, 2020, Phillis saw Dr. Talbot for a second opinion, who
observed “significant iris abnormalities including a hole inferiorly at 5 oclock,
atrophy at 6 oclock, and iridocorneal adhesions.” Dr. Talbot concluded that Phillis
would require another surgery, including a “corneal transplant, IOL reposition or
exchange, and iris repair OS.” Dr. Talbot referred Phillis to Dr. Hamill at Baylor
College of Medicine. On February 21, 2020, Phillis saw Dr. Hamill, who diagnosed
3
her with “corneal edema OS, pseudophakia OS, anterior synechiae OS, and age-
related cataract of the right eye[,]” and the left eye showed a “tilted scleral PCIOL
with severe diffuse corneal edema, a temporal vascularized corneal scar, and
multiple iridocorneal adhesions[.]” A pre-operative exam on May 18, 2020, revealed
“pseudophakic bullous keratopathy of the left eye with obscured view of the anterior
segment and posterior segment with multiple iridocorneal adhesions of peripheral
iris defects.” She underwent a fourth procedure on her left eye on July 8, 2020, for
a “PKP, iris reconstruction, IOL exchange for a trans-sclerally sutured lens of the
left eye.” One day after surgery, Phillis went for a follow-up visit, complaining of a
slight headache. An examination revealed that the graft was in a good position, and
there was some corneal edema with mild AC reaction. Phillis was to take two
medications and return in a week, and after several more follow-up visits, she was
“basically” doing well with “no complaints.”
According to the petition, “[t]he pathology of the cornea revealed diffuse
stromal edema, a retrocorneal fibrotic membrane, and near-total absence of
endothelial cells[,]” and “[t]he damage to Plaintiff’s eye was caused by Defendants’
negligence.” The petition asserted claims against Dr. Eezzuduemhoi for negligence
and gross negligence for:
1. Failing to timely correct the ACIOL haptic.
2. Failing to refer Plaintiff to a cornea specialist to expedite the timely
repair of the ACIOL haptic.
3. Failing to correct the malpositioned sclerally-fixated PCIOL.
4
4. Such other and further acts of negligence as may be supplemented as
a result of discovery performed in this suit.
The petition also stated claims against The Glaucoma Clinic under a theory of
respondeat superior for negligence and gross negligence. Plaintiff sought damages
for medical bills, pain and suffering, mental anguish, loss of earning capacity,
physical impairment, and loss of enjoyment of life as well as interest and attorney’s
fees. Plaintiff also sought exemplary damages.
Dr. Bradley’s Report
Phillis served a report from Dr. Jay Cameron Bradley on October 4, 2021. 2 In
his report, Dr. Bradley stated that he is a board-certified ophthalmologist and
currently practicing as a “Cornea, External Disease, Cataract, & Refractive Surgery
specialist” in Lubbock, Texas. Bradley stated that he had reviewed Phillis’s medical
records from The Glaucoma Center, The Medical Center of Southeast Texas, and
Baylor College of Medicine, and he included a summary description of Phillis’s
history from April 26, 2019 through August 27, 2020.
Bradley stated that for patients with a haptic of an ACIOL or a malpositioned
or “tilted” sclerally-fixated posterior chamber intraocular lens, the standard of care
2
In the initial motion to dismiss under the TMLA, the Defendants argued that
the matter should be abated until a representative of Phillis’s estate had been
appointed. Plaintiff filed a Suggestion of Death of Plaintiff, Phillis Delli on
December 4, 2021, and Letters Testamentary naming Billie Delli (“Billie”) as the
executrix of Phillis’s estate. Defendants then refiled their Chapter 74 Motion to
Dismiss RE Expert Report.
5
requires that the lens needs to be repositioned or exchanged as soon as possible to
avoid progressive and irreversible damage to the cornea. According to Bradley, “[i]n
both instances in this case, there were prolonged delays before the issue was
corrected.” Dr. Bradley stated that Dr. Eezzuduemhoi should have “corrected the
ACIOL haptic in the wound and the malpositioned sclerally-fixated PCIOL without
delay to prevent progressive and irreversible damage to the cornea [or] referred the
patient to a cornea specialist if she was unable to correct these issues.” In Dr.
Bradley’s opinion, Dr. Eezzuduemhoi breached the applicable standard of care by
failing to correct the ACIOL haptic in the wound for over seven weeks after the
initial surgery and failing to correct the malpositioned sclerally-fixated PCIOL.
Dr. Bradley states:
Dr. Eezzuduemhoi delayed correction of both issues for a prolonged
period of time directly resulting in progressive and irreversible corneal
damage. When intraocular lens implants are not in correct position
(such as in this case), the lens implant moves inside the eye and rubs
against the cornea. This causes the endothelial cells (which line the
inner surface of the cornea and keep the cornea clear) to progressively
die, resulting in corneal swelling and cloudiness. If the malpositioned
intraocular lens implant is not corrected, the number of endothelial cells
progressively decrease over time until the cornea is irreversibly
damaged and a corneal transplant is required to clear the cornea. The
delays in care of this case resulted in a need for additiona1 surgery and
poor outcome. With earlier intervention of the ACIOL haptic in the
wound and the malpositioned sclerally-fixated PCIOL, further surgery
would most likely have been avoided and a better outcome would most
likely been attained.
6
According to Dr. Bradley, Phillis had complicated cataract surgery, and because
ACIOL haptic in the surgery wound and malpositioned sclerally-fixated PCIOL
were not managed “urgently[,]” Phillis developed progressive and irreversible
corneal damage. Dr. Bradley wrote that most patients who suffer these issues are
able to achieve “complete restoration of vision[,]” and Phillis was unable to achieve
such recovery due to the lack of prompt diagnosis and treatment.
Defendants’ Motion to Dismiss
In Defendants’ motion to dismiss, the Defendants argued that Dr. Bradley’s
report did not meet the requirements of the TMLA because “causation of the
‘ultimate injury’ is lacking.” Specifically, the motion states:
Dr. Bradley was not provided the affidavit of Ms. Billie Delli,
and therefore could not have addressed the “ultimate injury,” i.e., the
full scope of damages claimed in this case.
Dr. Bradley does not address the status of Ms. Delli’s right eye.
Additionally, according to the Defendants, Dr. Bradley’s statements that Phillis had
a “poor outcome[]” and that most patients in Phillis’s position “often enjoy complete
restoration of vision[]” are impermissibly conclusory. The Defendants also argued
that an expert report must address other plausible causes of the harm for which
recovery is sought, and Dr. Bradley should have addressed the problems Phillis had
with her right eye because it “would point to causes and conditions bearing on the
7
left eye[.]” 3 According to the Defendants, Dr. Bradley’s report was deficient under
the TMLA standards, and the case should be dismissed.
Attached to the Defendants’ motion to dismiss was a copy of Dr. Bradley’s
report and Billie Delli’s affidavit. Billie’s affidavit was signed and sworn on
September 23, 2021. In her affidavit, Billie described her mother Phillis before the
surgery as outgoing and very involved with her family. According to Billie, after her
surgery, Phillis was unable to work, financially dependent, withdrawn, and “sorrow-
filled[.]”
At the hearing on the motion to dismiss, Defendants argued that, even though
Plaintiff’s burden at this stage of the litigation does not require it to marshal all its
proof, Plaintiff is still required to “provide a reasonably detailed explanation based
upon the facts of how they would prove proximate causation at trial.”
Plaintiff’s Response to Motion to Dismiss
In their response to the Defendants’ motion to dismiss, Plaintiff argued that
Dr. Bradley’s report provides “very specific and consistent opinions” about the
probable cause of Phillis’s injuries. According to Plaintiff, Billie’s affidavit was not
executed until forty-one days after Dr. Bradley’s report was issued, and the affidavit
has no bearing on whether the report meets the TMLA requirements. Plaintiff also
3
The Defendants’ motion to dismiss does not challenge Dr. Bradley’s
qualifications nor his opinions on standard of care and breach.
8
argues that Dr. Bradley’s failure to address Phillis’s right eye is not relevant because
“only the left eye is at issue in this case.” Plaintiff argues that Dr. Bradley’s opinion
on causation is not conclusory because it provides a fair summary of the causal
relationship between the breach and the injury, it is sufficient to inform Defendants
of the specific conduct Plaintiff challenges, and it provides a sufficient basis for the
trial court to conclude that Plaintiff’s claims have merit.
At the hearing on the motion to dismiss, Plaintiff argued the “gist of this entire
case [] only has to do with [Phillis’s] left eye[]” and the allegations about Phillis’s
“life enjoyments” and how problems with her right eye may have affected the left
eye only go to the scope of damages.
After the hearing on the motion to dismiss, the trial court signed an order
denying Defendants’ motion to dismiss. Defendants timely filed a notice of
interlocutory appeal.
Standard of Review and Applicable Statutory Requirements
The TMLA governs health care liability claims and requires that the plaintiff,
to avoid dismissal, serve an expert report addressing liability and causation as to
each defendant within 120 days after the defendant files an original answer. Rogers
v. Bagley, 623 S.W.3d 343, 348 (Tex. 2021) (citing Tex. Civ. Prac. & Rem. Code
Ann. § 74.351(a)). The purpose of the expert report requirement is to weed out
frivolous malpractice claims in the early stages of litigation, not to dispose of
9
potentially meritorious claims. Abshire v. Christus Health Se. Tex., 563 S.W.3d 219,
223 (Tex. 2018) (per curiam) (citing Am. Transitional Care Ctrs. of Tex., Inc. v.
Palacios, 46 S.W.3d 873, 877 (Tex. 2001)); see also Loaisiga v. Cerda, 379 S.W.3d
248, 258 (Tex. 2012) (“[Expert report] requirements are meant to identify frivolous
claims and reduce the expense and time to dispose of any that are filed.”). In
accordance with that purpose, the Act provides a mechanism for dismissal of the
claimant’s suit in the event of an untimely or deficient report. Tex. Civ. Prac. &
Rem. Code Ann. § 74.351(b).
In a case under the TMLA, we review a trial court’s ruling on a motion to
dismiss challenging the adequacy of an expert report for an abuse of discretion. See
Abshire, 563 S.W.3d at 223; Van Ness v. ETMC First Physicians, 461 S.W.3d 140,
142 (Tex. 2015) (per curiam); Palacios, 46 S.W.3d at 877-78. “A trial court abuses
its discretion if it acts in an arbitrary or unreasonable manner without reference to
any guiding rules or principles.” Bowie Mem’l Hosp. v. Wright, 79 S.W.3d 48, 52
(Tex. 2002) (per curiam). A trial court’s ruling does not constitute an abuse of
discretion simply because the appellate court would have ruled differently under the
circumstances. See id. A trial court also abuses its discretion if it fails to analyze or
apply the law correctly. See In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135
(Tex. 2004) (citing Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992)).
10
When reviewing the sufficiency of a report, “we consider only the information
contained within the four corners of the report.” Abshire, 563 S.W.3d at 223 (citing
Palacios, 46 S.W.3d at 878). And we view the entirety of the report rather than
isolating specific portions or sections. See E.D. v. Tex. Health Care, P.L.L.C., 644
S.W.3d 660, 667 (Tex. 2022) (appellate review of an expert’s report must consider
“the report as a whole[]”) (citing Van Ness, 461 S.W.3d at 144); see also Baty v.
Futrell, 543 S.W.3d 689, 694 (Tex. 2018).
While the report “need not marshal all the plaintiff’s proof,” it must provide
a fair summary of the expert’s opinions as to the applicable standards of care, how
the care rendered by the health care provider failed to meet the standards, and the
causal relationship between that failure and the injury claimed. Jelinek v. Casas, 328
S.W.3d 526, 539 (Tex. 2010); see also Tex. Civ. Prac. & Rem. Code Ann.
§ 74.351(r)(6) (An expert report is sufficient under the TMLA if it “provides a fair
summary of the expert’s opinions . . . regarding applicable standards of care, the
manner in which the care rendered . . . failed to meet the standards, and the causal
relationship between that failure and the injury[.]”); Jernigan v. Langley, 195
S.W.3d 91, 93 (Tex. 2006); Palacios, 46 S.W.3d at 875, 878. In determining the
adequacy of an expert report, a court reviews the pleadings to determine the claims
alleged and whether the report addresses those claims. See Christus Health Se. Tex.
v. Broussard, 306 S.W.3d 934, 938 (Tex. App.—Beaumont 2010, no pet.) (citing
11
Windsor v. Maxwell, 121 S.W.3d 42, 51 (Tex. App.—Fort Worth 2003, pet. denied)).
The report must “explain, to a reasonable degree, how and why the breach caused
the injury based on the facts presented.” Jelinek, 328 S.W.3d at 539-40. The trial
court need only find that the report constitutes a “good faith effort” to comply with
the statutory requirements. Tex. Civ. Prac. & Rem. Code Ann. § 74.351(l); see also
Abshire, 563 S.W.3d at 223; Palacios, 46 S.W.3d at 878. The Texas Supreme Court
has held that an expert report demonstrates a “good faith effort” when it
“(1) inform[s] the defendant of the specific conduct called into question and
(2) provid[es] a basis for the trial court to conclude the claims have merit.” Baty, 543
S.W.3d at 693-94.
The expert report “‘must set forth specific information about what the
defendant should have done differently’”; that is, “‘what care was expected, but not
given.’” E.D., 644 S.W.3d at 664 (quoting Abshire, 563 S.W.3d at 226). A report
adequately addresses causation when the expert explains “how and why” the breach
of the standard caused the injury in question by “explain[ing] the basis of his
statements and link[ing] conclusions to specific facts.” Abshire, 563 S.W.3d at 224.
The report need only make “‘a good-faith effort to explain, factually, how proximate
cause is going to be proven.’” Id. (quoting Columbia Valley Healthcare Sys., L.P. v.
Zamarripa, 526 S.W.3d 453, 460 (Tex. 2017)). The report presents a sufficient
12
causation analysis when it “draws a line directly” from the alleged breach of the
standard of care to the ultimate injury. See id. at 225.
As to causation, “[n]o particular words or formality are required[]” to explain
how the healthcare provider’s negligence caused the patient’s injury, but the report
must contain more than a conclusory statement explaining the expert’s theory of
causation to comply with the good-faith-report requirements of the TMLA. Scoresby
v. Santillan, 346 S.W.3d 546, 556 (Tex. 2011) (footnotes omitted); Jelinek, 328
S.W.3d at 539-40. At this stage, an expert’s report does not have to meet the
evidentiary requirements needed to make an expert’s opinion relevant and
admissible in a summary judgment proceeding or a trial. Miller v. JSC Lake
Highlands Operations, LP, 536 S.W.3d 510, 517 (Tex. 2017) (per curiam).
Analysis
Here, the Appellants’ primary challenge to the report pertains to its alleged
insufficiency on causation. Appellants argue that Dr. Bradley’s report is inadequate
as to causation because (1) it does not address how bad Delli’s vision was in both
eyes before she saw Dr. Eezzuduemhoi, (2) it does not address Delli’s vision at key
points in the timeline, (3) it does not address whether Delli’s vision improved after
the cornea transplant, (4) it does not address how the condition in Delli’s right eye
“informs what could or could not have been accomplished with the left eye,” and
(5) it does not address how “vague terms such as ‘poor outcome’” actually affect the
13
life activities Delli’s daughter’s affidavit describes. Appellants also argue that Dr.
Bradley’s opinion that there was a “poor outcome” with Delli’s left eye is vague and
conclusory. In addition, Appellants argue that Dr. Bradley did not compare what
Delli’s vision would have been without Dr. Eezzuduemhoi’s treatment, and
Bradley’s opinion “about ‘complete restoration of vision’ is speculative and
conclusory ipse dixit.” According to Appellants, Dr. Bradley speculates that a
different course of action by Dr. Eezzuduemhoi would have improved Delli’s
chances for a “complete restoration of vision” and this is nothing more than a “last
chance” theory that the Texas Supreme Court rejected in Kramer v. Lewisville
Memorial Hospital, 858 S.W.2d 397, 400 (Tex. 1993). Finally, Appellants argue that
even if the complaints against Dr. Eezzuduemhoi are accepted as true, Dr. Bradley’s
report only addresses Delli’s left eye, and because the report does not address Delli’s
right eye, it is inadequate for failing to address the “ultimate injury.”
At this stage of the proceeding we may not require a claimant to “present
evidence in the report as if it were actually litigating the merits[,]” and we cannot
say that the trial court abused its discretion in reaching the conclusion that Dr.
Bradley’s amended report constitutes a good faith effort to comply with the TMLA’s
requirement to provide a fair summary of his opinion with respect to the causal
relationship between Defendants’ alleged breach and Phillis’s claimed injury. We
also cannot say that the amended report failed to inform the Defendants of the
14
specific conduct called into question or that it fails to provide a basis for the trial
court to conclude the claims have merit. See Abshire, 563 S.W.3d at 226 (citing Tex.
Civ. Prac. & Rem. Code Ann. § 74.351(l), (r)(6); Palacios, 46 S.W.3d at 879); Baty,
543 S.W.3d at 693-94.
We disagree with Appellant’s argument that the report contains nothing more
than the mere ipse dixit of the expert. “[T]he mere ipse dixit of [an] expert—that is,
asking the jury to take the expert’s word for it—will not suffice.” Windrum v. Kareh,
581 S.W.3d 761, 769 (Tex. 2019) (citing City of San Antonio v. Pollock, 284 S.W.3d
809, 816 (Tex. 2009); see also Cooper Tire & Rubber Co. v. Mendez, 204 S.W.3d
797, 806 (Tex. 2006) (explaining that testimony is fundamentally unsupported when
“the only basis for the link between the [expert’s] observations and his conclusions
was his own say-so[]” (citing Volkswagen of Am., Inc. v. Ramirez, 159 S.W.3d 897,
912-13 (Tex. 2004) (Hecht, J., concurring))). Here, the report contains Dr. Bradley’s
opinion that: Dr. Eezzuduemhoi delayed correction of the ACIOL haptic in the
surgery wound and the malpositioned sclerally-fixated PCIOL; that when intraocular
lens implants are not in the correct position, the implant rubs against the cornea; and
that this causes the endothelial cells to die, which results in corneal swelling and
cloudiness. Dr. Bradley also explained the basis of his opinions when he wrote that
delayed correction of both issues for a prolonged period of time directly resulted in
progressive and irreversible corneal damage, and that with earlier intervention of the
15
ACIOL haptic in the wound and the malpositioned sclerally-fixated PCIOL, further
surgery would most likely have been avoided and a better outcome would most
likely have been attained. Dr. Bradley’s report “draws a line directly from” the
Defendants’ breach of the standard of care, to the delay in diagnosis and treatment,
and to the eye injury. See Abshire, 563 S.W.3d at 225. Dr. Bradley explains “to a
reasonable degree, how and why the breach caused the injury based on the facts
presented.” See Jelinek, 328 S.W.3d at 539-40.
The trial court could have also rejected Appellants’ argument that the report
was deficient because it only addressed the left eye and failed to address Phillis’s
right eye. The report explained sufficient detail at this preliminary stage to provide
a basis for the trial court to conclude that Plaintiff’s claims may have merit. The
report contained an explanation with respect to the alleged causal relationship
between Defendants’ alleged breach and Phillis’s left eye injury. We need not
determine whether the report is deficient for failing to address an injury to Phillis’s
right eye because the Supreme Court has explained that an expert report is sufficient
so long as it adequately addresses at least one liability theory against a defendant
health care provider. See Certified EMS, Inc. v. Potts, 392 S.W.3d 625, 630 (Tex.
2013); see also Abshire, 563 S.W.3d at 224 (explaining that the expert report need
not account for every known fact).
16
We also cannot say the trial court abused its discretion in rejecting Appellants’
suggestion that the claims alleged are nothing more than the “last chance” or “lost
chance of survival” claims rejected in Kramer. See 858 S.W.2d at 400; see also
Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 859-62 (Tex.
2009) (addressing Kramer and explaining that the Texas Supreme Court has rejected
the notion that the lost chance of survival or improved health is a distinct,
compensable injury). At this stage of the litigation, the plaintiff is not required to
marshal all evidence, and “the expert need not prove the entire case or account for
every known fact[]” as long as it is a good-faith effort to explain factually how the
plaintiff will prove proximate cause. Abshire, 563 S.W.3d at 224 (citing Zamarripa,
526 S.W.3d at 460).
Nor can we say that the trial court erred in rejecting Appellants’ argument that
Dr. Bradley’s opinion on causation was deficient because it did not address “all the
activities set forth in the affidavit of Ms. Billie Delli, i.e., the ‘ultimate injury’ for
which recovery in dollar damages is sought.” In evaluating the sufficiency of the
expert report, the trial court “could not look beyond the four corners of the report at
this stage to determine whether the facts asserted in the pleading and the report were
false.” See Broussard, 306 S.W.3d at 939 (citing Wright, 79 S.W.3d at 52; Palacios,
46 S.W.3d at 878). Billie’s affidavit was first filed with the Defendants’ motion to
dismiss, and it was not available to Dr. Bradley when he wrote his report. Any
17
alleged deficiency in failing to address certain activities described in Billie’s
affidavit may be the subject of further development in discovery or the subject of
other pretrial motions, but it is not instructive at this stage of the litigation because
the failure to address Billie’s affidavit does not render Dr. Bradley’s expert report
deficient under section 74.351. See Tex. Civ. Prac. & Rem. Code Ann. § 74.351;
Broussard, 306 S.W.3d at 939.
We overrule Appellants’ issue, and we affirm the trial court’s order.
AFFIRMED.
_________________________
LEANNE JOHNSON
Justice
Submitted on August 3, 2022
Opinion Delivered November 17, 2022
Before Kreger, Horton and Johnson, JJ.
18 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487073/ | In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-20-00292-CV
__________________
OHAH, LTD., D/B/A OAK HAVEN APARTMENT HOMES, Appellant
V.
LNG BUILDERS, LLC, ODOM TEXAS DEVELOPMENT, LLC,
AND THE CITY OF SHENANDOAH, Appellees
__________________________________________________________________
On Appeal from the 284th District Court
Montgomery County, Texas
Trial Cause No. 18-09-12429-CV
__________________________________________________________________
MEMORANDUM OPINION
Appellant OHAH, Ltd., d/b/a Oak Haven Apartment Homes (Oak Haven)
appeals the trial court’s final judgment granting a summary judgment in favor of
Appellees LNG Builders, LLC (LNG) and Odom Texas Development, LLC (OTD)
as Defendants and in favor of the City of Shenandoah (the City) as Intervenor, in a
1
dispute over an easement and drainage line1 which the defendants built on Oak
Haven’s property. We vacate the trial court’s judgment in part, we reverse the trial
court’s judgment in part, and we remand the matter to the trial court for further
proceedings.
Background 2
Oak Haven provides apartment homes for senior citizens at Oak Haven’s
property located at 19445 David Memorial Drive (Oak Haven’s Property) in
Shenandoah, Texas. OTD owns the real property located at 19391 David Memorial
Drive (OTD’s Property), which is adjacent to one side of Oak Haven’s Property.
OTD’s general contractor, LNG, built a hotel for OTD on OTD’s Property. During
the construction of the hotel, Oak Haven filed an Original Petition with Application
for Temporary Restraining Order, Application for Temporary Injunction, and
Application for Permanent Injunction against LNG and OTD (the Defendants).
According to the allegations in the petition, the Defendants indicated they intended
1
In this matter the parties have referred to the 24-inch pipeline as a “storm
water pipeline,” “storm sewer line,” “drainage line,” and “storm sewer drainage
line.” It is unclear on the record before us whether the pipeline will function to drain
only stormwater or whether it may also act as a sewer line. That said, all the parties
seem to agree that the 24-inch pipeline will drain something from OTD’s Property,
across or through Oak Haven’s Property, and into a detention pond. For purposes of
consistency, we will refer to the 24-inch pipeline as a “drainage line,” which is the
initial term used by Oak Haven in its Original Petition.
2
When possible, we have limited our discussion to the pleadings, procedural
information, and factual allegations relevant to our disposition.
2
to construct a 24-inch drainage line from OTD’s Property and across or through Oak
Haven’s Property to connect the hotel’s storm sewer drainage to a nearby detention
pond owned by the City of Shenandoah, and Oak Haven alleged that the Defendants
had no legal right to construct a drainage line on Oak Haven’s Property. Oak Haven
alleged that the Defendants had already trespassed on Oak Haven’s Property at least
on three occasions: once to place some wooden stakes, once to destroy Oak Haven’s
fence, and once to place netting on Oak Haven’s land. Oak Haven alleged that it
made a demand on LNG to cease, desist, and refrain from trespassing on Oak
Haven’s Property, but LNG ignored the demand and continued to trespass on Oak
Haven’s Property. According to Oak Haven’s petition, if the Defendants were not
enjoined from trespassing on Oak Haven’s Property, Oak Haven would suffer
immediate and irreparable harm for which Oak Haven would have no adequate
remedy at law.
Oak Haven included claims against the Defendants for trespass, requested a
TRO to order the Defendants to refrain from entering upon Oak Haven’s Property
until the trial court could hear Oak Haven’s Application for Temporary Injunction
Pendente Lite, requested that the trial court issue a temporary injunction to order
Defendants to refrain from entering Oak Haven’s Property until the trial court could
hear Oak Haven’s Application for Permanent Injunction, and requested that the trial
court issue a permanent injunction for the Defendants to refrain from entering Oak
3
Haven’s Property permanently. Oak Haven sought monetary damages in excess of
$500 but under $100,000, and Oak Haven attached an affidavit of its Chief Financial
Officer in support of its petition.
Oak Haven obtained an Ex-Parte Temporary Restraining Order against the
Defendants. In response, Defendants answered and raised the following defenses,
alleging that: (1) Oak Haven has no probable right of recovery and no legal right to
injunctive relief because Defendants have the legal right to construct a drainage line
pursuant to the 80-foot utility easement; (2) based on the 80-foot utility easement
Defendants are not guilty of trespass; (3) Oak Haven has not demonstrated
irreparable harm, probable injury, or that Oak Haven is without an adequate remedy
at law; (4) the underground storm sewer construction is necessary and without it
would likely cause flooding into Oak Haven’s senior living facility; (5) waiver,
estoppel, laches, and unclean hands bar the claims; and (6) the requested temporary
injunction and related affidavits lack factual specificity and fail to comply with Rule
680 of the Texas Rule of Civil Procedure. Defendants also asserted a counterclaim,
alleging Oak Haven wrongfully obtained the temporary restraining order.
The City intervened and filed a third-party claim against Oak Haven. The City
alleged that it had issued LNG a permit to construct the hotel, and as part of the hotel
construction, the City required LNG to provide storm water drainage to protect the
City’s residents from flooding. According to the City, it owns an 80-foot easement
4
between the hotel and the detention pond which was dedicated to the City by Oak
Haven in May 2000. The City alleged that the dedication was made in a plat from
May 2000 (the Plat), recorded in the Real Property Records of Montgomery County,
Texas, on or about August 31, 2000. The City alleged that, because it owns 3 an 80-
foot easement, the City has the absolute right under the dedication language on the
Plat to allow LNG to construct storm water drainage within the easement and the
City asserted it is a necessary party to the litigation. The City filed a claim against
Oak Haven for tortious interference with an existing contract for Oak Haven’s
interference with the City’s contract with the Defendants to construct storm water
drainage in the City’s easement, and the City asserted a claim against Oak Haven for
violating Chapter 10 of the Civil Practices and Remedies Code, for acting “in bad
faith[,]” and for failing to disclose to the trial court that Oak Haven had dedicated an
easement to the City. The City sought damages of over $200,000 but not more than
$1,000,000 for lost property taxes, hotel occupancy taxes, sales tax and lost alcohol
sales, allegedly caused by the delay in construction caused by Oak Haven.
Relying on the Plat, the City alleged that there was a dedication of the “80’
U.E.” from Senior Housing Development II, LLC (Oak Haven’s predecessor in title)
3
The City does not state whether it claims to own an exclusive or
nonexclusive easement. In its brief on appeal, the City refers to the 80-foot area
solely as an “easement.” Additionally, OTD and LNG also refer to the 80-foot area
as depicting nothing more than an “easement.”
5
to the City of Shenandoah as contained on the recorded Plat, which the City claims
gave it the right to allow OTD to build another drainage line within the 80 feet so
OTD could drain OTD’s property across and through Oak Haven’s property. The
City relied on the following language from the Plat to support this argument:
That SENIOR HOUSING DEVELOPMENTS II, LLC., duly organized
and existing under the laws of the State of Texas, with offices at 11934
ARBORDALE, HOUSTON, TEXAS 77024, owner of the property
shown on this plat, SENIOR HOUSING DEVELOPMENTS II, LLC.
does for and behalf of said Corporation, its successors and assigns,
adopt this plat according to the lines, streets, right-of-ways, alleys,
building lines and easements as shown thereon and does hereby
dedicate to the City of Shenandoah [emphasis added], a Municipal
Corporation and Political Subdivision of the State of Texas, the streets,
right-of-ways, alleys and easements shown thereon forever, which shall
also be for the mutual use and accommodation of all the public utilities
desiring to use or using same; no buildings, fences, trees, shrubs shall
be constructed or placed upon, over or across the easements shown on
the plat, any public utility shall have the right to remove and keep
removed all or part of buildings, fences, trees, shrubs, or growths which
in any way endanger or interfere with the construction, maintenance, or
efficiency of it[s] respective system on any of these easements, and any
public utility shall at all times have the right to ingress and egress to
and from and upon any of said easements for the purpose of
constructing, reconstructing, inspecting, patrolling, maintaining and
adding to or removing all or part of its respective system without the
necessity at any time of precuring the permission of anyone; and the
Corporation does hereby hold the City of Shenandoah, its successors
and assigns, its employees, officers, and agents, harmless from and does
hereby waive any and all claims, against the City of Shenandoah, its
successors and assigns, its employees, officers, and agents, harmless
from and does hereby waive any and all claims, against the City of
Shenandoah, its successors and assigns, for damages occasioned by the
establishing of grades or related to the use of the[ir] property shown on
the plat now and in the future by reason of flooding, flow, erosion or
damage caused by water, whether surface, flood, rain fall or inflow of
public water and SENIOR HOUSING DEVELOPMENTS II, LLC. for
6
and on behalf of said corporation, does hereby bind said corporation,
its successors, and assigns, to warrant and forever defend the title to the
property so dedicated.
It is undisputed that the Plat depicts an area marked as “80’ U.E.” upon Oak
Haven’s Property. The General Notes on the Plat state that “U.E.” indicates a utility
easement. The Plat then also includes in the legend a specific reference to a “G.S.U.
Easement (80’ R.O.W.) FILM CODE No.’S XXX-XX-XXXX, XXX-XX-XXXX, 315-01-
1449 & XXX-XX-XXXX[.]” And the “80’ U.E.” is further marked by two arrows, one
on either side of the 80-foot area, with specific references to the G.S.U. (Gulf States
Utilities) Easement. The area marked on the Plat as “80’ U.E.” runs east and west
between the northern structures on Oak Haven’s Property and the remainder of Oak
Haven’s structures that are south of the “80’ U.E.” As indicated on the Plat, the Plat
was created in April of 2000, for the Senior Housing Development. Oak Haven
contends that the utilities and improvements marked on the Plat were also intended
to benefit the Senior Housing Development. 4
The trial court held a hearing on Oak Haven’s Application for Temporary
Injunction. The City filed a brief arguing that the injunctive relief sought by Oak
Haven should be denied, and Oak Haven filed a brief arguing that the Plat does not
create a drainage easement for the private party Defendants (LNG and OTD) or the
4
We have attached to the end of this opinion an image of the Plat for further
reference.
7
City and that the Defendants violated the terms of the Plat by placing fences on the
80-foot right-of-way. The trial court denied Oak Haven’s Application for Temporary
Injunction.
LNG, OTD, and the City filed a Joint Motion for Summary Judgment. The
Defendants and the City argued that OTD “contrac[ted] with LNG” to construct the
hotel on OTD’s property under a permit issued by the City, the City halted
construction until the Defendants built a required “underground drainage sewer”
running from the hotel and along the 80-foot utility easement depicted on the Plat
and into the City-owned detention pond also depicted on the Plat. According to the
Joint Motion for Summary Judgment, the drainage line was necessary due to the
hotel development and any further development in the City that could cause flooding
or drainage issues into Oak Haven’s property and buildings. The Defendants and the
City argued that the “80’ U.E.” easement marked on the Plat “is a broad term that is
for all utilities including the underground drainage sewer[.]” The motion also alleged
that the City holds the legal right to control drainage within the city limits and that
the City was granted the easement from Oak Haven to do so as noted in the Plat. The
Defendants and the City argued that OTD and LNG were acting under a city permit
to construct the drainage line and that they “are the City’s authorized agent of the
City [] which in this situation is acting on its behalf as a public utility.” The motion
asserted that no genuine issue of material fact exists in this case which would
8
preclude the trial court from granting the summary judgment, that the case is purely
a question of law, and that the trial court already addressed this legal issue in denying
Oak Haven’s Application for Temporary Injunction.
Oak Haven supplemented its petition, adding a suit to quiet title and a claim
for declaratory judgement, requesting that the trial court quiet title and declare
pursuant to Chapter 37 of the Texas Civil Practice and Remedies Code that the Plat
does not create an easement and that neither Defendants nor the City have any legal
right under the Plat or otherwise to construct the drainage line on Oak Haven’s
property. Oak Haven filed a Motion for Partial Summary Judgment against the
Defendants. Oak Haven argued that the Plat does not convey an 80-foot easement to
the City and that the Defendants do not have an easement for the drainage line, and
they argued that, as a matter of law, the Plat did not create a new easement but merely
recognized an existing 1984 80-foot G.S.U. Easement within Oak Haven’s Property.
The Defendants and the City filed a Joint Motion for Summary Judgment as to Oak
Haven’s New Claims for “Suit to Quiet Title” and for “Declaratory Relief” Asserted
in its Newly-Filed Supplemental Petition and Oak Haven filed a response. Oak
Haven filed a second supplement to its petition, alleging that the Defendants
destroyed grass and vegetation on Oak Haven’s Property and that the destruction of
Oak Haven’s plants and other vegetation has caused Oak Haven substantial damage
and substantial costs to replace the vegetation.
9
The Defendants and the City filed a joint response to Oak Haven’s motion for
partial summary judgment. The City also filed an Amicus Brief arguing that Oak
Haven was not entitled to injunctive relief because certain language in the Plat
clearly contemplates use of the easement in the future and clearly grants the City the
right to add all the public utilities it deems necessary:
Senior Housing Developments II, LLC . . . does hereby dedicate to the
City of Shenandoah . . . the streets, right-of-ways, alleys and easements
shown thereon forever, which shall also be for the mutual use and
accommodation of all the public utilities desiring to use or using
same . . . .
The City also argued that Oak Haven, in signing and recording the Plat, induced the
City and other landowners to believe that an easement had been granted.
Oak Haven filed a Response with Evidentiary Objections to the Defendants’
and the City’s Joint Motion for Summary Judgment, and Oak Haven also filed a
Reply to the City’s Brief with respect to Oak Haven’s Motion for Partial Summary
Judgment. The Defendants filed a Supplemental Brief in Support of its Motion for
Summary Judgment and in Opposition to Oak Haven’s Motion for Partial Summary
Judgment, and the Defendants and the City filed a Joint Response to Oak Haven’s
Objections to Defendants’ Summary Judgment Evidence. Oak Haven filed a
Response to Defendants’ and the City’s Joint Motion for Summary Judgment as to
Oak Haven’s New Claims for Suit to Quiet Title and for Declaratory Relief Asserted
in its Newly-Filed Supplemental Petition, and Oak Haven argued that the only
10
easement the City has pursuant to the Plat, if any, is to install electrical
communication and transmission lines on Oak Haven’s Property. Oak Haven
responded to the Defendants’ and the City’s argument that Oak Haven’s trespass to
try title suit and a suit to quiet title are the same, and they also disagreed with the
Defendants’ argument that the declaratory judgment action is not appropriate
because Oak Haven had already raised the same issues in its trespass cause of action.
Oak Haven filed its Third Supplement to its Original Petition clarifying that
the City remained a party in the case because it continued to seek affirmative relief
against Oak Haven and further that Oak Haven had requested a declaratory judgment
with respect to the Defendants and the City. The Defendants and the City filed a
joint notice of nonsuit taking a nonsuit without prejudice of any and all
counterclaims pleaded against Oak Haven, the trial court granted the nonsuit, and
the trial court ordered that any and all counterclaims pleaded in the case by the
Defendants and the City against Oak Haven were dismissed without prejudice.
The City filed an Original Answer and objected to the court’s exercise of
subject matter jurisdiction because the City alleged it is protected from suit by
sovereign immunity and the cause of action does not fall under any waiver of that
sovereign immunity. The City specially excepted to Oak Haven’s claim that the City
is a party by way of the Supplemental Petition because a supplemental petition is not
a proper method for adding a party to a lawsuit. The City also specially excepted to
11
Oak Haven’s Original Petition and Supplemental Petitions for failure to state a cause
of action against the City. The City generally denied Oak Haven’s allegations,
argued that Oak Haven’s claims were barred for failure to give the required notice
to the City, and asserted various affirmative defenses.
On April 2, 2019, Oak Haven filed a Notice of Nonsuit of Claims against
Intervenor-Defendant the City of Shenandoah without prejudice, and the following
day the trial court granted the nonsuit of Oak Haven’s claims against the City. On
April 16, 2019, the trial court signed an order granting Oak Haven’s Motion for
Partial Summary Judgment. In a separate order signed the same day, the trial court
denied LNG, OTD, and the City’s Joint Motion for Summary Judgment.
OTD and LNG then filed additional counterclaims against Oak Haven for
tortious interference with existing contract, violations of Chapter 10 of the Civil
Practices and Remedies Code, and a wrongful temporary restraining order. LNG and
OTD filed their First Amended Answer and LNG filed a Second Amended Answer
to Oak Haven’s Original Petition and All Supplements Thereto. LNG filed a Rule
39 Motion for Joinder of Persons Needed for Just Adjudication and argued that the
City, as an easement owner had an interest that remained unprotected, and that the
12
City must be joined in the lawsuit under Rule 39 and section 37.006 of the Civil
Practice and Remedies Code.5 The trial court denied the motion.
LNG and OTD each filed traditional motions for summary judgment against
Oak Haven. LNG also filed a Third-Party Petition Against the City of Shenandoah,
and LNG argued that LNG was entitled to contribution from the City for any liability
that may be found to exist from LNG to Oak Haven. The City filed a Third-Party
Defendant’s Original Answer and Plea to the Jurisdiction. Oak Haven filed a Fourth
Supplement to Original Petition asking the trial court to “enjoin and bring an end to
the continued trespass.” OTD filed a Supplemental Answer with Crossclaim for
contribution from the City for any liability that may be found from OTD to Oak
Haven. The City filed a Traditional Motion for Summary Judgment against OTD
and LNG. LNG filed a Third-Amended Answer to Oak Haven’s Original Petition
and All Supplements Thereto. The City then filed an Application for Temporary
Injunction and asked the trial court to enjoin Oak Haven from altering, damaging or
destroying the existing storm drainage during the pendency of the litigation.
In Oak Haven’s Fourth Supplement to Original Petition with Second
Application for Temporary Injunction Pendente Lite and Application for Permanent
Injunction, Oak Haven alleged the Defendants violated section 11.086 of the Texas
5
We note that neither G.S.U. nor its successor in interest, the grantee of the
designated 80’ U.E. referenced on the Plat, are parties to this suit.
13
Water Code 6 by diverting or impounding the natural flow of surface waters and
permitting the diversion to continue in a way that damages Oak Haven’s Property,
alleged that the Defendants engaged in the theft of a device that prevented
Defendants’ illegal drainage of water from OTD’s Property to Oak Haven’s
property, and requested the trial court issue a temporary injunction pendente lite and
a permanent injunction to order the Defendants to refrain from draining OTD’s
Property onto or through Oak Haven’s Property.
LNG filed a Motion for Reconsideration and/or Motion for Clarification of
the trial court’s April 16, 2019 order granting Oak Haven’s Motion for Partial
Summary Judgment, and OTD joined in the motion. The City also filed a Response
to Oak Haven’s Motion for Partial Summary Judgment arguing that Oak Haven had
no affirmative cause of action against the City, that any claims potentially asserted
by Oak Haven against the City are barred by governmental immunity, and that the
City owns the easement as a matter of law. The City filed an Answer and Plea to the
Jurisdiction as to any affirmative claims by Oak Haven against the City. The City
6
Section 11.086 of the Texas Water Code provides:
(a) No person may divert or impound the natural flow of surface
waters in this state, or permit a diversion or impounding by him to
continue, in a manner that damages the property of another by the
overflow of the water diverted or impounded.
(b) A person whose property is injured by an overflow of water
caused by unlawful diversion or impounding has remedies at law and
in equity and may recover damages occasioned by the overflow.
Tex. Water Code Ann. § 11.086(a), (b).
14
filed a Motion for Summary Judgment Directed at Oak Haven. OTD filed an
Amended Motion for Final Summary Judgment against Oak Haven. Oak Haven filed
a response to the City’s Motion for Summary Judgment, OTD’s Amended Motion
for Summary Judgment, and LNG’s Traditional Motion for Summary Judgment.
Oak Haven filed a Supplement to Motion for Summary Judgment in which Oak
Haven denied the City’s claims that Oak Haven has brought affirmative claims
against the City, and Oak Haven requested final relief from the trial court because,
according to Oak Haven, if the trial court granted Oak Haven’s motion and
supplement, the only remaining matter before the Court would be the propriety and
amount of attorney’s fees. Oak Haven asked the trial court to enter a permanent
injunction prohibiting the Defendants and those acting in concert with them from
continuing to keep the drainage line on Oak Haven’s Property or from draining water
onto or through Oak Haven’s Property.
On August 18, 2020, the trial court signed an order vacating its April 16, 2019
order granting Oak Haven’s motion for partial summary judgment, and the trial court
denied Oak Haven’s Motion for Partial Summary Judgment and Oak Haven’s
Supplement to Motion for Summary Judgment, granted the City’s Motion for
Summary Judgment Directed at Oak Haven, granted OTD’s Amended Motion for
Final Summary Judgment, granted LNG’s Traditional Motion for Summary
Judgment, ordered that Oak Haven take nothing on its claims and causes of action,
15
noted that LNG’s and OTD’s causes of action for contribution against the City are
moot, and noted that the City’s and OTD’s claims for monetary relief and sanctions
against Oak Haven, as well as OTD’s claims for permanent injunction against Oak
Haven, were still pending.
Oak Haven filed a Motion for Final or Partial Summary Judgment against
OTD and LNG “in order to expedite the resolution of this dispute in the appellate
courts[]” and so it could appeal the trial court’s August 18, 2020 order with respect
to the easement. The City and OTD each filed a response to the motion. The City
and OTD also each filed a motion for attorney’s fees. On November 2, 2020, the
trial court signed an order denying Oak Haven’s Motion for Full or Partial Summary
Judgment, denying the City’s Motion for Award of Attorney Fees and ordering that
the City take nothing on its claims for attorney’s fees, denying OTD’s Motion for
Award of Attorney Fees and ordering that OTD take nothing on its claim for
attorney’s fees, and noting that OTD’s claim for permanent injunction against Oak
Haven was still pending.
The City filed a Notice of Nonsuit Without Prejudice of its claims for
injunctive relief against Oak Haven. OTD filed a Notice of Nonsuit Without
Prejudice of its claims for injunctive relief against Oak Haven. The trial court signed
a Notice of Finality that the combination of (1) the Orders on Motion for Summary
Judgment, signed August 18, 2020; (2) the Order on Oak Haven’s Motion for
16
Summary Judgment and Order on the City’s and OTD’s Motions for Attorney Fees,
signed November 2, 2020; (3) OTD’s Notice of Nonsuit Without Prejudice, filed
November 10, 2020; and (4) the City’s Notice of Nonsuit Without Prejudice, filed
on November 13, 2020, resolved all claims among all the parties. The trial court
stated that the last of these was signed on November 17, 2020, and that a nonsuit
finally disposed of the case. Oak Haven appealed. The City and OTD each filed a
Motion for New Trial on the Trial Court’s Failure to Award Conditional Attorney
Fees in the Event of an Unsuccessful Appeal. The trial court denied the motions.
Issue on Appeal
In one issue, Oak Haven argues the trial court erred in denying Oak Haven’s
motion for partial summary judgment and in granting LNG’s, OTD’s and the City’s
motions for summary judgment. According to Oak Haven, the trial court erred in
denying Oak Haven’s motion for partial summary judgment because the Plat does
not permit OTD or LNG to build a drainage line on Oak Haven’s Property. As to the
trial court’s granting of LNG’s and OTD’s motions for summary judgment, Oak
Haven argues that fact issues exist regarding Oak Haven’s trespass claim and OTD’s
and LNG’s excuses and that summary judgment in favor of the Defendants was
improper on Oak Haven’s other claims because they were unchallenged in the
motion for summary judgment. Oak Haven also argues that the trial court erred in
granting summary judgment in favor of the City because the trial court lacked subject
17
matter jurisdiction because Oak Haven had no claims against the City, and the City
had no claims against Oak Haven. In the alternative, Oak Haven argues that the
City’s motion fails on its merits.
Standard of Review
We review a trial court’s decision on a motion for summary judgment de novo.
See HCBeck, Ltd. v. Rice, 284 S.W.3d 349, 352 (Tex. 2009) (citing Valence
Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005)). When the parties file
competing motions for summary judgment, and the trial court grants one and denies
the other, we review all the questions presented and render the judgment that should
have been rendered by the trial court. See id. (citing Tex. Workers’ Comp. Comm’n
v. Patient Advocates of Tex., 136 S.W.3d 643, 648 (Tex. 2004)). In reviewing all
questions presented, we examine the parties’ summary judgment evidence. Mann
Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).
We review the evidence in the light most favorable to the non-movant and party
against whom the summary judgment was rendered. See id.; City of Keller v. Wilson,
168 S.W.3d 802, 807, 827 (Tex. 2005). To obtain a traditional summary judgment,
the “‘movant must establish that there is no genuine issue of material fact so that the
movant is entitled to judgment as a matter of law.’” Katy Venture, Ltd. v. Cremona
Bistro Corp., 469 S.W.3d 160, 163 (Tex. 2015) (quoting W. Invs., Inc. v. Urena, 162
S.W.3d 547, 550 (Tex. 2005)). If the movant meets his burden, “the burden then
18
shifts to the non-movant to disprove or raise an issue of fact as to at least one of
those elements.” Amedisys, Inc. v. Kingwood Home Health Care, LLC, 437 S.W.3d
507, 511 (Tex. 2014). But if the movant does not meet its burden, “the burden does
not shift, and the non-movant need not respond or present any evidence.” Id. A
defendant moving for summary judgment must plead and conclusively establish
each element of its defense as a matter of law to be entitled to summary judgment
on an affirmative defense. Johnson & Johnson Med., Inc. v. Sanchez, 924 S.W.2d
925, 927 (Tex. 1996). When, as here, a trial court’s order granting summary
judgment does not specify the grounds relied upon, the reviewing court must affirm
summary judgment if any of the summary judgment grounds are meritorious. See
FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000).
Analysis
When Oak Haven filed its Motion for Partial Summary Judgment, it had made
claims of trespass, declaratory relief, alleged a suit to quiet title, and Oak Haven
sought injunctive relief. The elements of trespass are: (1) entry (2) onto the property
of another (3) without the property owner’s consent or authorization. Envtl.
Processing Sys., L.C. v. FPL Farming Ltd., 457 S.W.3d 414, 419, 424-25 (Tex.
2015). A plaintiff who asserts a trespass cause of action bears the burden to prove it
did not consent to the defendant’s entry on to the land. Id. at 418-25.
19
Oak Haven moved for partial summary judgment against OTD and LNG,
arguing that the Plat did not permit OTD or LNG to construct a drainage line across
Oak Haven’s Property because OTD and LNG are not public utilities and because
OTD and LNG were attempting to create a new broad utility easement on the 80-
foot right-of-way that does not exist on the Plat. According to Oak Haven, the Plat,
as a matter of law, clearly did not create new easements but merely recognized the
August 14, 1984 easement (the “1984 Easement”) within Oak Haven’s Property.
Oak Haven argued that in eighteen years the Adjacent Property had never flooded
so therefore, Defendants’ 24-inch drainage line constructed from the Adjacent
Property through Oak Haven’s Property and to the detention pond “would only
mitigate a diversion of the natural flow of surface waters in a manner which causes
[] overflow of water onto [Oak Haven’s] Property.” Oak Haven argued that the
dispute involves the easements that Oak Haven’s predecessor allegedly granted to
the City and to public utilities and that LNG’s Larry Kellogg admitted in testimony
at the September 28, 2018 hearing that OTD and LNG are not “public utilities.”
According to Oak Haven, there is no grant of an easement shown on the Plat other
than the reference to “G.S.U. Easement (80’ R.O.W.) FILM CODE No.’S 294-01-
1449, XXX-XX-XXXX, XXX-XX-XXXX & XXX-XX-XXXX” on the Plat and that the Plat’s
references to “80’ U.E.” all refer to that same 80-foot right-of-way conveyed to
G.S.U. Oak Haven argues the words “easements shown thereon forever” in the plain
20
language of the Plat refers to the notation of the 1984 Easement and did not create a
new broad easement to the City to use for storm water runoff and it did not give the
City the right to allow the hotel builders and private entities (OTD and LNG) the
right to build storm or sewer pipelines in the 80-foot easement depicted on the Plat.
Instead, at most, the Plat would allow public utilities the right to construct electrical
transmission lines and communication lines only in accordance with the 1984
Easement named in the Plat.
As summary judgment evidence, Oak Haven attached an affidavit of Julie
Cutrer, the Chief Financial Officer for Oak Haven, and it attached a copy of the 1984
Easement, the Plat, and a “blowup” of the written words on the Plat. Cutrer stated
that OTD’s and LNG’s construction of a twenty-four-inch drainage line would cause
overflow waters onto Oak Haven’s Property and had already caused injury to Oak
Haven, neither OTD nor LNG have any legal right to construct a drainage line on
Oak Haven’s Property, OTD’s and LNG’s entry on Oak Haven’s Property is nothing
short of a naked trespass and has been physical, intentional, voluntary, and
unauthorized. According to Oak Haven, the 1984 Easement was not for general
purpose but only
to enter upon and to construct, maintain, operate, inspect, patrol,
replace, repair, and remove one line[] of structures, for one circuit,
composed of metal with lines of wires, crossarms, wires, stubs,
foundations, underground conduits and other usual fixtures for the
transmission of electricity and communications, said facilities to be
erected simultaneously, or at different future times[.]
21
In their joint response to the motion, OTD, LNG, and the City argued that Oak
Haven failed to prove all essential elements of its trespass claim because OTD’s and
LNG’s entry onto Oak Haven’s Property was authorized by the easement granted to
the City, and the City issued a permit to OTD to construct the underground drainage
line. According to the Defendants and the City, the Defendants’ construction of the
drainage line on Oak Haven’s Property was merely to comply with the City’s
requirement that OTD construct a drainage line within the City’s easement, and
therefore, Oak Haven has not proven that the Defendants exceeded the bounds of the
City’s legal rights under the easement. The Defendants and the City also argued Oak
Haven offered no evidence that the alleged trespass caused it injury.
The primary questions in this case are whether the Plat in question conveyed
an 80-foot easement by dedication to the City, and if it did, whether the scope of the
80-foot easement across Oak Haven’s Property allows the City to convey to private
parties such as OTD and LNG the right to use the 80-foot easement to build a
drainage line in the 80-foot easement. 7
Did the plat convey by dedication an 80-foot easement to the City?
We first address whether the Plat conveyed an 80-foot easement by dedication
to the City. The mere designation of a right-of-way on a recorded plat that otherwise
7
We confine our discussion in this memorandum opinion to express, rather
than implied, dedications because the Defendants and the City contend the City
holds the 80-foot easement by express dedication contained in the Plat.
22
lacks dedicatory language does not by itself create a dedicatory right-of-way. Price
v. Leger, No. 09-19-00199-CV, 2019 Tex. App. LEXIS 10781, at **8-9 (Tex.
App.—Beaumont Dec. 12, 2019, pet. denied) (mem. op.). In Price, the Majority
Opinion stated as follows:
The dedication of a street or ROW [right of way] involves setting apart
private land for public purposes. Ford v. Moren, 592 S.W.2d 385, 390
(Tex. Civ. App.—Texarkana 1979, writ ref’d n.r.e.); see Viscardi v.
Pajestka, 576 S.W.2d 16, 19 (Tex. 1978). Dedication can occur by
express grant or by implication, and an express dedication is generally
accomplished by a deed or other written instrument, such as a plat.
Gutierrez v. Cty. of Zapata, 951 S.W.2d 831, 837 (Tex. App.—San
Antonio 1997, no writ). The owner’s intent to dedicate land for public
use must be clearly shown. Broussard v. Jablecki, 792 S.W.2d 535, 537
(Tex. App.—Houston [1st Dist.] 1990, no writ). A dedication of private
property for public use is never presumed but must be established by
clear and unequivocal intention on the part of the landowner to
presently set aside and appropriate a part of his land for public use.
Aransas Cty. v. Reif, 532 S.W.2d 131, 134 (Tex. Civ. App.—Corpus
Christi 1975, writ ref’d n.r.e.).
2019 Tex. App. LEXIS 10781, at **8-9. Further, a Plat which is filed of record
showing thereon certain roads or rights of way, and containing dedicatory language
dedicating the roads, rights of way, or easements for public use, does not dedicate
the use to the public until the City makes an actual appropriation of the dedicated
parts by entry, use, or improvement. See Tex. Loc. Gov’t Code Ann. § 212.011(a).
The acceptance or approval of a Plat by the City does not mean the City has accepted
a dedication. See id. Dedication is a mere offer and the filing of a plat containing the
dedication does not constitute an acceptance of the dedication. See Langford v. Kraft,
23
498 S.W.2d 42, 49 (Tex. Civ. App.—Beaumont 1973, writ ref’d n.r.e.). Acceptance
does not require a formal or express act; implied acceptance is sufficient. See
Viscardi, 576 S.W.2d at 19; Moody v. White, 593 S.W.2d 372, 378-79 (Tex. App.—
Corpus Christi 1979, no writ).
Here, unlike Price, this Plat included language that the
owner of the property shown on this plat, SENIOR HOUSING
DEVELOPMENTS II, LLC. does for and behalf of said Corporation,
its successors and assigns, adopt this plat according to the lines, streets,
right-of-ways, alleys, building lines and easements as shown thereon
and does hereby dedicate to the City of Shenandoah [emphasis added],
a Municipal Corporation and Political Subdivision of the State of
Texas, the streets, right-of-ways, alleys and easements shown thereon
forever, which shall also be for the mutual use and accommodation of
all the public utilities desiring to use or using same. . . .
So, the Plat in question contains language that the City contends shows an intentional
dedication of the easements shown on the Plat for “use and accommodation of all
public utilities desiring to use or using same[.]” The Plat also showed an area
designated as a “Detention Basin Area[.]”
The City offered some evidence that when Oak Haven’s predecessor
developed its own property for the senior living development, the City issued
permits, provided utilities to the senior development, and maintained and located
utilities to the senior living development, and that the City located sanitary sewer
and storm sewers in “the easements” to benefit the senior living development. The
City alleged that, at some point after 2000, it purchased the detention basin area from
24
Oak Haven and built a new drainage line in the easements, without complaint by
Oak Haven.
The City contends “[t]he plat expressly create[d] two new easements: 1) a
Utility Easement, or U.E., and 2) a public utility easement[, and] [] also expressly
grants to the City the existing easements in favor of Gulf States Utilities.” The
private-party Defendants argue the City gave them permission to enter upon Oak
Haven’s property and to run another drainage line within the previously dedicated
80-foot utility easement on Oak Haven’s property. Oak Haven disagrees with these
contentions and arguments.
It is undisputed that the Plat specifically references a 1984 recorded 80-foot
utility easement. The parties agree that in 1984 an 80-foot utility easement was
conveyed to G.S.U. and the easement was filed of record at Film Codes 294-01-
1449, XXX-XX-XXXX, XXX-XX-XXXX & XXX-XX-XXXX of the Montgomery County Deed
Records. The Plat appears to depict thereon what is labeled as “80’ U.E.” to be the
same as the 1984 80-foot easement previously conveyed to G.S.U. That said, we
cannot agree with the City that the Plat created a new easement or that it “expressly
grants to the City the existing easements in favor of Gulf States Utilities.” We
conclude that the language contained in the Plat is unclear on what was intended by
the grantor when it referenced an “80’ U.E.” The Plat could simply be marking the
existing 1984 80-foot easement which had previously been conveyed to G.S.U.,
25
rather than creating a new utility easement. On the record now before us we find
there is a genuine issue of material fact as to whether the Plat dedicated an “80’
U.E.” to the City for public use or whether it simply marked the location of what had
previously been conveyed to G.S.U.
Does the easement, if any, as dedicated allow the City to grant LNG and
OTD the right to use the easement to construct an additional drainage
line to drain OTD’s property through Oak Haven’s property?
That said, even if we assume without deciding that the Plat had depicted a
“new” “80’ U.E.” or that it had conveyed by dedication the existing G.S.U. 80-foot
easement to the City and that the City’s evidence was sufficient to show as a matter
of law that the City accepted the dedication, we would still have to determine
whether the scope of the easement as dedicated allowed the City to grant LNG and
OTD the right to use the easement to construct an additional drainage line to drain
water or sewer from OTD’s property across and through Oak Haven’s property.
When an owner of land conveys an easement to a grantee, it confers upon the
grantee only the right to use the easement for the specific purpose outlined in the
grant. See Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 700 (Tex. 2002). It
is well established that the grant of an easement does not divest the property owner
of title to the fee estate. See Greenwood v. Lee, 420 S.W.3d 106, 111 (Tex. App.—
Amarillo 2012, pet. denied). An easement is a nonpossessory interest in land. See
Marcus Cable, 90 S.W.3d at 700. An “easement” or “right-of-way” generally
26
conveys a right to pass over, across, or through the described land for the purposes
described in the grant. See id. at 701. We refer to the fee estate of the parcel owned
by the grantor of the easement as the “servient estate,” and the grantee who benefits
from the easement holds the “dominant estate.” See Severance v. Patterson, 370
S.W.3d 705, 721 (Tex. 2012); Hubert v. Davis, 170 S.W.3d 706, 710 (Tex. App.—
Tyler 2005, no pet.).
In Marcus Cable, the Texas Supreme Court stated:
We apply basic principles of contract construction and
interpretation when considering an express easement’s terms. The
contracting parties’ intentions, as expressed in the grant, determine the
scope of the conveyed interest.
When the grant’s terms are not specifically defined, they should
be given their plain, ordinary, and generally accepted meaning. An
easement’s express terms, interpreted according to their generally
accepted meaning, therefore delineate the purposes for which the
easement holder may use the property. Nothing passes by implication
“except what is reasonably necessary” to fairly enjoy the rights
expressly granted. Thus, if a particular purpose is not provided for in
the grant, a use pursuing that purpose is not allowed. If the rule were
otherwise,
then the typical power line or pipeline easement, granted
for the purpose of constructing and maintaining a power
line or pipeline across specified property, could be used
for any other purpose, unless the grantor by specific
language negated all other purposes.
90 S.W.3d at 700-01 (internal citations omitted). The “80’ U.E.” as described in the
Plat at issue in this case is expressly for “public utilities[.]” Language on the Plat
states that the owners
27
dedicate to the City [], the streets, right-of-ways, alleys and easements
shown thereon forever, which shall also be for the mutual use and
accommodation of all the public utilities desiring to use or using
same[.]
The Plat states that the rights-of-way “shall also be for the mutual use and
accommodation of all the public utilities desiring to use or using same[,]” but the
Plat does not convey to the City unlimited “use” or even broad “public use,” nor
does it allow a neighbor to use the easement for a private purpose. The phrase “public
utilities” is not defined in the Plat. When a term is not defined in an agreement, we
give the term its common, ordinary meaning. Heritage Res., Inc. v. NationsBank,
Co., 939 S.W.2d 118, 121 (Tex. 1996). To determine the common, ordinary meaning
of undefined terms used in agreements, “we typically look first to their dictionary
definitions and then consider the term’s usage in other statutes, court decisions, and
similar authorities.” Tex. State Bd. of Examiners of Marriage & Fam. Therapists v.
Tex. Med. Ass’n, 511 S.W.3d 28, 35 (Tex. 2017). Black’s Law Dictionary defines
the term “public utility” as follows:
A privately owned and operated business whose services are so
essential to the general public as to justify the grant of special franchises
for the use of public property or of the right to eminent domain, in
consideration of which the owners must serve all persons who apply,
without discrimination. It is always a virtual monopoly.
Black’s Law Dictionary 1232 (5th ed. 1979). In chapter 186 of the Texas Utilities
Code, “public utility” means and includes
28
a private corporation that does business in this state and has the right of
eminent domain, a municipality, or a state agency, authority, or
subdivision engaged in the business of:
(1) generating, transmitting, or distributing electric energy to the
public;
(2) producing, transmitting, or distributing natural or artificial gas to
the public; or
(3) furnishing water to the public.
Tex. Util. Code Ann. § 186.001. Similarly, under Section 11.004 of the Texas
Utilities Code, “public utility” or “utility” means “(1) an electric utility, as that term
is defined by Section 31.002; or (2) a public utility or utility, as those terms are
defined by Section 51.002.” See Tex. Util. Code Ann. § 11.004. Section 31.002
provides the definitions for “Subtitle B Electric Utilities” and defines an “electric
utility” as “a person or river authority that owns or operates for compensation in this
state equipment or facilities to produce, generate, transmit, sell, or furnish electricity
in this state.” Id. § 31.002(6). Section 51.002 provides the definitions for “Subtitle
C Telecommunications Utilities” and defines “public utility” or “utility” as “a person
or river authority that owns or operates for compensation in this state equipment or
facilities to convey, transmit, or receive communications over a telephone system as
a dominant carrier.” Id. § 51.002(8). In City of Lubbock v. Phillips Petroleum Co.,
the Amarillo Court of Appeals discussed several cases and concluded that those
cases “support the definition of a public utility contained in Black’s Law Dictionary
setting out the distinguishing characteristics of a public utility, namely, an entity
providing essential services to the public at large and which has a monopoly or a
29
virtual monopoly in performing those services.” 41 S.W.3d 149, 155-57 (Tex.
App.—Amarillo 2000, no pet.). In Wichita Falls v. Kemp Hotel Operating Co., 162
S.W.2d 150, 152-53 (Tex. App.—Fort Worth 1942), aff’d, 170 S.W.2d 217 (Tex.
1943), the Fort Worth Court of Appeals stated “‘[a] ‘public utility’ has been
described as a business organization which regularly supplies the public with some
commodity or service such as gas, electricity, etc.’”
Considering the definitions above and applying such to the record before us,
we conclude that neither OTD nor LNG are “public utilities,” and further that the
24-inch drainage line LNG installed within the “80’ U.E.,” is not for use as a public
utility pipeline. There is absolutely no evidence in the record nor any allegation from
the Defendants or the City that OTD or LNG are “public utilities.” Moreover, it is
undisputed that the 24-inch drainage line is for the purpose of servicing OTD’s
property, and for draining it, and it is not being offered to the public at large for
performing the delivery of some other commodity or service. We conclude that at
most the Plat did no more than dedicate the “80’ U.E.” for public utilities, and the
Plat does not convey the right for the City to grant the neighboring property owner
or its contractor the right to use the 80-foot area to build another drainage line
through Oak Haven’s property to divert storm water or sewer from OTD’s property
into an adjoining pond so the neighboring private landowner and developer can build
on or develop the neighbor’s property. We conclude that such use of the alleged 80-
30
foot easement is inconsistent with basic principles of contract construction and
interpretation. See Marcus Cable, 90 S.W.3d at 700. To allow such would place an
additional burden on the servient estate. See id. at 703.
We note that the language in other paragraphs on the Plat also references
certain aerial easements (that are not at issue in this case). Therein it specifically
provides that the aerial easements are dedicated “to the use of the public for public
utility purposes[:]”
FURTHER, Owners have dedicated and by these presents do dedicate
to the use of the public for public utility purposes forever unobstructed
aerial easements. The aerial easements shall extend horizontally an
additional eleven feet, six inches [] for ten feet [] perimeter ground
easements or five feet, six inches [] for sixteen feet [] perimeter ground
easements or five from a plane sixteen [] above ground level upward,
located adjacent to and adjoining said public utility easements that are
designated with aerial easements (U.E. & A.E.) as indicated and
depicted hereon, whereby the aerial easement totals twenty one feet, six
inches [] in width.
FURTHER, Owners have dedicated and by these presents do dedicate
to the use of the public for public utility purposes forever unobstructed
aerial easements. The aerial easements shall extend horizontally an
additional ten feet [] for ten feet [] back-to-back ground easements or
seven feet [] for [] sixteen feet [] back-to-back ground easements from
a plane sixteen feet [] above ground level upward, located adjacent to
both sides and adjoining sold public utility easements that are
designated with aerial easements (U.E. and A.E.) as indicated and
depicted hereon, whereby the aerial easements totals [] thirty feet in
width.
The “public use” language in the aerial easements is absent in the “80’ U.E.” in
question on the same Plat, and we conclude that the omission was intentional and
31
deliberate. See FPL Energy, LLC v. TXU Portfolio Mgmt. Co., L.P., 426 S.W.3d 59,
67-68 (Tex. 2014) (refusing to “selectively import terms from other provisions [in
the parties’ contracts] to compensate for the absence of [a] term” in another provision
and concluding that the omission of that term was intentional and deliberate).
Because the private drainage line built by LNG for OTD is not a use or
purpose consistent with the scope of the easement depicted as the “80’ U.E.” as
stated in the Plat, it exceeds the scope of the interest, if any, purportedly conveyed
to the City by the dedication, and the Defendants’ use of the easement is not allowed
by virtue of the Plat. See Marcus Cable, 90 S.W.3d at 700-01. Furthermore, the
Defendants’ position that the City allegedly required it to locate the line in the “80’
U.E.” is of no import. We conclude, as a matter of law, that the Defendants’
construction of a drainage line on Oak Haven’s Property through the area marked as
an “80’ U.E.” was not authorized by the Plat. Accordingly, the trial court erred in
denying Oak Haven’s Motion for Partial Summary Judgment and Supplement to
Motion for Summary Judgment.
The Trial Court Erred in Granting OTD’s
Amended Motion for Final Summary Judgment
In OTD’s Amended Motion for Final Summary Judgment, OTD raised the
following defenses to Oak Haven’s trespass claims: (1) the two year statute of
limitations for trespass bars Oak Haven’s trespass claims because Oak Haven had
actual knowledge of similar entries on its property for more than eighteen years; (2)
32
OTD, as an employer, cannot be vicariously liable for alleged damages caused by
LNG, an independent contractor and any exceptions to that rule do not apply in this
case; and (3) Oak Haven does not allege elements of trespass against OTD and OTD
lacked the element of intent required on a trespass claim because there can be no
trespass when installing public utilities.
The limitations period for bringing a trespass claim is two years. Tex. Civ.
Prac. & Rem. Code Ann. § 16.003(a). Oak Haven argues that they acted promptly
and filed suit within weeks of first discovering the OTD and LNG trespass. OTD
alleges that Oak Haven had knowledge “of similar entries on its property for more
than eighteen years” and points to evidence that OTD contends shows the City
“owned and already had in place a 72 inch storm sewer running along the 80 foot
easement and then crossing the entirety of the 80 foot easement into the detention
pond” and that the pre-existing storm sewer is shown on the Plat. According to OTD,
Oak Haven therefore “had actual knowledge of the 72 inch storm sewer and that it
crossed [Oak Haven]’s property for more than 18 years [and Oak Haven] never
complained that the pre-existing 72 inch storm sewer, or related maintenance, was
trespassing on its property.” There is some evidence in the record that shows Oak
Haven has allowed the City to conduct certain maintenance on the 72-inch pre-
existing line in past years, and further that there has been a 72 inch storm sewer line
located within the area marked as the 80’ U.E., but those facts, even if true, would
33
not constitute a defense to the alleged trespass by OTD or LNG to install the new
24-inch drainage line within the alleged easement. Oak Haven’s summary judgment
evidence created a genuine issue of material fact regarding the discovery of the
alleged trespass claim and whether the claims are barred by the two-year statute of
limitations. 8 The trial court erred in granting OTD’s Amended Motion for
Traditional Summary Judgment on Oak Haven’s claim for trespass.
As to OTD’s argument in its motion for summary judgment that it was entitled
to summary judgment as a matter of law because Oak Haven did not allege elements
of trespass against OTD, we disagree.
“Trespass to real property is an unauthorized entry upon the land of
another[] and may occur when one enters—or causes something to
enter—another’s property.” Barnes v. Mathis, 353 S.W.3d 760, 764
(Tex. 2011). While a property owner has a right to exclude others from
his property, the property owner may choose to relinquish a portion of
the right to exclude by granting an easement. See Marcus Cable [], 90
S.W.3d [at] 700 []. For a plaintiff to recover damages for trespass to
real property, he must prove “(1) the plaintiff owns or has a lawful right
to possess real property, (2) the defendant entered the plaintiff’s land
and the entry was physical, intentional, and voluntary, and (3) the
defendant’s trespass caused injury to the plaintiff.” Wilen v.
Falkenstein, 191 S.W.3d 791, 798 (Tex. App.—Fort Worth 2006, pet.
denied). The plaintiff must prove that the defendant exceeded the
bounds of any legal rights he may have possessed. Koelsch v. Indus.
Gas Supply Corp., 132 S.W.3d 494, 497 (Tex. App.—Houston [1st
Dist.] 2004, pet. denied).
8
We note that in the Defendants’ appellate brief they do not argue the claims
were barred by limitations.
34
LaBrie v. State, No. 09-21-00027-CV, 2022 Tex. App. LEXIS 1315, at **21-22
(Tex. App.—Beaumont Feb. 24, 2022, no pet.) (mem. op.).
Oak Haven’s Original Petitions and supplements thereto alleged that OTD and
LNG trespassed on Oak Haven’s land, that OTD hired LNG to construct a drainage
line through Oak Haven’s Property and that the entry was physical, intentional,
voluntary, and unauthorized. Those allegations were sufficient to allege a trespass
claim against OTD and LNG. See id. (citing Barnes, 353 S.W.3d at 764; Wilen, 191
S.W.3d at 798). We reject OTD’s assertion that it was entitled to summary judgment
because OTD lacked the element of intent required on a trespass claim because it
hired LNG to construct the drainage line and that it could not be liable for trespass
because OTD did not physically engage in the trespass. A trespass may occur when
a defendant intentionally causes a third person or a thing to enter land in the
possession of another. See Barnes, 353 S.W.3d at 764; LaBrie, 2022 Tex. App.
LEXIS 1315, at *22; Wilen, 191 S.W.3d at 798 (citing Restatement (Second) of
Torts § 158 cmt. J (1977)). Oak Haven alleged that OTD trespassed on Oak Haven’s
Property when OTD’s contractor, LNG, constructed the drainage line on Oak
Haven’s Property. See Labrie, 2022 Tex. App. LEXIS 1315, at *22 (citing Barnes,
353 S.W.3d at 764; Wilen, 191 S.W.3d at 798).
We also decline the invitation from OTD to apply the doctrine of derivative
sovereign immunity to this case. OTD contends that it holds derivative sovereign
35
immunity from the City because OTD and LNG completed the drainage work
according to the City’s requirements and under a City permit. On appeal, OTD and
LNG argue that because the City is in control of flooding and required the drainage
to be constructed to protect Oak Haven’s Property from flooding, OTD and LNG
did not have discretion over the design or completion of the drainage line. OTD and
LNG rely on the decisions in Yearsley, Nettles, Brown & Gay Engineering, Inc., and
Glade, in support of its position. See Yearsley v. W.A. Ross Constr. Co., 309 U.S. 18
(1940); Nettles v. GTECH Corp., 606 S.W.3d 726 (Tex. 2020); Brown & Gay Eng’g,
Inc. v. Olivares, 461 S.W.3d 117 (Tex. 2015); Glade v. Dietert, 295 S.W.2d 642
(Tex. 1956). All four of those cases involve facts that are distinguishable from the
circumstances in this case. In each of those cases, the contractors were hired by
governmental entities on governmental projects. See Yearsley, 309 U.S. at 19;
Nettles, 606 S.W.3d at 729; Brown & Gay, 461 S.W.3d at 119; Glade, 295 S.W.3d
at 643. Here, OTD hired LNG, and nothing in the record before us indicates that
LNG was hired by the City, or under the control of the City.
Even if the City holds a “public utility” easement by dedication across Oak
Haven’s Property within the area marked as an “80’ U.E.[,]” the fact that OTD or
LNG obtained a City permit is not a substitute for OTD or LNG to properly acquire
consent from Oak Haven for OTD or LNG to enter Oak Haven’s Property for the
purpose of installing another drainage line which will provide private drainage for
36
OTD’s property, and the City permit does not transform OTD or LNG into
governmental contractors. OTD and LNG failed to present any evidence that (1)
OTD and LNG were hired by the City to build the drainage system, (2) the City
provided the drainage-system plans through a contract, or (3) OTD or LNG were
required by the City to follow the City’s plans strictly and without discretion.
“As a general rule, a permit granted by an agency does not act to immunize
the permit holder from civil tort liability from private parties for actions arising out
of the use of the permit.” FPL Farming, Ltd. v. Envtl. Processing Sys., L.C., 351
S.W.3d 306, 310 (Tex. 2011). “[A] permit is not a get out of tort free card.” Id. at
311.
In Brown & Gay, Brown & Gay, a private engineering firm, contracted with
the Fort Bend County Toll Road Authority (“the Authority”), a governmental unit,
to design and construct a roadway. 461 S.W.3d at 119. Under the contract, the
Authority delegated to Brown & Gay the responsibility of designing road signs and
traffic layouts, subject to approval by the Authority’s board of directors. Id. An
intoxicated driver entered an exit ramp of the roadway and collided with a car driven
by Pedro Olivares Jr., who was killed. Id. Olivares’s parents sued the Authority and
Brown & Gay, alleging that the failure to design and install proper signs, warning
flashers, and other traffic-control devices around the exit ramp where the intoxicated
driver entered the roadway proximately caused Olivares’s death. Id. at 120. Brown
37
& Gay filed a plea to the jurisdiction alleging it was entitled to governmental
immunity. Id. The trial court granted the plea, but the court of appeals reversed,
concluding that Brown & Gay was not entitled to sovereign immunity. Id.
The Texas Supreme Court affirmed the judgment of the court of appeals and
concluded that Brown & Gay as a private contractor was not immune from suit for
the consequences of its own actions taken in the exercise of its own independent
discretion:
We have never directly addressed the extension of immunity to
private government contractors, but our analysis in K.D.F. v. Rex, 878
S.W.2d 589 (Tex. 1994), is instructive.
....
. . . . [W]e held that another private company that “operate[d]
solely upon the direction of [the governmental entity]” and “exercise[d]
no discretion in its activities” was indistinguishable from [the
governmental entity], such that “a lawsuit against one [wa]s a lawsuit
against the other.” Id. [at 597]. This reasoning implies that private
parties exercising independent discretion are not entitled to sovereign
immunity.
....
. . . . The evidence shows that Brown & Gay was an independent
contractor with discretion to design the Tollway’s signage and road
layouts. We need not establish today whether some degree of control
by the government would extend its immunity protection to a private
party; we hold only that no control is determinative.[]
....
In sum, we cannot adopt Brown & Gay’s contention that it is
entitled to share in the Authority’s sovereign immunity solely because
the Authority was statutorily authorized to engage Brown & Gay’s
services and would have been immune had it performed those services
itself. That is, we decline to extend to private entities the same
immunity the government enjoys for reasons unrelated to the rationale
that justifies such immunity in the first place. The Olivareses’ suit does
not threaten allocated government funds and does not seek to hold
38
Brown & Gay liable merely for following the government’s directions.
Brown & Gay is responsible for its own negligence as a cost of doing
business and may (and did) insure against that risk, just as it would had
it contracted with a private owner.
Id. at 124, 126, 127. The Court also determined that the rationale underlying the
doctrine of sovereign immunity did not support extending that immunity to Brown
& Gay. Id. at 124; see also Nettles, 606 S.W.3d at 732, 736. Similarly, we conclude
that the evidence does not support an extension of immunity to LNG or OTD, and
the rationale underlying the doctrine of sovereign immunity does not support
extending that immunity to OTD or LNG.
Here, OTD owns the property adjacent to Oak Haven’s senior living complex.
OTD hired LNG to build a hotel on OTD’s property. Oak Haven has not sued the
City for trespass, and the City did not hire OTD, nor LNG, to complete drainage
work on the City’s behalf. According to the City, it only issued LNG a permit to
construct the hotel, and as part of the hotel construction project, the City required
LNG to provide storm water drainage to protect the City’s residents from flooding.
OTD and LNG have not shown that they were under contract with the City, that the
City controlled the building of the drainage line, or that each acted under the City’s
control and had no discretion in the project. We also reject OTD’s and LNG’s
argument that because the City is generally “in control of flooding” in the City and
because the City required the development to include drainage to protect neighbors
from potential flooding caused by the development of the Hotel, that means OTD
39
and LNG did not have discretion over the design or completion of the drainage line.
The City permit did not mention Oak Haven’s Property, and it certainly did not
control the manner, method, and means by which OTD and LNG dealt with the
drainage.9 On this record, OTD and LNG have not proven that they lacked discretion
in locating, designing, and installing the drainage line on, over, across, or through
Oak Haven’s Property.
We conclude the trial court erred in granting OTD’s Amended Motion for
Final Summary Judgment on Oak Haven’s trespass claim. Also, OTD’s Amended
Motion for Final Summary Judgment completely failed to address Oak Haven’s
claims for violations of section 11.086 of the Texas Water Code, Oak Haven’s claim
for injunctive relief, Oak Haven’s claim to quiet title, Oak Haven’s declaratory
9
The City permit basically provides that the City has received a permit fee
and generally provides the address of the construction and type of project, and also
contains the following notes and certifications:
NOTES: ****Any changes required on the on-site plans (Aloft
Hotels – 19391 David Memorial Dr.) that effect the Aloft Offsite Storm
Sewer plans will be at the owner[’]s expense****
....
I HEREBY CERTIFY THAT I HAVE READ AND
EXAMINED THIS DOCUMENT AND KNOW THE SAME TO BE
TRUE AND CORRECT. ALL PROVISIONS OF LAWS AND
ORDINANCES GOVERNING THIS TYPE OF WORK WILL BE
COMPLIED WITH WHETHER SPECIFIED HEREIN OR NOT.
GRANTING OF A PERMIT DOES NOT PRESUME TO GIVE
AUTHORITY TO VIOLATE OR CANCEL THE PROVISION OF
ANY OTHER STATE OR LOCAL LAW REGULATING
CONSTRUCTION OR THE PERFORMANCE OF
CONSTRUCTION.
40
judgment,10 and Oak Haven’s theft claim. A trial court can render summary
judgment only on those grounds that are specifically addressed in a motion for
summary judgment. See Tex. Integrated Conveyor Sys., Inc. v. Innovative Conveyer
Concepts, Inc., 300 S.W.3d 348, 365 (Tex. App.—Dallas 2009, pet. denied); Wright
v. Sydow, 173 S.W.3d 534, 554 (Tex. App.—Houston [14th Dist.] 2004, pet. denied)
(citing McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 342 (Tex. 1993)).
Where, as here, the trial court granted more relief than the movant requested in the
motion for summary judgment, we must reverse the summary judgment on those
claims and remand to the trial court the claims not addressed in the summary
judgment motion. See Page v. Geller, 941 S.W.2d 101, 102 (Tex. 1997).
The Trial Court Erred in Granting of LNG’s
Traditional Motion for Summary Judgment
In its Traditional Motion for Summary Judgment, LNG argued that it cannot
be liable for trespass because it had consent from the City to enter Oak Haven’s
Property, LNG was acting under the authority of the City when it entered Oak
Haven’s Property, and LNG has never claimed a legal or possessory right to Oak
10
We reject Defendants’ assertion that they are not proper parties to Oak
Haven’s declaratory judgment action as they have a claim or interest that would be
affected by a declaration as to whether the Plat creates a public drainage easement
or allows OTD to use Oak Haven’s Property to drain OTD’s storm sewer. See Tex.
Civ. Prac. & Rem. Code Ann. § 37.006(a) (“When declaratory relief is sought, all
persons who have or claim any interest that would be affected by the declaration
must be made parties.”).
41
Haven’s Property or under the easement. As summary judgment evidence, LNG
attached Intervenor, The City of Shenandoah’s Third Party Claim Against Oak
Haven as well as Oak Haven’s Original Petition with Application for Temporary
Restraining Order, Application for Temporary Injunction Pendente Lite, and
Application for Permanent Injunction with Request for Disclosure. LNG cited to the
City’s Third Party Claim against Oak Haven as evidence that the City granted LNG
permission to construct the drainage line in its easement and required OTD to drain
its property through storm drains running through OTD’s Property, extending
through the City’s easement on Oak Haven’s Property, and then ending in the
detention pond on the opposite side of Oak Haven’s Property. According to LNG,
the City as owner of the easement had the absolute right to permit OTD and LNG to
use its easement for moving storm water from OTD’s Property to the detention pond.
As to Oak Haven’s declaratory judgment action, LNG contends “[t]he scope of the
easement is a fight, specifically, between the City and [Oak Haven]” and “[a]ny
declaration in this matter cannot define rights or obligations that did not originally
exist[].”
We have already concluded that the “80’ U.E.” as reflected on the Plat did not
authorize the City, OTD, or LNG to construct the drainage line on Oak Haven’s
Property. Even if the City required drainage from OTD’s Property as alleged by
LNG in its summary judgment motion, LNG has failed to establish as a matter of
42
law that the City required the drainage line to run through Oak Haven’s Property.
We have also already determined that LNG and OTD failed to show they are entitled
to derivative sovereign immunity.
We conclude the trial court erred in granting LNG’s Traditional Motion for
Summary Judgment on Oak Haven’s trespass, declaratory judgment, and suit to
quiet title claims. Additionally, LNG’s Traditional Motion for Summary Judgment
also failed to address Oak Haven’s claim for alleged violations of section 11.086 of
the Texas Water Code, Oak Haven’s claim for injunctive relief, and Oak Haven’s
theft claim. Accordingly, we reverse the summary judgment in favor of LNG on
those claims and remand to the trial court the claims not addressed in the summary
judgment motion. See Page, 941 S.W.2d at 102.
The Trial Court Erred in Granting the City’s
Motion for Summary Judgment Against Oak Haven
When the trial court granted the City’s Motion for Summary Judgment
Directed at Oak Haven, Oak Haven had no claims against the City and the City had
no claims against Oak Haven. Although at one time Oak Haven and the City had
claims against each other, those claims were non-suited before the trial court granted
the City’s Motion for Summary Judgment Directed at Oak Haven. The trial court
lacked jurisdiction to grant a summary judgment on the non-suited claims. See
Grimes v. Stringer, 957 S.W.2d 865, 868 (Tex. App.—Tyler 1997, pet. denied) (trial
court had no jurisdiction to grant a summary judgment on claims non-suited prior to
43
the trial court ruling on the motion for summary judgment) (citing Scott & White
Mem. Hosp. v. Schexnider, 940 S.W.2d 594, 595-96 (Tex. 1996)). Accordingly, we
vacate that portion of the trial court’s order granting the City’s Motion for Summary
Judgment Directed at Oak Haven.
Conclusion
We sustain Oak Haven’s issue on appeal. As to the August 18, 2020 order, we
vacate that portion of the judgment granting the City’s Motion for Summary
Judgment Directed at Oak Haven. We reverse the trial court’s denial of Oak Haven’s
motion for partial summary judgment, because we conclude as a matter of law that
the plat did not grant the Defendants the right to construct the drainage line on Oak
Haven’s Property. We reverse the portion of the trial court’s judgment granting
OTD’s Amended Motion for Summary Judgment and LNG’s Traditional Motion for
Summary Judgment and the trial court’s order rendering a take-nothing judgment
against Oak Haven. We vacate the trial court’s November 2, 2020 order. We remand
the cause for further proceedings consistent with this Opinion.
VACATED IN PART; REVERSED AND REMANDED IN PART.
_________________________
LEANNE JOHNSON
Justice
Submitted on May 19, 2022
Opinion Delivered November 17, 2022
Before Kreger, Horton & Johnson, JJ.
44
45 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487071/ | In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-22-00335-CV
__________________
IN RE VERNON VELDEKENS, ET AL
__________________________________________________________________
Original Proceeding
284th District Court of Montgomery County, Texas
Trial Cause No. 22-05-06903-CV
__________________________________________________________________
MEMORANDUM OPINION
Relators, Vernon Veldekens; Marcel Town Center Cross Creek, LLC; Marcel
Town Center Riverstone, LLC; Marcel Boulevard, LLC; Apex Suites 1, LLC; Apex
Suites 2, LLC; Apex Suites 3, LLC; Atelier Salon Suites, 1, LLC; Atelier Salon
Suites 2, LLC; The Perfect Round 1, LLC; The Perfect Round 2, LLC; and The
Perfect Round 3, LLC, filed a petition for a writ of mandamus and a motion for
temporary relief. See Tex. R. App. P. 52.1, 52.10. Relators seek to compel the trial
court to vacate a September 11, 2022 order disqualifying their counsel in a lawsuit
where Real Party in Interest Bowerman Contracting, LLC. asserted quantum meruit,
promissory estoppel, and fraud claims in connection with an alleged agreement for
1
Bowerman Contracting to perform commercial construction superintendent services
and other services for Veldekens on the Relators’ commercial real estate projects.
See Tex. Gov’t Code Ann. § 22.221.
Bowerman Contracting’s motion to disqualify claimed Relator’s trial counsel
represented both Bowerman Contracting and the Relators “on an ongoing basis
concerning all aspects of their business relationship.” Relators argue Bowerman
Contracting failed to establish that the current lawsuit is the same as or substantially
related to two subcontractor payment disputes, where Relators’ counsel represented
Bowerman Contracting, or a fishing boat dispute where Relators’ counsel
represented Bowerman Contracting’s principal. See Tex. Disciplinary Rules Prof’l
Conduct R. 1.09(a)(3), reprinted in Tex. Gov’t Code Ann., tit. 2, subtit. G app. A
(“Without prior consent, a lawyer who personally has formerly represented a client
in a matter shall not thereafter represent another person in a matter adverse to the
former client: . . . if it is the same or a substantially related matter.”). Relators argue
Bowerman Contracting failed to provide any evidence that Bowerman Contracting
disclosed to Relators’ counsel any confidential information that relates to Bowerman
Contracting’s agreement with Veldekens.
2
The trial court granted Bowerman Contracting’s motion to disqualify
Relators’ counsel after holding two evidentiary hearings1 and examining documents
in camera, but the documents that the trial court examined in camera have been
omitted from the mandamus record. The trial court noted that the documents
included discussions that pertained to the business separation between Plaintiff and
Defendants and related to events that occurred at a time when counsel represented
both Plaintiff and Defendants. The trial court found “counsel was involved in the
business and litigation aspects of the arrangement between Plaintiff and Defendants,
and that arrangement is central to the issues in this case.” The trial court found that
the “evidence meets the burden of showing a prior attorney/client relationship with
defense counsel, as well as a substantial relationship between the two
representations.” The trial court also found that counsel could have acquired
confidential information concerning his prior client that could be used either to that
prior client’s disadvantage or for the advantage of his current client.
The relators have the burden of providing this Court with a sufficient record
to establish their right to mandamus relief. Walker v. Packer, 827 S.W.2d 833, 837
1
Bowerman testified at the hearing that he had discussed and disclosed
information to the attorney about the compensation and business arrangement
between the Plaintiff and Defendants which is at issue in the underlying suit, and
Bowerman produced for in camera review to the court certain documents
representing communications between the parties and the attorney. Bowerman also
alleged at the hearing that the attorney should be disqualified because he is a fact
witness.
3
(Tex. 1992) (orig. proceeding). After reviewing the mandamus petition and the
record that Relators submitted with their petition, and based upon the mandamus
record, we conclude that Relators have not shown they are entitled to the relief
sought in their mandamus petition. Accordingly, we deny the petition for a writ of
mandamus and the motion for temporary relief. See Tex. R. App. P. 52.8(a).
PETITION DENIED.
PER CURIAM
Submitted on November 16, 2022
Opinion Delivered November 17, 2022
Before Golemon, C.J., Kreger and Johnson, JJ.
4 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487075/ | In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-20-00170-CV
__________________
KARLA FRANCO HERRERA, Appellant
V.
ARIEL ALEJANDRO MATA, Appellee
__________________________________________________________________
On Appeal from the 418th District Court
Montgomery County, Texas
Trial Cause No. 18-11-14838-CV
__________________________________________________________________
MEMORANDUM OPINION
Once a court’s plenary power over its judgment expires, the court’s
judgment may not set aside unless the court grants a “bill of review for
sufficient cause, filed within the time allowed by law[.]” 1 A bill of review
is an equitable proceeding, in which a party may ask a court to set aside
a judgment the party may no longer challenge through a motion for new
1Tex. R. Civ. P. 329b(f).
1
trial or through an appeal. 2 Ordinarily, a plaintiff who files a bill of
review must “plead and prove (1) a meritorious defense to the underlying
cause of action, (2) which the plaintiffs were prevented from making by
the fraud, accident or wrongful act of the opposing party or official
mistake, (3) unmixed with any fault or negligence on their own part.”3
But “[i]f legal remedies were available but ignored,” the plaintiff is not
entitled to relief in equity in a bill of review. 4
After the divorce decree in Trial Court Cause Number 18-02-01586
filed by Ariel Alejandro Mata became final, Karla Franco Herrera filed a
Bill of Review (Bill or Bill of Review) and sought to overturn the decree.
The parties tried the issues presented in Karla’s Bill to the bench. 5 Nine
witnesses, including Karla and Ariel, testified during the seven-day trial.
Following the trial, the trial court issued written findings of fact and
conclusions of law. Among these, the trial court found that Karla
“exercised her own free will” and was “not under duress when she settled”
2WWLC Inv., L.P. v. Miraki, 624 S.W.3d 796, 799 (Tex. 2021).
3Id. (cleaned up).
4Wembley Inv. Co. v. Herrera, 11 S.W.3d 924, 927 (Tex. 1999).
5Karla’s Second Amended Bill of Review was her live pleading in
the trial.
2
the issues involved in her divorce. As related to Karla’s Bill, the trial
court also found that Ariel “did not commit any fraudulent, accidental, or
wrongful act th[at] prevented [Karla] from asserting any defense or
claim” incident to their divorce. And the trial court found that “[m]uch of
[Karla’s] testimony [in the proceedings on Karla’s Bill] was not credible.”
What’s more, the trial court issued more than eighty findings of fact and
fifteen conclusions of law to support its final judgment. The trial court
ordered the parties to take nothing from each other on their claims and
counterclaims when it entered the final judgment on Karla’s Bill.
After the trial court rendered, Karla appealed. On appeal, Karla’s
attorney filed a brief raising a single issue, which asserts Karla’s “due
process and other rights were not adequately respected before she was
deprived of her property and other constitutional rights.” But we
conclude Karla’s arguments lack merit, so we will affirm for the reasons
more fully explained below.
Karla’s Issues (Restated)
Karla presents her issue broadly and in one issue. Yet her brief fails
to provide the Court with points of error clearly identifying the errors she
wants the Court to review. She compounds that problem further in her
3
brief by failing to provide the Court with appropriate citations to
authorities and to the appellate record. 6
That said, most of the complaints Karla has raised concern issues
she could have pursued had she exercised due diligence in the case
involving her divorce, as we explain below. 7 For instance, Karla
complains here that she didn’t receive prior notice of the final hearing the
trial court conducted to approve the final decree in the divorce, a hearing
where the trial court merely signed the agreed Final Decree, which Karla
had signed as approved. Karla also complains that after the trial court
approved the final decree, she wasn’t notified of the fact the trial court
had entered the decree. Together with these complaints, Karla also
complains the trial court in handling her divorce violated her rights to
due process when it failed to require the final decree and a mediated
settlement agreement—all documents Karla signed—to be translated
into Spanish from English because Karla’s first language is Spanish.
In addition to the above complaints, which concern the case
involving Karla’s divorce, Karla also complains the trial court excluded
6See Tex. R. App. P. 38.1(f).
7See Wembley Inv. Co., 11 S.W.3d at 927.
4
relevant evidence during the trial of the claims she raised in her Bill.
Specifically, Karla argues the trial court erred in excluding her testimony
about what Carlos, her son, told her that Ariel told him. The trial court
excluded the testimony ruling it was hearsay.
Karla now claims her testimony about what Carlos told her Ariel
said would have supported her claim that Ariel committed fraud in their
divorce had her testimony been admitted in the trial. Last, Karla
complains the greater weight and preponderance of the evidence
supports a finding granting (rather than denying) her Bill of Review.
Standard of Review
In Bill of Review proceedings, the petitioner “must open and
assume the burden of proving that the judgment was rendered as the
result of the fraud, accident or wrongful act of the opposite party or
official mistake unmixed with any negligence of his own.”8 When, as here,
parties have tried the case to the bench, the trial court is the sole judge
of the credibility of the witnesses who have testified in the trial. 9 In a
factual sufficiency review, the evidence is viewed in a neutral light, and
8Baker v. Goldsmith, 582 S.W.2d 404, 409 (Tex. 1979).
9See City of Keller v. Wilson, 168 S.W.3d 802, 819 (Tex. 2005).
5
the trial court’s verdict will be set aside only if it is so contrary to the
overwhelming weight of the evidence that it is clearly wrong and
unjust. 10
If the plaintiff can establish the requirements needed to prove the
elements required to prevail on a Bill, the validity of a prior judgment
that could not otherwise be challenged in a motion for new trial or
through an appeal may be challenged by filing a Bill of Review. 11 Again,
in a Bill of Review proceeding, the petitioner must ordinarily plead and
prove (1) they have a meritorious claim or defense, (2) which they were
prevented from making by the opposing party’s fraud, accident, or
wrongful act, (3) that is unmixed with fault or negligence of their own. 12
We review the ruling of a lower court on a plaintiff’s Bill of Review
using an abuse-of-discretion standard, which occurs only when the trial
court acts arbitrarily, unreasonably, or without reference to any guiding
10SeePlas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex.
1989); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam).
11Miraki, 624 S.W.3d at 799.
12Id.
6
rules or principles. 13 On questions of law, we review the trial court’s
ruling de novo. 14
Even should the petitioner in a Bill of Review proceeding prove they
have a meritorious defense to the underlying judgment, they must also
prove they were prevented from asserting their defense to the underlying
suit due to fraud, accident, or the wrongful act of the opposing party or
an official mistake, unmixed with any fault or negligence of their own.15
As to fraud, the Bill of Review plaintiff must prove the fraud was extrinsic
to the underlying suit, in contrast to proving intrinsic fraud, which is
fraud the Bill of Review plaintiff could have raised in the underlying
suit. 16 The Texas Supreme Court explained the difference between
intrinsic and extrinsic fraud as follows:
‘Extrinsic fraud’ is fraud which denied a party the opportunity
to fully litigate upon the trial all the rights or defense [they
were] entitled to assert. ‘Intrinsic fraud,’ by contrast, relates
to the merits of the issues which were presented and
presumably were or should have been settled in the former
action. Within that term are included such matters as
13Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990); In the Estate
of Curtis, No. 09-14-00242-CV, 2015 Tex. App. LEXIS 9982, at *10 (Tex.
App.—Beaumont Sept. 24, 2015, no pet.).
14In the Estate of Curtis, 2015 Tex. App. LEXIS 9982, at *10.
15See Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex. 2004).
16Tice v. City of Pasadena, 767 S.W.2d 700, 702 (Tex. 1989).
7
fraudulent instruments, perjured testimony, or any matter
which was actually presented to and considered by the trial
court in rendering the judgment assailed. Such fraud will not
support a bill of review, for each party must guard against
adverse findings upon issues directly presented. 17
Generally, the party with the burden of proof must direct their
factual insufficiency complaints at specific findings on appeal rather than
challenging the judgment as a whole. 18 On appeal, Karla didn’t direct her
challenges specifically at any of the trial court’s findings of fact. To be
fair, however, we understand that Karla’s argument is that the trial
court’s finding that Ariel didn’t commit any fraudulent act which
prevented her from asserting a defense to the judgment in the parties’
divorce is against the greater weight and preponderance admitted in the
trial of her Bill of Review. 19 But as to findings Karla didn’t challenge, the
trial court’s findings
17Id.
18Tinnell v. Poulson Custom Homes, Inc., No. 09-06-390 CV, 2008
Tex. App. LEXIS 1594, at *6 (Tex. App.—Beaumont Mar. 6, 2008, pet.
denied); see also 6 ROY W. MCDONALD & ELAIN GRAFTON CARLSON, TEXAS
CIVIL PRACTICE § 18:12 (2d ed. 1998).
19See Williams v. Khalaf, 82 S.W.2d 651, 658 (Tex. 1990) (noting
that broader points of error should be construed “liberally to adjudicate
justly, fairly and equitably the rights of the litigants”); Cain, 709 S.W.2d
at 176 (noting the correct standard of review for challenges to the
sufficiency of the evidence requires a court of appeals to consider and
8
occupy the same position and are entitled to the same weight
as the verdict of a jury. They are binding on an appellate court
unless the contrary is established as a matter of law, or if
there is no evidence to support the findings. 20
With these standards in mind, we discuss the facts leading to the
parties’ divorce as those facts are relevant to our review of the trial court’s
verdict on Karla’s Bill and on our resolution of Karla’s appeal.
Background
The Underlying Divorce, Trial Court
Cause Number 18-02-01586
We begin with the underlying divorce between Karla and Ariel in
Trial Court Cause Number 18-02-01586. The record shows that in
February 2018, Ariel sued Karla for divorce. Ariel alleged the parties had
been married since 1997, had ceased living together, and that the
marriage had become insupportable because of discord or a conflict of
personalities that destroyed the legitimate ends of their marriage. In
response to Ariel’s suit, Karla answered and filed counterclaims. In her
answer, Karla alleged that Ariel had “committed fraud on the community
weigh all the evidence and to set the verdict aside “only if it is so contrary
to the overwhelming weight of the evidence as to be clearly wrong and
unjust”).
20McGalliard v. Kuhlmann, 722 S.W.2d 694, 697 (Tex. 1986).
9
estate.” Among Karla’s counterclaims, she alleged Ariel had “plotted and
carried out a plan to actually defraud” her of her “separate and
community estate.” In another counterclaim, Karla alleged Ariel
breached a fiduciary duty he owed her because he had her sign a
document that was in English rather than Spanish, “which she believes
divest[ed] her of her interest in their company GBA Group LLC,” . . . a
“multimillion dollar company holding millions in assets.”
Even though both parties were represented by counsel, Karla and
Ariel communicated with each other directly. Karla agreed to settle the
disputed issues in the divorce even though she was advised not to do so
by her attorney. For instance, on the night of July 4, 2018, after Karla
and Ariel engaged in private negotiations without counsel, they signed a
joint letter—the Letter Agreement—which they then sent jointly to their
attorneys. The Letter Agreement outlines the essential terms on which
Karla and Ariel agreed to settle the disputed issues in their divorce. The
Letter Agreement contains several promises, for example Ariel agreed to
pay Karla a lump sum of $50,000 upon the approval of the Final Decree
by the court. He also agreed to pay Karla spousal support annually, in a
specified amount, for a specific period of years. Even so, the parties
10
changed that amount weeks later, increasing the total payout in Karla’s
favor by around forty percent. In the Letter Agreement, the parties
further agreed that neither party committed fraud. The Letter
Agreement is typed, the record contains versions written in Spanish and
English, and the one in Spanish contains what purports to be Ariel’s and
Karla’s signatures. 21
A day after Ariel and Karla signed the Letter Agreement, Karla left
Ariel a message stating that even though her attorney had advised her
she deserved more money, she wanted to move forward with their
agreement and settle because getting more money was not worth the pain
the proceedings were causing her son, Carlos, and the people she loves.
That same day, Karla sent her attorneys a letter, in Spanish, notifying
them she was terminating their attorney-client relationship. The letter
states: “Mi decisión es irreversible.”
Less than a week later, Karla’s attorneys, by motion, asked the trial
court for permission to withdraw. In the motion, the attorneys alleged
that Karla had agreed to their request. And since Karla signed the order,
21The record includes a copy of the same letter, written in English.
However, the signatures on that letter are illegible.
11
which acknowledges she approved the attorneys’ withdrawal, the trial
court granted the motion and allowed the attorneys to withdraw.
On July 27, 2018, Ariel’s attorney sent Karla drafts of documents
resolving Ariel’s and Karla’s divorce under terms to which they had
agreed. Ariel’s attorney sent the following documents to Karla for her
review: (1) a draft Final Decree; (2) an LLC Agreement, which is related
to an entity named Karla’s Love LLC; (3) an Agreed Transfer of Property
Held by Marlow V LP, which is an agreement transferring property
owned by Ariel and Karla to Karla’s Love LLC; and (4) a Special
Warranty Deed with Vendors Lien on a home, which conveys GBA Group
LLC’s interest in certain property to Karla’s Love LLC. When Ariel’s
attorney forwarded these documents to Karla, he told her a mediation in
their divorce was tentatively scheduled for July 31, but that the
mediation could be rescheduled depending on the mediator’s availability
on other days. Karla didn’t ask to reschedule the mediation.
On the day before the mediation, Ariel’s lawyer, by email, told the
mediator he expected Karla to appear at the mediation pro se. He also
sent the mediator a copy of the draft Final Decree. Ariel’s attorney also
told the mediator that Karla “was meeting with a lawyer [that] afternoon
12
at 3:00 to go over all of the Decree and closing documents before giving
us her final approval.” Karla consulted and discussed the settlement
documents with a new attorney, whom she chose, on July 30, 2018.22 The
next day, Karla, Ariel, and Ariel’s attorney attended a mediation. The
mediation ended with Karla and Ariel signing the Mediated Settlement
Agreement, an agreement resolving the issues in their divorce. Under the
terms of the Mediated Settlement Agreement, Karla and Ariel agreed to
sign four exhibits attached to the Mediated Settlement Agreement: (1)
the Final Decree, (2) the LLC Agreement for Karla’s Love LLC, (3) the
Agreed Transfer of Interest of Property held by Marlow VP LP, and (4)
the Special Warranty Deed with Vendors Lien. Additionally, the
Mediated Settlement Agreement provides:
....
9. MEDIATED SETTLEMENT AGREEMENT: EACH
PARTY INTENDS AND AGREES THAT EITHER
PARTY SHALL BE ENTITLED TO JUDGMENT ON
THIS AGREEMENT UNDER THE PROVISIONS OF
22Karla denied that she actually met with an attorney about the
draft documents before signing them even though she agreed she did
schedule a meeting with one. Even so, the trial court found she did meet
with an attorney of her own choosing before the mediation occurred and
Karla did not challenge that finding in her appeal.
13
SECTION 153.0071 OR SECTION 6.602 OF THE TEXAS
FAMILY CODE.
10. EACH PARTY UNDERSANDS AND AGREES THAT
THIS AGREEMENT IS NOT REVOCABLE.
On July 31, 2018, Ariel and Karla signed the Mediated Settlement
Agreement and the Final Decree.
On August 20, 2018, the trial court conducted a hearing to approve
the Final Decree. Ariel appeared for the hearing with his attorney. Ariel’s
attorney announced the parties had settled the case, noting that the
parties had both signed the Final Decree. Karla, however, did not attend
the hearing. During the hearing the trial court signed the decree after
learning that Karla and Ariel had both signed their names to the Final
Decree. 23
The Bill of Review Proceeding and Trial in
Trial Court Cause Number 18-11-14838
23We further note that because the Final Decree meets the
requirements of Family Code section 6.602, the agreement bound the
parties and gave Ariel the right to have a judgment on agreement
“notwithstanding Rule 11, Texas Rules of Civil Procedure, or another rule
of law.” Tex. Fam. Code Ann. § 6.602(a)(c). Unlike other settlement
agreements, when parties sign an agreement subject to section 6.602,
“the trial court is not required to determine if the property division is
‘just and right’ before approving the MSA.” Milner v. Milner, 361 S.W.3d
615, 618 (Tex. 2012).
14
In November 2018, seeking to set aside the Final Decree signed by
the 418th District Court in Trial Court Cause Number 18-02-01586,
Karla filed a Bill of Review, which the Clerk assigned to the 418th
District Court. In her Bill, Karla alleged that Ariel’s fraudulent and
wrongful acts prevented her from asserting meritorious claims she would
have otherwise raised in her divorce. As previously noted, however, Karla
alleged that Ariel committed fraud and had converted the parties’
community property during the case involving their divorce. And in the
divorce, Karla claimed that Ariel’s fraudulent conduct caused her
damages of over one million dollars. In her Bill, Karla claimed that before
she signed the Mediated Settlement Agreement, Ariel threatened to have
her jailed for adultery and to have her deported to Mexico her country of
origin if she refused to settle in their divorce.
When Ariel answered, he filed a general denial. But he also denied
that Karla was under duress when she signed the Final Decree, he denied
he procured the Final Decree through duress or fraud, and he denied he
prevented Karla from presenting a defense to the Final Decree. In
15
January 2020, the trial court called the case to trial. Nine witnesses
(including Karla and Ariel) testified in the seven-day trial.
When the trial ended, the trial court found that Karla “failed to
establish by a preponderance of the evidence that she was prevented from
making any meritorious claim or defense because of any fraud, accident
or wrongful act of [Ariel].” In addition to that finding, the trial court made
eighty-four other findings of fact together with more than ten conclusions
of law. We paraphrase the findings the trial court made as they relate to
the issues on which Karla’s appeal hinges, as follows:
• Karla and Ariel both signed the Final Decree in the
mediation on July 31, 2018, evidencing their agreement
to the terms of the divorce, both in form and in
substance.
• Since before 2018, Karla could read, write, and speak
basic English.
• Much of Karla’s testimony was not credible.
• Ariel’s testimony was significantly more credible than
Karla’s.
• Ariel did not force Karla to terminate her relationship
with any attorney.
• Karla was not under duress and exercised her free will
when settling the divorce.
• Ariel did not force Karla to settle the divorce.
• Ariel did not commit any fraudulent, accidental, or
wrongful act that prevented Karla from asserting any
defense or affirmative claim in their divorce.
16
After the trial court signed the judgment denying Karla relief in the
proceeding on her Bill of Review, Karla appealed.
Standard of Review
Analysis
On appeal, Karla argues that in the case involving the parties’
divorce, she wasn’t provided with prior notice of the hearing to approve
the Final Decree. Karla, however, presented that claim for the first time
in her appeal. To preserve error, a party must make the trial court aware
of the complaint in a timely manner and obtain a ruling. 24 Karla’s Second
Amended Petition for Bill of Review, her live pleading, doesn’t include
any claims alleging the trial court in the divorce proceeding failed to
notify her of the hearing on the final decree. Besides that, nothing in the
record shows that Karla wasn’t given proper notice of the final hearing,
which ended with the trial court in the divorce case approving the Final
Decree. Karla also could have raised her lack of notice claim in a post-
judgment motion in the case involving her divorce. Even so, we need not
24State Dep’t ofHighways & Pub. Transp. v. Payne, 838 S.W.2d 235,
241 (Tex. 1992); see Tex. R. App. P. 33.1.
17
review Karla’s lack of notice claim because it was not properly preserved
for our review in the appeal. 25
Karla also complains that in the case involving her divorce, she
wasn’t properly notified of the fact the trial court entered the Final
Decree. But like Karla’s other lack of notice claim, Karla neither pleaded,
proved, or obtained a ruling from the trial court on her claim she was not
properly notified of the fact the Final Decree had been entered in her
divorce. Add to that, one of Karl’s exhibits admitted during the trial on
her Bill shows the Montgomery County District Clerk sent Karla a letter
in the case involving her underlying divorce of the fact that the trial court
had signed the Final Decree the day it was entered. Because Karla
neither pleaded nor obtained a ruling that she was not notified of the
entry of the Final Decree in the Bill of Review proceeding, she failed to
properly preserve her complaint alleging she wasn’t properly notified of
the entry of the Final Decree for the purpose of her appeal. 26
Karla also complains the trial court violated her rights to due
process by failing to require the documents she signed in the mediation
25Tex. R. App. P. 33.1, 33.2.
26Id.
18
to be translated from English into Spanish, her first language. But Karla
failed to prove that when she was in the trial court in the Bill of Review
proceeding that she asked the trial court handling her divorce to have the
settlement documents translated from English into Spanish before the
mediation occurred. Without securing a ruling from the trial court
denying her request to have the documents translated before she signed
them, Karla is not entitled to collaterally attack the judgment in her
divorce on a claim she could have but failed to raise in the trial court in
a Bill of Review. 27
Next, Karla complains the trial court erred in excluding her
testimony about what she claimed her son, Carlos, told her that Ariel told
him. The trial court sustained Ariel’s objection to Karla’s testimony about
what Carlos told her Ariel told him as hearsay. On appeal, Karla argues
the trial court “artificially imposed” rulings in Ariel’s favor excluding
Karla’s testimony, but she then never explains why the trial court abused
its discretion in sustaining Ariel’s objection. She also doesn’t cite cases to
support her argument that the testimony should have been admitted. To
27Tice, 767 S.W.2d at 702.
19
top that off, Karla offers no argument to explain how the trial court’s
exclusion of Karla’s testimony about what she claims Carlos told her was
harmful in the context of a seven-day trial, a trial in which the trial court
found Karla not credible, a finding she never challenged.
Her argument claiming the trial court abused its discretion in
refusing to admit her testimony is also without merit. Hearsay, an out-
of-court statement offered to prove the truth of the matter asserted, is
generally inadmissible. 28 At trial, Karla argued that her statement about
what Carlos told her Ariel told him was admissible under Rule 803(24).29
Under the exception Karla relies on here, a trial court may admit a
hearsay statement that a reasonable person in the declarant’s position
would have made only if [the declarant] believed it to be true because
when it was made it was so contrary to [the declarant’s] pecuniary or
proprietary interest that it had a great tendency to invalidate [the
declarant’s] claim or expose [the declarant] to civil or criminal liability or
make [the declarant] an object of hatred, ridicule or disgrace. 30 Yet “[a]ll
28Tex. R. Evid. 801, 802.
29Tex. R. Evid. 801(24).
30Id.
20
hearsay exceptions require a showing of trustworthiness.”31 And as the
party who was seeking to have the hearsay declaration of a witness
admitted as an exception to the general rule, Karla had the burden to
show the evidence was within the exception she relied on in the trial.32
Given the trial court’s finding that most of Karla’s testimony was not
credible, we conclude the trial court did not abuse its discretion in
excluding Karla’s testimony about what she claimed Carlos told her Ariel
told him.
Last, we turn to Karla’s claim that the greater weight and
preponderance of the evidence supports a finding granting her Bill of
Review. We conclude that when considered as a whole, the evidence
supports the trial court’s finding that Ariel did not commit any
fraudulent, accidental, or wrongful act, which prevented Karla from
asserting any defenses or affirmative claims in the parties’ underlying
divorce.
31Robinson v. Harkins & Co., 711 S.W.2d 619, 621 (Tex. 1986).
32See Skillern & Sons, Inc. v. Rosen, 359 S.W.2d 298, 301 (Tex.
1962).
21
In a bench trial, the trial court “may believe one witness and
disbelieve others[.]” 33 Here, the trial court could reasonably have
disbelieved Karla’s testimony that Ariel falsely represented any facts
material to the parties’ property in their divorce, that he forced Karla to
sign documents transferring her interest in property she owned to others
when the documents themselves notified a person of what property they
transferred. Here, the trial court rejected Karla’s claim she didn’t
understand the documents because they are written in English and not
Spanish. The trial court also found that Karla consulted with an attorney
before she signed the documents relevant to her divorce, documents
signed in a binding mediation that resulted in a settlement of the
property dispute in the parties’ divorce.
To be sure, Karla testified during the trial that Ariel made false
representations that induced her to sign the documents in the mediation,
threatened to have her jailed for adultery, threatened to have her
deported, and that he made her terminate her attorney. But all that
conduct occurred before Karla attended the mediation and signed the
33McGalliard v. Kuhlmann, 722 S.W.2d at 697.
22
Final Decree, so it was all conduct Karla could have (but didn’t) bring up
in the suit involving the parties’ divorce. Besides, Karla admitted in the
trial on the case involving her Bill that she signed the Mediated
Settlement Agreement. And that Agreement states neither party
committed fraud. Given the evidence before the court, the matters Karla
complains about concern matters that relate to intrinsic rather than
extrinsic fraud. For that reason, it was reasonable for the trial court to
find that Karla’s claims related to issues that she raised or with
reasonable diligence could have raised in the parties’ divorce.
The trial court also found the judgment in the divorce case was not
rendered under circumstances that were unmixed with negligence of
Karla’s own. 34 We agree with the trial court that there is evidence in the
record supporting that finding. For instance, the trial court heard
testimony that Karla fired the attorneys she retained to represent her
after those attorneys learned that Karla negotiated a settlement with
Ariel on her own. The trial court heard testimony that Karla’s attorney’s
told Karla after she signed the letter that they could get her more money
34See Baker, 582 S.W.2d at 409.
23
if she didn’t settle. And Karla’s attorneys, when they represented her,
filed pleadings alleging Ariel committed fraud and converted property
owned by the community estate.
As the factfinder, the trial court could reasonably have concluded
that under the circumstances, Karla acted negligently by firing the
attorneys and proceeding to represent herself against someone she
alleged had engaged in fraud. Considering the record as a whole, we
cannot say the trial court’s verdict is so contrary to the overwhelming
weight of the evidence that it is clearly wrong and unjust.
Conclusion
We overrule Karla’s issues. The trial court’s judgment denying
Karla’s Bill of Review is
AFFIRMED.
_________________________
HOLLIS HORTON
Justice
Submitted on April 18, 2022
Opinion Delivered November 17, 2022
Before Golemon, C.J., Horton and Johnson, JJ.
24 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487081/ | IN THE
TENTH COURT OF APPEALS
No. 10-21-00309-CV
DICK B. SIMMONS, SR., AND
JULIE M. SIMMONS,
Appellants/Cross-
Appellees
v.
WHITE KNIGHT DEVELOPMENT, LLC,
Appellee/Cross-
Appellant
From the 361st District Court
Brazos County, Texas
Trial Court No. 18-001344-CV-361
ORDER
This appeal was referred to mediation on September 16, 2022. Mediation was to
be held by November 15, 2022. On November 4, 2022, appellants’ Motion to Set Aside
the Order for Mediation was filed. In the motion, appellants’ request the Referral for
Mediation be set aside because appellants are in their 80’s and cannot afford to pay the
mediator’s fee or pay any amount to settle the case.
In light of appellants’ motion to set aside, the Referral to Mediation Order, issued
September 16, 2022, is stayed.
Because appellee/cross-appellant has not filed its briefs yet in this appeal,
appellee/cross-appellant is ORDERED to file its briefs within 30 days from the date of
this Order.
Appellants’ Motion to Set Aside the Order for Mediation will be held in abeyance
until further order of the Court.
PER CURIAM
Before Chief Justice Gray, and
Justice Johnson
Mediation order stayed
Briefs due
Motion held in abeyance
Order issued and filed November 17, 2022
[RWR]
Simmons v. White Knight Development, LLC Page 2 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487082/ | IN THE
TENTH COURT OF APPEALS
No. 10-22-00031-CV
IN THE INTEREST OF J.A.H., A CHILD
From the 170th District Court
McLennan County, Texas
Trial Court No. 2019-2166-4
MEMORANDUM OPINION
In three issues, pro se appellant, Freda Catherine Richie, contends that: (1) the trial
court did not conduct a full, fair, and efficient hearing on her motion for modification of
the trial court’s prior order in suit affecting the parent-child relationship; (2) appellee,
Russell Hardy, committed “Medical Negligence” by failing to continue with J.A.H.’s
psychology treatments; and (3) Hardy committed “Educational Negligence” by failing to
follow recommendations from J.A.H.’s school.1 We affirm.2
1 Despite notification from this Court that his appellee’s brief was late, Hardy has not filed an
appellee’s brief in this matter.
2 In light of our disposition, we dismiss all pending motions as moot.
Background
In a child-support-review order signed on August 7, 2019, Hardy and Richie were
named joint managing conservators of J.A.H., and Hardy was designated as the
conservator who could determine the child’s primary residence. Richie was ordered to
pay Hardy $205 a month in child support and $113 a month for medical support for J.A.H.
The trial court also determined that Richie owed $8,869 in retroactive child support and
ordered Richie to pay $94.35 a month to the Office of the Attorney General for retroactive
child support until J.A.H. reaches the age of majority. Thereafter, Richie was ordered to
pay $275.35 a month until the child-support arrearage is paid in full.
On September 27, 2019, Richie filed a petition to modify the parent-child
relationship, requesting that she be appointed the person who has the right to designate
the primary residence of J.A.H., that she and Hardy be awarded physical possession of
J.A.H. for an equal amount of time; that her child-support obligation be terminated; and
that Hardy should be ordered to pay her child support. Richie also requested temporary
orders that she have the exclusive right to made educational and medical decisions for
J.A.H, among other things. After a hearing, the trial court denied Richie’s motion for
temporary orders.
Richie later filed a motion to refer this matter to mediation, which the trial court
granted. Because the dispute was not resolved in mediation, it was set for a final hearing.
After the hearing, the trial court signed an order on Richie’s petition to modify the parent-
In the Interest of J.A.H., a child Page 2
child relationship. In this order, which was signed on January 4, 2022, the trial court
denied Richie’s request to modify custody for J.A.H.; granted judgment in favor of the
Office of the Attorney General for $4,742.93, which represented Richie’s child-support
arrearage at the time; and ordered Richie to pay Hardy $505.52 a month in child support
and $25 a month for medical support. It is from the trial court’s January 4, 2022 order
that Richie now appeals.
The Hearing on Richie’s Petition to Modify the Parent-Child Relationship
In her first issue, Richie contends that the trial judge did not conduct a full, fair,
and efficient hearing because he told the attorneys that he did not need to examine every
exhibit and that he was not concerned about what happened three or four years ago, but
rather what was happening in November 2021, when the hearing occurred.
“Parties have a right to a fair and impartial trial.” Markowitz v. Markowitz, 118
S.W.3d 82, 86 (Tex. App.—Houston [14th Dist.] 2003, no pet.) (citing Metzger v. Sebek, 892
S.W.2d 20, 37 (Tex. App.—Houston [1st Dist.] 1994, writ denied)). “One of the
fundamental components of a fair trial is a neutral and detached judge.” Id. (citing Ward
v. Village of Monroeville, 409 U.S. 57, 62, 93 S. Ct. 80, 84, 34 L. Ed. 2d 267 (1972)). “A judge
should not act as an advocate nor an adversary for any party.” Id. (citing Metzger, 892
S.W.2d at 38). “‘To reverse a judgment on the ground of improper conduct or comments
of the judge, we must find (1) that judicial impropriety was in fact committed and (2)
probable prejudice to the complaining party.’” Id. (quoting Metzger, 892 S.W.2d at 39).
In the Interest of J.A.H., a child Page 3
The scope of review is the entire record. . . . We note that judicial remarks
during the course of a trial that are critical or disapproving of, or even
hostile to, counsel, the parties, or their cases, ordinarily do not support a
bias or partiality challenge. . . . Such remarks may constitute bias if they
reveal an opinion deriving from an extrajudicial source; however, when no
extrajudicial source is alleged, such remarks will constitute bias only if they
reveal such a high degree of favoritism or antagonism as to make fair
judgment impossible.
Barrientos v. Nava, 94 S.W.3d 270, 291-92 (Tex. App.—Houston [14th Dist.] 2002, no pet.)
(internal citations & quotations omitted). In Barrientos, the court of appeals concluded
that the trial judge held strong opinions about the proposed trustee, but those opinions
were based on the testimony and evidence the trial judge heard and saw during trial. Id.
at 292. As such, the court of appeals concluded that there was no evidence of improper
bias. Id.
Here, Richie filed a petition to modify the parent-child relationship, and the trial
court conducted a final hearing on the petition on November 18, 2021. Richie’s trial
counsel repeatedly asked Richie questions about actions that transpired in the years
preceding the November 18, 2021 hearing. In response, the trial judge noted that he was
concerned about what was happening at the time of the hearing and that he had already
signed orders addressing the prior actions that served as the basis of much of Richie’s
testimony. In other words, the testimony and evidence regarding these actions were not
relevant regarding the issues to be resolved at the November 18, 2021 hearing.
Furthermore, there is no evidence of judicial impropriety or that the trial judge prohibited
the parties from trying their case or presenting evidence regarding the matter at hand—
In the Interest of J.A.H., a child Page 4
Richie’s petition to modify the parent-child relationship. Accordingly, we reject Richie’s
contention that the trial judge failed to conduct a “full, fair, and efficient hearing.” We
overrule her first issue.
“Medical Negligence”
In her second issue, Richie claims that Hardy committed “Medical Negligence” by
allegedly failing to continue with J.A.H.’s psychology treatments. In support of this issue,
Richie relies on Rule 707.469 of the Texas Administrative Code and section 261.001(4)(b)
of the Texas Family Code. See TEX. ADMIN. CODE. ANN. § 707.469; see also TEX. FAM. CODE
ANN. § 261.001(4)(b).
In her live pleading, Richie did not allege that Hardy committed “Medical
Negligence.” And because there was no pleading, there is no finding from the trial court
on this allegation. Given the absence of a pleading and a finding from the trial court on
this allegation, there is nothing preserved for us to review in this issue. See Cricket
Commc’ns, Inc. v. Trillium Indus., 235 S.W.3d 298, 311 (Tex. App.—Dallas 2007, no pet.)
(“Because there were no pleadings to support their requests for relief under the statute,
the trial court did not err in denying attorney’s fees.” (internal citation omitted)); see also
Celotex Corp. v. Tate, 797 S.W.2d 197, 207 (Tex. App.—Corpus Christi 1990, writ dism’d)
(“Because no jury question was submitted, we have no finding on the issue of successor
liability. By its failure to plead non-liability as a successor corporation, Celotex has
preserved nothing for review.” (internal citation omitted)).
In the Interest of J.A.H., a child Page 5
Furthermore, we note that both section 707.469 of the Texas Administrative Code
and section 261.004(4)(b) of the Texas Family Code pertain to investigations of child abuse
and neglect by the Texas Department of Family and Protective Services and, thus, are not
relevant to this proceeding, which involved the modification of a suit affecting the parent-
child relationship. See TEX. ADMIN. CODE. ANN. § 707.469; see also TEX. FAM. CODE ANN. §
261.001(4)(b).
And to the extent Richie challenges testimony from Hardy regarding his alleged
failure to continue J.A.H.’s medical treatment, we note that “[b]ecause of the fact-
intensive nature of reviewing custody issues, an appellate court must afford great
deference to the factfinder on issues of credibility and demeanor because the child’s and
parent’s behavior, experiences, and circumstances are conveyed through words,
emotions, and facial expressions that are not reflected in the record.” In re A.D.T., 588
S.W.3d 312, 317 (Tex. App.—Amarillo 2019, no pet.) (citing Chavez v. Chavez, 148 S.W.3d
449, 458 (Tex. App.—El Paso 2004, no pet.)). At the hearing, Hardy testified that he had
taken J.A.H. to psychologist Dr. Michael P. Carey every two or three weeks, although he
had missed a few appointments due to scheduling conflicts with the VA. In response to
questioning from the trial court, Hardy noted that he intends to continue taking J.A.H. to
therapy appointments with Dr. Carey. Based on our review of the record, we cannot say
that Richie has directed us to evidence in the record to overcome the great deference
In the Interest of J.A.H., a child Page 6
afforded to the factfinder on this issue of credibility and demeanor. See id.; see also Chavez,
148 S.W.3d at 458. We overrule Richie’s second issue.
“Educational Negligence”
In her third issue, Richie contends that Hardy committed “Educational
Negligence” by failing to follow recommendations from J.A.H.’s school. Like before,
Richie did not assert, in her live pleading, the allegation made in this issue. As such, there
is no finding from the trial court on this contention. Thus, there is nothing preserved in
this issue for us to review. See Cricket Commc’ns, Inc., 235 S.W.3d at 311; see also Celotex
Corp., 797 S.W.2d at 207. Moreover, Richie does not cite any law in support of her
contention in this issue. See TEX. R. APP. P. 38.1(i). Accordingly, we overrule Richie’s
third issue.
Conclusion
Having overruled all of Richie’s issues on appeal, we affirm the judgment of the
trial court.
STEVE SMITH
Justice
In the Interest of J.A.H., a child Page 7
Before Chief Justice Gray,
Justice Johnson,
and Justice Smith
(Chief Justice Gray concurring with a note)*
Affirmed
Opinion delivered and filed November 16, 2022
[CV06]
*(Chief Justice Gray concurs in the Court’s judgment. A separate opinion will not issue.)
In the Interest of J.A.H., a child Page 8 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487083/ | IN THE
TENTH COURT OF APPEALS
No. 10-21-00170-CR
CORDELL WILLIAM DALRYMPLE,
Appellant
v.
THE STATE OF TEXAS,
Appellee
From the 54th District Court
McLennan County, Texas
Trial Court No. 2019-652-C2
MEMORANDUM OPINION
Cordell William Dalrymple was convicted of two counts of aggravated sexual
assault of a child and sentenced to 40 years in prison for each count. See TEX. PENAL CODE
§ 22.021. A separate judgment of conviction was signed for each count.
Dalrymple’s appellate attorney filed a motion to withdraw and a brief in support
of the motion asserting that he has diligently reviewed the appellate record and that, in
his opinion, the appeal is frivolous pursuant to the United States Supreme Court opinion
in Anders, but also presenting nonreversible error in the judgments pursuant to this
Court’s order in Allison. See Anders v. California, 386 U.S. 738, 87 S. Ct. 1396, 18 L. Ed. 2d
493 (1967); Allison v. State, 609 S.W.3d 624, 628 (Tex. App.—Waco 2020, order).
Counsel's brief evidences a professional evaluation of the record for error and
compliance with the other duties of appointed counsel. We conclude that counsel
performed the duties required of appointed counsel. See Anders, 386 U.S. at 744; High v.
State, 573 S.W.2d 807, 812 (Tex. Crim. App. 1978); see also Kelly v. State, 436 S.W.3d 313,
319-320 (Tex. Crim. App. 2014); In re Schulman, 252 S.W.3d 403, 407 (Tex. Crim. App.
2008).
In reviewing the Anders portion of this appeal, we must, "after a full examination
of all the proceedings, ... decide whether the case is wholly frivolous." Anders, 386 U.S. at
744; see Penson v. Ohio, 488 U.S. 75, 80, 109 S. Ct. 346, 102 L. Ed. 2d 300 (1988); accord
Stafford v. State, 813 S.W.2d 503, 509-11 (Tex. Crim. App. 1991). An appeal is "wholly
frivolous" or "without merit" when it "lacks any basis in law or fact." McCoy v. Court of
Appeals, 486 U.S. 429, 439 n. 10, 108 S. Ct. 1895, 100 L. Ed. 2d 440 (1988). After a review of
the entire record in this appeal, we have determined the appeal to be wholly frivolous.
See Bledsoe v. State, 178 S.W.3d 824, 826-27 (Tex. Crim. App. 2005); Cummins v. State, 646
S.W.3d 605, 620-621(Tex. App.—Waco 2022, pet. ref'd).
As noted previously, despite finding no reversible error, counsel has presented
one issue of nonreversible error, that the trial court erred in assessing costs in both counts
in violation of Texas Code of Criminal Procedure article 102.073(a), the “single criminal
action” provision. Where allegations and evidence of more than one offense are
presented in a single trial or plea proceeding, the trial court errs in assessing costs in each
conviction. Hurlburt v. State, 506 S.W.3d 199, 203-204 (Tex. App.—Waco 2016, no pet.).
Dalrymple v. State Page 2
The State concedes that the judgments for both counts should be reformed to reflect that
costs are assessed in only one judgment. We agree that costs should have been assessed
in either Count I or Count II, but not both. See Hurlburt v. State, 506 S.W.3d 199, 203-204
(Tex. App.—Waco 2016, no pet.). Accordingly, we modify the judgment in Count II to
strike the portion of the “special findings or orders” section on page 2 of the trial court’s
judgment which states,
“The Court adjudges statutory court costs against the defendant. The Court
orders the defendant to pay all statutory court costs. The Court orders the
clerk to collect all statutory court costs.”1
Therefore, because only one judgment is modified, the trial court's Judgment of
Conviction by Jury, Count I, is affirmed, the trial court’s Judgment of Conviction by Jury,
Count II, is affirmed as modified, and counsel’s motion to withdraw from representation
of Dalrymple is granted. See Cummins v. State, 646 S.W.3d 605 (Tex. App.—Waco 2022,
pet. ref’d).
TOM GRAY
Chief Justice
Before Chief Justice Gray,
Justice Smith, and
Justice Wright 2
Affirmed; affirmed as modified
Opinion delivered and filed November 16, 2022
Do not publish
[CRPM]
1
The bill of cost should be modified to reflect the cost due in the judgment as it has been modified by this
opinion.
2
The Honorable Jim R. Wright, Senior Chief Justice (Retired) of the Eleventh Court of Appeals, sitting by
assignment of the Chief Justice of the Texas Supreme Court. See TEX. GOV'T CODE §§ 74.003, 75.002, 75.003.
Dalrymple v. State Page 3 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494085/ | Opinion
STEPHEN RASLAVICH, Bankruptcy Judge.
Introduction
Before the Court are a number of motions related to Plaintiffs Complaint for Declaratory Relief. That Complaint seeks a determination that the real estate listed in his Bankruptcy Schedule A is his property.1 Defendant disputes that claim and has filed a Motion for Summary Judgment. After Plaintiff filed a reply to that motion, Defendant amended it to add a request for dismissal for failure to join necessary parties. Plaintiff filed a motion to consolidate this adversary proceeding with the case which he brought against the person whose name is on the deed to the property he claims to be his. All of the motions are opposed. A hearing on the three requests was held on October 24, 2006, after which the Court took the matters under advisement. Because the Motion for Summary Judgment is potentially dispositive of the entire matter, the Court will address that motion first. For the reasons set forth below, the Defendant’s Motion for Summary Judgment will be granted.2
Standard for Summary Judgment
Motions for summary judgment are governed by Rule 56 of the Federal Rules of Civil Procedure (“Fed.R.Civ.P.”).3 Pursuant to Rule 56, summary judgment should be granted when the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). For purposes of Rule 56, a fact is material if it might affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The moving party has the burden of demonstrating that no genuine issue of fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986).
The court’s role in deciding a motion for summary judgment is not to weigh evidence, but rather to determine whether the evidence presented points to a disagreement that must be decided at trial, or whether the undisputed facts are so one sided that one party must prevail as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. at 247-252, 106 S.Ct. at 2509-12. In making this determination, *723the court must consider all of the evidence presented, drawing all reasonable inferences therefrom in the light most favorable to the nonmoving party, and against the movant. See United States v. Premises Known as 717 South Woodward Street, 2 F.3d 529, 533 (3rd Cir.1993); J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1531 (3d Cir.1990), cert. denied, 499 U.S. 921, 111 S.Ct. 1313, 113 L.Ed.2d 246 (1991); Gould, Inc. v. A & M Battery and Tire Service, 950 F.Supp. 653, 656 (M.D.Pa.1997).
The Defendant’s Evidence
The burden of proof falls first on the Defendant who is the moving party here. See Huang v. BP Amoco, 271 F.3d 560, 564 (3d Cir.2001) (“The moving party bears the initial burden of demonstrating the absence of any genuine issue of material fact.”) It is his aim to prove that Plaintiff transferred the property. To do that, he relies on admitted pleadings and documentary evidence.4 That evidence establishes the following: in November 1999 the Plaintiff was the owner of the real property located at 183 Orchard Circle in Lans-dale, Pennsylvania. Complaint, Answer ¶ 7. At that time, Plaintiff placed a mortgage on the property to secure a loan. Id. Subsequently, he defaulted on the loan and the property was scheduled for a Sheriffs Sale on July 27, 2005. Id. ¶¶ 8,10 In the runup to the sale, the parties appear to have been discussing some arrangement whereby the Plaintiff would sell the property to the Defendant, who, in turn, would lease it back to the Plaintiff. Id. ¶¶ 13,14 On the day scheduled for the Sheriffs sale, the parties executed two agreements: the Real Estate Purchase Contract and the Residential Lease with Option to Purchase. See Complaint, Answer ¶¶ 17, 18; Amended Motion for Summary Judgment, Ex. B, C. The Purchase Contract provided that Plaintiff would convey the property to Defendant or a nominee of his choosing and scheduled a closing on the property for September 30, 2005. Amended Motion, Ex. B. The Lease provided that Plaintiff would rent the property for two years with an option to buy it back. Id. Ex. C. The Sheriffs sale did not occur because the mortgage arrears were paid. Complaint ¶¶ 11, 12; Amended Motion, Ex. D.5 On September 30, 2005, a deed was executed whereby the Plaintiff appears to have conveyed the property to Helen T. Roytman.6 Amended Motion, Ex. E. The Plaintiff continues to reside in the property and receives mail correspondence there addressed to Roytman. See Docket for Debtor’s Main Case No. 06-10675; Complaint ¶¶ 25,26.
To the Court, this evidence tends to confirm Plaintiffs position. The Purchase Contract, Lease and Deed all appear to have been validly executed. Each is signed by both parties and the Deed was executed in the presence of a notary. All of the documents are consistent with each other.7 The Purchase Contract provides *724that Plaintiff would convey the property to Defendant or his nominee, which appears to have happened here. See Deed. The Lease provides that Plaintiff would occupy the property and he is living there now. See Voluntary Petition. The Contract provides for a closing on September 30, 2005, which is the date of the Deed. The Contract also lists a down payment equal to the amount paid to stop the Sheriffs Sale. Compare Ex. B and D. But the most probative piece of evidence is the Deed which is a notarized document. The significance of the of the notary seal cannot be overestimated: “A notary’s certificate of acknowledgment is prima facie evidence of the due execution of the instrument.” Sheaffer v. Baeringer, 346 Pa. 32, 36, 29 A.2d 697, 699 (1943). These documents— as well as what is alleged and admitted in the pleadings — demonstrate that Plaintiff divested himself of the property. The Court, therefore, finds that the Defendant has supported his motion for summary judgment. The burden thus shifts to Plaintiff to demonstrate that his claim of ownership remains a triable issue of fact.
The Plaintiff’s Response
Where Plaintiff identifies a material factual dispute is in the validity of the Deed. Plaintiff maintains that the Deed is invalid because he never signed it. Reply, 1. But there was disagreement at the hearing as to what evidence Plaintiff was required to offer to make the issue triable. Plaintiff maintains that his pleadings are enough and that the issue boils down to one of credibility. Transcript (T-) 11,16 To quote counsel, “it’s a question of who [sic ] you believe.” T-14. Has Plaintiff articulated the correct standard for assessing this summary judgment request?
He has not. In pertinent part, Rule 56 provides:
[w]hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of the adverse party’s pleading, but the adverse party’s response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial.
F.R.C.P. 56(e) (emphasis added). The Supreme Court has interpreted this rule to mean exactly what it says: “To successfully oppose entry of summary judgment, the nonmoving party may not simply rest on its pleadings, but must designate specific factual averments through the use of affidavits or other permissible evidentiary material that demonstrate a triable factual dispute.” Celotex Corp. v. Catrett, 477 U.S. at 324, 106 S.Ct. at 2553; Anderson v. Liberty Lobby, Inc., 477 U.S. at 247-50, 106 S.Ct. at 2509-11. Such evidence must be sufficient to support a jury’s factual determination in favor of the nonmoving party. Id. Evidence that merely raises some metaphysical doubt regarding the validity of a material fact is insufficient to satisfy the nonmoving party’s burden. Matsushita Electric Industrial Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1355-56, 89 L.Ed.2d 538 (1986). If the nonmoving party fails to adduce sufficient evidence in connection with an essential element of the case for which it bears the burden of proof at trial, the moving party is entitled to entry of summary judgment in its favor as a matter of law. Celotex Corp. v. Catrett, 477 U.S. at 322-23, 106 S.Ct. at 2552-53. Has Plaintiff satisfied his burden of offering evidence to support his claim that he did not sign the deed?
He has not. An acknowledgment of a deed can only be impeached by clear and convincing evidence of fraud. Popovitch v. Kasperlik, 70 F.Supp. 376, *725383-84 (W-D.Pa.1947). Arguably, Plaintiff makes an implicit claim of fraud when he alleges that he “has never attended a settlement or conveyed title to [the property];” that “at no other time did [he] sign a deed or any other documents in favor of the Defendant” and that “ownership of the property was never given by [him] to Defendant.” Complaint, ¶¶ 20-22. However, those allegations are not supported by evidence (i.e., “specific facts”) of fraud. All that is offered is supposition that he might have been elsewhere when the closing took place. (T-14,15) Suppositions, however, are not proofs. See Druker v. Thomas Jefferson University, 2005 WL 579741 *4 (E.D.Pa.2005) (requiring plaintiff to offer evidence in support of subjective suppositions). They are the “metaphysical doubt[s]” that the High Court deemed deficient in Matsushita, supra. At a minimum, some explanation of where he was on the day of the purported conveyance is required here. Without any evidence, the Court cannot make any inferences — much less reasonable ones — in Plaintiffs favor. See Matsushita, 475 U.S. at 587, 106 S.Ct. at 1356 (explaining that inferences must be drawn from underlying facts) Put another way, his failure to produce evidence of a triable fact means that he cannot enjoy any of the presumptions afforded a party against whom summary judgment is sought. See Tunnell v. Wiley, 514 F.2d 971, 976 (3d Cir.1975) (“Given the opportunity to respond to a movant’s affidavits, an adverse party may not rest upon a mere cryptic and conclusory allegation in his pleading, but must set forth specific facts showing that there is a genuinely disputed factual issue for trial. Where this opportunity to supplement the record is ignored, summary judgment for the movant who has carried his burden of proof is appropriate.”) Based on the evidence offered by Plaintiff at the hearing, the Court finds that Defendant is entitled to summary judgment in this adversary proceeding.8
The Affidavit
The day after the hearing, the Plaintiff hand-delivered to the Court’s *726chambers a document styled “Affidavit.” This comes after the Court advised Plaintiff that his mere denials were insufficient to survive summary judgment and without leave to reopen and supplement the record. Is this permitted by the applicable rules?
It is not. Rule 56 provides that “[t]he adverse party prior to the day of hearing may serve opposing affidavits.” F.R.C.P. 56(c) (emphasis added). Likewise, Bankruptcy Rule 9006 provides, in pertinent part, that “opposing affidavits may be served not later than one day before the hearing, unless the court permits them to be served at some other time.” B.R. 9006(d) (emphasis added). Under either rule, then, Plaintiffs affidavit is untimely. In such case, Bankruptcy Rule 9006 which provides that “the court for cause shown may at any time in its discretion ... (2) on motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect.” B.R. 9006(b)(1) (emphasis added). Because plaintiffs affidavit was not accompanied by a motion, it is out of order. Under these circumstances, the Court lacks discretion to admit the affidavit. See Lujan v. Nat’l Wildlife Fed., 497 U.S. 871, 896-97, 110 S.Ct. 3177, 3192-93, 111 L.Ed.2d 695 (1990) (stating that request for enlargement after expiration of deadline requires motion demonstrating excusable neglect)
But even assuming that the Court were to admit the affidavit, the result would be the same. The affidavit is wholly self-serving; it does no more than paraphrase what it is in the Complaint. More to the point, it never controverts the evidence which the Defendant has offered. On summary judgment, this is fatal as the Supreme Court has explained:
In ruling upon a Rule 56 motion, a District Court must resolve any factual issues of controversy in favor of the non-moving party only in the sense that, where the facts specifically averred by that party contradict facts specifically averred by the movant, the motion must be denied. That is a world apart from “assuming” that general averments embrace the “specific facts” needed to sustain the complaint. As set forth above, Rule 56(e) provides that judgment “shall be entered” against the nonmoving party unless affidavits or other evidence “set forth specific facts showing that there is a genuine issue for trial.” The object of this provision is not to replace conclusory allegations of the complaint or answer with conclusory allegations of an affidavit.
It will not do to “presume” the missing facts because without them the affidavits would not establish the injury that they generally allege. That converts the operation of Rule 56 to a circular promenade: plaintiffs complaint makes general allegation of injury; defendant contests through Rule 56 existence of specific facts to support injury; plaintiff responds with affidavit containing general allegation of injury, which must be deemed to constitute averment of requisite specific facts since otherwise allegation of injury would be unsupported (which is precisely what defendant claims it is).
Lujan, supra, 497 U.S. at 888-89, 110 S.Ct. at 3188-89 (emphasis added). Yet this is exactly what the Affidavit would have the Court do. It dresses up the allegations in the Complaint as statements under oath. And it does so without adding a shred of specificity or detail. Some degree of elaboration on the forgery claim is required especially given the presence of the notary seal on the deed and the Plaintiffs unadorned claim that he was elsewhere, the seal notwithstanding. The no*727tary is a neutral party to this dispute with no stake in the outcome. See Lewars v. Weaver, 121 Pa. 268, 291, 15 A. 514, 518 (1888) (observing that a notary is an entirely disinterested person as to transaction he witnesses) So this is not a matter requiring Plaintiff to offer more proof than the movant or to prove a negative; rather, he must offer some evidence that would support a verdict in his favor. The problem for Plaintiff is that his Affidavit, even if it were admitted, is wholly without probative value.9 It is no more than a facile attempt to manufacture a triable issue of fact so as to survive summary judgment. In that regard it fails.
Summary
The Court holds that Defendant is entitled to summary judgment. Entry of judgment in Defendant’s favor, in turn, moots both the Defendant’s Motion to Join as well as the Plaintiffs Motion to Consolidate, neither of which need further be considered.
. It is, essentially, an action to quiet title. See Pa.R.C.P. 1061(b)(3) (describing an action to quiet title as, inter alia, an action to compel an adverse party to admit the invalidity of a deed)
. The Complaint alleges that this is a core proceeding when it references 28 U.S.C. § 157. Complaint, V 3. It explains that it seeks to determine the Plaintiff's and Defendant’s interest in the subject real estate. Id. While that sounds closest to subsection (b)(2)(K) (determining the validity extent and priority of liens), it is more akin to subpara-graph (H), proceedings regarding fraudulent conveyances. However characterized, the allegation of core jurisdiction is admitted by the Defendant. See Answer ¶ 3. This is, therefore, a core matter over which the Court may exercise jurisdiction.
.Fed.R.Civ.P. 56 is applicable to the instant proceeding pursuant to Rule 7056 of the Federal Rules of Bankruptcy Procedure ("Fed.R.Bankr.P.”)
. The rule does expressly require affidavits. See F.R.C.P. 56(a).
. The Defendant alleges that he cured the arrears but the Plaintiff is inexplicably reticent as to whether that it is the case. Complaint, Answer ¶¶ 11, 12. Regardless, the deposit reflected on the Purchase Contract is the same amount that was needed to reinstate the mortgage. It appears safe to conclude, then, that Defendant cured the mortgage default.
. The Amended Motion states that Plaintiff assigned his right to purchase the property to Helen Roytman. Helen Roytman is one of the Defendants named in the adversary proceeding no. 06-00450 which the Plaintiff seeks to consolidate with this one. The record, however, contains no express assignment.
. In the Complaint, Plaintiff maintains that the Purchase Contract is incomplete but does not specify how that document is deficient. *724See Complaint, ¶ 17. The Court's own review of the Contract does not reveal any deficiency.
. At the hearing the Plaintiff challenged for the first time the admissibility of the Deed. T-4. He maintains that the Defendant's copy of the Deed is not authenticated. T-12. Without a certified copy of the deed, his argument concludes, the document is not admissible. Id.
The Court's review of that issue reveals that the Federal Rules of Evidence apply to bankruptcy cases. See B.R. 9017; F.R.E. 1101(b). A condition precedent to admissibility of a document is authenticity. See F.R.E. 901, Advisory Committee Notes (“This requirement of showing authenticity ... falls into the category of relevancy dependent upon fulfillment of a condition of fact and is governed by ... Rule 104(b)”) A document is authentic when the proponent offers evidence sufficient to support a finding that the document is what the proponent says it is. Id. While Rule 901 provides illustrative examples of methods of authentication, Rule 902 recognizes that some evidence is intrinsically authentic. Among such examples of self-proof are certified copies of public records and acknowledged documents. See F.R.E. 902(4) and (8). Although the Deed as offered contains a notary's acknowledgment, it is only a copy, and not an original. This matters given rule 1003’s disallowance of a duplicate in lieu of an original document where authenticity is at issue. See F.R.E. 1003(1). Thus, the copy of the deed would not be self-authenticating under rule 902(8). Even so, the Court observed that the notary seal and recording information on the copy are indications of veracity. T-12. For that reason, the Court advised Plaintiff that if he wishes to press the issue of authenticity, he may file a motion for reconsideration on that point. T-13. The Court is skeptical, however, that this is an argument borne of desperation. Accordingly, if Plaintiff presses this point (which he can easily confirm) and if it turns out that Defendant produces a certified copy identical to the copy already in the record, then the Court will consider Rule 9011 and Plaintiff may be required to pay the costs of putting Defendant through that needless exercise. T-13,14.
. The Court notes in passing that the signature on the Deed appears strikingly the same as that on Plaintiff's Affidavit. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494086/ | MEMORANDUM DECISION REGARDING COMPENSATORY CONTEMPT DAMAGES, SECOND BILL OF PARTICULARS
DENNIS MONTALI, Bankruptcy Judge.
Plaintiff Lehman Brothers Holdings Inc. (“Lehman”) has filed a motion entitled Lehman Brothers Holdings Ine.’s Motion and Memorandum Summarizing and Requesting the Award of Compensatory Contempt Damages Associated with Lehman’s Second Bill of Particulars (the “Motion,” docket no. 1265) together with supporting documents (docket nos. 1264-1279, filed Apr. 13-14, 2006). The Motion covers the period from November 1, 2004, through December 31, 2005. Lehman seeks $3,369,891.521 in compensatory contempt *5damages consisting of $3,239,939.36 in legal fees and $129,952.16 in expenses. For the reasons set forth below the court will award Lehman $3,197,891.02.
II. Background2
In violation of the automatic stay John Kontrabecki (“Kontrabecki”) caused the dilution of shares of stock of two Polish subsidiaries that were previously 100% owned by debtor The Kontrabecki Group LP (“TKG”). The dilution reduced TKG’s interest to that of a minority shareholder. This adversary proceeding was commenced by Lehman and Aron M. Oliner, the Chapter 11 Trustee of The Kontrabecki Group Limited Partnership (“Trustee”), to unwind the transfer of control of the Polish subsidiaries and to recover damages from Kontrabecki. Lehman is now prosecuting this action pursuant to a settlement with Trustee, as described in the Amended Memorandum Decision Regarding Compensatory Contempt Sanctions filed on August 5, 2005 (docket no. 988).3
Kontrabecki alleged that he was unable to unwind the transfer but over time the evidence accumulated that he was controlling transferee Piotr Kukulka (“Kukulka”) to frustrate the unwind. The court imposed coercive sanctions including fines and eventually periods of incarceration. Progress was halting and when not sufficiently coerced Kontrabecki frustrated the unwind but eventually it was accomplished.
Lehman sought damages flowing from Kontrabecki’s contumacious behavior, limited at this point to legal fees and expenses incurred by it and Trustee. The court has ruled that compensatory damages are appropriate when the “contumacious behavior significantly contributed to the [harm]” and “such a result was foreseeable.” In re General Motors Corp., 110 F.3d 1003, 1018 (4th Cir.1997). The attorneys’ fees and expenses must also be reasonable. Applying these standards the court previously awarded Lehman a total of $5,968,230.00 on its request for $6,664,295.00 in compensatory contempt damages for the period from March 1, 2003, through October 31, 2004 (the “Award”). Lehman’s present Motion includes fees incurred in attempting to collect the prior Award.
Kontrabecki filed an Opposition to the Motion and supporting papers on August 23, 2006 (docket nos. 1346-1348). Lehman filed a Response on September 8, 2006 (docket no. 1360). The matter was argued on September 26, 2006, and submitted for decision.
III. Issues
A. General objections
Kontrabecki argues that Lehman’s request for attorneys’ fees and expenses *6“crosses the line between compensatory-civil contempt sanctions and punitive sanctions.” Opp. p. 1:22-23 (footnote omitted). He claims that Lehman was inefficient, has “overlawyered virtually every issue,” and has had at least two and sometimes three lawyers participating in every hearing, telephone conference, and deposition. Opp. pp. 3:4-12, 24:26-27, 25:2-11. Kontrabecki has reviewed the time spent by Lehman’s principal timekeepers and arrived at an overall percentage reduction that he believes is justified.4 On this basis he argues that Lehman should recover no more than $1,200,824.00 in fees and $48,164.00 in expenses, a reduction of over two thirds. Opp. p. 4:1-16 and Appendix.
The court rejects this blanket reduction. Kontrabecki has provided no rational basis for the percentage reductions he chooses. Nor has the court’s own review suggested that any sort of blanket reduction in Lehman’s fees and expenses is warranted. It is true that Lehman has vigorously litigated this adversary proceeding using a team of lawyers, but Kontrabecki has had his own team of two or three lawyers at virtually every hearing and has been at least as vigorous in his own litigation and efforts to frustrate the unwind. Lehman would be disadvantaged if it put forward a lesser legal team to deal with Kontrabecki.
Kontrabecki implies that he has been caught in a trap in which he is required to effect the unwind but prevented by Lehman from doing so, and that Lehman’s fees should be disallowed on that basis. He claims that Lehman “focused its efforts on preventing [him] from raising” the $5 million that he claims he needed to recover the Polish subsidiaries’ stock. Opp. p. 2:3 (emphasis added). Lehman’s alleged motive was to keep him incarcerated indefinitely. The court is not persuaded.
The court has previously found that Kontrabecki controls Kukulka, so Kontrabecki could have avoided all delays by simply directing Kukulka to accomplish the unwind. Regardless whether the $5 million transfer to Kukulka was a sham payment or served some other purpose, Kontrabecki has not established that he needed to raise any funds at all.
Alternatively, assuming for the sake of discussion that Kontrabecki and Kukulka had a falling out (despite all the evidence to the contrary) and that it was therefore necessary for Kontrabecki to raise the $5 million and negotiate complex unwind documentation, Kontrabecki himself was still primarily responsible for any delays and inefficiency in accomplishing these tasks. The court has previously found that many aspects of the unwind documentation presented by Kontrabecki were unreasonable, such as provisions (allegedly drafted by Kukulka) for Kontrabecki’s exculpation by Lehman. Lehman was also entitled to be particularly cautious given Kontrabecki’s history, which includes transferring control of TKG’s only assets away from its bankruptcy estate and then repeatedly frustrating the unwind of that transfer. For example, Lehman was justified in seeking safeguards before Kontrabecki was permitted to liquidate substantial United States assets and transfer $5 million in proceeds to Poland. The court finds below that not all of Lehman’s requested safeguards were reasonable but most issues could have been resolved quickly by Kontrabecki had he been inclined to do.
Focusing on Lehman’s efforts to collect the Award, Kontrabecki objects that Lehman incurred nearly $1.5 million on this *7task which he calls an “obscene” and unjustified amount. Opp. p. 2:20-22. Although the court agrees that there has been extensive legal work in this adversary proceeding, there is ample evidence that Lehman’s efforts to collect the Award were necessary and that Kontrabecki was not using his best efforts to pay the Award. One example among many is Kontrabecki’s preposterous representation through his attorneys that he interpreted Lehman’s demands and the court’s orders directing him to pay the Award to mean that he should pay only the entire dollar amount and was therefore under no obligation to pay any lesser portion. See Transcript, Dec. 14, 2005, pp. 7:18-8:5 (attached as Ex. 5 to Declaration of Peter J. Benvenutti re Transcripts in Support of Lehman Brothers Holdings Inc.’s Documentary Proof of Compensatory Contempt Damages, filed Apr. 13, 2006, docket no. 1268). Faced with such tactics it is not surprising that Lehman incurred a large amount of attorneys’ fees in collecting the Award.
For all of these reasons the court will not impose any blanket reduction in Lehman’s fees and expenses. Each of Lehman’s activities challenged by Kontrabecki will be evaluated on its own merits.
B. Specific objections
1. The 200j Thanksgiving Furlough
Kontrabecki points out that although Lehman did not oppose his request for a Thanksgiving furlough it would not stipulate to a furlough, forcing him to file a motion and appear at a hearing to obtain a brief release from incarceration. Lehman argues that it was appropriate to require a hearing so that it could express its reluctance both to the court and to Kontrabecki, and not give the impression that future furloughs would be acceded to in the ordinary course. On this point the court agrees with Kontrabecki. With or without a hearing both the court and Kontrabecki were well aware of Lehman’s reluctance to accede to any relaxation of coercive sanctions.
That said, as Kontrabecki tacitly concedes that “the task at hand” was not so much whether he would have a furlough as “determining the procedure for [his] release and subsequent resubmission to custody.” Opp. p. 7:2-3. The hearing was useful for that purpose so the court will only disallow a portion of Lehman’s fees.
The court has not been able to determine the precise amount of fees attributable to this task. The court attempted to do so by reviewing daily time records and by cross-referencing Lehman Brothers Holdings Inc.’s Second Bill of Particulars Regarding Compensatory Contempt Damages, filed on April 13, 2006 (docket no. 1266) (the “Second Bill of Particulars”), p. 5:4-6, with Lehman’s Motion (docket no. 1265), Ex. B, to determine that this task falls within category “hh.” Unfortunately, category “hh” includes other tasks and the “hh” time entries are not broken down into smaller time increments. For example, an entry for “11/23/04” attached to the declaration of Mr. Kaufman (docket no. 1269, filed Apr. 13, 2006) (“Kaufman Deck”) reflects 6.4 hours for “hh” tasks that include everything from “Polish developments” to Kontrabecki’s access to a telephone while in prison to “Kontrabecki’s release over holidays.” It is impossible to know precisely how much time is attributable to the Thanksgiving furlough. See also Declaration of Peter J. Benvenutti in Support of Lehman Brothers Holdings Inc.’s Documentary Proof of Compensatory Contempt Damages, filed Apr. 13, 2006 (docket no. 1273) (“Benvenutti Deck”), Ex. A, entries for 11/15/04 through 11/24/04. In the absence of greater detail the court has used a rough estimate of Lehman’s time spent on *8this task. The court has probably overestimated the time spent — this task probably did not take much time, considering that no papers were filed by Lehman in opposition to Kontrabecki’s motion for a furlough. This seems appropriate because it is Lehman’s initial burden to establish the proper amount of its fees. The court has assumed that this task occupied as much as 7 hours of Mr. Kaufman’s time at $435/ hr., 1 hour of Mr. Brow’s time at $260/hr., 7 hours of Mr. Benvenutti’s time at $590.00/hr., and 0.1 hours of Ms. Toops’ time at $335/hr., for a total of $7,468.50. Out of this amount the court will disallow $4,000.005
2. Lehman’s “Protective Motion ”
Kontrabecki objects that after he and Lehman agreed to unwind documentation Lehman filed a motion for approval of the documentation which in reality sought additional relief that the court later denied (docket no. 877, filed Apr. 26, 2005) (the “Protective Motion”). Kontrabecki points out that at the hearing on the Protective Motion the court characterized it as (a) seeking an advisory opinion, (b) attempting to rewrite a portion of the parties’ agreement, and (c) seeking to expand the court’s exclusive jurisdiction without an adequate basis to do so. Opp. pp. 8:10-17, 9:14-10:3. Lehman first responds that its concerns about how Kontrabecki might undermine the unwind transaction were justified. Resp. p. 10:6-11. That is not the point. The issue is not whether Lehman’s concerns were justified but what remedies it sought and whether Kontrabecki should be forced to pay legal fees for seeking remedies which the court denied. On this issue the court mostly agrees with Kontrabecki. The court is nevertheless somewhat persuaded by Lehman’s alternative argument that the motion served its purpose. Resp. p. 8:23-25. The arguments and colloquy at a lengthy hearing on the Protective Motion on April 28, 2005, clarified some complex legal issues and most of those issues would have had to be addressed anyway when Kontrabecki later attached the $5 million in Poland before those funds were transferred to Kukulka. Balancing these considerations the court will disallow roughly two thirds of Lehman’s time spent on the Protective Motion.
The court has reviewed the time entries for the weeks before and after the Protective Motion was filed on April 26, 2005, and estimates that this task occupied as much as 19 hours of Mr. Kaufman’s time at $435/hr., 0.4 hours of Mr. Brow’s time at $260/hr., 9.5 hours of Mr. Benvenutti’s time at $630/hr., 0.6 hours of Ms. Toops’ time at $405/hr., and 9.0 hours of Ms. Whitehead’s time at $230/hr. for a total of $16,667.00.6 Out of this amount the court will disallow $12,000.00.
3. Motion for Release
Kontrabecki argues that Lehman should not be compensated for opposing *9his Motion for Release from Coercive Sanctions filed on May 2, 2005 (docket no. 894) because the court released him on indefinite furlough. As Kontrabecki concedes, however, that release was conditioned on a strict timetable for wiring the $5 million to Poland, executing the share transfer agreements, and registering the share transfers. Opp. pp. 11:25-12:2.
Kontrabecki claims that there was “no justification for keeping him incarcerated when all the steps necessary to finalize the transfers were within the sole discretion of Lehman to take” (Opp. p. 12:2-4) but the steps just mentioned were largely within his control, either directly or through Kukulka. Lehman’s attorneys’ fees for opposing the Motion for Release are compensable and Kontrabecki’s objections on this point are overruled.
4. Delayed registration in Poland
Kontrabecki claims that he was forced to remain incarcerated for two additional months because of a bureaucratic delay in the Polish courts in transferring a file from Warsaw to Kielce, where Kukulka had moved the corporate headquarters of one of TKG’s Polish subsidiaries. Kontrabecki claims that Lehman’s activities at this time did nothing to further the registration and that he had “no role” in the process so, he implies, no amount of coercion could help the unwind because it was out of his hands. Opp. p. 13:17.
This ignores the court’s contrary findings. Kontrabecki himself quotes the court’s finding that Kukulka’s activities that caused the bureaucratic delays were part of “the scheme” with Kontrabecki, and that “it’s time to put the pressure back on” in the form of coercive sanctions. Opp. p. 13:12-14 (quoting Transcript, June 23, 2005, p. 8:2-25).
Kontrabecki also argues that Lehman should have taken the initiative and met sooner with the Chairman of the Warsaw court to try to expedite the transfer of the file to Kielce. Opp. pp. 16:3-17:7.7 Lehman principally argues that it was Kontrabecki’s obligation to “clean[ ] up the mess he had created.” Resp. p. 11:9-10. The court is not entirely persuaded by this argument because in the court’s view Lehman was not entitled to sit by indefinitely even if the primary responsibility was with Kontrabecki to effect the unwind. The court is more persuaded by Lehman’s alternative argument that it saw the prospect of becoming proactively involved in the registration process as a minefield because Kontrabecki would have seized on any opportunity to argue that Lehman was responsible for any delay or disruption in the unwind. Lehman therefore was hesitant before getting involved. Lehman’s concerns were legitimate. Kontrabecki had an affirmative duty to try to accomplish the unwind, he has pointed to no evidence that he cooperated with Lehman to determine what steps could be taken to expedite the process, and it is too easy for him to say in hindsight that Lehman should have taken the initiative that he did not take himself. Lehman’s attorneys’ fees on this issue are compensable and Kontrabecki’s objections to those fees are overruled.
5. Lehman’s Motion to Expand Coercive Sanctions
After Lehman learned that Kontrabecki had attached the $5 million in Poland — the funds that Kukulka had al*10legedly demanded in connection with the unwind — Lehman filed a Motion and Memorandum of Law of Lehman Brothers Holdings Inc. to Modify and Expand Coercive Sanctions Against Defendant John Kontrabecki (docket no. 939, filed July 5, 2005) (the “Motion to Expand Coercive Sanctions”). The motion sought to extend Kontrabecki’s incarceration, even after the unwind transfers were registered in Poland, until he either dismissed his Polish lawsuit against Kukulka or else obtained a release from Kukulka that waived potential claims against Lehman and waived Kukulka’s ability to challenge the unwind. Lehman argued that the alleged dispute between Kontrabecki and Kukulka was a sham, and alternatively that it gave Kukulka numerous avenues to disrupt or rescind the unwind, and that these were sufficient grounds to keep Kontrabecki incarcerated. The motion was lengthy and was supported by a large appendix and an extensive declarations from Lehman’s Polish counsel (docket no. 941, filed July 5, 2005, and later no. 973, filed July 21, 2005) about the possible ramifications of what Kontrabecki had already done and what he and Kukulka might do in future.8
The court denied Lehman’s motion because the harms it anticipated might never occur and the incarceration it proposed had no definite end and could have lasted literally years, until Kontrabecki’s lawsuit against Kukulka was resolved by the Polish courts. Nevertheless, Lehman is correct that the motion accomplished much of what it sought. In denying the motion the court (a) rejected Kontrabecki’s argument that the unwind documentation essentially gave him permission to sue Kukulka regardless of any future adverse consequences to TKG and Lehman, (b) held that if Kontrabecki’s activities turn out to have prevented the complete accomplishment of the unwind then he “has violated the [court’s] orders,” and (c) ruled that “[i]t is foreseeable that [the] harms [anticipated by Lehman] might arise” from Kontrabecki’s activities. See Memorandum Decision Regarding Motion to Modify and Expand Coercive Sanctions Against Defendant John Kontrabecki, filed Aug. 9, 2005 (docket no. 1004) at 4:6-12 and n. 6 (attached as Ex. 22 to Request for Judicial Notice in Support of Defendant John Kontrabecki’s Opposition to Lehman Brothers Holdings Inc.’s Motion for Award of Compensatory Contempt Damages Associated with the Second Bill of Particulars, filed Aug. 23, 2006, docket no. 1347 (the “Kontrabecki RJN”)).
Since the date of the court’s ruling Kukulka has apparently made no attempt to rescind the unwind. Kontrabecki argues that Kukulka’s inaction (and the fact that the unwind happened at all) are evidence that Lehman’s responses to his activities were unnecessary. See, e.g., Opp. pp. 10:17-11:4, 12:6-10, 14:3-4. To the contrary, Kukulka’s inaction after more pressure was put on Kontrabecki is further evidence that Kontrabecki controls Kukulka.
For these reasons the court is inclined to disallow some but by no means all of Lehman’s fees regarding the Motion to Expand Coercive Sanctions. The court is also inclined to reduce Lehman’s fees *11somewhat for inefficiency. The court recognizes that this was a difficult motion to prepare because Lehman did not want to provide Kontrabecki and Kukulka with a roadmap for actions they might take but at the same time Lehman wanted to establish that further incarceration was warranted to coerce Kontrabecki’s compliance with his obligation to completely effect the unwind. Nevertheless, the court’s review of the motion papers suggests some inefficiency by Lehman’s counsel, as does the court’s calculation of the total dollar amount expended on this one motion.
The court has reviewed the time entries for June, July and half of August, 2005— i.e., from more than one month before the motion until a week or so after the court’s written decision thereon. The court estimates that this task occupied approximately 186.7 hours of Mr. Kaufman’s time at $435/hr. (i.e., $81,214.50), 3.0 hours of Mr. Aldridge’s time at $440/hr. (i.e., $1,320.00), 13.3 hours of Mr. Brow’s time at $260/hr. (i.e., $3,458.00), 13.6 hours of F.L. Russell’s time at $175/hr. (i.e., $2,380.00), 51.4 hours of Ms. Chandler’s time at $165/hr. (i.e., $8,481.00), 37 hours of Mr. Benvenutti’s time at $630/hr. (i.e., $23,310.00), 15.6 hours of Ms. Toops’ time at $405/hr. (i.e., $6,318.00), 46.5 hours of Ms. Whitehead’s time at $230/hr. (i.e., $10,695.00), 18.4 hours of Mr. Stone’s time at $175/hr. (i.e., $3,220.00), 28.7 hours of Mr. Gilicinski’s time at $425/hr (i.e., $12,197.50), 42.9 hours of Mr. Grohman’s time at $315/hr (i.e., $13,513.50), and 41.0 hours of B. Koczetkow’s time at $195/hr (i.e., $7,995.00), for a total of $174,102.50.9 Out of this amount the court will disallow $87,000.00.
6. Lehman’s motion to withhold Kontrabecki’s passport
Kontrabecki objects to Lehman’s fees incurred in an unsuccessful attempt to prevent him from retrieving his passport from Trustee. Opp. pp. 14:21-15:21. Kontrabecki objects that Lehman’s Motion for Order for Continued Withholding of Kontrabecki’s Passport, filed on October 5, 2005 (docket no. 1073) (the “Passport Motion”), cited no legal authority that justified retaining his passport. Opp. p. 15:12— 13. Kontrabecki is incorrect. Lehman cited several relevant cases and as the court long ago observed the power to incarcerate implies the lesser power to condition freedom from incarceration on turning over a passport.
The court is somewhat persuaded by Kontrabeeki’s alternative argument that the harm that Lehman sought to address was too speculative. The closing of the unwind had already taken place on May 19, 2005, and as discussed above although it was foreseeable that Kukulka and Kontrabecki might somehow attempt to reverse the unwind it was also possible that such harm would never occur. The court had recently refused on this basis to extend Kontrabecki’s incarceration by denying Lehman’s Motion to Expand Coercive Sanctions.
On the other hand, Lehman had cause to believe that further coercion might be necessary, or that Kontrabecki might pose a flight risk, or both. He already had a history of frustrating the court’s orders, he had been ordered in February of 2003 to take “all steps available to him” to cause the unwind but delayed the unwind until May of 2005 largely by claiming that Ku*12kulka was beyond his power or the court’s jurisdiction in Poland, he sought the return of his passport to travel to Poland, he had liquidated assets in the United States including his home, he claimed that his remaining assets in the United States were either encumbered or could not be liquidated whereas he claimed that his assets in Poland had substantial equity, he had recently transferred $5 million to Poland, he had then attached that $5 million in Poland, and his counsel advised Lehman that he intended to contact the Polish prosecutor’s office claiming that Kukulka had extorted the $5 million from him. See Passport Motion (attached as Ex. 25 to Kontrabecki RJN, docket no. 1347). All of this might reasonably suggest to Lehman that Kontrabecki was a flight risk, or intended to reverse the unwind, or both.
After hearing arguments on the Passport Motion the court decided that on balance withholding Kontrabecki’s passport would have been too great an imposition on him as an international businessman and the harms envisioned by Lehman were too speculative to justify that imposition. Still, Lehman’s attempt to prevent the return of Kontrabecki’s passport was both foreseeable and not entirely unreasonable. Weighing these considerations the court will disallow approximately two thirds of Lehman’s time on this matter.10
The court has reviewed Lehman’s daily timesheets and has found some time related to the passport issue in June of 2005, shortly after the unwind closing took place in Poland, with the bulk of the time in October of 2005 through shortly after November 1, 2005, when the court rendered its decision. Lehman’s time is not broken down into specific allotments for preparation of the Passport Motion but the court estimates that this task occupied roughly 6.9 hours of Mr. Kaufman’s time at $435/ hr. ($3,001.50), 0.3 hours of Mr. Aldridge’s time at $440/hr. ($132), 18.8 hours of Mr. Benvenutti’s time at $630/hr. ($11,844.00), and 15.5 hours of Ms. Toops’ time at $405/ hr. ($6,277.50) for a total of $21,255.00. Out of this amount the court will disallow $14,000.00.
7. Lehman’s uncategorized billing records
Kontrabecki objects that Lehman seeks fees for providing greater detail regarding its previously uncategorized fees, as ordered by the court (Opp. p. 18:11-25), but as Lehman points out the court already reduced Lehman’s fees associated with preparing its initial bills by over $340,000.00 because there was not enough detail in those bills. Resp. p. 13:12-22. See Memorandum Decision Regarding Compensatory Contempt Sanctions, pp. 20:8-21:26, filed July 27, 2005 (docket no. 980) (attached as Ex. 31 to Kontrabecki RJN). If Lehman’s fees were reduced again for providing that detail then Kontrabecki would receive a double recovery.
Kontrabecki objects to Lehman’s motion in limine to address what it calls “a legal issue [that] it believed Mr. Kontrabecki might raise in his yet-to-be [filed] opposition brief to Lehman’s request for compensatory sanctions.” Opp. pp. 18:26-19:9. As Lehman points out, Kontrabecki’s attorneys made inconsistent statements and strongly suggested that they would present the disputed legal issue at a *13later time, which Lehman rightly feared would further delay an already protracted process. Resp. p. 14, n. 4. This type of situation is what a motion in limine is for. The court will not disallow any fees on this basis.
Kontrabecki persuasively objects that Lehman seeks to bill him for unsuccessfully opposing a further motion for more detail entitled Motion of John Kontrabecki for More Definite Statement of Lehman’s Claimed Compensatory Contempt Damages, filed Nov. 22, 2004 (docket no. 769) (the “Motion for More Definite Statement”). Opp. p. 18:3-10. Lehman filed its response on December 15, 2004 (docket no. 801). Lehman now argues that Kontrabecki did not make use of the greater detail that it was forced to provide and what he “should have done in the first place was what he in fact did later: complain about the specific activities [that] he thought should not be compensated and ask the Court to instruct Lehman, in every case where the Court agreed with him, to calculate fees associated with the activity and deduct them from its submission.” Resp. p. 14:15-19. The weakness in Lehman’s argument is that the greater detail was important so that Kontrabecki could know what “specific activities” he should complain about. It is difficult to know if a litigant’s attorneys have been inefficient on any' given task without having a breakdown by task and principal attorney. The court will disallow Lehman’s fees in opposing Kontrabecki’s Motion for More Definite Statement.
The court has reviewed Lehman’s fees from November 22, 2004, when the Motion for More Definite Statement was filed, through the date of the hearing and oral ruling on the motion on January 21, 2005. Based on that review the court estimates that this task occupied roughly 33.1 hours of Mr. Kaufman’s time at $435/hr. ($14,-398.50), 70.0 hours of S. Chandler’s time at $165/hr. ($11,550.00), 16.2 hours of T. Vu’s time at $195/hr. ($3,159.00), 6.4 hours of Mr. Brow’s time at $260/hr. ($1,664.00), 12.2 hours of Mr. Benvenutti’s time at $590/hr. ($7,198.00) and 0.7 hours of his time at $630/hr. ($441.00), 5.7 hours of Ms. Toops’ time at $335/hr. ($1,909.50), 7.1 hours of Ms. Whitehead’s time at $210/hr. ($1,491.00), and 16.3 hours of Mr. Stone’s time at $165/hr. ($2,689.50) for a total of $44,500.50, all of which is disallowed.
8. Activities in anticipation of attachment
Kontrabecki objects that Lehman sought and obtained an order giving it the right to attach his assets and took discovery regarding those assets but then never attached anything. He argues that Lehman’s efforts “just resulted in more wasted time and resources.” Opp. p. 20:12.
The court disagrees. As Lehman argues, the discovery revealed assets that could be liquidated to pay the Award despite Kontrabecki’s claim that he had none. Resp. p. 15:14-16. The attachment became unnecessary because Kontrabecki agreed to an extension of a temporary protective order. Resp. pp. 15:17-16:14. Lehman’s time on these matters is fully compensable and Kontrabecki’s objections on this point are overruled.
9. Mission West litigation
Lehman discovered that Kontrabecki had substantial equity to pay the Award from interests in two limited partnerships, the so-called Mission West interests. Kontrabecki argued that he could not convert those interests to stock, that if he could convert those interests he could not legally sell the stock because he could not require it to be registered, that he held too large a stake in the Mission West entities and was therefore an insider which compli*14cated any liquidation of his interests, that the stock was not traded in sufficient quantities to pay Lehman expeditiously, and that he would be able to pay Lehman out of a Polish development that would be sold in short order. As it turns out, none of this was accurate.
After Kontrabecki was ordered to liquidate his Mission West interests he persuaded the court to appoint an agent of his own choosing to maximize the sales price. That agent resigned, Trustee was appointed as his replacement, and the Mission West interests were then liquidated.
Kontrabecki argues that Lehman “grossly over-simplified and overstated [his] ability to liquidate his Mission West interests.” Opp. p. 20:25-26. Assuming without deciding that there is any truth in the accusation, that is irrelevant. If there were more expeditious ways to pay the Award, as Kontrabecki claimed, then he remained free to do so. Meanwhile, whatever complexity was inherent in liquidation of the Mission West interests is not Lehman’s fault.
Kontrabecki also argues that Lehman’s analysis was simply wrong on some issues and that it should not be compensated for flawed analysis. Opp. pp. 21:23-22:3. The court notes that Kontrabecki’s own expert initially opined that he very likely would not obtain freely tradeable stock (id.), but that turned out to be no significant obstacle. The court concludes that both Lehman and Kontrabecki were hampered by a lack of clear information from Mission West entities, and to some extent by misinformation from Kontrabecki who overstated his equity interests such that he appeared to be an insider. The court is not convinced that Lehman’s legal analysis was flawed. Ultimately the experts for Lehman and Kontrabecki agreed on the essential issues, once the facts were known.
Kontrabecki argues that Lehman insisted on a defective form of letter, which he was compelled to send to the Mission West principals to liquidate his interests. Opp. pp. 23:20-24:5. The court rejects this argument for two alternative reasons. First, it was primarily Kontrabecki’s responsibility to liquidate his interests and pay the Award but he was intransigent so Lehman had to take the leading oar. If there was any defect in Lehman’s draft letter then Kontrabecki should have pointed it out. Second, the alleged defect was that a “proper tender had to be submitted on a particular form” (Opp. p. 24:1) but as the court recalls Lehman inquired as to the correct documentation and was not provided any such form because none existed. Lehman’s fees should not be reduced for any alleged defect in or delay from the form of tender.
On one issue concerning Mission West the court agrees with Kontrabecki that some of Lehman’s fees should be reduced, but Lehman has already done so voluntarily. Lehman’s attorneys used a member of their firm, Mr. Titelbaum, both as its legal counsel and as its designated expert witness. Kontrabecki demanded discovery of the materials considered by Mr. Titelbaum and the basis for his opinions, which included attorney-client matters that Lehman did not wish to reveal. The court permitted Lehman to withdraw its designation of Mr. Titelbaum as an expert witness and to designate an alternate expert instead. As Lehman points out, it has already made a $10,000.00 “[c]redit adjustment re Titelbaum expert opinion” in its billings. See Benvenutti Decl., Ex. A5, p. 24. The court has reviewed the time associated with that expert opinion and believes that no further adjustment is appropriate.
10. Polish proceedings
Kontrabecki complains that he and the court are not familiar with many of the *15proceedings in Poland and that Lehman’s explanations of some of those proceedings are inadequate. Opp. pp. 25:14-26:11. Lehman responds that Kontrabecki never asked for further information but that the time devoted to these matters is de minim-is and, if the court directs, it can delete the time spent on these matters. Rather than prolong the litigation over these issues the court will simply reduce Lehman’s fees by $7,500.00 with the direction to Lehman that if its fees on these matters are more than $10,000.00 then it should submit a declaration stating the actual dollar amount and the court will reduce its fees accordingly.
IV. Disposition
The court calculates the total amount disallowed at $172,000.50. Counsel for Lehman should upload a proposed form of order awarding it compensatory contempt damages consisting of fees of $3,067,938.86 and expenses of $129,952.16 for a total award of $3,197,891.02, for the reasons stated in this Memorandum Decision, payable on or before 30 days from the date of entry of that order. Lehman should serve that proposed order in compliance with B.L.R. 9021-1.
. Lehman’s motion papers state the amount as one penny less, but this appears to be a mathematical error. See Motion Ex. A.
. The following discussion constitutes the court’s findings of fact and conclusions of law. Fed. R. Bankr.P. 7052(a).
. Kontrabecki objects in a footnote that after this settlement it is unclear why Trustee should have performed any work at all. Lehman has not responded to this objection.
The court has reviewed Trustee's declaration and the attached daily timesheets (docket no. 1278) (“Trustee Decl.”). The largest portion of the $18,439.00 in fees were incurred in response to Kontrabecki's request for further billing detail in connection with fees earned prior to the settlement agreement. See Trustee Deck, daily timesheets and Ex. E (summary). The court will allow those fees. After the settlement agreement the bankruptcy estates still had at least a potential interest in this litigation, but the estates' chances of any significant recovery are becoming increasingly remote. Therefore the court will allow some fees for monitoring this litigation, especially in the months immediately following the settlement, but will disallow $3,000.00 based on Kontrabecki's unopposed objection.
. The court only required principal timekeepers to break down their time into detailed categories, so Kontrabecki has assumed that the same reduction is appropriate for non-principal timekeepers.
. The court has used rough estimates for this and other tasks rather than inviting a further round of litigation over the precise dollar amounts. The court wishes to avoid any further expense to any party on the issues discussed herein, mindful that there has already been an enormous amount of litigation in this adversary proceeding and the parties are already disputing such issues as Lehman's current fees incurred to collect its past fees.
. Lehman appears to have already written off some time related to the Protective Motion. The earliest relevant time entry attached to Mr. Kaufman's declaration (docket no. 1269) is for Apr. 14, 2005, but that entry describes “further edits to protective motion'' (emphasis added) suggesting that the motion had already been drafted. The court has found no evidence of such earlier work in March or April of 2005 in the timesheets attached to either Mr. Kaufman's or Mr. Benvenutti's declaration.
. Kontrabecki split his objections regarding the delayed registration in Poland into two sections of his Opposition's argument: II. A.l.d. and II.A.l.g. Lehman addresses them both in section B.4. of its Response. See Resp. p. 10 lines 6 and 25 (citing Opp. Sections II.A.l.d. and II.A.l.g.).
. Lehman later filed another declaration by Bartosz Grohman, one of its Polish attorneys (filed Oct. 25, 2005, docket no. 1090), describing potential harms that might arise if the court were to grant Kontrabecki's Motion for Order Dissolving Injunction, Terminating Coercive Sanctions and Directing Return of Passport. The court has treated the time spent on this declaration as if it had been submitted in support of Lehman's Motion to Expand Coercive Sanctions, and has disallowed some of that time, because for purposes of this discussion it raises the same issues.
. See daily timesheets attached to Kaufman Decl. (especially category "kk”) and Benvenutti Deck for June through early August, 2005, and daily timesheets attached to Deck of Lech Gilicinski in Support of Lehman Brothers Holdings Inc.'S Documentary Proof of Compensatory Contempt Damages (filed Apr. 13, 2006, docket no. 1275) for June through October, 2005 (see footnote 8 above regarding October time).
. On October 25, 2005, Lehman also filed an Opposition of Lehman Brothers Holdings Inc. to Kontrabecki’s Motion for Order Dissolving Injunction, Terminating Coercive Sanctions and Directing Return of Passport (docket no. 1088). In general the time spent by Lehman's attorneys on this opposition undoubtedly focused on the non-passport issues and did not involve new research or significant drafting on the passport issue because Lehman had already done most of that work in connection with the Passport Motion. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494087/ | MEMORANDUM DECISION
JOHN J. HARGROVE, Bankruptcy Judge.
Chapter 7 trustee, Richard M. Kipper-man, (the “trustee”), filed this adversary proceeding against Sondra S. Sutherland (“Sutherland”) asserting claims for relief under § 544(a)(1), (2), and (3), § 545(2), and § 547(b).1
Sutherland moved for summary judgment contending 1) that her charging lien was valid and attached to the proceeds from the sale of debtor’s real property; and 2) that her FLARPL lien was perfected and not subject to a preference attack since it was given in the ordinary course of business. “[I]n an abundance of caution,” the trustee’s opposition analyzed all the documents evidencing Sutherland’s various liens that allegedly secured her attorneys’ fees. The trustee’s cautious approach raised many issues not addressed in Sutherland’s initial pleadings. Accordingly, when the Court heard oral argument on July 7, 2006, both parties argued issues that were outside the scope of Sutherland’s initial motion. Thus, the review of Sutherland’s summary judgment motion has been extremely challenging due largely to the fact that the issues raised have been a moving target.
After hearing oral argument, the Court authorized additional briefs from both parties on issues regarding the charging lien, the judicial lien and the FLARPL lien, and took those matters under submission.2
This Court has jurisdiction to determine this matter pursuant to 28 U.S.C. §§ 1334 and 157(b)(1) and General Order No. 312-D of the United States District Court for the Southern District of California. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(F),(H) and (K).
I.
FACTS
Prior to his bankruptcy filing, debtor was involved in a dissolution proceeding in which Sutherland was his attorney. On February 3, 2005, debtor entered into a retention agreement with Sutherland which included a provision that allegedly created a charging lien in her favor on money and property due to, or received by debtor as a result of the assets awarded to him in the dissolution proceeding.
On June 8, 2005, a stipulated judgment of dissolution was entered. The stipulated judgment provided, inter alia, that with *31respect to the real property at 2022 Elevada Street, Oceanside, California (the “real property”), debtor had 90 days to buy out his ex-wife’s interest and if unable to do so, the parties agreed that their real property would be sold and the proceeds divided in accordance with the judgment.
On August 10, 2005, the family court judge signed a Stipulation Re: Fees, wherein both debtor and his ex-wife acknowledged that they owed their respective attorneys fees and costs and that such fees and costs would be taken directly out of each party’s respective share of escrow proceeds upon the sale of their real property. Sutherland contends that this order created a “judicial lien” on the proceeds.
On August 23, 2005, debtor evidently instructed Sutherland to “do whatever it takes to put a lien” on the real property because he was going to file bankruptcy.
On September 16, 2005, Sutherland filed a notice of Family Law Attorney’s Real Property Lien in the dissolution action. The notice provided that debtor intended to record an encumbrance on his interest only in the community real property to pay his attorney’s fees and costs. The accompanying declaration noted that the lien was in the amount of $27,110.90. The debtor further provided in his declaration that Sutherland was to include in her lien payments for his share of minor’s counsel’s fees, mediator fees, and fees owed to Dr. Sparta for his work on custody issues. The debtor further declared that it was “my request and idea that this lien be recorded, to assure that the professionals involved in this case are paid.” [See decl. of Donald A. Bush, Notice of Family Law Attorney’s Real Property Lien, 3:10-12].
On September 27, 2005, Sutherland declares that she “perfected (that) statutory lien [the FLARPL]” by recording an All-Inclusive Deed of Trust and Assignment of Rents. The deed referenced an underlying promissory note in the amount of $27,110.90.
On October 16, 2005, debtor filed his voluntary chapter 7 petition.
On December 22, 2005, debtor filed an ex parte application to sell the real property. The application stated that debtor had entered into a contract to sell the real property pursuant to a family law court decree. The order approving the sale provided that any distributions to debtor, his ex-wife, and their respective attorneys would be held in an escrow account.
On or about January 3, 2006, the sale closed and net proceeds in the amount of $197,580.85 were held pending further orders from this Court and resolution of the trustee’s objection to debtor’s homestead in excess of $50,000. This Court found that the debtor was entitled to a homestead exemption in the amount of $150,000.
Sutherland continued to represent debt- or in his dissolution action until January 18, 2006, when the family court granted her motion to be relieved as counsel. Sutherland declares that as of that date, debtor owed her $19,738.36.
On January 26, 2006, Sutherland filed her proof of claim asserting a secured claim in the amount of $27,110.90. She evidently amended that proof of claim by reducing it to $19,738.36 ($12,523.02 is for pre-petition services and $7,215.34 is for post-petition services) which represents her attorney services rendered on behalf of debtor.3
*32All proceeds from the sale of the real property have been distributed to the ex-wife, her attorney, debtor, and others pursuant to various orders of this Court with the exception of $27,110.90.
II.
DISCUSSION
A. STANDARDS FOR SUMMARY JUDGMENT
Rule 56(c) of the Federal Rules of Civil Procedure, made applicable to adversary proceedings by Fed. R. Bankr.P. 7056, provides that summary judgment:
[S]hall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
“The moving party bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” Hughes v. United States, 953 F.2d 531, 541 (9th Cir.1992) citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). “After the moving party has met its initial burden, Rule 56(e) ... requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the ‘depositions, answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine issue for trial.’ ” Hughes, 953 F.2d at 541 (citation omitted).
Technically, no cross-motion for summary judgment is necessary ... because if there is “no genuine dispute respecting a material fact,” the court can grant summary judgment sua sponte. Cool Fuel, Inc. v. Connett, 685 F.2d 309, 311-312 (9th Cir.1982).
B. THE CHARGING LIEN: WHAT DID IT ATTACH TO?
Sutherland’s “Professional Retainer Agreement” provides in relevant part:
The firm shall have a lien in the amount of all fees, costs and other sums due upon claims and causes of action to which this agreement pertains... on any funds or property due to or received by [the Debtor] on the matter(s) covered by this Agreement. This shall include, without limitation, any settlement, judgment, arbitration or other award.
This paragraph serves as the basis for Sutherland’s charging lien. At issue is whether Sutherland’s charging lien attached to the proceeds from the sale of debtor’s real property.
1. ARGUMENTS OF THE PARTIES
Sutherland argues that the language in the contract clearly shows the parties intended to include in her charging lien any of the debtor’s real property or its proceeds that he was awarded in the dissolution action. She contends that at the time the parties entered into the fee agreement, both were aware that debtor owned only one substantial asset, i.e., the real property. According to Sutherland, “[t]he language in the fee agreement ... is much broader and clearly can be interpreted to include the sales proceeds.” She further maintains that the parties were both “aware that the only asset would have to be sold or at least borrowed against to allow the debtor to have the ability to pay his debt to ... Sutherland.”
*33In opposition, the trustee relies primarily on Broach v. Michell (In re Bouzas), 294 B.R. 318 (Bankr.N.D.Cal.2003). In Bouzas, the charging lien was valid, but the court considered whether the lien attached to the debtor’s real property or its proceeds. The debtor engaged Michell to represent her in a dissolution action and executed a written attorney-client fee contract that contained a provision similar to the one in this adversary proceeding.4 At the time of the filing, the community property had not yet been divided, but the real property had been sold and the proceeds were held by Michell in her trust account. After the filing, Michell turned over the proceeds to the trustee. Michell filed a proof of claim for her unpaid fee and asserted that the claim was secured by the contractual lien. The trustee alleged that the lien was avoidable under § 544(a) because it was unperfected by any type of public filing or notice.
The Bouzas court noted that “the attorney charging lien was effective as soon as the contract that creates it is executed” and was “a legally sanctioned ‘secret lien’ ”. Id. at 321 (citation omitted). Even though the court found the lien valid, it noted that the “critical issue is whether Michell’s charging lien gave her an automatically perfected security interest in the debtor’s interest in the real property and thus the sale proceeds.” Id. at 324.
To determine this issue, the court first looked to the language of the contract and found that it did not express an intent to create a lien directly on the debtor’s interest in the real property or its proceeds prior to judgment or settlement. The court noted that because the contract did not express an intent to create a lien on the debtor’s interest in the real property or its proceeds, the only other possibility was whether under California law, a charging lien attaches to the subject matter of the underlying litigation. After examining California law, the court found support for the proposition that the agreement gave the attorney an interest in the proceeds of the litigation, but not its subject matter. Id. (citations omitted). Thus, the court ruled that Michell did not have a lien on the proceeds generated from the sale of the debtor’s real property.
Similarly, the trustee argues that the language used in paragraph 8.3 of Sutherland’s Professional Retainer Agreement, ie. “Property due to or received by you,” does not specifically describe the debtor’s real property and, therefore, it could not have been intended to be included in the charging lien. Relying on footnote 5 in Bouzas, the trustee further argues that even if the Court were to assume that the language granted Sutherland a charging lien in debtor’s real property and the proceeds, her retainer agreement could no longer be considered the basis for the charging lien and it would not be automatically perfected because it is a lien in the debtor’s share of the community property.5 *34Bouzas, 294 B.R. at 325 n. 5. In other words, family law attorneys must follow the procedure set forth in California Family Code § 2033 in order to assert a lien on community real property and cannot use a charging lien.
Sutherland distinguishes Bouzas by noting that the language in her Professional Retainer Agreement is broader. She further argues that the community property was divided prior to the filing of the petition so that her lien attached to the debt- or’s “recovery” as of June 8, 2005. Lastly, Sutherland contends that the Court’s comments in footnote 5 in Bouzas are simply dicta.
2. ANALYSIS
Determination of contract or property rights by the bankruptcy courts ordinarily is controlled by state law. See Butner v. United States, 440 U.S. 48, 54, 99 5.Ct. 914, 59 L.Ed.2d 136 (1979). Since the Professional Retainer Agreement was entered into in the State of California, California law will determine the extent of Sutherland’s charging lien.
In the California Practice Guide for Family Law, the authors note that “Agreements giving counsel a lien to satisfy attorney fees out of funds or property awarded to the client (‘charging lien’) are commonplace.” 6 Hogoboom & King, 2 Cal. Prac. Guide Family L, Ch.l-E, Attorney Fees and Costs Arrangement [hereinafter the “Family Law Practice Guide”], at ¶ 1:279. As a “practice pointer,” the authors state that “In dissolution cases, attorneys routinely contract for a lien against the client’s separate property and community property share awarded by the court or received in settlement.” Id. at ¶ 1:285. The Family Law Practice Guide further states that the only limitation to a charging lien is that it cannot attach to funds owed as child support. Id. at ¶ 1:280.2.
Under California law, the attorney’s charging lien is created by contract. California Civil Code § 2881 (liens can be created by (1) operation of law or (2) contract); Hansen v. Jacobsen, 186 Cal.App.3d 350, 355, 230 Cal.Rptr. 580 (1986) (equitable lien may be created by contract between the attorney and client). “[T]he California Supreme Court held that the intent of the parties determines the type of claim an attorney may assert against any fund generated due to his efforts.... if the parties intend that the attorney look directly to the settlement for payment, then a lien against that settlement is created in the attorney’s favor.” Alioto v. Official Creditor Comm. (In re Pacific Far East Line, Inc.), 654 F.2d 664, 668-69 (9th Cir. 1981) citing Isrin v. Superior Court, 63 Cal.2d 153, 157, 45 Cal.Rptr. 320, 403 P.2d 728 (1965).
Under California law, the interpretation of a contract is a question of law. In re Bennett, 298 F.3d 1059, 1064 (9th Cir.2002). “ ‘The fundamental goal of [contract] interpretation is to give effect to the mutual intention of the parties. If contract language is clear and explicit, it governs.’ ” Id.; see also Cal.Civ.Code § 16367. Charging liens are valid and *35perfected upon execution of the contract creating the lien. See Carroll v. Interstate Brands Corp., 99 Cal.App.4th 1168, 1175, 121 Cal.Rptr.2d 532 (2002) (“An attorney’s charging lien is created and takes effect at the time the fee agreement is executed.”) citing Cetenko v. United Cal. Bank, 30 Cal.3d 528, 534, 179 Cal.Rptr. 902, 638 P.2d 1299 (1982).
Although initially the Court found Bouzas persuasive, upon receiving additional briefs from the parties and reexamining Bouzas, the Court declines to follow this case. Bouzas is not binding on this Court and apparently no other courts have adopted its holding.
Unlike other states that either have statutory attorney’s liens or follow the common law regarding attorney’s liens, California law provides that the attorney’s charging lien can be created only by contract. The scope of the lien must therefore be determined by the language in the contract.
The Court finds that, as a matter of law, the broad language used in Paragraph 8.3 of Sutherland’s retainer agreement creating her lien “on any funds or property due to or received by [the Debtor]” manifests the intent of both Sutherland and debtor to include real property or its proceeds awarded to debtor through the dissolution action as security for Sutherland’s charging lien. To find otherwise would require family law attorneys to draft charging lien provisions with such specificity that would not only be cumbersome, but which would also require them to predict which funds or which property would be awarded to their clients through the dissolution proceeding. Such specificity appears not to be a requirement when examining form attorney lien provisions provided in various practice guides.8
Further, this Court could find no prohibition under California law that would prevent a family law attorney from taking an equitable interest in real property or its proceeds that are awarded to their clients in a dissolution action, through a contractual charging lien. Interestingly, it appears that the attorney’s charging lien has its origins in cases involving real proper*36ty.9 As pointed out above, the only apparent limitation is that the charging lien may not attach to funds owed as child support. The Family Law Practice Guide states that broad charging liens such as the one in this case are the preferred method for securing attorney fees regardless of the nature of the property.
‘BOTTOM LINE’ PRACTICE POINTER — Use Secured Liens Sparingly: As a practical matter, notwithstanding the ability to overcome ethical, procedural and substantive law hurdles..,prudent counsel should reserve secured promissory note fee arrangements as a last resort option in marital cases. A § 2033 family law attorney’s real property lien introduces further procedural complexities into the proceedings... it makes sense to limit attorney fee security arrangements to contractual charging liens.”
Family Law Practice Guide at ¶ 1:302.
Another aspect of the attorney’s lien is that the attorney must wait until the client obtains a “judgment” and then bring a “separate, independent action against the client to establish the existence of the lien, to determine the amount of the lien, and to enforce it.” Carroll v. Interstate Brands Corp., 99 Cal.App.4th at 1173, 121 Cal.Rptr.2d 532. Given this background, the dicta in footnote 5 of Bouzas is unpersuasive. Notably, the Bouzas court did not include its analysis regarding California Family Code § 2033 in the body of its opinion nor can its comments in the footnote be considered a holding in the case. In sum, it does not appear to this Court that Family Code § 2033 precludes an attorney from taking an equitable lien in their client’s real property or its proceeds especially when the attorney cannot even enforce the lien until the client is awarded the same.
Lastly, assuming paragraph 8.3 is ambiguous, the immediate post-contract conduct of the parties can serve to show how the parties originally understood the contract to operate. As the court stated in Southern Cal. Edison Co. v. Superior Court, 37 Cal.App.4th 839, 851, 44 Cal.Rptr.2d 227 (1995), “The rule is well set tled that in construing the terms of a contract the construction given it by the *37acts and conduct of the parties with knowledge of its terms, and before any controversy has arisen as to its meaning, is admissible on the issue of the parties’ intent.” In this case, the subsequent Stipulation Re Fees signed by debtor, his ex-wife, and the family court judge, Sutherland’s service of the notice of Family Law Attorney’s Real Property Lien, and the debtor’s signing of the promissory note and Sutherland’s recording of the All Inclusive Deed of Trust, demonstrate that Sutherland and debtor intended that she look to the proceeds from the sale of the real property to pay her fees.
Because the facts are undisputed, the Courts finds that Sutherland is entitled to summary judgment as a matter of law on the issue of whether her charging lien attached to the proceeds of debtor’s real property.10
C. THE STIPULATION RE FEES: JUDICIAL LIEN
Sutherland contends that the Stipulation Re Fees, signed by the Family Court judge, is a judicial lien. The content of the Stipulation reveals that both debtor and his ex-wife acknowledged owing their respective attorneys fees and costs and each agreed that all attorney fees and costs due their respective attorney’s would be taken directly out of each party’s respective share of escrow. Initially, the Court notes that the stipulation contains no language that grants Sutherland a lien on the debt- or’s real property or its proceeds. Nonetheless, the trustee assumes Sutherland has a judicial lien, and argues that he can avoid that lien under § 544(a) because it is unperfected. Therefore, the Court assumes that Sutherland has a judicial lien for purposes of this discussion.
It is undisputed that Sutherland never recorded the Stipulation re Fees, thereby giving the trustee constructive notice of its contents. Sutherland has offered no authority that would excuse her from recording nor advanced any argument in response to the trustee.
The trustee seeks to avoid Sutherland’s alleged judicial lien pursuant to his avoidance powers as a judicial lien creditor who obtains a judicial lien at the commencement of the case, and the rights and powers of a bona fide purchaser who has perfected its interest at the commencement of the case. See § 544(a)(1),(3). Since the transfer at issue involves either a security interest in debtor’s real property or its proceeds, the rights of a judicial lien creditor or bona fide purchaser are defined by California law. Placer Savings and Loan Assoc. v. Walsh (In re Marino), 813 F.2d 1562, 1565 (9th Cir.1987) (citations omitted).
California law allows a judicial lien creditor and a bona fide purchaser to avoid a prior unperfected security interest:
*38Every conveyance of real property ... is void as against any subsequent purchaser or mortgagee of the same property ... whose conveyance is first duly recorded, and as against any judgment affecting the title, unless the conveyance shall have been duly recorded prior to the record of notice of action.
Cal.Civ.Code § 1214 (West 2006). Considered under this statute alone, a judicial lien creditor and bona fide purchaser would be able to avoid debtor’s transfer of the security interest in the real property to Sutherland.
The Court finds that, as a matter of law, the trustee as hypothetical lien creditor and bona fide purchaser under § 544(a)(1),(3) could not be charged with constructive notice of Sutherland’s Stipulation which was not recorded as of the petition date. Although the trustee has not filed a cross motion for summary judgment, this Court may nevertheless grant summary judgment in his favor on this issue since there is no genuine issue as to any material fact. Cool Fuel, 685 F.2d at 311-12.
D. THE FLARPL LIEN
Pursuant to California Family Code § 2033(a), “[ejither party may encumber his or her interest in community real property to pay reasonable attorney fees in order to retain or maintain legal counsel in a dissolution proceeding... and attaches only to the encumbering party’s interest in the community real property.” Under § 2033(b), the notice of the lien must be served personally on the other party (or his or her attorney of record) at least 15 days before recordation of the encumbrance.
1. ARGUMENTS OF THE PARTIES
Sutherland declares that her FLARPL lien was perfected when she recorded the All Inclusive Deed of Trust.
The trustee argues that the only way for Sutherland to perfect her FLARPL lien is to have filed the Notice of Family Law Attorney’s Real Property Lien that is required under California Family Law Code § 2033(b). The trustee maintains that filing the “All-Inclusive Deed of Trust and Assignment of Rents” was inadequate because on the face of the Deed of Trust there is no reference to the FLARPL. Therefore, according to the trustee, the FLARPL remains unperfected at the time of the filing of debtor’s petition and is avoidable by the trustee under § 544(a)(1), (2) and (3).
2. ANALYSIS
It is undisputed that Sutherland did not record a Notice of Family Law Attorney’s Real Property Lien. Rather, she filed the All Inclusive Deed of Trust and Assignment of Rents on September 27, 2005. The trustee frames the issue as whether the All Inclusive Deed of Trust is sufficient to “perfect” Sutherland’s FLARPL as against the trustee as a lien creditor.
This Court need not decide what is the proper method to perfect a FLARPL lien under California law because it is the All Inclusive Deed of Trust that is before the Court and there is no dispute that it has been recorded giving constructive notice to the trustee regarding Sutherland’s attorneys’ fees. California Civil Code § 1213 titled “Record of conveyances; constructive notice, recording certified copies; effect” states in relevant part that “Every conveyance of real property.. .from the time it is filed with the recorder for record is constructive notice of the contents thereof to subsequent purchasers and mortgagees.... ” Thus, the trustee cannot use his avoiding powers under § 544(a) to invalidate the All Inclusive Deed of Trust.
*39Even though there was no cross motion filed by the trustee on this issue and it was the trustee who raised this argument in his opposition, the Court finds there is no genuine issue of any material fact, and therefore sua sponte grants summary judgment in favor of Sutherland on this issue. Cool Fuel, 685 F.2d at 311-12.
III.
CONCLUSION
The Court finds that Sutherland has a valid charging lien on the proceeds from the sale of the real property for both her pre and post-petition fees. The Court further finds her alleged judicial lien is unperfected and subject to the trustee’s avoidance powers. Lastly, the Court finds that Sutherland’s filing of the All Inclusive Deed of Trust and Assignment of Rents was adequate to impart constructive notice to the trustee that she asserted an interest in the real property and its proceeds for her attorney fees.
This Memorandum Decision constitutes findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052. Sutherland is directed to file with this Court an order in conformance with this Memorandum Decision within ten (10) days from the date of entry thereof.
. The Complaint alleges the following claims for relief: 1) avoidance of unperfected Family Law Attorney’s Real Property Lien (the “FLARPL”) pursuant to § 544(a)(1),(2), and (3); 2) avoidance of the FLARLP, if a statutory lien, pursuant to § 545(2); 3) avoidance of preferential transfer as to Deed of Trust pursuant to § 547(b); 4) avoidance of post-petition transfer as to Deed of Trust pursuant to § 549(a); 5) avoidance of claimed judicial lien pursuant to § 544(a); 6) avoidance of attorney’s charging lien on subject property and sale proceeds pursuant to § 544(a)(1),(2) and (3).
. The Court did not make a ruling with respect to the trustee’s third claim for relief, whether or not the All Inclusive Deed of Trust constituted a preference, since Sutherland’s attorney contended at the hearing that there is a disputed issue of fact regarding the debt- or’s insolvency. Further, although Sutherland asserted the ordinary course of business defense in her initial motion, she did not provide any analysis for the Court to consider. [See Transcript dated July 7, 2006, 65:12-16].
. Sutherland's attorney, Mr. Parks, represented at the initial hearing on this matter that the previous claim of $27,110.90 encompassed future services. When Sutherland withdrew her representation the claim was amended. [see Transcript dated July 27, 2006, 31:1-18],
. The agreement stated: “Client grants...a lien on client’s cause of action, judgment, settlement or otherwise, amount due or to be paid or that becomes due to client, for all unpaid fees, interest and for all costs.... ”
. The Court stated:
The contract could have provided for a lien in the debtor's share of the community property. However, such a lien would not have constituted an attorney’s charging lien. Therefore, it would not have been automatically perfected and entitled to priority based on the date of execution of the contract. It would also have been avoidable by the Trustee under 11 U.S.C. § 544(a) if unperfected. Moreover, as the Trustee noted, to the extent that Michell had obtained and perfected a lien on the Debtor's share of the Real Property to secure her fees in the dissolution action, the lien would have been void or voidable under California law unless she first complied *34with § 2033 of the California Family Code....
. The trustee argues in his supplemental brief that “The attorney's charging lien is typically used in tort-based cases taken on a contingency fee basis, not in marital dissolution actions where real property is likely to be part of a judgment.” The Family Law Practice Guide, however, appears to contradict the trustee's statement.
. CONTRACTS, HOW TO BE INTERPRETED.
A contract must be so interpreted as to give effect to the mutual intention of the parties *35as it existed at the time of contracting, so far as the same is ascertainable and lawful.
. The Family Law Practice Guide, Form l:G.l entitled Attorney Fees and Costs Agreement, ¶ 8 suggests using the following language to create the attorney's lien in a fee agreement:
Attorney Lien: I shall have a lien upon any money or property awarded or payable to you in this proceeding, whether by judgment, settlement or otherwise, as security for the payment of fees and costs due me under this Agreement. This lien could delay payments to you or receipt by you of some or all of the money or product you may be awarded in this proceeding as a result of my legal services until any fees/ costs billing disputes are resolved.
In the California Practice Guide for Professional Responsibility, the authors provide the following form language to create an attorney's lien in a fee agreement:
You hereby grant us a lien as security for the payment of fees and costs due and owing to us under this agreement. This lien will attach to.......... (any recovery you may obtain, whether by arbitration award, judgment, settlement or otherwise, in this matter; or the property that is the subject of this transaction)....
Vapnek, Tuft, 5 California Practice Guide: Professional Responsibility, Form 5:EE (2006).
In IB Am.Jur. Legal Forms 2d Alimony and Separation Agreements § 17:5 (2006), the attorney lien provision is slightly more comprehensive:
The attorney shall have the right to place a lien on any and all of the client’s real or personal property, or money, whether separate or community property, for the payment of any fees or costs outstanding.
. The Isrin court provides a short history regarding the recognition of an attorney's lien in California. The court noted that some California courts did not recognize the common-law charging lien of an attorney for his fee while other courts did. 63 Cal.2d at 157, 45 Cal.Rptr. 320, 403 P.2d 728 (citations omitted). In recognizing the attorney’s lien, the court noted:
As Professor Radin has remarked (28 Cal. L.Rev. at p. 597, fn. 26), 'How these cases are to be reconciled to the doctrine that there is no lien for the attorney in California is not quite clear.’ An answer may lie in the fact that typically these were suits to establish an interest in real property, and the plaintiff had agreed by contract to convey to his attorney, as compensation for the latter’s services in conducting the litigation, a certain percentage of whatever land might be recovered. Analogizing to the settled rule of equity in suits on a contract for the sale of land, the courts held that upon execution of the contingent fee contract the attorney, like a vendee, immediately acquired equitable title to his share of the land and that such interest would be protected, if necessary, by the imposition of a constructive trust. While the analogy is not free from doubt, the holdings of these early land cases have been extended in more recent times to personal injury actions, with little apparent concern for niceties of definition ....
The Court concluded that "For our present purposes, however, we need not attempt resolution of such conflicts in the law of attorney’s liens. It will be enough to observe that in whatever terms one characterizes an attorney’s lien under a contingent fee contract, it is no more than a security interest in the proceeds of the litigation.” Id. (citations omitted).
. In his supplemental brief, the trastee argued that the Sutherland’s charging lien does not cover her fees incurred during the post-petition period because her retainer agreement is an executory contract that was rejected as a matter of law. The trustee therefore concludes, without analysis, that "even if [Sutherland] had a valid, perfected attorney's charging lien, the lien did not secure the fees and costs incurred during the post-petition period." The trustee relies on Pacific Far East, 654 F.2d at 664. Sutherland has not responded to this argument. Nonetheless, the Court finds that the trustee's argument regarding the executory nature of Sutherland’s retainer agreement misplaced. 11 U.S.C. § 365 permits a trustee to assume those executory contracts which benefit the estate and reject those which do not. Assumption or rejection of Sutherland's retainer agreement has no effect on the estate because the proceeds generated from the sale of debt- or's real property are exempt, unless the trustee can use his avoidance powers to set aside Sutherland's lien. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494088/ | OPINION AND ORDER
MICHAEL J. KAPLAN, Bankruptcy Judge.
These two Adversary Proceedings, involving different Debtors, have been consolidated for hearing and decision because they present identical issues and the same Defendant. The Defendant has moved to dismiss and the Debtors have opposed.
Although the facts are not exactly “stipulated,” it appears from the submissions that there is no material dispute.
For ease of expression, the Court will speak hereinafter as if there were only one Debtor and only one bankruptcy petition, that being Mr. Bruno’s case.
Prior to the filing of the Petition, the Defendant, Chase, had made a report, in the ordinary course of business, to a credit reporting agency. The report was that the Debtor’s credit card account was past due, had been charged-off, and had a remaining balance left owing and unsatisfied. Then came the filing of the Chapter 7 case, and, in ordinary course, the Debtor was discharged. At no time after the filing of the Petition did Chase communicate with the Debtor or the Debtor’s attorney or make any affirmative attempt to collect the debt. Neither did Chase further report to the credit reporting agency.
Rather, sometime later, the Debtor learned that his credit report did not show that the debt had been discharged in bankruptcy. The Debtor believes (and wishes to prove at trial) that either he has been denied credit that he would have obtained *91had the credit report shown that the debt to Chase had been discharged in bankruptcy, or that he has paid higher rates for the credit that he has obtained since his “fresh start” than he would have been charged had the fact of the bankruptcy discharge been disclosed on his credit report.
Because credit reporting agencies are not “parties in interest” who would receive notice of any particular bankruptcy filing, and because they apparently do not independently gather bankruptcy discharge information to “update” individuals’ credit reports, the Debtor asserts that it was Chase’s responsibility to report to the credit reporting agency that the information contained in the report was no longer accurate; that in fact there was no money remaining to be paid because it had been discharged in bankruptcy.
The Debtor thus argues that Chase, having left this information on the credit report, has violated the discharge injunction contained in 11 U.S.C. § 524 and the Order of Discharge and seeks damages, etc.
The Debtor cites a number of cases decided under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act to the effect that providing an adverse report to a credit reporting agency may constitute an effort to “collect the debt” even in the absence of any direct communication with the defaulting borrower, actually seeking payment. Those cases are premised on the fact that the adverse credit report provides a powerful incentive for the borrower to pay even a disputed debt, in order that the borrower not find herself or himself thwarted in an effort even to have an apartment rental application approved.
For its part, Chase correctly points out that none of those cases arose under 11 U.S.C. § 524.
If the facts were different in the present case — if the report to the credit reporting agency had occurred after the Debtor’s discharge- — -then the present case would squarely present the question of whether 11 U.S.C. § 524 should be interpreted in the same way that courts have interpreted those other Acts. But it is this Court’s view that the fact that the adverse credit report, which was true and accurate when it was made, occurred prior to the bankruptcy filing, renders the eases under those other Acts inapplicable.1
*92Consequently, this seems to be a case of first impression, asking whether 11 U.S.C. § 524, standing alone, compels a lender to take the affirmative step of notifying its credit reporting agency or agencies that the defalcation that was previously reported has been discharged in bankruptcy.
HOLDING
The Court rules that no such affirmative step is compelled by 11 U.S.C. § 524. Rather, if a debtor who has been discharged in bankruptcy wishes to avoid what the debtor asserts has occurred in this case, then attorneys for bankruptcy debtors should be advising their clients, after the issuance of the bankruptcy discharge, to obtain a copy of their credit report or reports and follow the established process under those other Acts for updating the record, if they wish to do so.
ANALYSIS
The Court agrees with Chase that decades of jurisprudence on the subject of bankruptcy discharge places it beyond cavil that discharge does not extinguish the debt, but only the remedy, and that many debtors elect to voluntarily repay discharged debts for reasons unrelated to debt collection activity.
Most importantly, it can readily be seen that neither 11 U.S.C. § 524 nor the discharge orders that are routinely entered by this Court expressly compel any affirmative action of any sort by any creditor whose debt has been discharged. Q.E.D.
This result is by no means unique to the consequences of discharge. For example, many thousands of judgment liens are “voided” by orders of Bankruptcy Courts under 11 U.S.C. § 522(f) each year, and although many debtors’ attorneys seek to include language in the 522(f) order that compels the judgment creditor to do something, such as to “take steps” to have the judgment lien marked “released” or “discharged” or “voided,” this writer has routinely stricken such language from any § 522(f) order. Rather, this writer has only entered orders under § 522(f) that simply declare the judgment lien “void, subject to the provisions of 11 U.S.C. § 349,” and “requesting” that the County Clerk mark the judgment rolls accordingly. (Here in the State of New York, the County Clerks are officers of the State Court, and this writer would never presume to “order” some other court’s clerk to do anything in a matter to which they were never properly a party.)
There are many other orders entered by bankruptcy courts that expressly or by virtue of statute “void” this, or “deem” that, or “declare” some other thing. But almost never do we command involuntary participants in bankruptcy proceedings to take affirmative steps to implement our decisions, in cases in which they have done nothing on a post-petition basis to violate the Code.2
Indeed, in Chapter 11 eases particularly, bankruptcy courts do things that alter even the “public record” (such as U.C.C. recordings), and expressly state, in our orders, that our orders prevail “despite” the public record and without the need to alter the public record. Bankruptcy Courts do such things, typically, only when they know that the bankruptcy filing is itself a “public record” that requires those who deal with a debtor to be aware of the *93bankruptcy docket. Those are typically business cases, in which post-petition creditors either perform “due diligence,” or are on “publication notice” or are on inquiry notice because the U.S. Trustee requires (properly) that a D-I-P checking account be labeled “Debtor-in-Possession” on the checks.
Post-petition actions, of course, are an entirely different matter, not presented in this case.
CONCLUSION
Chase’s failure to notify a credit reporting agency that its pre-petition report of an account delinquency has ended in a bankruptcy discharge does not violate 11 U.S.C. § 524.
The motion to dismiss is granted. Any remedy for the Debtors rests in legislation, not in judicial rulings under the applicable statutes.
SO ORDERED.
. In an interesting aside, such a change in facts would also present the question of whether a prior decision of the United States District Court for this District under the Fair Debt Collection Practices Act and favoring the Debtor, compels the present Court, as a matter of hierarchical stare decisis, to rule in the Debtor's favor. This writer has addressed the stare decisis issue often in published decisions and is firmly of the view that each bankruptcy judge in a district served by more than one U.S. District Court Judge is bound by stare decisis to obey the decision of any. one of those District Court Judges in a like case until a different U.S. District Court Judge of the same district disagrees with his or her peer's earlier decision, in which event each Bankruptcy Judge is free to go either way. See Irr Supply Centers, Inc. v. Phipps, 217 B.R. 427 (Bankr.W.D.N.Y.1998) aff'd on other grounds, 98 CV 0294C, (W.D.N.Y. Jul 19, 1999), Curtin J.; Arway v. Mt. St. Mary’s Hosp., 227 B.R. 216 (Bankr.W.D.N.Y.1998); In re Reid, 237 B.R. 577 (Bankr.W.D.N.Y.1999) and the following articles: Evan H. Caminker, Why Must Inferior Courts Obey Superior Court Precedents?, 46 Stanford L.Rev. 817 (1994), Michael C. Dorf, Prediction and the Rule of Law, 42 U.C.L.A. Rev. 651, 682-83 (1996), Paul Steven Singerman & Paul A. Avron, Of Precedents and Bankruptcy Court Independence: Is a Bankruptcy Court Bound by a Decision of a Single District Court Judge in a Multi-Judge District?, 22 Am. Bankr.Inst. J. 1, (2003), H. Michael Muniz, Anarchy or Anglo-American Jurisprudence? The Doctrinal Effect of Stare Decisis upon Bankruptcy Courts in the Face of District Court Precedents, 76 Fla. B.J. 34 (2002).
. One exception is a direction by this Court to a levying creditor to inform the County Sheriff or U.S. Marshal to stop a levy and execution that began pre-petition and was still in-process when the petition was filed. Such a direction simply implements 11 U.S.C. § 362 which, by its terms, stops a collection effort in its tracks. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494089/ | MEMORANDUM OPINION
LETITIA Z. CLARK, Bankruptcy Judge.
Came on for consideration the Defendants’ Motion for Partial Summary Judgment on Nondischargeability (Docket No. 20) filed by Texas Department of Public Safety, and Thomas A. Davis, Jr., in his Official Capacity as Director of the Texas Department of Public Safety (collectively “DPS”) and the “Plaintiffs (Debtor) Motion for Summary Judgment” (Docket No. 21) filed by Jackie Lloyd Holder, Jr., Debtor. After review of the motions, responses thereto, affidavits in support, and the argument of counsel, the court will enter a separate Judgment declaring that the sum of $5,960 is nondischargeable pursuant to 11 U.S.C. § 523(a)(7). To the extent any of the Findings of Fact may be considered Conclusions of Law, they are adopted as such. To the extent any of the Conclusions of Law may be considered Findings of Fact, they are adopted as such.
Debtor filed a voluntary chapter 13 petition on October 13, 2005 which was converted to a chapter 7 proceeding on November 15, 2005. Debtor scheduled DPS as a general unsecured creditor with a claim for surcharges levied pursuant to the Texas Transportation Code. The surcharges are imposed on persons convicted of traffic law violations. Tex. Transp. Code §§ 708.102 and 708.103. In the instant case, the parties stipulated that total surcharges, in the amount of $5,960, net of collection costs, were levied against Debtor for convictions for driving while intoxicated, for second convictions occurring within 36 months, convictions for failure to maintain financial responsibility, and convictions for driving with an invalid license. Amended Stipulation of Facts, Docket No. 30. Failure to pay these surcharges can result in the suspension of a driver’s license. Tex. Transp. Code § 708.152.
Debtor filed the instant adversary proceeding and requests that the court declare the surcharges (including interest, collection costs, and fees) dischargeable. Debtor contends that DPS violated the automatic stay by attempting to collect the surcharges. Debtor also alleges that DPS is withholding the reinstatement of his driver’s license for failure to pay the surcharges and that DPS should be enjoined from withholding the reinstatement.
DPS contends that the debt is nondisehargeable pursuant to 11 U.S.C. *187§ 523(a)(7) and denies violating the automatic stay. The parties filed the instant cross motions for summary judgment. DPS submitted affidavits and exhibits in support of its motion for summary judgment. Debtor did not file any affidavits in support but did file exhibits.
Summary Judgment is appropriate where the court, viewing evidence in the light most favorable to the non-moving party, finds that there is no genuine issue of material fact and it should be granted as a matter of law. F.R.C.P. 56(c). The purpose of summary judgment is to “pierce the pleadings” and to assess the proof in order to see whether there is a genuine need for trial. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Rule 56(c) mandates the entry of summary judgment “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). These standards apply equally in bankruptcy cases. United States v. Kolstad (In re Kolstad), 101 B.R. 492, 493 (Bankr.S.D.Tex.1989).
Section 523(a)(7) provides that a claim is nondischargeable “to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss.” Section 101 of the Bankruptcy Code does not define the terms “fine, penalty, or forfeiture.” Surcharges imposed for convictions of traffic law violations have uniformly been found to be fines and penalties. See In re Curtin, 206 B.R. 694 (Bankr.N.J.1996); In re Kent, 190 B.R. 196 (Bankr.N.J.1995); and In re Kish, 238 B.R. 271 (Bankr.N.J.1999).
Section 101(27) of the Bankruptcy Code defines “governmental unit” to include a department or agency of the United States or a State. Surcharges collected by the state of Texas are payable to the Department of Public Safety by and through its contractor, Municipal Services Bureau. Those monies are remitted on behalf of DPS to the Comptroller on the first Monday of each month. Tex. Transp. Code § 708.156; Tex. Health & Safety Code § 780.002(a). The court finds that DPS and the Comptroller of Public Accounts are governmental units under section 523(a)(7).
The Comptroller deposits 49.5% of the surcharge monies received into the general revenue fund. Tex. Health & Safety Code § 780.002(b). Another 49.5% of the money received is deposited into an account called the “Trauma Fund.” Tex. Health & Safety Code §§ 780.002(b) and 780.003. The remaining 1% is used to offset DPS’s expenses incurred in administering the Driver Responsibility Program and DPS concedes that this is dischargeable as it is compensation for actual pecuniary loss.
Debtor claims that the 49.5% of the surcharge monies deposited in the general revenue fund are not for the benefit of a governmental unit because it is possible that some of those monies would end up being deposited into the “Texas Mobility Fund.” 1 When traffic fines collected by the *188state are added to the 49.5% of surcharges collected by DPS, any amount in excess of $250 million, collected in a given year, is deposited in the Texas Mobility Fund. Tex. Transp. Code § 780.002(c). Debtor contends that although the Texas Mobility Fund appears to be primarily intended to fund publicly owned highways, there is no prohibition on the use for privately owned public transportation projects.
Debtor’s argument is weak. The maintenance of public highways and use of monies to fund public transportation projects is of benefit to the state and its citizens. See Thompson v. Hewitt, 311 B.R. 415 (E.D.Pa.2004)(Collection of money by the state for payment to a harmed individual found to be nondischargeable because the government benefited from the deterrent effect resulting from the imposition of the restitution obligation.)
In addition, collection of the surcharges has never historically exceeded $250 million per year and thus, no surcharge monies have been deposited into the Texas Mobility Fund to date. Affidavit of Karen Campbell, Appropriations Control Officer, Fund Accounting, Texas Comptroller of Public Accounts, Exhibit No. 1, Defendant’s Motion for Partial Summary Judgment on Nondischargeability, Docket No. 20. The court finds that monies paid into the general revenue fund are for the benefit of the state, which is a governmental unit, and are not paid to the Department of Public Safety or the Comptroller for any “actual pecuniary loss” incurred. Thus, the court finds that these monies are nondischargeable.
The other 49.5% of the surcharge monies are deposited in the Trauma Fund, which is a dedicated account within the general revenue fund maintained by the Texas Comptroller. Monies in the Trauma Fund may be used to fund designated trauma facilities, county and regional emergency medical services, and trauma care systems. Tex. Health & Safety Code § 780.004. These monies are to reimburse providers of emergency medical and trauma care. DPS contends that this fund provides a benefit to the state as it furthers the state’s interests on behalf of the citizens of Texas for sustainable, continuing health care, including reimbursement to facilities that provide emergency medical care. This court agrees.
The Trauma Fund is designed to compensate trauma centers, and local governments that reimburse trauma centers, for the trauma cases that drivers such as Debtor tend to cause. Section 780.004(b) of the Texas Health and Safety Code states that the money is to be used to fund a portion of the uncompensated trauma care provided in the state. Funds disbursed to eligible facilities are based on a proportionate share of uncompensated trauma care provided in the state. The possibility that some of the funds disbursed may ultimately be paid to private facilities is not determinative that the payment of the surcharges are not for the benefit of the state.
Payments made from the Trauma Fund benefit the state by furthering its interests in the health and safety of its citizens. These payments help to ensure that the citizens of Texas are provided with continued emergency medical and trauma care. The court finds that the Trauma Fund provides a benefit to the state as it reimburses certain facilities for a portion of the uncompensated services provided to trauma patients. The court finds that the monies paid into the Trauma Fund are paid to and for the benefit of a governmen*189tal unit. As such, the court finds that these monies are nondischargeable.
Debtor contends that DPS violated the automatic stay by withholding the reinstatement of Debtor’s driver’s license. Debtor contends that reinstatement is being withheld on the bases that he has not paid the levied surcharges and has not paid a civil judgment or posted security for the judgment. Section 362(h)2 provides that “[a]n individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.” Pursuant to this section, Debt- or requests the court to award him attorney’s fees and costs in connection with the prosecution of this adversary proceeding.
Debtor’s driver’s license currently is suspended as a result of a criminal court order. Debtor’s driver’s license was suspended continuously from October 14, 2003 through the petition date, October 13, 2005 (with the exception of the time from October 8, 2004 and November 29, 2004). Since filing for bankruptcy, Debt- or’s driver’s license has been suspended continuously and will be through March 2007. These suspensions were the result of the Debtor’s convictions for driving while intoxicated, for a second driving while intoxicated conviction occurring within 36 months of the first, driving without liability insurance, driving with an invalid license, and driving with a suspended license. The suspensions of Debtor’s license are unrelated to his failure to pay pre or post petition surcharges owed to DPS. Affidavit of Sherrie Zgabay, Manager of the Driver Improvement Bureau of the Texas Department of Public Safety, Docket No. 24.
Debtor contends the automatic stay was violated by DPS as a result of DPS’s attempt to collect the surcharges post-petition. The court takes judicial notice of the fact that after conversion to chapter 7, the Notice of Creditors’ Meeting was mailed December 2, 2005. Main Case Docket No. 10. DPS received the notice December 5, 2005. Exhibit No. 10, Plaintiffs Motion for Summary Judgment, Docket No. 21. Thereafter, DPS sent Debtor a one page form letter dated December 20, 2005, referencing correspondence from Debtor, citing the requirements for reinstatement of Debtor’s driver’s license and indicating that DPS “is unable to accept a meeting of creditors as compliance.” Exhibit No. 1, Plaintiffs Motion for Summary Judgment, Docket No. 21. DPS sent Debtor another one page form letter dated March 30, 2006, notifying him that additional filings were required in order to reinstate his license. This correspondence also stated that “[pjartial compliance [had] been received regarding the status of [Debtor’s] driver record.” Exhibit No. 3, Plaintiffs Motion for Summary Judgment, Docket No. 21.
The above referenced letters from the DPS appear to be in response to inquiries from the Debtor in connection with reinstating his license. The surcharges and payment thereof are referenced in the letters; however, the content of these letters is mostly informational as to the requirements to have a driver’s license reinstated. DPS outsources its automated billing process, and as a result of the safeguards in the system designed to prevent fraud, it is virtually impossible to override the auto*190matie generation of notices that surcharges have been levied. Affidavit of Sherrie Zgabay, Manager of the Driver Improvement Bureau of the Texas Department of Public Safety, Docket No. 24. The court finds that the DPS has not wilfully violated the automatic stay.
Debtor also contends that DPS’s requirement that Debtor post security is a violation of the automatic stay. An uninsured motorist who is or is likely to be held liable for damages to another resulting from an automobile accident must post security in an amount sufficient to pay the anticipated amount of a judgment for damages resulting from the accident. This financial assurance is designed to ensure that persons who suffer a loss in an automobile accident where Debtor, as an uninsured motorist, was at fault, would be made whole.
According to the collection practices of DPS, in the event a judgment is rendered in favor of a party and that party participates in Debtor’s bankruptcy, posting security is not required. DPS no longer seeks security based on the allegations of the Debtor in his pleadings in the instant case. Debtor stated that a judgment was obtained against him as a result of an automobile accident and that this claim was being addressed in Debtor’s main case bankruptcy proceeding. Affidavit of Sherrie Zgabay, Docket No. 24. The court finds there was no wilful violation of the automatic stay by DPS. The court finds that the actions of DPS in requesting Debtor to provide security was not to collect on a debt. The court finds any actions of the DPS which might be considered violation of the stay were inadvertent. The court finds that DPS was providing information to Debtor of its requirements and policies regarding reinstatement. Debtor’s request for damages, fees and costs are denied.
The parties stipulated that the total net amount of the surcharges in controversy is $5,960. This amount reflects the deductions of the 1% statutory reimbursement from the surcharge as well as 4% which represents collection costs. The court finds that the amount of $5,960 owed by Debtor to DPS is nondischargeable.
Based upon these findings of fact and conclusions of law, the court will enter a separate Judgment in conjunction therewith.
. The Texas Mobility Fund was created in the state treasury and is a revolving fund to provide a method of financing the construction, reconstruction, acquisition and expansion of state highways. Money in the fund may also be used to provide participation by the state in payment of portions of the costs of constructing and providing publicly owned toll roads and other public transportation pro*188jects. Texas Constitution, Article III, Section 49-k (2001).
. The instant case was filed prior to the effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”), October 17, 2005. Although the pre-amendment statute is applicable, there have been no substantive changes for the purposes of this discussion. Pre-amendment subsection 362(h) was redesignated as subsection 362(k)(l) in the BAPCPA. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494090/ | *194OPINION
MARY P. GORMAN, Bankruptcy Judge.
This matter is before the Court on the Cross-Motions for Summary Judgment filed by Plaintiff/Trustee and by the respective Defendants in the above-captioned related adversary proceedings.
This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(E) and (F).
Leprechaun Trucking, Inc. (“Debtor”) filed its voluntary Chapter 7 petition in bankruptcy on October 16, 2005. Jeffrey D. Richardson (“Trustee”) was appointed Trustee of Debtor’s bankruptcy estate. Debtor was a trucking company and, in the course of its business, purchased crushed limestone for use in road construction projects and for resale. In 2002, Debtor began purchasing crushed limestone from Pana Limestone Quarry Co. (“Pana Quarry” or, collectively with Truman L. Flatt & Sons Co., Inc., “Defendants”).
Pana Quarry is owned by David Flatt and is headquartered in Springfield, Illinois. Pana Quarry sells limestone to a number of trucking companies. Charles Brian “Barney” Flatt, who is a cousin to David Flatt, oversees production and sales at Pana Quarry.
David Flatt also owns Truman L. Flatt & Sons Co., Inc. (“Truman Flatt” or, collectively with Pana Quarry, “Defendants”). Truman Flatt shares its headquarters in Springfield, Illinois with Pana Quarry. Truman Flatt is engaged in the construction business, primarily in the area of road construction. In the course of its operations, Truman Flatt hired Debtor to perform hauling services, and Debtor did so on an ongoing basis until several weeks before its bankruptcy filing.
During the relevant time period, David Flatt’s wife, Christine Flatt, worked in the Springfield office of Truman Flatt and Pana Quarry. She oversaw financial operations for both companies. In early 2005, she recognized that a large balance had become due and owing by Debtor to Pana Quarry. She decided to have Truman Flatt, Pana Quarry, and Debtor enter into a three-way payment arrangement.
Christine Flatt asked Barney Flatt to contact Debtor about the arrangement. Barney Flatt called Sandy Lowrance, office manager of Debtor. After the conversation and beginning April 2, 2005, the parties undertook a “check swap” arrangement. Under the arrangement, Truman Flatt would continue to utilize Debtor to perform hauling services and Pana Quarry would continue to sell crushed limestone to Debtor. Truman Flatt would pay Debtor for performing hauling services, but Debt- or was to concomitantly pay on its account with Pana Quarry every dollar Truman Flatt would pay to Debtor. The mechanics involved an actual check swap — Sandy Lowrance would go to the Springfield offices of Truman Flatt and Pana Quarry, pick up a check payable to Debtor from Truman Flatt, and deliver a check (or checks) from Debtor payable to Pana Quarry in the same amount. There was more than one occasion when Debtor was permitted to pay to Pana Quarry less than it received from Truman Flatt. In total, the “check swap” occurred on ten occasions.
Following the filing of Debtor’s bankruptcy petition on October 16, 2005, Trustee filed two related adversary complaints. On February 15, 2006, Trustee filed his Complaint against Truman Flatt. Trustee alleges that Debtor rendered services to Truman Flatt totaling $33,392, and that *195that amount has not been paid.1
On May 3, 2006, Trustee filed his Complaint against Pana Quarry. Trustee alleges that, within 90 days of the filing of the bankruptcy, Debtor, while insolvent, made payments to Pana Quarry which totaled $99,394.33, and that said payments allowed Pana Quarry to receive more than it would have received in a Chapter 7 bankruptcy case had the transfers not been made.2
Pana Quarry and Truman Flatt both assert as a defense their contention that Debtor, in April, 2005, when it entered into the “check swap” arrangement, orally assigned to Pana Quarry all of its rights to future payments from Truman Flatt for trucking services yet to be rendered. Consequently, Defendants argue, the $99,460.33 received by Pana Quarry from Debtor during the preference period was absolutely assigned and transferred by the Debtor outside of the preference period and, thus, is not subject to the claim of the Trustee. Additionally, because of the oral assignment, Truman Flatt argues that any amounts which Truman Flatt owed Debtor at the time of the bankruptcy filing are actually owed to Pana Quarry. Thus, Trustee has no claim against Truman Flatt for said amounts.
Pana Quarry offers a second affirmative defense in response to the Trustee’s Complaint filed against it. Pana Quarry contends that any alleged preferential payments were paid in the ordinary course of business and, thus, are not subject to avoidance as preferential by the Trustee.
Trustee, Pana Quarry, and Truman Flatt have all filed Motions for Summary Judgment. As set forth above, the issue of whether the “check swap” created an absolute assignment which defeats the Trustee’s rights is common to both cases and is raised by all parties in their summary judgment motions.
Defendants argue that oral assignments are recognized as valid under Illinois, and that the funds claimed by the Trustee in both cases were subject to a valid oral assignment. According to the Defendants, as of April 2, 2005 — the date the “check swap” arrangement was put into place— Pana Quarry acquired all of Debtor’s rights to payments to become owing to Debtor by Truman Flatt. Consequently, they argue that the implementation of the “check swap” constituted an absolute and irrevocable transfer of Debtor’s rights in and to said funds, or right to receive said funds.
Trustee disputes the contention that the parties have a valid oral assignment. At most, Trustee contends, the record shows that the parties entered into an informal arrangement where, between April, 2005, and September, 2005, checks were exchanged by mutual assent. However, Trustee proffers, the record also shows that on not every occasion was there an even swap, and that fact is evidence of the absence of a true assignment. Finally, *196Trustee contends that the “check swap” arrangement may have been an attempt to create a security interest with respect to future accounts receivable owed to Debtor from Truman Flatt. However, to be enforceable against the Trustee, the security interest would have to have been in writing and a financing statement would have to have been filed to perfect the secured interest. No such documents exist.
■ Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Bankr.P. 7056, incorporating by reference Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). Summary judgment will be granted only where it is clear that there is no dispute about the facts or inferences to be drawn therefrom. Central Nat. Life Ins. Co. v. Fidelity and Deposit Co. of Maryland, 626 F.2d 537, 539 (7th Cir.1980) citing U.S. v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962). On a motion for summary judgment, the court must view the evidence in the light most favorable to the non-moving party. In re Chambers, 348 F.3d 650, 654 (7th Cir.2003). It is not the role of the trial court to weigh the evidence or to determine its credibility, and the moving party cannot prevail if any essential element of its claim for relief requires trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The movant bears the burden to prove each fact material to its claim and to establish that each fact is not in genuine dispute. If the movant fails to make that showing, summary judgment is not proper and must be denied. See In re Rogstad, 126 F.3d 1224, 1227-28 (9th Cir.1997).
“The primary purpose of granting a summary judgment motion is to avoid unnecessary trials when there is no genuine issue of material fact in dispute.” In re JII Liquidating, Inc., 341 B.R. 256, 263 (Bankr.N.D.Ill.2006). Where the material facts are not in dispute, the sole issue is whether the moving party is entitled to a judgment as a matter of law. ANR Advance Transp. Co. v. International Brotherhood of Teamsters, Local 710, 153 F.3d 774, 777 (7th Cir.1998). The entry of summary judgment against a party is mandated, if, after adequate time for discovery and upon motion, that party fails to make a showing sufficient to establish the existence of an element essential to that party’s case. Celotex Corp. v. Catrett, supra, 477 U.S. at 322, 106 S.Ct. at 2552.
An “assignment” is a transfer of some identifiable property, right, claim, or interest, from the assignor to the assignee. An equitable assignment is an assignment that gives the assignee a title which, although not cognizable at law, equity will recognize and protect. National Bank of Albany Park in Chicago v. Newberg, 7 Ill.App.3d 859, 866, 289 N.E.2d 197, 202 (1972).
An assignment operates to transfer to the assignee all of the assignor’s right, title, or interest in the thing assigned; the assignee, by acquiring the same rights as the assignor, stands in the shoes of the assignor. In re Estate of Martinek, 140 Ill.App.3d 621, 629-30, 94 Ill.Dec. 939, 488 N.E.2d 1332, 1337-38 (1986) (citations omitted). There must be a present transfer of the assignor’s right, which is so far complete as to deprive the assignor of his or her control over the subject of the assignment, and the assign- or must not retain any power of revocation. 6A C.J.S. Assignments § 57 (2006) (citations omitted). An assignor no longer *197has any rights in the property assigned. People v. Wurster, 97 Ill.App.3d 104, 106, 52 Ill.Dec. 648, 422 N.E.2d 650, 652 (1981) (citation omitted).
Assignments are to be interpreted in the same way as any other contract. See Lowrance v. Hacker, 888 F.2d 49, 51 (7th Cir.1989), citing Advance Process Supply Co. v. Litton Ind. Credit Corp., 745 F.2d 1076 (7th Cir.1984). Oral assignments are valid, unless expressly prohibited by statute. Strosberg v. Brauvin Realty Services, Inc., 295 Ill.App.3d 17, 30, 229 Ill.Dec. 361, 691 N.E.2d 834, 843 (1998), citing In re National Tire Services, Inc., 201 B.R. 788 (Bankr.N.D.Ill.1996). When there is no writing to evidence the intention to transfer some identifiable property, claim, or right, it is necessary to scrutinize the surrounding circumstances and the acts of the parties to ascertain their intentions. Strosberg v. Brauvin Realty Services, Inc., supra, 295 Ill.App.3d at 30, 691 N.E.2d at 844 (citation omitted).
Lack of formality in an assignment may mean that the assignment is revocable, or that it is subject to the defenses or claims of the obligor which accrue subsequently, or that it can be defeated by creditors of the assignor or by subsequent assignees of the same right. 6 Am.Jur.2d Assignments § 121 (2006), citing Restatement (Second) of Contracts 2d § 324, Comment a.
The deposition testimony of all of the individuals involved in the check swap on behalf of all of the participants was submitted with the summary judgment motions. It is clear that there is no factual dispute as to how the check swap was originally arranged or how it was carried out. Brief conversations were had by various individuals about the Debtor using the proceeds earned from Truman Flatt to pay Pana Quarry. No one used the term “assignment” or any other relevant legal term in the conversations and no paperwork was created to memorialize the agreement. The parties merely agreed that when Truman Flatt paid Debtor, Debtor would pay Pana Quarry.
When money was due to Debtor by Truman Flatt, it was paid by Truman Flatt to Debtor. At the time the payment was made, Sandy Lowrance would deliver a check or checks of like amount to Pana Quarry. Occasionally, the procedure varied when Debtor had bills to pay and could not devote the entire proceeds from Truman Flatt to pay Pana Quarry.
Based on these undisputed facts, at most, the parties made an oral agreement to use the “check swap” to pay down debt to Pana Quarry. There is nothing in the record to support the contention that Debtor relinquished and Pana Quarry acquired the rights to future payments which became due to Debtor from Truman Flatt. Further, to the extent that the “check swap” constituted an oral agreement between the parties, it was subject to exception when Debtor could not pay all the funds it received from Truman Flatt to Pana Quarry.
The record, even when viewed in a light most favorable to the Defendants, cannot sustain a finding that a valid assignment occurred here. The “check swap” arrangement does not bear any of the markings of an absolute, unconditional transfer of Debtor’s rights. Debtor did not relinquish to Pana Quarry any interest in its accounts receivable from Truman Flatt. Rather, Debtor engaged in a revocable-at-will arrangement which allowed it to continue doing business with Defendants. If Debtor had ceased the “check swap” and stopped doing business with Defendants, Debtor would still have an enforceable claim against Truman Flatt for any amounts owing to Debtor for services provided. In addition, if, hypothetically, a *198non-wage garnishment had been served on Debtor’s bank after Debtor had deposited a check from Truman Flatt but before Debtor’s corresponding check to Pana Quarry had cleared, the garnishment would be executed against those funds in Debtor’s account, and Pana Quarry would have no claim superior to that of the garnishing creditor.
If an absolute assignment had occurred, then Debtor would have given up its right to be paid directly and Truman Flatt would have had a legal obligation to pay Pana Quarry directly. Likewise, Pana Quarry would have had an enforceable right to collect directly from Truman Flatt. Nothing in the parties’ conduct as testified to by the Defendants’ own witnesses supports a finding that any of the parties acted as though they had agreed to an absolute assignment. To the contrary, Truman Flatt always paid Debtor directly after the “check swap” agreement was made, and that fact clearly evidences that the “check swap” agreement was not an assignment at all.
For the reasons set forth above, the Court finds that summary judgment should be granted in favor of Trustee and against Defendants in each adversary proceeding on the question of whether Debt- or’s rights to payments from Truman Flatt for services rendered were the subject of a valid oral assignment. This finding is dis-positive of the Truman Flatt adversary but a second defense of ordinary course of business is raised by Pana Quarry and must also be addressed.
The Trustee’s preference action against Pana Quarry is based on Section 547(b) which provides as follows:
(b) Except as provided in subsection (c) of this section, the trustee may avoid any transfer of an interest of the debtor in property—
(1) to or for the benefit of a creditor;
(2) for or on account of an antecedent debt owed by the debtor before such transfer was made;
(3) made while the debtor was insolvent;
(4) made—
(A) on or within 90 days before the date of the filing of the petition; or
(B) between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and
(5) that enables such creditor to receive more than such creditor would receive if—
(A) the case were a case under chapter 7 of this title;
(B) the transfer had not been made; and
(C) such creditor received payment of such debt to the extent provided by the provisions of this title.
11 U.S.C. § 547(b).3
Payments of $99,460.33 were made to Pana Quarry by Debtor within the ninety days prior to the bankruptcy filing on October 16, 2005. Therefore, the transfers took place within the preference period. Other than Pana Quarry’s general denial for insufficient knowledge, no one disputes, and nothing in the record refutes, that Debtor was insolvent at the time the transfers were made. The transfers were for antecedent debts, i.e. unpaid invoices for *199goods previously sold and delivered. The transfers allowed Pana Quarry to receive more than it would have received had the transfers not been made. See Affidavit of Jeffrey D. Richardson dated September 5, 2006.
The ordinary course of business defense raised by Pana Quarry is set forth at § 547(c)(2) as follows:
(c) The trustee may not avoid under this section a transfer—
(2) to the extent that such transfer was—
(A) in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee;
(B) made in the ordinary course of business or financial affairs of the debtor and the transferee; and
(C) made according to ordinary business terms[.]
11 U.S.C. § 547(c)(2).
A creditor asserting the defense has the burden to prove each element by a preponderance of the evidence. 11 U.S.C. § 547(g); Matter of Midway Airlines, Inc., 69 F.3d 792, 797 (7th Cir.1995). If the creditor fails to prove any of the three elements, the defense is inapplicable."
The parties do not dispute that the transfers were made in payment of debts which were incurred in the ordinary course of business of Debtor and Pana Quarry. The dispute is whether the payments were made in the ordinary course of business of the Debtor and Pana Quarry and according to ordinary business terms.
The purpose of the ordinary course of business defense is “to leave undisturbed normal financial relations, because it does not detract from the general policy of the preference section to discourage unusual action by either the debtor or his creditors during the debtor’s slide into bankruptcy.” H.R.Rep. No. 595, 95th Cong. 1st Sess. 373 (1977); S.Rep. No. 989, 95th Cong.2d Sess. 88 (1978), U.S.Code Cong. & Admin.News 1978, pp. 5963, 6329, 5787, 5874. As one court explained, “the ordinary course exception to the preference rule is formulated to induce creditors to continue dealing with a distressed debt- or so as to kindle its chances of survival without a costly detour through, or a humbling ending in, the sticky web of bankruptcy”. In re Molded Acoustical Products, Inc., 18 F.3d 217, 219 (3rd Cir.1994) (citations omitted). Another court has held that the ordinary course of business defense was designed to “leave undisturbed normal commercial and financial relationships and protect recurring, customary credit transactions which are incurred and paid in the ordinary course of business of both the debtor and the debt- or’s transferee.” Kleven v. Household Bank F.S.B., 334 F.3d 638, 642 (7th Cir.2003), quoting In re Armstrong, 231 B.R. 723, 729 (Bankr.E.D.Ark.1999), aff'd 260 B.R. 454 (E.D.Ark.2001).
Section 547(c)(2)(B) is a subjective test based upon the course of dealings between the debtor and the transferee. In re Garofalo’s Finer Foods, Inc., 186 B.R. 414, 428-29 (N.D.Ill.1995). In determining whether transfers are ordinary in relation to the past practices of the parties, the Court must look at a number of factors, including the following:
1. the length of time the parties were engaged in the transactions at issue;
2. whether the amount or form of tender differed from past practices;
3. whether the debtor or creditor engaged in any unusual collection or payment activity; and
*2004. whether the creditor took advantage of the debtor’s deteriorating financial condition.
In re Grand Chevrolet, Inc., 25 F.3d 728, 732 (9th Cir.1994). The twelve-month period preceding the preference period is an appropriate standard for determining the ordinary course of business between parties. See Lovett v. St. Johnsbury Trucking, 931 F.2d 494, 498 (8th Cir.1991); In re Bank of New England Corp., 161 B.R. 557, 560 (Bankr.D.Mass.1993).
Debtor began doing business with Pana Quarry in 2002. The “check swap” arrangement was commenced in April, 2005. Debtor’s bankruptcy petition was filed in October, 2005. All of the alleged preferential payments were made after the implementation of the “check swap” arrangement.
Without question, the “check swap” arrangement differed from past practices and constituted an “unusual” payment or collection activity. None of Pana Quarry’s other 20 customers was subject to such an arrangement, and Debtor was not subject to such an arrangement until April, 2005, when its payables to Pana Quarry became so far past due as to raise serious concern. Debtor did not pay any of its other creditors by “check swap.”
It is clear that Pana Quarry took advantage of Debtor’s deteriorating financial condition to pressure Debtor into the “check swap” arrangement. Debtor was advised that agreeing to the “check swap” was a condition precedent for continuing to do business with both Pana Quarry and Truman Flatt. Given Debtor’s precarious financial condition at the time, Debtor had no choice but to acquiesce to the “check swap”. Payments made as a result of economic pressure are not made in the ordinary course of business. In re Carini, 245 B.R. 319, 324 (Bankr.E.D.Wis.2000). Accordingly, viewing the record in a light most favorable to Pana Quarry, the Court finds that the payments made by Debtor to Pana Quarry during the preference period were not made in the ordinary course of the business or financial affairs of Debt- or and Pana Quarry.
Section 547(c)(2)(C) is an objective test based upon industry practices or standards. In re Daedalean, Inc., 193 B.R. 204, 214 (Bankr.D.Md.1996). The Bankruptcy Code does not define “ordinary business terms”. However, the Seventh Circuit has held that “ ‘ordinary business terms’ refers to the range of terms that encompasses the practices in which firms similar in some general way to the creditor in question engage, and that only dealings so idiosyncratic as to fall outside that broad range should be deemed extraordinary and therefore outside the scope of subsection (c)”. In re Tolona Pizza Products Corporation, 3 F.3d 1029, 1033 (7th Cir.1993) (emphasis in original).
It is difficult to understand how a “check swap” arrangement could fall within the range of “ordinary business terms”. Pana Quarry suggests that many of the “check swap” payments were made within 120 days of when they became due, which is within the range of ordinary payment terms in its industry. That may well be the case. However, payment within 120 days is not the only business term agreed to by the parties which must be “ordinary” in order for Pana Quarry to prevail. Here, the payment terms were also that the Debtor would generally pay Pana Quarry in the same amounts and on the same dates as Debtor received payments from Truman Flatt. Pana Quarry does even suggest that ordinary business terms would include having the dates and amounts of payments due on an obligation be determined by receipts from a third party.
*201The “check swap” simply cannot be an ordinary business term because businesses could not exist if they were required to pay all receipts from specific customers to specific creditors. Businesses need to be able to pay their employees, taxes, utilities and other overhead expenses from their receipts. A “check swap” is an extraordinary collection arrangement and not an ordinary business term.
Because as a matter of law the “check swap” payments were not made in the ordinary course of the Debtor’s or Pana Quarry’s business, and because a “check swap” is not an ordinary business term, summary judgment will be entered in favor of Trustee and against Pana Quarry on Trustee’s preference claim.
Trustee’s Motions for Summary Judgment pray for costs of suit. Costs “shall be allowed as of course to the prevailing party unless the court otherwise directs[.]” Fed.R.Bankr.P. 7054(d). Thus, Trustee’s requests for costs are allowed.
Trustee’s Complaints prayed for prejudgment interest. Trustee did not, however; request pre-judgment interest in his Motions for Summary Judgment. Accordingly, the Court does not award pre-judgment interest.
This Opinion is to serve as Findings of Fact and Conclusions of Law pursuant to Rule 7052 of the Rules of Bankruptcy Procedure.
See written Orders.
. Trustee concedes in his Motion for Summary Judgment that $2,184.79 of the total constitutes late charges. Trustee waived the late charges apd any request for pre-petition interest and, therefore, reduced his demand to $31,207.04. See Trustee’s Motion for Sum: mary Judgment at p. 3.
. Paragraph 5 of Trustee’s Complaint states that "[d]uring the preference period, and while the Debtor was insolvent, the Debtor made payments to the Debtor which totaled $99,394.33.” Actually, the Debtor made payments during the preference period to the Defendant — Pana Quarry. That fact is made manifest in the other pleadings and exhibits filed and is not disputed. Pana Quarry states that it actually received $99,460.33 during the preference period. See Answer of Pana Quarry May 19, 2006, p. 2.
. The Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA”) generally became effective with respect to cases filed on or after October 17, 2005. Because this case was filed on October 16, 2005, BAPCPA does not apply. All references to the Bankruptcy Code herein are to the pre-BAPCPA Code. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494091/ | MEMORANDUM DECISION
SARAH SHARER CURLEY, Bankruptcy Judge.
I. INTRODUCTION
This matter comes before the Court on the parties’ request for what is essentially summary judgment. On January 17, 2006, the Debtor and Plaintiff herein, Derek Micko, filed a Complaint for Declaratory Relief to determine the dischargeability of his student loan obligations (“Complaint”). At a Rule 16 Scheduling Conference on July 6, the Court and the parties determined that the matter could be resolved as a matter of law after briefing and oral argument. The parties filed a stipulated “Statement of Facts” on August 4, 2006, and the Plaintiff filed his memorandum of law on August 7, 2006. The Defendant, Student Loan Finance Corporation (“SLFC”), filed its Reply on August 14, 2006. The Defendant also filed a Motion to Dismiss Complaint on August 7, 2006. The Court held oral argument on August 21, 2006, at which time the parties requested additional time to determine whether there was any further legal support for their respective positions. The Court ordered the parties to submit their respective case law citations, if any, by August 25, 2006, at which time the matter would be deemed under advisement.1 On August 25, 2006, the Plaintiff submitted his Supplemental Brief Regarding In re Udell, 454 F.3d 180 (3rd Cir.2006). On August 26, 2005, the Defendant responded in a Sur-Reply.2
In this Memorandum Decision, the Court has now set forth its findings of fact and conclusions of law pursuant to Rule 7052 of the Rules of Bankruptcy Procedure. The issues addressed herein constitute a core proceeding over which this Court has jurisdiction. 28 U.S.C. §§ 1334(b) and 157(b) (West 2006).
II. FACTUAL BACKGROUND
The Plaintiff filed a petition for relief under Chapter 7 of the Bankruptcy Code on October 14, 2005 and received a discharge on February 13, 2006. On January 17, 2006, the Plaintiff filed his Complaint seeking a determination that his indebtedness to the Defendant is discharged under 11 U.S.C. § 523(a)(8). The Plaintiff seeks to discharge 13 loans owed to the Defendant, disbursed on 13 different dates, and totaling approximately $80,585.90.
The Defendant, formed in 1978 as a nonprofit entity, is now an employee-owned S corporation. It specializes in loans to students seeking to obtain higher education. Each loan obtained by the Plaintiff was memorialized by a Loan Application and Promissory Note. Many portions of these documents were to be completed by authorized school officials only, and “School Codes” used in these forms are the codes assigned to institutions of higher education by the United States Department of Education. The documents include information regarding the applicant’s enrollment status, anticipated graduation date, and cost of attendance. Fur*212ther, each loan includes a “Statement of Borrower’s Rights and Responsibilities” which describes payment deferment eligibility. The Defendant follows similar procedures for deferment on the notes as those utilized for the Federal Family Educational Loan Program (“FFELP”).3 If the borrower, in this case the Plaintiff, has no FFELP loans, the “eligibility will be the same as Federal Stafford loans disbursed on or after July 1,1993.”4
The Defendant extended the loans at issue to the Plaintiff to allow him to attend the University of North Dakota. The loans were made pursuant to the Great Opportunities Academic Loan Program and are known as “GOAL Notes.” The GOAL program is not funded in any part by a governmental unit or nonprofit institution. However, GOAL Notes are “qualified educational loans” under the Internal Revenue Service Publication 970 (2005). As such, subject to Internal Revenue Code income limitations, the interest paid by borrowers under GOAL Notes is deductible from the borrower’s gross income when paying income taxes. Additionally, under the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”), such “qualified educational loans” are now nondischargeable in bankruptcy. See 11 U.S.C. § 523(a)(8)(B) (2006). However, because of the filing date of this bankruptcy case, BAPCPA does not apply. Notably, it is undisputed that the Plaintiff received the loans as an “educational benefit.” Additionally, the Plaintiff is not seeking to discharge the loans on a determination of “undue hardship.” Thus, this Court’s determination of whether the Defendant’s loans are within the parameters of a “student loan” under Section 523(a)(8) will determine whether judgment should be entered in favor of the Plaintiff, discharging said loans, or his Complaint should be dismissed.
III. ISSUE PRESENTED
Because the facts are undisputed, the parties seek a legal determination of whether the loan obligations should be discharged. The Plaintiff asserts that his indebtedness to the Defendant does not fall within the purview of 11 U.S.C. § 523(a)(8), which provides that discharge will not be granted:
for an educational benefit overpayment or loan made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution, or for an obligation to repay funds received as an educational benefit, scholarship or stipend, unless excepting such debt from discharge under this paragraph will impose an undue hardship on the debtor and the debtor’s dependents.
It is clear that the Defendant is not a governmental unit, and the parties agree that the program under which the loans were offered was not funded in whole or in part by a governmental unit or a nonprofit institution. Additionally, the Plaintiff is not seeking to discharge the loans on a determination of “undue hardship,” and the parties agree that the loans conferred an “educational benefit” upon the Plaintiff. The issue for this Court to determine is whether the Defendant’s loans to the Plaintiff are “obligations to repay funds received as an educational benefit” under 11 U.S.C. § 523(a)(8).
IV. DISCUSSION
As noted previously, the parties agree that the legal issue presented may be resolved pursuant to the statement of *213facts presented by the parties. The Court need only determine which party is entitled to a judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). Each party has presented a different analysis as to the interpretation of Section 523(a)(2)(8). Any exercise of statutory interpretation must begin with the language of the statute itself. United States v. Ron Pair Enters., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989); In re Perez, 318 B.R. 742, 747 (Bankr.M.D.Fla.2005). If no ambiguity appears on the face of the statute, its plain meaning is to be given effect. Ron Pair, 489 U.S. at 241, 109 S.Ct. 1026 (“The plain meaning of legislation should be conclusive, except in the ‘rare cases [in which] the literal application of a statute will produce a result demonstrably at odds with the. intentions of its drafters.’ ” (quoting Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982))); In re Proalert, LLC, 314 B.R. 436, 441 (9th Cir. BAP 2004) (“When the words of a statute are clear, ‘judicial inquiry is complete.’ ” (quoting Conn. Nat’l Bank v. Germain, 503 U.S. 249, 253-54, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992))). When a statute’s language is clear, “the sole function of the court is to enforce it according to its terms.” Ron Pair, 489 U.S. at 241, 109 S.Ct. 1026.
The Plaintiff argues that the loans he received from the Defendant do not fall within the ambit of the nondischargeable loans in Section 523(a)(8), which are described- as “obligationfs] to repay funds received as an educational benefit.” The Plaintiff argues that loans from private lenders, although they may confer an “educational benefit” on the borrower, are not within the parameters of Section 523(a)(8). The Plaintiff asserts that because the Section limits nondischargeable educational benefit overpayments or loans to those “made, insured or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution,” the phrase “obligation to repay funds received as an educational benefit” must apply only to government units or nonprofit lenders. To hold otherwise, the Plaintiff argues, would render the first portion of the Section superfluous. The Court disagrees.
Although the Court has reviewed the decision of In re Udell, 454 F.3d 180 (3rd Cir.2006), the case does not resolve the issues at hand. The defendant in Udell was expelled from the United States Air Force Academy before he was able to complete his compulsory years of service in the Air Force. The cost of his education at the Academy, to be repaid through Air Force service, became due and owing as a monetary amount. He sought to discharge that obligation in bankruptcy. The Udell Court considered the application of 10 U.S.C. § 2005(d), which makes an educational obligation owed to the government and arising in connection with service in the armed forces nondischargeable for five years after such service has ended; but that statute is silent as to the discharge-ability of the obligation thereafter. The Third Circuit concluded that once the five years had passed, 11 U.S.C. § 523(a)(8) would make the loans nondischargeable. Id. at 186. It held that the loans were “plainly an educational benefit made under a program funded by the government and Udell [had] an obligation to repay funds received as an educational benefit.” Id. at 185-86. The Court assumed the loans were an “obligation to repay funds received as an educational benefit” without comment. Id. It did not elaborate on the issue at hand: whether such a loan was the only type of “obligation to repay funds received as an educational benefit” rendered nondischargeable by Section 523(a)(8). Not *214only does the Udell opinion lack analysis relevant to this matter, but the Udell Court ultimately found the loans to be nondischargeable on a separate ground; that is, the loans were funded under a government program. However, the Udell Court rejected the debtor’s argument that his educational loans were dischargeable because of the legislative history of Section 523(a)(8). Citing Ron Pair, 489 U.S. 235, 240-41, 109 S.Ct. 1026, 103 L.Ed.2d 290, the Court held that “the plain language of a statute is normally regarded as conclusive” and declined to look beyond the ordinary meaning of Section 523(a)(8). Id. at 186-87.
The Ninth Circuit case of In re Nys, 446 F.3d 938 (9th Cir.2006), is similarly inapposite to the matter at hand. In a footnote, the Ninth Circuit states that Section 523(a)(8) does not discharge any individual Chapter 7 debtor’s educational debt, unless excepting the debt from discharge “would impose an undue hardship on the debtor and the debtor’s dependents, for .... an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution.” Id. at 942, n. 3. The Plaintiff uses this citation to assert that only those loans mentioned in the Section itself are nondischargeable, creating an inference that others are dis-chargeable. However, the quotation is not applicable to this case for three reasons. First, the Ninth Circuit quoted the language of BAPCPA, yet its decision and this matter concern an interpretation of the Bankruptcy Code before its recent revisions. Second, the Plaintiffs reliance is misplaced because the Ninth Circuit is quoting only a portion of Section 523(a)(8). The Section continues with the following language: “an obligation to repay funds received as an educational benefit, scholarship, or stipend; or any other educational loan that is a qualified education loan....” 11 U.S.C. § 523(a)(8) (2006) (emphasis added). In essence, the Nys decision focuses on the issue of undue hardship, an issue not in dispute here. Finally, the footnote cited was not critical to the decision in Nys; hence, it is only dicta, if that, and need not be followed by this Court.
The Plaintiff places great reliance on a series of cases involving private schools which provided driver training, primarily to those individuals who wished to obtain commercial licenses to drive trucks. See In re Scott, 287 B.R. 470 (Bankr.E.D.Mo.2002); United Resource Sys., Inc. v. Meinhart, 211 B.R. 750 (Bankr.Colo.1997); and McClure v. Action Career Training (In re McClure), 210 B.R. 985 (Bankr.N.D.Texas 1997) (collectively, “the driving school cases”). Each of these cases considered the dischargeability of loans extended by a private, for-profit truck driving school to a student of that school. Scott, 287 B.R. at 472; Meinhart, 211 B.R. at 752; McClure, 210 B.R. at 985. In each case, the Court determined that the loans were discharge-able and were not “obligation[s] to repay funds received as an educational benefit” within the meaning of Section 523(a)(8). Scott, 287 B.R. at 474-75; Meinhart, 211 B.R. at 753-55; McClure, 210 B.R. at 987-88. The Scott Court, for example, interpreted the phrase, “obligation to repay funds received as an educational benefit” to exclude the loans extended by the private school at issue. Scott at 474. It opined, without citation to authority, that the phrase was applicable to “grants that must be repaid only under certain conditions (like the failure of a medical student grant recipient to practice in a physician shortage area after graduation).” Id. The Scott Court provided no basis for this conclusion, and this Court finds it unpersua*215sive.5
The defendants involved in the three driving school cases are easily distinguished from the Defendant before this Court. In each of the driving school cases, the defendant offered student loans to attract customers for its for-profit business operations. Unlike the driving school defendants, the Defendant, in this case, is not a for-profit vocational training school that uses the prospect of financial aid to recruit students. Rather, the Defendant loans money only to students who attend post-secondary schools that participate in federal student aid programs administered by the United States Department of Education. The “School Codes” it uses on its loan applications are those issued by the United States Department of Education. The loan deferments on the GOAL notes extended to the Plaintiff are identical to those deferments to which federal student loan notes are subject. The Defendant specializes in servicing educational loans made pursuant to the Federal Family Education Loan Program. Thus, the Defendant’s practices are much like those of the nonprofit lenders and governmental units that Section 523(a)(8) is intended to protect: namely those that lend money only to students obtaining higher education, and whose ability to lend money to additional students largely depends on the repayment of prior loans. See In re McLeroy, 250 B.R. 872, 878 (“By enacting section 523(a)(8), Congress sought principally to protect government entities and non profit institutions of higher education — organizations which lend money or guarantee loans to individuals for educational purposes — from bankruptcy discharge.” (emphasis added)). In fact, the Defendant began operation in 1978 as a nonprofit lender. Although its organizational form has changed, it continues to operate in a manner substantially similar to a nonprofit institution.
Even the documentation or funding mechanisms for the loans at issue in the driving school cases are substantially different from the loans at issue in this case. In the Scott case, for example, the loan was evidenced by a “Retail Installment Contract.” Scott at 472. In Meinhart, the Court expressed doubt that the monies at issue had ever been “received” by the debtor, as Section 523(a)(8) requires. Meinhart at 754-55. It is undisputed that the loans at issue in this case were appropriately disbursed to the Plaintiff on the 13 disbursement dates stipulated by the parties. Moreover, each loan was evidenced by a Loan Application and Promissory Note, part of which was completed by the Plaintiff and part of which was completed by the post-secondary school he attended. Sections of the Loan Applications included government issued school codes and other information typically provided by schools to student aid programs funded by the government or by nonprofit institutions. Because the schools in Scott, Meinhart, and McClure did not participate in federal or nonprofit student loan programs, the schools provided loans that were much more similar to “retail installment contracts” extended to customers purchasing goods or services than student loans. The loans were provided to enable the debtors in those cases to purchase, over time, a service the school provided. The GOAL notes at issue in this case allowed the Plaintiff to finance a post-secondary education — the same education that loans provided to him by government or nonprofit *216lenders would have allowed him to finance.6
To hold that Section 523(a)(8) applies to “obligation^ to repay funds received as an educational benefit” if they were extended only by governmental units or nonprofit entities would depart from the plain meaning of the statute. If Congress had intended to limit nondischargeable obligations to repay funds received as educational benefits to certain institutions, such as governmental units or nonprofit lenders, Congress would have so indicated.
Instead, the statute provides a broad description of obligations to repay money modified only by the words “received as an educational benefit.” The fact that certain loans funded by the government or a nonprofit institution are separated from the “funds received as an educational benefit” by the conjunction “or” further supports the Defendant’s assertion that a broader category of loans was interpreted by Congress as being nondischargeable. “Courts ... are obligated to refrain from inserting language into a statute that Congress has opted to omit.” In re USinternetworking, Inc., 291 B.R. 378, 381 (Bankr.D.Md.2003). Thus, this Court must look to the plain meaning of Section 523(a)(8), which renders an “obligation to repay funds received as an educational benefit” nondischargeable. An obligation is defined as “a commitment (as by a government) to pay a particular sum of money, also: an amount owed under such an obligation.” Merriam-Webster Dictionary (2006). It is undisputed that the Plaintiff committed himself to repay the money extended to him by the Defendant, as evidenced by the GOAL notes. Additionally, it is undisputed that the loans at issue conferred an educational benefit on the Plaintiff. Thus, on the plain language reading of the statute that Ron Pair requires, the Plaintiffs loans are nondischargeable.
Although this case was filed prior to the effective date of BAPCPA, that Act’s provisions reinforce the conclusion that Section 523(a)(8)’s language regarding “an obligation to repay funds received as an educational benefit” should necessarily include lenders such as the Defendant. Since its enactment as part of the Bankruptcy Reform Act of 1978, Section 523(a)(8) has been amended several times. From these amendments, a general pattern has emerged. Each time, Congress has provided additional protection from discharge to lenders offering student loans. Compare, e.g., 11 U.S.C. § 523(a)(8) (1988) (excluding from discharge “educational loanfs] made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit, or nonprofit institution”) with 11 U.S.C. § 523(a)(8) (1990) (excluding from discharge the same items as before with the addition of “obligation^] to repay funds received as an educational benefit”) and 11 U.S.C. § 523(a)(8) (2005) (excluding from discharge the same items as before with the addition of “any other educational loan that is a qualified educational loan, as defined in Section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual.” Qualified educational loans are loans incurred by a taxpayer that are used to pay higher education expenses. See I.R.C. § 221(d)(1) (2006)). The latest version of Section 523(a)(8), making “qualified educational loans” nondischargeable, is simply a clarification by Congress that entities extend*217ing loans to individuals in order to enable those individuals to attend institutions of higher education are entitled to be protected with a nondischargeable obligation unless a debtor may prove an undue hardship. This Court’s analysis of Section 523(a)(8) is consistent with Congressional intent.
The Court acknowledges concerns regarding such an interpretation of 11 U.S.C. § 523(a)(8). However, any concerns as to interpretation may be addressed on a case-by-case basis. The lender in this matter has established procedures which are substantially similar to a governmental unit or a nonprofit lender. Such an entity should be entitled to the protections of Section 523(a)(8). Moreover, BAPCPA has clarified the language at issue to the extent it is necessary.
V. CONCLUSION
Based on the stipulated facts, and the plain meaning of 11 U.S.C. § 523(a)(8), this Court concludes that the Plaintiffs educational obligation to the Defendant, in the amount of $80,585,90, plus interest accruing at the contract rate, is nondischargeable. The Plaintiffs Motion to have judgment entered in his favor is denied. The Defendant’s Motion that the Plaintiffs Complaint be dismissed is granted. The Court will issue a separate order incorporating this Memorandum Decision.
. Minute Entry of August 21, 2006.
. The Defendant entitled its Reply as being in support of a “Motion for Finding of Nondischargeability.'' The Defendant also filed a Motion to Dismiss. Since the Complaint focuses on the issue of nondischargeability, if the Defendant is correct in its legal analysis, the Court must dismiss the Complaint.
. "Statement of Facts” of August 4, 2006, at ¶ 8.
. Id.
. The recent Third Circuit decision of In re Udell, 454 F.3d 180 (3rd Cir.2006) does not cite or refer to Scott even though the dicta might arguably support the Court's conclusion in Udell.
. The Plaintiff apparently sought at least some of the loans from the Defendant because he reached the monetary limit for student loans provided by the government or nonprofit lenders. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494092/ | MEMORANDUM OPINION
ROBERT D. BERGER, Bankruptcy Judge.
Pending before the Court is the Chapter 13 Trustee’s and Defendant Novastar Home Mortgage, Inc.’s joint Motion to Approve Settlement and Compromise (Doc. No. 5); Defendant Debtor’s Objection to Proposed Settlement (Doc. No. 8); Debt- or’s Motion to Grant Modified Equitable Mortgage (Doc. No. 12); and Novastar *221Home Mortgage, Inc.’s Response to Motion to Grant Modified Equitable Mortgage (Doc. No. 13). Chapter 13 Trustee William H. Griffin appears. Novastar Home Mortgage, Inc. (“Novastar”), appears by counsel Thomas J. Lasater. Debtor Lucinda A. Ramsey appears by counsel George J. Thomas. Based upon the pleadings, undisputed facts as represented by counsel, and arguments of counsel, the Court DENIES both motions.
Background
On September 18, 2002, Debtor’s former spouse executed a note in favor of Novas-tar in the principal sum of $133,650.00 (“Note”). The Debtor did not execute the Note and has never been personally obligated to pay the debt. To secure the Note, Debtor and her former spouse both executed and delivered a mortgage to Novastar granting a lien on their home in Mission, Kansas. Novastar failed to perfect its lien by recording the mortgage. Novastar admits it cannot find the mortgage document.1 Debtor’s former spouse conveyed his ownership interest in the home to Debtor by quitclaim deed recorded on May 14, 2003. The Debtor filed for voluntary relief under Chapter 13 on August 2, 2004.
Debtor filed a Chapter 13 plan identifying the Novastar mortgage as her home mortgage. Debtor proposed to pay post-petition monthly mortgage payments in the amount of $1,300.00 directly to Novas-tar outside the plan. Pre-petition arrearage estimated to be $3,394.00 would be paid from plan payments. The plan included the following note concerning Novastar’s mortgage:
Debtor has reason to believe that creditor Novastar Mortgage Company does not have a properly perfected security interest on debtor’s homestead. Apparently, there is no lien filed with the Johnson County Recorder of Deeds as of the date of this bankruptcy filing. Creditor should be required to provide proof of lien perfection along with its proof of claim. If this creditor cannot provide proof of lien perfection, this debt should be treated as an unsecured debt and paid according to the terms of this plan.
Novastar does not contend that it did not receive notice of the bankruptcy filing and the plan. Novastar did not object to the plan, and the Court confirmed the plan on October 1, 2004. Novastar never sought relief from the confirmation order.
Novastar filed a proof of claim for a secured claim in the amount of $139,220.86 on January 3, 2005 (Claim No. 10). Novastar did not provide proof of lien perfection. Further, Novastar filed Claim No. 10 more than a month after the claims bar date of November 30, 2004. On January 20, 2005, Debtor filed an objection to Novastar’s claim, alleging Claim No. 10 was untimely; the lien was unperfected; and the plan provided Claim No. 10 was to be treated as unsecured. The Debtor requested Claim No.. 10 be either disallowed or classified as unsecured. Debtor mailed a copy of the objection and notice of hearing to Novastar at the address Novastar provided in its proof of claim. Novastar failed to appear at the objection hearing held February 8, 2005. The Court entered an Order disallowing Claim No. 10 on February 16, 2005. The Order disallowing Claim No. 10 was served on Novastar; however, Novastar never appealed or otherwise sought relief from the Order denying its claim.
Eventually, on May 24, 2005, Novastar filed a Motion for Relief from Stay admit*222ting its mortgage was unperfected as of the petition date, but requesting the Court acknowledge a lien pursuant to K.S.A. § 58-22232 and grant Novastar stay relief to enforce the mortgage in state court. As the basis of the motion, Novastar alleged the Debtor made only one post-petition mortgage payment of $1,016.00. Novastar further alleged the Debtor did not make any mortgage payments after August 2004. Lastly, Novastar alleged it paid taxes and insurance costs for the property. The Debtor did not deny that she failed to make the foregoing payments, but she challenged the amounts allegedly due. As of May 23, 2005, Novastar alleged the payoff amount due on the mortgage was $147,005.93,3 the arrearage being $15,357.57. The parties place the value of the home between $100,000.00 and $130,000.00.
Procedural Posture
The Debtor objected to stay relief, arguing, in part, that Novastar’s lien was avoided by operation of law under 11 U.S.C. § 544.4 The Debtor also argued that treatment of Novastar’s claim in the confirmed plan constituted res judicata under 11 U.S.C. § 1327.5 The Court denied the stay relief motion on June 21, 2005, not because § 544 automatically avoids a lien, but to allow the Trustee time to decide whether he would seek to avoid the mortgage under § 544 through an appropriate adversary proceeding. The Court did not reach the issue of the res judicata effect of the Debtor’s confirmed plan.
On September 27, 2005, the Trustee, with the cooperation of Novastar, filed the instant Complaint to Avoid and Recover Avoidable Transfer and to Determine Rights pursuant to 11 U.S.C. § 544. The next day, on September 28, the Trustee and Novastar filed a joint Motion to Approve Settlement and Compromise in which Novastar would 1) consent to the avoidance of its unperfected lien for the benefit of the estate; 2) pay $4,000 to the Trustee for his rights in and to the avoided and preserved mortgage lien; and 3) waive its unsecured claim against the estate in the amount of $150,869.93. For the Debt- or, the settlement provides that the Trustee agrees to waive his claim against the Debtor for the post-petition mortgage payments, which have not been paid to Novas-tar under the plan. Lastly, Novastar would be granted stay relief to foreclose the lien in state court.
The Debtor objects to the proposed settlement and counters with a Motion to Grant [Novastar] a Modified Equitable Mortgage in the amount of $100,000 or “any reasonable suggestion” as to the amount. Novastar objects to Debtor’s proposal, countering that its unrecorded mortgage defines the parties’ obligations.
Discussion
The Existence of Novastar’s Lien
Debtor’s objection to the proposed settlement first challenges whether Novastar even has a lien to avoid. Debtor bases her objection on the Order Confirming Chap*223ter 13 Plan (Doc. No. 19) and the Order denying Novastar’s Claim No. 10 (Doc. No. 25). The Debtor argues the Orders constitute res judicata as to whether Novastar has a lien to avoid.
In order for a judgment or order to have preclusive effect in a later action there must be (1) a final judgment on the merits; (2) identity of the parties; and (3) identity of the cause of action in both suits.6 Identity of cause of action includes all claims or legal theories of recovery that arise from the same transaction, event, or occurrence.7 If the foregoing elements are met, res judicata is appropriate unless the party seeking to avoid preclusion did not have a full and fair opportunity to litigate the claim in the prior suit.8
Debtor’s Chapter 13 Plan Did Not Extinguish the Lien
An order confirming a Chapter 13 plan may be a final judgment on the merits even though the plan attempts to accomplish relief normally requiring an adversary proceeding.9 For example, several courts, including some in the Tenth Circuit, have found that liens may be modified or extinguished in the debtor’s Chapter 13 plan.10 As a general rule, albeit with many exceptions, perfected liens may pass through bankruptcy undisturbed.11 In order to void a lien, the debtor must take some affirmative step.12 Accordingly, the determination of the validity, priority, or extent of a lien usually requires an adversary proceeding.13 However, a Chapter 13 plan may accomplish the same relief, provided the debtor includes clear and unambiguous language which unequivocally puts the creditor on notice that its lien rights will be finally determined upon confirmation of the plan.14 Andersen is the seminal case and, although it deals with the dischargeability of a student loan, it stands for the res judicata effect of confirmed Chapter 13 plans in the Tenth Circuit.15 Even so, Andersen has been criticized because attorneys have since inserted provisions into Chapter 13 plans hoping to achieve preclusive effect, notwithstanding heightened notice requirements for some actions such as discharging a student loan or extinguishing a lien.16 Poland requires Chapter 13 plan language to *224specifically establish the elements of the proposed course of action (for example, including the factual finding that the student loan creates an undue hardship or that confirmation will void the lien) in order to later invoke res judicata.17 Thus, under Andersen and Poland, before a Chapter 13 plan may be res judicata for unlitigated provisions in the Tenth Circuit, the plan must (1) specifically and unambiguously advise the creditor that its rights will be altered by confirmation of the plan; (2) decisively advise the creditor how its claim shall be treated upon confirmation; and (3) provide heightened notice to the creditor that, at a minimum, advises of the extraordinary provision to be given preclusive effect in a confirmation order.
For example, Davis’s plan definitively stated the creditor was secured by an unperfected mortgage which would be avoided upon plan completion.18 Likewise, Andersen specifically stated in her plan that confirmation would constitute a factual finding of undue hardship. Bilal stated confirmation would constitute a finding that the loan transaction was rescinded under TILA and the mortgage void and unenforceable. The Davis, Andersen, and Bilal plans left no room for the creditor to believe that its claim would be determined at a later date. In contrast, Poland involved plan language which did not specifically include a finding of undue hardship. Absent language conclusively resolving the very question at issue, the confirmation order is not a final judgment on the merits of the unlitigated issue.19
To achieve res judicata, Debtor had to include definite findings of fact and conclusions as to Novastar’s treatment. In this case, Debtor’s plan did not avoid or otherwise extinguish Novastar’s lien. In fact, the plan acknowledged Novastar held the Debtor’s home mortgage and would be paid outside the plan with the exception of estimated arrearage to be paid through the plan. The plan then stated, “If [Novastar] cannot provide proof of lien perfection, this debt should be treated as an unsecured debt and paid according to the terms of this plan.” Normally, as a lien-holder, Novastar would not be required to file a proof of claim to retain its lien. However, Novastar’s lien is vulnerable because it is unperfected. Debtor’s plan specifically called out Novastar to file a proof of claim and provide proof of lien perfection.20 The plan’s language relating to proof of perfection and treatment of Novastar’s claim is prospective, not determinative. The plan states, “[Novastar] should be required to provide proof of lien perfection along with its proof of claim. If [Novastar] cannot provide proof of lien perfection the debt should be treated as an unsecured debt and paid according to the terms of this plan.” The plan contains no conclusive finding of fact or determination of the validity of Novastar’s lien. At best, the plan requires Novastar to file a proof *225of claim to initiate a process for resolving the perfection issue and the ultimate treatment of Novastar’s claim. The Court’s Order Confirming Chapter 13 Plan does not avoid Novastar’s lien, nor does it prescribe any definite treatment for Novas-tar’s claim. At best, Debtor’s plan flagged the issue for future determination, which is where the parties are now.
Novastar’s Failure to Defend Claim No. 10
More problematic than its failure to object to the plan is Novastar’s failure to appear at its claim objection hearing.21 Since perfected liens may pass through bankruptcy, a secured creditor may ignore the proof of claim process altogether and look solely to its lien for satisfaction of the debt.22 Therefore, a secured creditor’s failure to file a proof of claim does not invalidate or extinguish a lien although it may disallow the creditor’s claim, i.e., the creditor’s ability to receive any payments through the plan.23 Likewise, where, as here, a secured creditor files an untimely claim which is disallowed, the lien is not extinguished because failure to file a timely claim, alone, is not grounds for extinguishing a lien.24
However, once a creditor files a secured claim, the claim is subject to objection as to the validity, priority, or extent of the lien.25 A claim objection based upon the validity, priority, or extent of a lien initiates an adversary proceeding and requires service of the objection in the manner provided for a summons and complaint.26 A claim objection based upon complete repayment of the loan or the loan having never been made, if successful, would result in a disallowed claim and the loss of the corresponding lien.27 On the other hand, an objection based upon failure to perfect does not extinguish the lien; rather, the trustee’s relief is to avoid and preserve the lien for the benefit of the estate.28 The lien remains enforceable against the debtor. Upon avoidance by the trustee, the lienholder merely changes from the unperfected creditor to the trustee.
In this case, even though Debtor attacked perfection in its claim objection, the issue of the lien was never actually litigated. Therefore, the Debtor may not invoke collateral estoppel as to the existence of the lien.29 Further, the claim objection did not seek the relief of avoiding and preserving the lien for the benefit of the estate. The claim objection requested the claim be disallowed or classified as unsecured. Novastar lost its claim by failing to appear. The Order denying Claim No. 10 is basically a default judgment as to the claim, but the Order does not address the lien. The lien in this case was not the subject of a bona fide dispute as to its existence. Debtor does *226not deny she executed the mortgage. Debtor never contested the claim on the ground that the loan was not made or that the mortgage had been satisfied. Debtor’s objection was based on Novastar’s failure to record the mortgage prior to her bankruptcy filing. As between the Debtor and Novastar, the lien is valid and exists.30 Thus, Novastar’s lien survived the claim objection attack, albeit as unperfected.
Standard in Approving Settlements
Having determined Novastar’s lien has not been previously avoided and preserved for the benefit of the estate, the Court turns to the substance of the Motion to Approve Settlement and Compromise. Whether to approve a proposed settlement is a matter within the Court’s discretion.31 In determining whether a settlement is fair and equitable and in the best interest of the estate, the Court considers (1) the probable success of the litigation on the merits; (2) any potential difficulty in collection of a judgment; (3) the complexity and expense of the litigation; and (4) the interest of creditors in deference to their reasonable views.32 Ultimately, the Court must weigh the value of the settlement against the value of the litigation.33 However, the Court need not resolve all issues, but only identify them so that the reasonableness of the settlement may be evaluated.34 The Court should also consider the extent to which the settlement is truly the product of arms-length bargaining.35 The burden of persuasion rests with the party proposing the settlement.36
Additional Standards When Proposed Settlement Disposes of an Estate Asset
In addition, when the settlement amounts to a cause of action being sold to the present defendant or, as in this case, the sale of the Trustee’s avoided lien rights, the Court must independently evaluate the proposal as a sale of an estate asset.37 Such compromise of a claim disposing of an estate asset implicates both the sale provisions under 11 U.S.C. § 363 and Rule 6004 and the compromise provisions of Rule 9019(a).38 However, under Chapter 13, unlike Chapter 7 and Chapter 11, a Chapter 13 Trustee has no power to sell property of the estate under § 363(b).39
*227Effect of Preserving a Lien for the Benefit of the Estate under Chapter 13
Even so, the Chapter 13 Trustee is empowered to exercise Chapter 5 avoiding powers and preserve avoided liens for the benefit of the estate.40 Upon avoidance of a lien under § 544, the Trustee steps into the shoes of the defendant lienholder.41 The value of the avoided lien is automatically preserved for the benefit of the estate.42 However, Chapter 13 does not authorize the Trustee to liquidate property.43 Thus, the Chapter 13 Trustee may not recover the value of the lien by selling it. Instead, the Chapter 13 Trustee’s avoidance of an unperfected lien, specifically under § 544, benefits the estate by either one of two ways allowed under the Code. First, avoidance of the lien nullifies the security transaction.44 Accordingly, the portion of the debtor’s income (or allocation in the plan) to pay the secured claim is no longer required to be paid to the defendant creditor. The resulting increase in disposable income available to pay creditors holding allowed claims under the Chapter 13 plan is a benefit to the estate.45 The second way the Chapter 13 Trustee may realize the benefit of an avoided lien for the estate is triggered by the debtor’s desire to retain the property. Under the “best interests of creditors” test, the Code assures that unsecured creditors will receive at least as much as they would receive if the case were liquidated under Chapter 7.46 Thus, if a Chapter 13 debtor elects to retain property subject to an avoided and preserved lien now held by the Trustee, the debtor must pay into the plan the value of the lien.47 If the debtor is unable to pay into the plan the value of the lien which the creditors would receive under Chapter 7, then the debtor will be unable to complete a Chapter 13 plan.
The optimal value of an avoided lien is the value of the collateral capped by either (1) the amount of the debt on the petition date or (2) the amount necessary to pay unsecured creditors in full, regardless the fair market value of the lien. In other words, the Chapter 13 Trustee does not need to recover more than the amount which pays the administrative costs and allowed claims in full under the debtor’s plan. The value of the lien may be realized by either an increase in plan payments to reflect the increase in disposable income, or, if a Chapter 13 debtor desires to keep the property subject to the avoided lien, the debtor must “purchase” the property by paying into the plan an amount of money equal to the value as of the effective date of the plan not to exceed the amount which pays the allowed claims under the debtor’s plan in full.48
*228Analysis
The proposed settlement can not be confirmed under the best-interest-of-the-estate test. The probable success of the litigation on the merits is 100%. Novastar admits its lien is unperfected and avoidable under 11 U.S.C. § 544.49 The Trustee faces no difficulty in collecting the judgment because the avoided lien is automatically preserved for the benefit of the estate under 11 U.S.C. § 551. The litigation is not complex or expensive and could be summarily concluded. Lastly, the interest of creditors in this ease is comprised of creditors holding allowed claims. Novastar does not have an allowed claim. More specifically, Novastar has a previously adjudicated disallowed claim. Novas-tar’s interests are not part of the allowed claims pool warranting consideration under the best-interest-of-the-estate test.50 Thus, all factors weigh against approval of the proposed settlement.
Additionally, the proposed settlement cannot be approved because the Trustee has no authority to sell his rights in Novastar’s avoided and preserved mortgage lien for $4,000 or any other amount. The Trustee also cannot partially avoid the lien to the limited extent of paying the claims and administrative expenses of the estate.51 The available means of realizing the value of the lien involve rights unique to the Chapter 13 debtor; accordingly, the Debtor has standing to object to the Trustee’s proposed settlement with Novastar. The avoided lien may not be sold without the Debtor’s consent because it is property of the estate. The Chapter 13 debtor has exclusive power to sell property of the estate under 11 U.S.C. § 1303. Thus, only the Debtor may cash-out the value of the lien from the estate. If the Debtor cannot pay the lien’s value up to an amount to pay unsecured creditors as much as they would have realized under Chapter 7, the remedy is either (1) conversion (at which point the Chapter 7 liquidating Trustee may sell the lien for the highest offer); or (2) dismissal (at which point the unperfected lien will revert back to Novastar).
Debtor’s Motion to Grant Modified Equitable Mortgage Is Beyond the Equitable Powers of this Court
The Debtor’s Motion to Grant Modified Equitable Mortgage is nothing more than an attempt to force a settlement over Novastar’s objection. If the parties cannot reach a mutually agreeable resolution, the Court adjudicates the parties’ present rights. The Court does not create new rights under these circumstances. Conclusion
For the foregoing reasons, the Chapter 13 Trustee’s and Defendant Novastar Home Mortgage, Inc.’s joint Motion to Approve Settlement and Compromise (Doc. *229No. 5) is DENIED. Debtor’s Motion to Grant Modified Equitable Mortgage is DENIED.
IT IS SO ORDERED.
. Novastar filed an "Affidavit of Lost Document” regarding the mortgage in Johnson County, Kansas, post-petition on December 30, 2004.
. K.S.A. § 58-2223 provides an unrecorded mortgage is valid only between the parties thereto and parties having actual notice of the encumbrance. As to all others, mortgages are not valid encumbrances unless they are filed with the register of deeds.
. The amount continues to increase. As of September 15, 2005, Novastar alleges the amount due is $150,869.93.
. U.S.C. § 544 allows the trustee to avoid an unperfected mortgage.
. “The provisions of a confirmed plan bind the debtor and each creditor, whether or not the claim of such creditor is provided for by the plan, and whether or not such creditor has objected to, has accepted, or has rejected the plan.” 11 U.S.C. § 1327.
. In re Davis, 188 Fed.Appx. 671, 675, 2006 WL 1734250, at *4 (10th Cir. June 21, 2006) (citing MACTEC, Inc. v. Gorelick, 427 F.3d 821, 831 (10th Cir.2005). Davis is an Order and Judgment and is not binding precedent; however, the facts of Davis are similar to this case).
. Id. (quoting Plotner v. AT & T Corp., 224 F.3d 1161, 1169 (10th Cir.2000)).
. Id.
. 11 U.S.C. § 1327; In re Layo, 460 F.3d 289, 293 (2nd Cir.2006); In re Bilal, 296 B.R. 828, 836 (Bankr.D.Kan.2003).
. In re Davis, 188 Fed.Appx. 671, 2006 WL 1734250 (10th Cir. June 21, 2006); see also In re Bilal, 296 B.R. 828; In re Sosnowski, 314 B.R. 23, 27 (Bankr.D.Del.2004).
. Dewsnup v. Timm, 502 U.S. 410, 417, 112 S.Ct. 773, 116 L.Ed.2d 903 (1992); Cen-Pen Corp. v. Hanson, 58 F.3d 89, 92 (4th Cir.1995).
. Id. at 92-93; Matter of Penrod, 50 F.3d 459, 462 (7th Cir.1995).
. Bankruptcy Rule 7001(2); In re Banks, 299 F.3d 296, 301 (4th Cir.2002); see also In re Woodling, 2004 Bankr.LEXIS 1751 (Bankr.D.Kan. Oct. 14, 2004); In re Fowle, 2006 Bankr.LEXIS 771 (Bankr.D.Kan. Apr. 20, 2006).
. In re Andersen, 179 F.3d 1253, 1256-57 (10th Cir.1999); In re Fowle, 2006 Bankr.LEXIS 771, at *9.
. Andersen, 179 F.3d at 1256-57.
. In re Poland, 382 F.3d 1185, 1189 n. 2 (10th Cir.2004).
. Id. at 1188; In re Davis, 2006 WL 1734250; In re Bilal, 296 B.R. at 828. Another example is requiring debtors to give heightened notice by filing a motion before seeking to strip down a second mortgage lien. In re Woodling, 2004 Bankr.LEXIS 1751; In re Fowle, 2006 Bankr.LEXIS 771, at *9.
. In re Davis, 2006 WL 1734250, at *1.
. In re Poland, 382 F.3d at 1188-89; see also Cen-Pen Corp. v. Hanson, 58 F.3d at 93; In re Johnson, 279 B.R. 218, 226 (Bankr.M.D.Tenn.2002); Matter of Beard, 112 B.R. 951, 954 (Bankr.N.D.Ind.1990).
.Debtor’s own due diligence would have discovered the mortgage was unrecorded, which, as in Davis, would have provided a factual finding to be given preclusive effect. However, as the Davis dissent observed, Davis’s factual finding was false, which raises another criticism of Andersen and res judicata by ambush.
. Novastar fails to address this omission.
. 11 U.S.C. § 506(d)(2); Matter of Tarnow, 749 F.2d 464, 465 (7th Cir.1984).
. Id.
. Id. at 466.
. Matter of Penrod, 50 F.3d at 462.
. Fed. R. Bankr. P. 3007, 7001, and 7004.
. 11 U.S.C. § 506(d); Matter of Tarnow, 749 F.2d at 465-66; Matter of Penrod, 50 F.3d at 462.
. 11 U.S.C. § 551; In re Gilliam, 2004 Bankr.LEXIS 1653, at *29 (Bankr.D.Kan. Oct. 28, 2004).
. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n. 5, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979) (default judgment does not give rise to collateral estoppel because an essential element of issue preclusion is that the issue be "actually litigated” in the earlier litigation).
. K.S.A. § 58-2223 (an unrecorded mortgage is not valid except between the parties thereto).
. Reiss v. Hagmann, 881 F.2d 890, 891-92 (10th Cir.1989).
. In re Western Pacific Airlines, Inc., 219 B.R. 575, 579 (D.Colo.1998).
. Id.., citing In re The Hermitage Inn, Inc., 66 B.R. 71, 72 (Bankr.D.Colo.1986).
. Id.
. In re Bugaighis, 2004 WL 3190352, at *5 (Bankr.D.Colo. Nov.5, 2004) (citing Conn. Gen. Life Ins. Co. v. United Companies Fin. Corp. (In re Foster Mortgage Corp.), 68 F.3d 914, 918 (5th Cir.1995)).
. In re The Hermitage Inn, Inc., 66 B.R. at 72.
. In re Mickey Thompson Entertainment Group, Inc., 292 B.R. 415, 421 (9th Cir. BAP 2003), citing Myers v. Martin (In re Martin), 91 F.3d 389, 394-95 (3rd Cir.1996) (When confronted with a motion to approve a settlement, the Court may consider whether the property of the estate being disposed of in the settlement might draw a higher price through a competitive process and be the proper subject of a § 363 sale.).
. Id. at 422, adding "whether to impose formal sale procedures is ultimately a matter of discretion that depends upon the dynamics of the particular situation.”
. 11 U.S.C. § 1303 ("Subject to any limitations on a trustee under this chapter, the debtor shall have, exclusive of the trustee, the rights and powers of a trustee under sections 363(b)....”); In re Richardson, 283 B.R. 783, *227800 (Bankr.D.Kan.2002) (Chapter 13 trustee not authorized to collect, liquidate, or distribute property like a Chapter 7 trustee).
. In re Hansen, 332 B.R. 8 (10th Cir. BAP 2005); 11 U.S.C § 551.
. In re Gilliam, 2004 Bankr.LEXIS 1653, at *29.
. 11 U.S.C. § 551; McRoberts v. Transouth Financial (In re Bell), 194 B.R. 192, 197 (Bankr.S.D.Ill.1996).
. 11 U.S.C. § 1303; In re Richardson, 283 B.R. at 792.
. In re Coleman, 426 F.3d 719, 726-27 (4th Cir.2005).
. McRoberts (In re Bell), 194 B.R. at 197.
. 11 U.S.C. § 1325(a)(4).
. McRoberts (In re Bell), 194 B.R. at 198; see also In re Hearn, 337 B.R. 603, 615-16 (Bankr.E.D.Mich.2006).
. McRoberts (In re Bell), 194 B.R. at 198; see also In re Gilliam, 2004 Bankr.LEXIS 1653, at *29.
. Motion to Approve Settlement and Compromise (Doc. No. 5), page 2, paragraph 10.
. Novastar suggests it will have an unsecured claim in the amount of $150,869.93 upon avoidance of its lien, presumably relying on 11 U.S.C. § 502(h) and Bankruptcy Rule 3002(c)(3) (dealing with filing and allowance of unsecured claims resulting from avoidance actions). However, the Court questions whether 11 U.S.C. § 502(h) or Rule 3002(c)(3) resurrects a disallowed claim. In re Toronto, 165 B.R. 746, 752 n. 4 (Bankr.D.Conn.1994) (quoting Advisory Committee Note (1983), "Although the claim of a secured creditor may have arisen before the petition, a judgment avoiding the security interest may not have been entered until after the time for filing claims has expired. Under Rule 3002(c)(3) the creditor who did not file a secured claim may nevertheless file an unsecured claim within the time prescribed.” (Emphasis added)). Res judicata may be applicable, but this issue is not briefed and is not before the Court.
.In re Coleman, 426 F.3d at 724. | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8494095/ | MEMORANDUM OPINION
D. MICHAEL LYNN, Bankruptcy Judge.
On August 28, 2006, this court heard the Motion for Summary Judgment (the “Mo*395tion ”) filed by Blumberg & Bagley, L.L.P. (“B & B”). The court heard arguments from counsel for B & B, counsel for Dianne Reed, Chapter 7 Trustee (the “Trustee”), and counsel for Dale Rabe (“Rabe,” and together with B & B, the “Defendants”). The court exercises core jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334(a) and 157(b)(2)(E). This memorandum opinion embodies the court’s findings of fact and conclusions of law. Fed. R. Bankr.P. 7052.
I.
BACKGROUND
On July 29, 2003, Dale Richard Grotjohn (the “Debtor” or “Grotjohn”) filed his chapter 7 case. On January 14, 2004, the court entered an order of discharge, and this case was subsequently closed. On November 1, 2004, the Debtor moved to re-open this bankruptcy case in order to disclose a partnership interest in Stanley Wright and Carz, Inc. (“SWC ”) as well as to disclose causes of action against one of the partners of SWC (the “Stanley Litigation”) that were omitted from the Debt- or’s schedules and statement of financial affairs. On January 12, 2005, the court entered an order re-opening this case. After the case was re-opened, the Debtor filed various amended schedules with the court seeking to list the Stanley Litigation as an estate asset and assert an exemption as to the Stanley Litigation. The Plaintiff and SWC objected to the Debtor’s claimed exemption of the Stanley Litigation. On July 19, 2005, the court entered an order denying the Debtor’s claimed exemption of the Stanley Litigation.
On January 31, 2006, the Trustee initiated this adversary proceeding against B & B and Rabe seeking a turnover and recovery of proceeds of purported estate assets (the “Complaint ”). The Complaint alleges that in September 2004, the Debtor purported to transfer to Rabe an interest in the Stanley Litigation. The attempted transfer was apparently to generate funds to pay attorneys B & B to pursue the Stanley Litigation in Texas state court. The Trustee alleges that in exchange for the transferred claims, the Debtor and/or B & B received from Rabe in excess of $40,000 in cash. B & B served as counsel for the Debtor in the Stanley Litigation. The Complaint alleges that Rabe paid money directly to B & B or alternatively that Rabe paid money to the Debtor to pay B & B in pursuing the Stanley Litigation.
The Trustee alleges that the transferred claims are property of the estate under 11 U.S.C. § 541(a)(6) and thus the transfers are avoidable under 11 U.S.C. § 549 as post-petition transfers. Moreover, the Trustee seeks recovery from Rabe and B & B to the extent that Rabe paid any money directly to B & B in conjunction with or in exchange for Rabe’s receipt of the transferred claims. Alternatively, the Trustee, pursuant to 11 U.S.C. § 550, seeks recovery from Rabe and B & B alleging that Rabe was the initial transferee and B & B was the entity for whose benefit the transfer of money in exchange for the transferred claims was made in order to pay B & B’s attorneys’ fees incurred in the Stanley Litigation.
The Trustee alleges that B & B was aware of the Debtor’s bankruptcy during its representation of the Debtor in the Stanley Litigation and failed to file a motion with this court to be retained “as counsel to the Debtor [sic]” or as counsel to the Trustee to pursue the Stanley Litigation. See Complaint, ¶¶ 22-24.
II.
DISCUSSION
The parties agree that at least as of September 2004, the claims and causes of *396action associated with the Stanley Litigation were property of the Debtor’s estate. See B & B’s Memorandum in Support of the Motion, ¶ 46, n. 4; and Complaint, ¶ 7. The core of the Trustee’s argument is that the monies transferred from Rabe to B & B, or alternatively from Rabe to the Debt- or and then to B & B (the “Transferred Money”), are proceeds, product or offspring of property of the estate (the Stanley Litigation). See Complaint, ¶¶ 10 and 19. The court is not persuaded by this argument.
Black’s Law Dictionary defines offspring as “children; issue; progeny.” Black’s Law Dictionary 1115 (7th ed.1999). It defines product as “Something that is distributed commercially for use or consumption and that is usu[ally] ... (2) the result of fabrication or processing ...” 1M at 1225. The definitions of offspring and product make clear that the Transferred Money is neither offspring nor product.
With respect to proceeds, the court looks to the Uniform Commercial Code to determine the definition of proceeds. See In re Cafeteria Operators, L.P., 299 B.R. 400, n. 4 (Bankr.N.D.Tex.2003). After a review of Uniform Commercial Code § 9-102(a)(64), the court concludes that the Transferred Money is not proceeds of the Stanley Litigation. The money transferred from Rabe to either the Debtor or B & B did not occur as a result of the sale or other disposition of the Stanley Litigation. In fact, at the time that Rabe transferred the money to either the Debtor or B & B, the Stanley Litigation was not disposed of. Had the Trustee appeared on the scene at that time, she could have pursued the Stanley Litigation to judgment, and, as B & B agrees, she would not have had to share any proceeds of the litigation with anyone.
Section 541(a)(6) is drafted broadly to capture any property which is created by exchange or use of property of the estate. It is not, however, broad enough to reach everything that changes hands simply because of property of the estate. Congress could have included language in section 541(a)(6) like that in section 1129(b)(2)(B), which reaches property received or retained “on account of’ an interest. As the Supreme Court held in Bank of Am. Nat’l Trust and Sav. Ass’n v. 203 N. LaSalle St. P’ship, 526 U.S. 434, 450-51, 119 S.Ct. 1411, 143 L.Ed.2d 607 (1999), such language would capture anything of value that would not be received or retained but for such an interest. In the case at bar, it is true that the money paid by Rabe to B & B or Grotjohn would not have been paid but for the Stanley Litigation. But, as B & B now argues, where, as here, neither was the property of the estate used to create (as in production) the money paid by Rabe nor was property of the estate diminished in exchange for Rabe’s money, the connection between the estate property and Rabe’s payments is inadequate to make that money itself estate property.
To the extent that the Debtor purported to transfer an interest in the Stanley Litigation to Rabe, that transfer is ineffective as a matter of law. See 40235 Washington Street Corp. v. Lusardi, 329 F.3d 1076, 1080 (9th Cir.2003). The court’s finding that the Transferred Money was not a transfer of property of the estate necessarily moots the Trustee’s relief under 11 U.S.C. § 549. See In re Lambert, 273 B.R. 663, 668 (Bankr.N.D.Fla.*3972002); In re Smith, 224 B.R. 44, 47 (Bankr.E.D.Mich.1998); In re Samaniego, 224 B.R. 154, 163 (Bankr.E.D.Wash.1998); In re Prine, 222 B.R. 610, 613 (Bankr.N.D.Iowa 1997). Section 549 provides, “[e]xcept as provided in subsection (b) or (c) of this section, the trustee may avoid a transfer of property of the estate ...” 11 U.S.C. § 549(a) (emphasis added). To the extent that Rabe transferred money to the Debtor or to B & B as consideration for an interest in the Stanley Litigation, the court holds that the transfer was a gift or other voluntary transfer which did not result in any change in the estate and which the Trustee may not recover. That transaction did not result in a diminution to the estate and caused no harm to the estate.2
The court, having reviewed the pleadings filed in this adversary proceeding and having reviewed the transcript of the hearing on the Motion, determines that based on the allegations and arguments made by counsel for the Defendants and counsel for the Trustee, the Trustee’s Complaint may be amended to conform to the facts and evidence to state a potential cause of action.
The Stanley Litigation was disposed of through the trial in state court. The recovery, or lack thereof, resulting from the Stanley Litigation is immaterial to the fact that the claims were disposed of. Any prosecution of the Stanley Litigation at this point would be barred by res judicata or collateral estoppel under Texas law. State and County Mut. Fire Ins. Co. v. Miller, 52 S.W.3d 693, 696 (Tex.2001). Accordingly, there may be a question as to whether the disposition of the Stanley Litigation harmed the Debtor’s estate. The court thus believes that the appropriate issue to be tried in this matter, if any, is whether the Defendants exercised control over property of the estate in violation of 11 U.S.C. § 362(a)(3) and, through that exercise of control, effected a disposition of that property to the detriment of the estate.
Federal Rule of Civil Procedure 15(b), made applicable to this proceeding by Federal Rule of Bankruptcy Procedure 7015(b), provides that “[w]hen issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings.” Fed.R.Civ.P. 15(b). The purpose of conforming pleadings to the evidence is to bring the pleadings in line with the issues actually developed at trial. See 6 C. Wright & A. Miller, Federal Practice and Procedure § 1493. There is authority that suggests that a court may allow amendments to pleadings sua sponte. See Luria Brothers & Co., Inc. v. Alliance Assurance Co., Ltd., 780 F.2d 1082 (2d Cir.1986). Accordingly, it is
ORDERED that the Motion is GRANTED in part and DENIED in part; and it is further
ORDERED that the Trustee may amend the Complaint to include a cause of action against the Defendants for violation of 11 U.S.C. § 362(a)(3) within ten (10) days of entry of this order. Should the Trustee fail to do so, Defendants may renew the Motion and final judgment will enter.
ON MOTION FOR REHEARING
Plaintiff has asked that the court reconsider its conclusion that the Transferred Money is not property of the estate. *398Plaintiff, noting the court’s comment that the words “on account of’ might be broad enough, if used in 11 U.S.C. § 541(a)(6), to capture the Transferred Money, first points to Uniform Commercial Code § 9-102(a)(64)(B), which defines proceeds to include “whatever is ... distributed on account of’ collateral. While this UCC provision indeed uses the term “on account of,” it does so in connection with the verb “distributed.” As reflected in cases construing section 9-102(a)(64)(B), the provision is meant to reach distributions on a claim, stock dividends and the like. See In re Hanley, 305 B.R. 84, 87 (Bankr.M.D.Fla.2003). Certainly the language of this provision of the UCC could not be interpreted to mean that a secured creditor having a lien on the Stanley Litigation would be entitled to the Transferred Money, let alone that such a hypothetical secured creditor could compel — as could a holder of stock could compel payment to it of a declared dividend — distribution to it of any money by Rabe.
Second, Plaintiff urges that the term “proceeds” as used in section 541(a)(6) has, in any case, a broader meaning than the same term as used in the UCC. The court does not disagree. See, e.g., Lesmeister v. Lesmeister (In re Lesmeister), 242 B.R. 920, 924 (Bankr.D.N.D.1999), In re Hanley, 305 B.R. 84, 86 (Bankr.M.D.Fla.2003). This does not mean, however, that anything that is connected to estate property will necessarily itself be estate property. See, e.g., Burgess v. Sikes (In re Burgess), 438 F.3d 493 (5th Cir.2006) (holding disaster relief payment are not proceeds of estate property).
In the case at bar, had the Trustee been in control of the Stanley Litigation at the time of Rabe’s payment, the Trustee would only have been entitled to the Transferred Money if she had conveyed to Rabe an interest in the Stanley Litigation. The Transferred Money was not “generated by” estate property (Shurley v. Texas Commerce Bank—San Angelo, N.A. (In re Shurley), 115 F.3d 333, 346 (5th Cir.1997)). The Trustee could only have collected the funds by releasing other property of the estate, but the estate was not so diminished and the Transferred Money, though logically connected to estate property, cannot be property of the estate.
For these reasons, rehearing is denied. The deadline fixed by the second decretal paragraph in the main opinion shall run from November 16, 2006.
It is so ORDERED.
. The court has omitted portions of the definition of ''product” which on their face are inapplicable to the case at bar.
. The transaction with Rabe did not result in the estate "disposing of or parting with” property and so was not ever a transfer of property of the estate. See 11 U.S.C. § 101(54). | 01-04-2023 | 11-22-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487084/ | IN THE
TENTH COURT OF APPEALS
No. 10-22-00145-CR
CASTULO MANUEL MORENO,
Appellant
v.
THE STATE OF TEXAS,
Appellee
From the 54th District Court
McLennan County, Texas
Trial Court No. 2020-713-C2
MEMORANDUM OPINION
Appellant, Castulo Manuel Moreno, was convicted of continuous sexual abuse of
a young child, a first-degree felony. See TEX. PENAL CODE ANN. § 21.02. A jury assessed
punishment at life imprisonment in the Institutional Division of the Texas Department of
Criminal Justice. We affirm.
Appellant’s appointed counsel filed a motion to withdraw and an Anders brief in
support of the motion asserting that he has diligently reviewed the appellate record and
that, in his opinion, the appeal is frivolous. See Anders v. California, 386 U.S. 738, 87 S. Ct.
1396, 18 L. Ed. 2d 493 (1967). Counsel’s brief evidences a professional evaluation of the
record for error and compliance with the other duties of appointed counsel. We conclude
that counsel has performed the duties required of appointed counsel.1 See id. at 744, 87 S.
Ct. at 1400; High v. State, 573 S.W.2d 807, 812 (Tex. Crim. App. 1978); see also Kelly v. State,
436 S.W.3d 313, 319-20 (Tex. Crim. App. 2014); In re Schulman, 252 S.W.3d 403, 407 (Tex.
Crim. App. 2008).
In reviewing an Anders appeal, we must, “after a full examination of all the
proceedings . . . decide whether the case is wholly frivolous.” Anders, 386 U.S. at 744, 87
S. Ct. at 1400; see Penson v. Ohio, 488 U.S. 75, 80, 109 S. Ct. 346, 350, 102 L. Ed. 2d 300 (1988);
accord Stafford v. State, 813 S.W.2d 503, 509-11 (Tex. Crim. App. 1991). An appeal is
“wholly frivolous” or “without merit” when it “lacks any basis in law or fact.” McCoy v.
Court of Appeals, 486 U.S. 429, 439 n.10, 108 S. Ct. 1895, 1902, 100 L. Ed. 2d 440 (1988). After
a review of the entire record in this appeal, we have determined the appeal to be wholly
frivolous. See Bledsoe v. State, 178 S.W.3d 824, 826-27 (Tex. Crim. App. 2005).
1 On August 15, 2022, appellant filed a motion to access the appellate record. On August 17, 2022,
we ordered appellate counsel to provide appellant with a copy of the appellate record and to notify this
Court of when the appellate record was provided. We also informed appellant that his pro se response
would be due within thirty days of when appellate counsel notified this Court that the appellate record
had been forwarded to appellant. On August 23, 2022, appellate counsel notified this Court that he had
sent appellant a copy of the appellate record. More than thirty days have passed, and appellant has not
filed a pro se response in this matter.
Moreno v. State Page 2
Accordingly, we affirm the judgment of the trial court. Counsel’s motion to
withdraw from representation of appellant is granted.
STEVE SMITH
Justice
Before Chief Justice Gray,
Justice Smith, and
Visiting Justice Davis2
Affirmed
Opinion delivered and filed November 16, 2022
Do not publish
[CRPM]
2 The Honorable Rex Davis, Senior Justice of the Tenth Court of Appeals, sitting by assignment of
the Chief Justice of the Texas Supreme Court. See TEX. GOV’T CODE ANN. §§ 74.003, 75.002, 75.003.
Moreno v. State Page 3 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487088/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
IN THE MATTER OF DISCIPLINE OF No. 85456
ROBERT L. BACHMAN, BAR NO. 5860
FILE
NOV 1 7 20
EL
Ct.
BY
EF DEPUTY CLERK
ORDER APPROVING CONDITIONAL GUILTY PLEA AGREEMENT
This is an automatic review of a Southern Nevada Disciplinary
Board hearing panel's recommendation that this court approve, pursuant
to SCR 113, a conditional guilty plea agreement in exchange for a stated
form of discipline for attorney Robert L. Bachman. Under the agreement,
Bachman admitted to violating RPC 1.4 (communication), RPC 1.5 (fees),
RPC 1.16 (declining or terminating representation), RPC 5.3
(responsibilities of nonlawyer assistants), and RPC 5.4 (professional
independence of a lawyer). He agreed to a six-month suspension stayed
during a one-year probationary period with conditions.
Bachman has admitted to the facts and violations as part of his
guilty plea agreement. The record therefore establishes that he violated the
above-cited rules by allowing nonlawyers to meet with two of his clients and
handle their cases, by including in his retainer agreement with those clients
that retainer deposits were nonrefundable, by including in the retainer that
a company that was not a law firm would perform the services the clients
hired him for, and by failing to communicate with the clients regarding the
status of their cases.
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The issue for this court is whether the agreed-upon discipline
sufficiently protects the public, the courts, and the legal profession. See
State Bar of Nev. v. Claiborne, 104 Nev. 115, 213, 756 P.2d 464, 527-28
(1988) (explaining the purpose of attorney discipline). In determining the
appropriate discipline, we weigh four factors: "the duty violated, the
lawyer's mental state, the potential or actual injury caused by the lawyer's
misconduct, and the existence of aggravating or mitigating factors." In re
Discipline of Lerner, 124 Nev. 1232, 1246, 197 P.3d 1067, 1077 (2008).
Bachman admitted that he knowingly violated duties owed to
clients, the public, and to the legal system. Two clients suffered injury or
potential injury by paying Bachman for legal services he never provided.
The baseline sanction for such misconduct, before considering aggravating
or mitigating circumstances, is suspension. Standards for Imposing Lawyer
Sanctions, Compendium of Professional Responsibility Rules and
Standards, Standard 4.42 (Am. Bar Ass'n 2018) (providing that suspension
is appropriate "when a lawyer knowingly fails to perform services for a
client and causes injury"), Standard 7.2 (providing that suspension is
appropriate "when a lawyer knowingly engages in conduct that is a violation
of a duty owed as a professional and causes injury or potential injury to a
client, the public, or the legal system"). The record supports the panel's
findings of two aggravating circumstances (multiple offenses and a
vulnerable victim) and one mitigating circumstance (absence of a prior
disciplinary record). Considering all four factors, we conclude that the
agreed-upon discipline is appropriate.
Accordingly, we hereby suspend Robert L. Bachman for six
raonths, stayed during a one-year probationary period commencing from the
date of this order and subject to the following conditions: Bachman provides
2
quarterly reports to the State Bar to include a list of firm employees and
responsibilities, and an explanation of how those employees are trained to
perform their responsibilities. The report will also include a review of the
procedures used when working with the company Debt Solution Services to
ensure any legal work required to be performed by that company is done by
respondent or another attorney. Bachman will also update his retainer
agreement and submit it to the State Bar for review before the probationary
term expires. Finally, Bachman shall pay the costs of the disciplinary
proceedings, including $2,500 under SCR 120, before the probationary term
expires.1 The State Bar shall comply with SCR 121.1.
It is so ORDERED.2
,
Parraguirre
Al/iiGusO
Sr.J.
Stiglich
cc: Law Office of Timothy P. Thomas, LLC
Chair, Southern Nevada Disciplinary Board
Bar Counsel, State Bar of Nevada
Executive Director, State Bar of Nevada
Perry Thompson, Admissions Office, U.S. Supreme Court
1The plea agreement permitted Bachman to pay the costs of the
proceedings over the term of his probationary period.
2 The Honorable Mark Gibbons, Senior Justice, participated in the
•
SUPREME COURT
decision of this matter under a general order of assignment.
OF
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https://www.courtlistener.com/api/rest/v3/opinions/8487090/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
WARREN HAVENS, No. 85311
Petitioner,
vs. FILE
ARNOLD LEONG; AND CHERYL
CHOY, NOV 1 7 2022
Res • ondents. EUZAB A. E3P VN
LBRX !PRE OURT
BY
ORDER DENYING PETITION
This pro se original petition for a writ of certiorari, mandamus,
and prohibition challenges a minute order denying petitioner's motions to
conduct a deposition, for relief under NRCP 60(b), and for relief under
Eighth Judicial District Court Rule 2.20(e) in a tort action. Having
considered the petition, we are not persuaded that our extraordinary and
discretionary intervention is warranted. See Pan v. Eighth Judicial Dist.
Court, 120 Nev. 222, 224, 88 P.3d 840, 841 (2004) (writ relief is proper only
when there is no plain, speedy, and adequate remedy at law and the
petitioner bears the burden of demonstrating that writ relief is warranted).
To begin, although petitioner has provided a minute order with his petition,
he has not supplied copies of any written district court orders memorializing
the rulings. See Rust v. Clark Cty. Sch. Dist., 103 Nev. 686, 689, 747 P.2d
1380, 1382 (1987) (explaining that a minute order is ineffective for any
purpose and that a written order signed and filed by the district court is
essential to this court's review); see also NRAP 21(a)(4) (stating that it is
the petitioner's obligation to provide an appendix that includes all records
that may be essential to understand the matters set forth in the petition).
In addition, petitioner has failed to present any cogent argument or relevant
authority as required to carry his burden to demonstrate that an appeal
SUPREME COURT
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10/ 19,17A ,41g02.
from the district court's final judgment does not afford him a plain, speedy,
and adequate remedy. See Pan, 120 Nev. at 229, 88 P.3d at 844.
Accordingly, we
ORDER the petition DENIED.
P rraguirre
A•14p4..0 ,J
Hardesty Stiglich
cc: Hon. Elham Roohani, District Judge
Warren Havens
Ben's Law
Eighth District Court Clerk
SUPREME COURT
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2 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487094/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
KEVIN PHILLIP RASPPERRY, No. 83894
Appellant,
vs.
THE STATE OF NEVADA,
FILE
Respondent. NOV 1 6 2022
ORDER OF AFFIRMANCE
This is an appeal from a judgment of conviction, pursuant to a
jury verdict, of four counts of driving under the influence resulting in death
or great bodily harm, four counts of reckless driving causing death or great
bodily harm, one count of felony driving under the influence, and two counts
of possession of a controlled substance. Eighth Judicial District Court,
Clark County; Tierra Danielle Jones, Judge. Appellant Kevin Phillip
Raspperry raises nine contentions on appeal.'
First, appellant argues that his speedy trial rights were
violated. We disagree. As to the statutory right to a speedy trial under NRS
178.556, there was good cause for the nearly 22-month delay. See Huebner
v. State, 103 Nev. 29, 31, 731 P.2d 1330, 1332 (1987) (stating that dismissal
is mandatory under NRS 178.556 only if no good cause is shown for the
delay). In particular, the delay in bringing appellant to trial was
attributable to motion practice, the COVID-19 pandemic, and
accommodating the district court's calendar. As to the constitutional right
to a speedy trial, the delay between arraignment and trial was sufficient to
trigger a speedy-trial analysis, State v. Inzunza, 135 Nev. 513, 516-17, 454
'Pursuant to NRAP 34(f)(1), we have determined that oral argument
is not warranted in this appeal.
SUPREME COURT
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(0) 1947A •40NPP,
(o0
P.3d 727, 731 (2019) (holding that a delay approaching one year is sufficient
to trigger constitutional speedy-trial analysis), but the relevant factors
weigh against a violation. See Barker v. Wingo, 407 U.S. 514, 530 (1972)
(identifying the factors to be balanced in deciding whether the right to a
speedy trial has been violated). The reasons for the delay were valid and
appropriate. Appellant litigated a motion to dismiss which was denied, then
waived his speedy trial rights, and then agreed upon delays for this court to
resolve pending cases relevant to that motion, and the remainder of the
delay was compelled by the district court's calendar and other pandemic
related delays. See id. at 531 (explaining that deliberate attempts to delay
the trial by the State should weigh against the government, neutral factors
like negligence or overcrowded courts should be weighted less heavily, and
valid reasons may justify appropriate delay); cf. United States v. Olsen, 21
F.4th 1036, 1047 (9th Cir. 2022) (holding that "a global pandemic that has
claimed more than half a million lives in this country . . . falls within such
unique circumstances to permit a court to temporarily suspend jury trials
in the interest of public health"); United States v. Smith, 460 F. Supp. 3d
981, 984 (E.D. Cal. 2020) ("Almost every court faced with the question of
whether general COVID-19 considerations justify an ends-of-justice
continuance and exclusion of time [from speedy-trial considerations] has
arrived at the same answer: yes."). And appellant has not demonstrated
prejudice. See Barker, 407 U.S. at 532 (explaining that prejudice "should
be assessed in the light of the interests of defendants which the speedy trial
right was designed to protect"). Appellant asserted that he faced a more
aggressive prosecution due to the severity of the murder charge and
suffered anxiety due to the length of the delay and severity of the murder
charge. The record does not indicate that the prosecution assignment track
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prejudiced appellant. While the anxiety to the accused is a harm that the
speedy trial right was designed to guard against, see Inzunza, 135 Nev. at
518, 454 P.3d at 732, as so much of the delay was a consequence of
appellant's motion to dismiss the murder charge, we conclude that
appellant has not demonstrated a violation of his constitutional right to a
speedy trial.
Second, appellant argues that there was insufficient evidence
adduced at trial to show that he was driving the car that collided with the
victim's vehicles. He also argues that there was inadequate proof that he
possessed the controlled substances in the backpack in the car.
Viewing the evidence in the light most favorable to the
prosecution, we conclude that a "rational trier of fact could have found the
essential elements of the crime[s] beyond a reasonable doubt." McNair v.
State, 108 Nev. 53, 56, 825 P.2d 571, 573 (1992) (quoting Jackson v.
Virginia, 443 U.S. 307, 319 (1979)); see Bolden v. State, 97 Nev. 71, 73, 624
P.2d 20, 20 (1981) (holding that a jury's verdict will not be disturbed on
appeal where substantial evidence supports it). Witnesses testified that a
gray Toyota Avalon, registered to appellant's mother, careened through a
red light at roughly 100 miles per hour. The Avalon struck an SUV in the
intersection, causing the SUV to strike another car and a bus. The heavily
damaged Avalon came to rest over 200 feet away from the collision. A
medical technician testified that he extricated appellant from the driver's
seat of the Avalon and saw no one else in the car. A responding officer also
observed appellant being removed from the driver's side of the vehicle.
Witnesses also testified that a backpack with containers of MDMA and
methamphetamine was recovered from the Avalon. Testing showed
appellant's blood alcohol content was .205 percent under two hours after the
SUPREME COURT
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collision and revealed the presence of MDMA and marijuana. Based on this
evidence, a rational juror could conclude beyond a reasonable doubt that
appellant was impaired, drove recklessly through the intersection, and
caused multiple collisions resulting in great bodily harm and death while in
possession of controlled substances. See NRS 484C.110(1)(c) (driving under
the influence); NRS 484C.430(1) (driving under the influence causing death
or substantially bodily harm); NRS 484B.653(1) (reckless driving); NRS
453.336 (possession of a controlled substance).
Third, appellant argues that the district court erred in
admitting blood alcohol evidence without an adequate foundation and chain
of custody, pointing to a mistake in the documentation. We discern no abuse
of discretion. See Mclellan v. State, 124 Nev. 263, 267, 182 P.3d 106, 109
(2008). The State established a chain of custody through the testimony of
the officer who documented the blood draw and the phlebotomist who
performed the blood draws. Nothing in the record suggests that the blood
samples were not those obtained from appellant or that any discrepancy in
the chain of custody rendered it unsound. See Sorce v. State, 88 Nev. 350,
352-53, 497 P.2d 902, 903 (1972). Although the documentation had errors
in that the time of the blood draws was written into the "incident time" box
on the form, testimony established that the samples shared the same event
number as the police report for the collision investigation. Thus, any
discrepancies in the documentation went to the weight of the evidence, not
its admissibility. See Hughes v. State, 116 Nev. 975, 981, 12 P.3d 948, 952
(2000).
Fourth, appellant contends that the testimony of a witness
through a teleconferencing application violated his right to confrontation,
SUPREME COURT
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(01 1947A
and the district court failed to make sufficient findings that it was
necessary. We agree.
Courts may permit witnesses to appear by simultaneous
audiovisual transmission at trial provided that such a presentation "is
necessary to further an important public policy and only where the
reliability of the testimony is otherwise assured." Lipsitz v. State, 135 Nev.
131, 136, 442 P.3d 138, 143 (2019) (applying the standard in Maryland v.
Craig, 497 U.S. 836 (1990), to two-way audiovisual communication); see
SCR Part IX-A(B) Rule 2. Simultaneous audiovisual transmission of
testimony may "be used only after the trial court hears evidence and makes
a case-specific finding that the procedure is necessary to further an
important state interest." Lipsitz, 135 Nev. at 136-37, 442 P.3d at 143.
Here, the district court noted that administrative orders related to the
COVID-19 pandemic authorized teleconferenced testimony and that the
method of transmission permitted the jury to see the witness and the
defense to cross-examine him, ensuring reliability. See Craig, 497 U.S. at
845-46. However, the district court did not make the required case-specific
findings that the witness who testified via audiovisual transmission was
especially vulnerable to COVID-19 and therefore needed the
accommodation. See Lipsitz, 135 Nev. at 136-37, 442 P.3d at 143.
Although the State has not argued that any error in this respect
was harmless, we conclude that our sua sponte review for harmlessness is
appropriate here.2 See Belcher v. State, 136 Nev. 261, 268, 464 P.3d 1013,
2The State's argument that "[a]ppellant fails to explain who his
defense was in any way prejudiced by the use of live audio-visual
transmission[I does not meet its burden of proving that any error was
harmless beyond a reasonable doubt. See Medina, 122 Nev. at 355, 143 P.3d
at 477.
SUPREME COURT
OF
NEVADA
5
(0) 194Th
1024 (2020) (providing that where the State fails to argue that error is
harmless, this court may still determine that an error was harmless after
considering the following factors: "(1) the length and complexity of the
record, (2) whether the harmlessness of an error is certain or debatable, and
(3) the futility and costliness of reversal and further litigation."); Medina v.
State, 122 Nev. 346, 355, 143 P.3d 471, 477 (2006) (concluding that when
State can show beyond a reasonable doubt that Confrontation Clause error
did not contribute to the verdict, reversal is unnecessary); see also Chapman
v. California, 386 U.S. 18, 23-24 (1967) (adopting harmless error standard).
The record in this case, which has only three days of testimony about the
cause of a traffic collision, is not voluminous or complex. The harmlessness
of the error is not debatable given that other witnesses provided similar
testimony as the challenged witness—that they saw appellant in or being
removed from the Avalon following the collision—and other evidence linked
appellant to the Avalon—namely, the vehicle registration in his mother's
name. See Medina, 122 Nev. at 355, 143 P.3d at 477 (recognizing that court
may consider the extent to which testimony is cumulative of other evidence
and strength of the State's case in determining whether its admission was
harmless). Because we are confident that a rational jury would have found
appellant guilty without the remote testimony, it would be futile to reverse
and remand because another trial would reach the same result. See Brooks,
772 F.3d at 1172 (concluding that remand for retrial would be futile where
there is overwhelming evidence of guilt). Accordingly, we conclude that the
confrontation error due to the remote testimony was harmless beyond a
reasonable doubt.
Fifth, appellant contends that the district court erred in
admitting evidence of uncharged conduct. He asserts testimony that the
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vehicle control module did not record the charged event because it was full
of data implied that he had caused other collisions. We discern no plain
error. See Green v. State, 119 Nev. 542, 545, 80 P.3d 93, 94-95 (2003)
(reviewing unobjected-to error for plain error affecting substantial rights).
The reference to the module being full was not an unmistakable reference
to appellant's prior bad acts as the record indicates that the car appellant
was driving was registered to his mother. See Patterson v. State, 111 Nev.
1525, 1530, 907 P.2d 984, 987 (1995) ("An error is plain if the error is so
unmistakable that it reveals itself by a casual inspection of the record."
(internal quotation marks omitted)). Further, data about the event was
retrieved from one of the victim's cars, which indicates that the data filling
the module on appellant's vehicle may have included all events involving
that car regardless of who was at fault. Additionally, appellant did not
demonstrate substantial prejudice given the overwhelming evidence of
guilt.
Sixth, appellant contends that the district court erred in not
inquiring into juror bias when a juror informed the court that he knew a
witness during a break in that witness's testimony. After being informed of
the juror's statement, counsel for appellant acquiesced to the court's plan to
question the juror but then did not object when the court failed to do so after
it reconvened. We conclude that appellant failed to demonstrate plain error
affecting his substantial rights. See Green, 119 Nev. at 545, 80 P.3d at 94-
95; cf., Daly v. State, 99 Nev. 564, 568, 665 P.2d 798, 801 (1983) (recognizing
that a contemporaneous objection is necessary to preserve error related to
a court's failure to enforce an earlier ruling); McCall v. State, 97 Nev. 514,
516, 634 P.2d 1210, 1211 (1981) (recognizing that the failure to object to an
unqualified juror when grounds for disqualification are known constitutes
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waiver). The failure to inquire into potential bias constituted error that was
plain from a casual inspection of the record. See Sanders v. Sears-Page, 131
Nev. 500, 507, 354 P.3d 201, 206 (Ct. App. 2015) (recognizing trial court's
duty to question jurors when information suggesting actual bias arises).
However, appellant did not establish prejudice—i.e., that a biased juror
served on his jury. See Preciado v. State, 130 Nev. 40, 44, 318 P.3d 176, 178
(2014) ("A district court's erroneous denial of a challenge for cause is
reversible error only if it results in an unfair empaneled jury."); Blake v.
State, 121 Nev. 779, 796, 121 P.3d 567, 578 (2005) (concluding that
appellant not denied right to impartial jury so long as "the jury actually
seated [was] impartial"). The juror's mere acquaintance with the witness
did not establish actual or implied bias. See United States v. Bradshaw, 787
F.2d 1385, 1390 (10th Cir. 1986) (concluding that, while a potential juror's
acknowledgment that he was acquainted with government witnesses would
necessitate further inquiry, that fact in and of itself does not compel a
conclusion of bias); Tinsley v. Borg, 895 F.2d 520, 528-29 (9th Cir. 1990)
(noting that, absent actual bias, courts have declined to find implied bias
based on a juror's personal acquaintance with a witness); see also Tomlin v.
State, 81 Nev. 620, 624-25, 407 P.2d 1020, 1022 (1965) (concluding that
district court did not err in retaining juror after she informed district
attorney's office she knew a witness but assured court she could remain
impartial). Additionally, trial counsel for both parties did not appear
concerned that the relationship between the witness and jurOr was anything
more significant than a past work acquaintanceship. Under these
circumstances, we conclude that appellant has not demonstrated that the
trial court's failure to question the juror affected his substantial rights.
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Seventh, appellant contends that comments made by the
prosecutor indicating that appellant was blaming the car or police
investigation constituted improper disparagement of legitimate defense
tactics. Appellant did not object to either argument, and we discern no plain
error, Valdez v. State, 124 Nev. 1172, 1190, 196 P.3d 465, 477 (2008). A
prosecutor may not "ridicule or belittle the defendant or the case." Earl v.
State, 111 Nev. 1304, 1311, 904 P.2d 1029, 1033 (1995); see Browning v.
State, 124 Nev. 517, 534, 188 P.3d 60, 72 (2008) (recognizing that a
prosecutor's disparagement of defense counsel or the legitimate tactics of
defense counsel is improper). But here the challenged comments, when
considered in context, did not belittle the defense case or tactics. See Knight
v. State, 116 Nev. 140, 144-45, 993 P.2d 67, 71 (2000) (observing that "[a]
prosecutor's comments should be viewed in context" when considering
whether a defendant should be afforded relief). Instead, the comments
responded to the substance of appellant's cross-examination of State
witnesses, which sought to discredit the investigation or indicate a fault in
the vehicle may have caused the collision. That response was within the
bounds of permissible argument. See Greene v. State, 113 Nev. 157, 178,
931 P.2d 54, 67 (1997) (recognizing rebuttal arguments may permissibly
respond to issues raised by the defense's closing), receded from on other
grounds by Byford.v. State, 116 Nev. 215, 235, 994 P.2d 700, 713 (2000).
Eighth, appellant argues that his aggregate sentence was
excessive and disproportionate given the collision was the result of his drug
and alcohol addiction rather than malice.
We discern no abuse of discretion. See Martinez v. State, 114
Nev. 735, 737-38, 961 P.2d 143, 145 (1998) (recognizing that sentencing
courts have wide discretion in imposing sentence); Sims v. State, 107 Nev.
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438, 439, 814 P.2d 63, 64 (1991) (recognizing that the legislature and
sentencing courts are afforded great deference and a reviewing court "rarely
will be required to engage in extended analysis to determine that a sentence
is not constitutionally disproportionate" (quoting Solem v. Helm, 463 U.S.
277, 290 n.16 (1983))). A sentence that is within the statutory limits is not
"cruel and unusual punishment unless the statute fixing punishment is
unconstitutional or the sentence is so unreasonably disproportionate to the
offense as to shock the conscience." Blume v. State, 112 Nev. 472, 475, 915
P.2d 282, 284 (1996) (quoting CuIverson v. State, 95 Nev. 433, 435, 596 P.2d
220, 221-22 (1979)). Appellant's sentence falls within the parameters of the
relevant statutes, and he does not allege those statutes are
unconstitutional. See NRS 193.130(2)(d); NRS 453.336(2)(b); NRS
484B.653(9); NRS 484C.400(1)(c); NRS 484C.430(1). The district court
sentenced him within the guidelines of NRS 176.035(1) to concurrent and
consecutive sentences, which was in the district court's discretion, see
Pitmon v. State, 131 Nev. 123, 128-29, 352 P.3d 655, 659 (Ct. App. 2015),
and we conclude that the aggregate sentence imposed is not so grossly
disproportionate so as to shock the conscience and constitute cruel and
unusual punishment. See Harrnelin v. Michigan, 501 U.S. 957, 1001 (1991)
(plurality opinion) (explaining the Eighth Amendment does not require
strict proportionality between crime and sentence; it forbids only an
extreme sentence that is grossly disproportionate to the crime).
Lastly, appellant contends that the cumulative effect of errors
during trial warrants relief. "When evaluating a claim of cumulative error,
we consider the following factors: `(1) whether the issue of guilt is close, (2)
the quantity and character of the error, and (3) the gravity of the crime
charged." Valdez, 124 Nev. at 1195, 196 P.3d at 481 (quoting Mulder v.
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State, 116 Nev. 1, 17, 992 P.2d 845, 854-55 (2000)). Appellant has
demonstrated two errors: the erroneous admission of teleconferenced
testimony and the failure to question a juror regarding potential bias.
While the crimes charged were serious, the State presented overwhelming
evidence of appellant's guilt. Further, the errors did not have significant
cumulative effect as the error admitting remote testimony was harmless
due to the' cumulative nature of the testimony and the record did not
indicate that the juror was biased.
Having considered appellant's contentions and concluding that
they do not warrant relief, we
ORDER the judgment of conviction AFFIRMED.3
Prraguirre
J.
94. , Sr.J.
Stiglich GilIons
cc: Hon. Tierra Danielle Jones, District Judge
Steven S. Owens
Attorney General/Carson City
Clark County District Attorney
Eighth District Court Clerk
3The Honorable Mark Gibbons, Senior Justice, participated in the
decision of this matter under a general order of assignment.
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https://www.courtlistener.com/api/rest/v3/opinions/8487122/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
YOCHUM V. YOCHUM
Cite as 312 Neb. 535
Heather K. Yochum, now known as
Heather K. Underwood, appellant,
v. Chad C. Yochum, appellee.
___ N.W.2d ___
Filed September 30, 2022. No. S-21-563.
1. Divorce: Judgments: Appeal and Error. The meaning of a divorce
decree presents a question of law, in connection with which an appellate
court reaches a conclusion independent of the determination reached by
the court below.
2. Contempt: Appeal and Error. In a civil contempt proceeding where
a party seeks remedial relief for an alleged violation of a court order,
an appellate court employs a three-part standard of review in which (1)
the trial court’s resolution of issues of law is reviewed de novo, (2) the
trial court’s factual findings are reviewed for clear error, and (3) the trial
court’s determinations of whether a party is in contempt and of the sanc-
tion to be imposed are reviewed for abuse of discretion.
3. Attorney Fees: Contempt: Appeal and Error. A trial court’s decision
awarding or denying attorney fees in a contempt proceeding will be
upheld on appeal absent an abuse of discretion.
4. Judgments: Words and Phrases. A judicial abuse of discretion
requires that the reasons or rulings of the trial court be clearly unten-
able insofar as they unfairly deprive a litigant of a substantial right and
a just result.
5. Damages: Evidence: Proof. A plaintiff’s evidence of damages may not
be speculative or conjectural and must provide a reasonably certain basis
for calculating damages.
6. ____: ____: ____. The question whether the evidence of damages is
“reasonably certain” is a question of law, and not as a matter to be
decided by the trier of fact.
7. Evidence: Records: Pleadings: Appeal and Error. An appellate record
typically contains the bill of exceptions, used to present factual evidence
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to an appellate court, and the transcript, used to present pleadings and
orders of the case to the appellate court.
8. Evidence: Records: Appeal and Error. A bill of exceptions is the only
vehicle for bringing evidence before an appellate court; evidence which
is not made a part of the bill of exceptions may not be considered.
9. ____: ____: ____. Before an appellate court can consider evidence bear-
ing upon an issue of fact, evidence must have been offered at the trial
court and embodied in the bill of exceptions.
10. Divorce: Contempt. When a party willfully violates a decree, coercive
and remedial sanctions are appropriate.
11. Contempt. Civil contempt proceedings are instituted to preserve and
enforce the rights of private parties to a suit when a party fails to com-
ply with a court order made for the benefit of the opposing party.
12. Contempt: Costs: Attorney Fees. Costs, including reasonable attorney
fees, can be awarded in a contempt proceeding when there has been a
finding of contempt.
13. Attorney Fees. The decision to award attorney fees is a matter of
discretion.
Appeal from the District Court for Lancaster County: Susan
I. Strong, Judge. Affirmed in part, vacated in part, and in part
reversed and remanded for further proceedings.
Ryan Mick Swaroff, of Swaroff Law, L.L.C., for appellant.
Jeanelle S. Kleveland, of Kleveland Law Office, for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Miller-Lerman, J.
NATURE OF CASE
The district court for Lancaster County found that Heather
K. Yochum, now known as Heather K. Underwood, was in
contempt of court orders contained in the divorce decree
from Chad C. Yochum. Specifically, it found that for the tax
years 2014 and 2019, she willfully violated the dependency
tax exemption provisions of her marital dissolution decree
and the order in modification. Heather appeals the findings of
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Cite as 312 Neb. 535
contempt, the amount of damages awarded to Chad, and attor-
ney fees. We reverse the district court’s order finding Heather
in contempt for taking tax exemptions for the 2014 tax year,
but affirm with respect to her filing for 2019. We vacate the
award of $3,975 awarded to Chad for tax year 2014, because
he was not harmed in 2014. We also vacate $600 in dam-
ages awarded to Chad for the 2019 tax year for lack of proof.
Finally, we reverse the award of attorney fees to Chad and
remand the cause for further proceedings with respect to the
amount of Chad’s attorney fees.
STATEMENT OF FACTS
On March 7, 2011, the district court entered a decree dis-
solving the marriage of Heather, the appellant, and Chad, the
appellee. The parties have four children together. In 2016, the
decree of dissolution was modified as to child support obli-
gations, custody, and specific parenting time. In 2020, Chad
filed an application for order to show cause, alleging that
Heather was in contempt of the district court’s prior orders
because she claimed dependency tax exemptions on her fed-
eral taxes in 2014 and 2019. The district court for Lancaster
County held hearings on three dates in the fall of 2020 and
a fourth date in June 2021. In October 2020, Heather filed a
motion for Chad to show cause why he should not be found
in contempt of court for allegedly failing to pay his portion
of childcare expenses during 2019. The record may be sum-
marized as follows:
2011 Decree.
The 2011 decree awarded Heather physical custody of the
parties’ minor children, and Chad received reasonable rights
of parenting time set forth in the parenting plan. It provided
that Chad pay child support to Heather and subjected him to
income withholding. The attached property settlement also
provided that “in the event [Chad] fails to pay any support
as such failure is certified each month by the Clerk of the
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YOCHUM V. YOCHUM
Cite as 312 Neb. 535
Lancaster County District Court in which court-ordered sup-
port is delinquent in an amount equal to the support due and
payable for a one-month period of time,” he would be required
to show cause why such payment was not made or face a war-
rant for his arrest. Critical to the arguments made in this litiga-
tion, the decree provided:
7. DEPENDENCY EXEMPTIONS: Commencing the
year 2011, [Chad] shall have the right to claim [two
of the minor children] as dependents on his State and
Federal Taxes. At such time as there are three (3) minor
children, [Heather] shall claim two (2) of the children
in even-numbered years, and [Chad] shall claim one (1)
child in even-numbered years. In odd-numbered years,
[Heather] shall claim one (1) minor child and [Chad]
shall claim two (2) children. At such time as there are
two (2) minor children, each party shall claim one (1)
child. When there is only one minor child, the parties
shall alternate the dependency exemption with [Heather]
claiming the minor child in all even-numbered years
and [Chad] claiming the minor child[] all odd-numbered
years. [Chad] shall only be entitled to claim any of the
minor children for dependency exemption purposes in
any year so long as he is current on his child support,
child care, and medical care obligations at the end of
the appropriate tax year. [Heather] agrees to not make
any conflicting claim for said exemptions and shall upon
request execute an IRS form 8332 releasing all right to
claim said exemption.
8. CHILD CARE: The parties shall each pay 50% [of]
the work related child care costs incurred on behalf of the
minor children, and [Chad] shall reimburse [Heather], as
necessary, for child care expenses within fifteen (15) days
of receipt of the statement for the same. [Heather] shall be
allowed to claim the child care expense as a deduction on
her taxes each year.
(Emphasis supplied.)
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YOCHUM V. YOCHUM
Cite as 312 Neb. 535
2016 Order in Modification.
On July 27, 2016, the district court entered an order in
modification which, inter alia, modified the amount of Chad’s
child support obligations. The order of modification did not
provide for any changes to the parties’ dependency tax exemp-
tions and childcare obligations and stated that “[a]ny provi-
sions not herein modified from prior orders remain in full force
and effect.”
2014 Dependent Tax Exemption.
Chad offered as an exhibit a notice of penalty he received
from the Internal Revenue Service after both he and Heather
had claimed the same two minor children for the tax year
2014.
Chad testified, and the record reflects, that in 2014, he
had an automatic wage withholding for his child support.
However, a payment history report from the Department
of Health and Human Services (DHHS) showed that on
December 31, 2014, Chad owed $557.79. Chad and Heather
testified that Chad did not meet his child support obligations
for a period of several weeks in 2013 because he lost his
job, and the amount owed shown on the DHHS report at the
end of 2014 reflected what remained of his prior arrearage.
The DHHS report showed that Chad’s consistent payments
throughout 2014 applied to satisfy the present month’s child
support obligation, and DHHS applied any remaining money
from Chad’s payments to the balance in arrears carried for-
ward from past months.
Heather had testified at depositions taken in July 2016
that she believed Chad could not take the 2014 dependency
exemption, because he was not “current” on child support.
She testified that she had talked to child support enforcement
and obtained a copy of the payment history report for that
year. Because Chad did not have a zero balance at the end
of 2014, she filed her taxes believing he could not take the
exemption.
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YOCHUM V. YOCHUM
Cite as 312 Neb. 535
2019 Dependent Tax Exemption.
With respect to the 2019 tax year, the payment history report
from DHHS showed that Chad had a credit on December 31,
2019, of $114.85 for child support. Chad testified about a
timing issue, specifically that the account showed a credit,
because there are periods of time where there are credits and
periods of time where money is owed, depending on how
many pay periods are in a month. He testified that in January
or early February 2020, he sent a text message to Heather
reminding her that he could claim the two minor children
on the taxes for the 2019 tax year. He received no response.
He testified that he sent a text message to Heather in August
2020 asking why she used the child tax deduction and that she
stated she forgot.
Chad testified at the October 2020 trial that he lost a $2,000
tax credit because he could not claim one child in 2019 and
that he subsequently lost out on a coronavirus relief payment
of $500. He explained that the 2019 coronavirus relief package
would have given him an additional payment for each child
under the age of 17 and requested that Heather repay the relief
money as well as the tax credit.
Daycare.
Chad testified on cross-examination that the children
attended daycare from 2010 to 2018, and he conceded that he
had never paid childcare expenses to Heather or to the child-
care facilities. He claimed he had never received any statement
or receipt from Heather regarding expenses for daycare or
childcare. He acknowledged two text message conversations
and agreed that Heather had previously told Chad that he owed
half of childcare expenses. Chad testified that he thought day-
care expenses were free for Heather because of her work for
the childcare providers. He testified that he believed that day-
care continued to be free as a benefit of Heather’s employment
and that that was their understanding at the time of the divorce.
He testified that he did not receive an invoice to pay daycare
expenses until late 2020.
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YOCHUM V. YOCHUM
Cite as 312 Neb. 535
Heather testified that she had provided Chad three daycare
receipts over the years and that she alone paid for daycare
from 2011 through 2018. Heather testified that she stopped
providing Chad receipts, because he would get angry and call
her names. Heather testified that she received “Title 20” and
$5,000 per year of daycare costs from her employer. Heather
did not provide any exhibits showing receipts she sent to Chad
prior to October 2020, which date was proximate to Heather’s
filing for contempt for Chad’s alleged failure to pay childcare.
Heather offered exhibits 21 and 22, which included attach-
ments to an October 5, 2020, text message sent by Heather to
Chad. The attachments were represented as reflecting daycare
expenses. After her benefits, Heather claimed to have paid
childcare expenses of $946 in 2016, $1,135.95 in 2017, and
$757.28 in 2018. Exhibits 21 and 22 were excluded from evi-
dence as hearsay.
District Court Order.
At the conclusion of the evidence, the district court found
Heather in contempt for taking incorrect dependency exemp-
tions in 2014 and 2019. The court noted that Chad fell behind
in 2013 when he lost his job. In June 2021, the court issued an
order finding Heather in willful and contumacious contempt
of the decree, sentencing her to 30 days in jail, with the abil-
ity to avoid jail time by making $200 monthly payments to
Chad for 24 months. The court ordered Heather to pay a total
judgment of $10,075, which was composed of $3,975 in addi-
tional taxes Chad paid in 2014, a $2,000 tax refund he lost for
2019, $500 and $600 2020 coronavirus relief payments, and
$3,000 in attorney fees. Heather appeals.
ASSIGNMENTS OF ERROR
Heather claims, summarized and restated, that the district
court erred when it found that Heather was in willful and con-
tumacious contempt of the decree and order in modification.
She also claims that the district court abused its discretion with
respect to damages and attorney fees awarded to Chad.
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312 Nebraska Reports
YOCHUM V. YOCHUM
Cite as 312 Neb. 535
STANDARDS OF REVIEW
[1] The meaning of a divorce decree presents a question
of law, in connection with which an appellate court reaches
a conclusion independent of the determination reached by the
court below. Vyhlidal v. Vyhlidal, 311 Neb. 495, 973 N.W.2d
171 (2022).
[2] In a civil contempt proceeding where a party seeks reme-
dial relief for an alleged violation of a court order, an appellate
court employs a three-part standard of review in which (1) the
trial court’s resolution of issues of law is reviewed de novo, (2)
the trial court’s factual findings are reviewed for clear error,
and (3) the trial court’s determinations of whether a party is in
contempt and of the sanction to be imposed are reviewed for
abuse of discretion. Id.
[3,4] A trial court’s decision awarding or denying attorney
fees in a contempt proceeding will be upheld on appeal absent
an abuse of discretion. See Becher v. Becher, 311 Neb. 1, 970
N.W.2d 472 (2022). A judicial abuse of discretion requires that
the reasons or rulings of the trial court be clearly untenable
insofar as they unfairly deprive a litigant of a substantial right
and a just result. Id.
ANALYSIS
Heather claims that the district court erred when it found
that she was willfully in contempt of court because she had
claimed dependency exemptions on her federal income taxes
for the years 2014 and 2019. She also challenges the amounts
of damages and attorney fees awarded to Chad. Heather
contends that the language of the decree, unchanged by the
subsequent order in modification, permitted Chad to claim
the minor children for dependency exemption purposes only
“so long as he is current on his child support, child care, and
medical care obligations at the end of the appropriate tax
year” and that he was not “current.” Brief for appellant at 14
(emphasis omitted). Below, we examine whether Chad was
current on these obligations at the end of the 2014 and 2019
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YOCHUM V. YOCHUM
Cite as 312 Neb. 535
tax years and conclude that Chad was not current in 2014 but
was current in 2019 and thereby entitled to the dependency tax
exemption for 2019, but not 2014. We also adjust the damages
awarded to Chad and remand the issue of attorney fees to the
district court.
2014 Tax Year.
With respect to 2014, Heather argues that Chad was in
arrears on child support payments and was not “current” at the
end of the year—and thus not entitled to claim the dependent
tax exemption—and was not harmed with respect to his liabil-
ity for the 2014 tax year. We agree with Heather’s argument.
Chad does not contest that he owed a balance on December
31, 2014, but argues that because he had not missed monthly
payments in 2014, he was “current.” We conclude that “cur-
rent” in the context of this decree means fully paid and up to
date. Chad was not “current” at the end of the 2014 tax year.
The testimony was consistent that Chad had an automatic
wage withholding, except for 6 weeks in 2013 when he lost
his job. Exhibits at trial, including child support payment his-
tory reports from DHHS, confirmed this testimony. When Chad
missed several child support payments in 2013, his account fell
into arrears. As Chad resumed his regular payments, each pay-
ment applied first to the pending month’s child support obliga-
tion. Money remaining after the pending month’s support obli-
gation served to reduce the amount in arrears, and the arrearage
decreased until Chad became fully caught up in 2016. On
December 31, 2014, Chad owed a balance of $557.79, largely
composed of the arrearage incurred in 2013 for failure to pay
child support.
Chad argues that he was “current” under the decree, because a
balance of $557.79 was not enough to trigger enforcement pro-
ceedings. As authority, he cites Neb. Rev. Stat. § 43-1718.01(4)
(Reissue 2016), which provides:
No obligor whose child support payments are automati-
cally withheld from his or her paycheck shall be regarded
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Cite as 312 Neb. 535
or reported as being delinquent or in arrears if (a) any
delinquency or arrearage is solely caused by a disparity
between the schedule of the obligor’s regular pay dates
and the scheduled date the child support is due, (b) the
total amount of child support to be withheld from the
paychecks of the obligor and the amount ordered by the
support order are the same on an annual basis, and (c) the
automatic deductions for child support are continuous and
occurring.
Section 43-1718.01 concerns child support enforcement. This
case is not an enforcement action. Instead, we are called upon
to follow the language of the decree. See Vyhlidal v. Vyhlidal,
311 Neb. 495, 973 N.W.2d 171 (2022). Even if § 43-1718.01
could provide context for the meaning of certain words used
in the decree, it is factually inapplicable here because Chad’s
arrearage is not a timing issue “solely caused by a disparity
between the schedule of the obligor’s regular pay dates and the
scheduled date the child support is due.” Chad’s arrearage was
not caused solely by bureaucratic lag or timing discrepancies;
the reason he was not current was because of events in 2013.
Under the plain language of the decree, because Chad was not
current on his child support obligations at the end of the 2014
tax year, he was not entitled to claim the dependency exemp-
tion on his federal taxes.
The record shows that Heather was informed by DHHS
reports that Chad was in arrears on December 31, 2014, and
thus, Chad was not “current.” Appropriately, she filed her taxes
and claimed the dependency exemption for the 2014 tax year.
The district court erred when it held Heather in willful and
contumacious contempt of court for having taken child tax
exemptions in her tax filings for 2014. We reverse this portion
of the order of the district court. Further, based on our ruling,
because Chad was not harmed with respect to his tax liability
for the 2014 tax year, we vacate the damage award of $3,975
to which Chad was not entitled.
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Cite as 312 Neb. 535
2019 Tax Year.
With respect to 2019, Heather claims that the district court
erred when it found her in contempt for taking the dependent
tax credit for 2019. Specifically, Heather claims that Chad was
not current on paying his portion of childcare expenses and
thus not entitled to the exemptions. We find no merit to this
claim of error.
Heather testified that she paid work-related childcare
expenses for the children over the years, and Chad admitted
that he had never paid Heather for daycare, because he believed
it was a benefit of Heather’s employment. However, turning to
the decree which controls our analysis, the question for the trial
court and for us on appeal is whether Chad failed to “reimburse
[Heather], as necessary for child care expenses within fifteen
(15) days of receipt of the statement for the same.”
The record before us has no evidence that Heather timely
submitted childcare expense statements to Chad prior to
December 31, 2019, as anticipated by the decree or that such
statements remained unpaid at the end of December 2019.
Heather’s requests for reimbursement for childcare expenses
submitted to Chad after December 31, 2019, are not encom-
passed by the assignments of error in this appeal. The record of
admitted evidence does not prove a failure by Chad to timely
pay childcare, and we note merely incidentally that DHHS pay-
ment history reports demonstrate that on December 31, 2019,
Chad had a child support credit of $114.85.
Given the admitted evidence, Chad established that Heather
took the dependency exemption for 2019, even though Chad
was current on his obligations under the decree and order
in modification. The district court did not err when it found
Heather in contempt of the decree, because she took the depen-
dency exemptions for the 2019 tax year. We affirm this portion
of the district court’s order.
Damages for 2019 Tax Year.
Because we have concluded that Chad was entitled to the
dependency exemption for 2019, we must consider the damages
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he may have suffered as a consequence of being deprived of
the exemption in 2019. Specifically, although there was evi-
dence that Chad did not receive a $500 coronavirus relief pay-
ment, Heather claims that Chad did not adduce evidence of the
second 2020 relief payment, and the district court erred when
it included an extra $600 in damages for Chad that was unsup-
ported by the evidence at trial. We agree with Heather that the
record lacks evidence related to a hypothetical $600 payment
and vacate the award of $600.
[5,6] We have often stated that a plaintiff’s evidence of dam-
ages may not be speculative or conjectural and must provide
a reasonably certain basis for calculating damages. Pribil v.
Koinzan, 266 Neb. 222, 665 N.W.2d 567 (2003). We have con-
sistently framed the question whether the evidence of damages
is “reasonably certain” as a question of law, and not as a matter
to be decided by the trier of fact. Id.
[7-9] Here, to evaluate whether the evidence of Chad’s
claimed damages is reasonably certain, we must examine the
evidence in the record. An appellate record typically contains
the bill of exceptions, used to present factual evidence to an
appellate court, and the transcript, used to present pleadings
and orders of the case to the appellate court. In re Estate of
Radford, 297 Neb. 748, 901 N.W.2d 261 (2017). A bill of
exceptions is the only vehicle for bringing evidence before an
appellate court; evidence which is not made a part of the bill
of exceptions may not be considered. Id. Before this court can
consider evidence bearing upon an issue of fact, evidence must
have been offered at the trial court and embodied in the bill
of exceptions. Smick v. Langvardt, 216 Neb. 778, 345 N.W.2d
830 (1984). Specifically, we must consider whether the bill
of exceptions contains any evidence which contributed to the
lower court’s decision either through exhibits, through judicial
notice, or as a result of a stipulation or admission by the par-
ties. See In re Estate of Radford, supra.
The parties do not dispute that Chad lost a $2,000 refund
he would have received if he had claimed a dependent on his
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YOCHUM V. YOCHUM
Cite as 312 Neb. 535
2019 taxes. Chad also testified at the October 5, 2020, hearing
that he lost a $500 payment from the federal coronavirus relief
package. However, although Chad did not testify to a second
relief payment, the district court nevertheless awarded Chad
$1,100 to reflect $500 and $600 coronavirus relief payments.
Although there was some argument by counsel for Chad rela-
tive to the $600 stimulus opportunity, the record does not con-
tain evidence, judicial notice, or stipulation or admission of the
parties that Chad lost a $600 relief payment which may have
been available later in 2020. Accordingly, we reverse the award
of the additional $600 in damages to Chad because it exceeded
the evidence in the record.
Attorney Fees.
Finally, Heather assigns error to the district court’s award of
$3,000 for Chad’s attorney fees, noting that Chad had submit-
ted an affidavit that indicated his attorney fees were $2,031.44.
[10-12] We have explained that when a party willfully vio-
lates a decree, coercive and remedial sanctions are appropri-
ate. See Vyhlidal v. Vyhlidal, 311 Neb. 495, 973 N.W.2d 171
(2022). Civil contempt proceedings are instituted to preserve
and enforce the rights of private parties to a suit when a party
fails to comply with a court order made for the benefit of the
opposing party. Id. Costs, including reasonable attorney fees,
can be awarded in a contempt proceeding when there has been
a finding of contempt. Id.
[13] The decision to award attorney fees is a matter of dis-
cretion. See Becher v. Becher, 311 Neb. 1, 970 N.W.2d 472
(2022). Because we reverse the portion of the order which
found Heather in contempt related to the 2014 dependency
exemption and we vacate the damage awards of $3,975 and
$600 to Chad, we believe the district court should exercise its
discretion anew in light of these outcomes. Accordingly, we
reverse the award of attorney fees and remand the cause for
reconsideration and recalculation of attorney fees in light of
this opinion.
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Cite as 312 Neb. 535
CONCLUSION
For the reasons above, we conclude that Heather was not
in contempt of the decree when she took a dependency tax
exemption for 2014, and we reverse the order of the district
court which found Heather in contempt regarding the 2014 tax
exemption and vacate the award to Chad of $3,975 occasioned
by this incorrect ruling. We affirm the order finding Heather
in contempt with respect to the 2019 tax year. We vacate the
award of $600 in damages to Chad for a lost coronavirus relief
payment for the 2019 tax year which was unsupported by the
record. We reverse the award of attorney fees to Chad and
remand the cause with directions to award Chad reasonable
attorney fees, and for further proceedings in conformity with
this opinion.
Affirmed in part, vacated in part, and
in part reversed and remanded
for further proceedings. | 01-04-2023 | 11-18-2022 |
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11/18/2022 08:06 AM CST
- 647 -
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312 Nebraska Reports
IN RE ESTATE OF ADELUNG
Cite as 312 Neb. 647
In re Estate of Madeline A.
Adelung, deceased.
Lynda Adelung Heiden, Personal Representative
of the Estate of Madeline A. Adelung,
deceased, appellant and cross-appellee,
v. Kent A. Adelung, appellee and
cross-appellant.
___ N.W.2d ___
Filed October 14, 2022. No. S-21-838.
1. Appeal and Error. The construction of a mandate issued by an appel-
late court presents a question of law.
2. Judgments: Appeal and Error. On questions of law, an appellate court
is obligated to reach a conclusion independent of the determination
reached by the court below.
3. Actions: Appeal and Error. The law-of-the-case doctrine reflects the
principle that an issue litigated and decided in one stage of a case should
not be relitigated at a later stage.
4. Appeal and Error. Under the law-of-the-case doctrine, an appellate
court’s holdings on issues presented to it conclusively settle all matters
ruled upon, either expressly or by necessary implication.
5. Judgments: Appeal and Error. The law-of-the-case doctrine applies
with greatest force when an appellate court remands a case to an inferior
tribunal. Upon remand, a district court may not render a judgment or
take action apart from that which the appellate court’s mandate directs
or permits.
6. Judgments: Waiver: Appeal and Error. Under the mandate branch
of the law-of-the-case doctrine, a decision made at a previous stage of
litigation, which could have been challenged in the ensuing appeal but
was not, becomes the law of the case; the parties are deemed to have
waived the right to challenge that decision. But an issue is not consid-
ered waived if a party did not have both an opportunity and an incentive
to raise it in a previous appeal.
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IN RE ESTATE OF ADELUNG
Cite as 312 Neb. 647
Appeal from the County Court for Buffalo County: Gerald
R. Jorgensen, Jr., Judge. Affirmed.
Blake E. Johnson, of Bruning Law Group, for appellant.
Jared J. Krejci, of Smith, Johnson, Allen, Connick & Hansen,
for appellee.
Heavican, C.J., Cassel, Stacy, Papik, and Freudenberg,
JJ., and Noakes, District Judge.
Heavican, C.J.
INTRODUCTION
This case comes to us following our remand to the county
court for a redetermination of damages owed by the defendant.
At issue is whether the county court erred when it declined to
award prejudgment interest to the estate. The estate appeals.
We affirm.
BACKGROUND
This is the second time this court has been presented with an
appeal from the estate of Madeline A. Adelung (Estate). 1 In our
earlier case, Adelung’s son, Kent A. Adelung, appealed from
the decision of the county court finding him liable following
an action for an equitable accounting sought by the Estate’s
personal representative, Lynda Adelung Heinen, Madeline’s
daughter.
On appeal, we concluded that the Estate was barred by
the statute of limitations from recovering a portion of the
farm income it alleged that Kent had wrongfully collected.
We affirmed, as modified, the county court’s judgment and
remanded the cause to the county court with directions for the
court to calculate the judgment in conformity with our opinion.
Upon remand, the Estate sought prejudgment interest.
The county court noted that it had not previously ordered
1
See In re Estate of Adelung, 306 Neb. 646, 947 N.W.2d 269 (2020).
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Cite as 312 Neb. 647
prejudgment interest, that this court’s opinion had made no
mention of prejudgment interest, and that to award it would
“not [be] proper.” The Estate appeals, and Kent cross-appeals.
ASSIGNMENTS OF ERROR
The Estate assigns that the county court erred in not applying
prejudgment interest under Neb. Rev. Stat. § 45-104 (Reissue
2021) to the amount of the modified judgment.
On cross-appeal, Kent assigns that the county court erred
in not concluding that the Estate failed to adequately plead or
otherwise raise the issue of prejudgment interest and, as such,
did not have a substantive right to recover such interest.
STANDARD OF REVIEW
[1,2] The construction of a mandate issued by an appellate
court presents a question of law. 2 On questions of law, we are
obligated to reach a conclusion independent of the determina-
tion reached by the court below. 3
ANALYSIS
This case examines the intersection of the awarding of pre-
judgment interest and the law-of-the-case doctrine. Some back-
ground on both principles is helpful.
Statutory authority for the awarding of prejudgment interest
is separately found in Neb. Rev. Stat. § 45-103.02 (Reissue
2021) and § 45-104. We clarified in Weyh v. Gottsch 4 that
§§ 45-103.02 and 45-104 are
alternate and independent statutes authorizing the recovery
of prejudgment interest. In other words, the Legislature
has created three separate ways to recover prejudgment
interest, and none is preferred. Section 45-103.02(1)
authorizes the recovery of prejudgment interest on unliq-
uidated claims when the statutory preconditions are met,
2
County of Sarpy v. City of Gretna, 276 Neb. 520, 755 N.W.2d 376 (2008).
3
Id.
4
Weyh v. Gottsch, 303 Neb. 280, 313-14, 929 N.W.2d 40, 63 (2019).
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Cite as 312 Neb. 647
§ 45-103.02(2) authorizes the recovery of prejudgment
interest on liquidated claims, and § 45-104 authorizes the
recovery of prejudgment interest on four categories of
contract-based claims without regard to whether the claim
is liquidated or unliquidated.
[3-5] As noted, the law-of-the-case doctrine is also impli-
cated here. This doctrine reflects the principle that an issue
litigated and decided in one stage of a case should not be reliti-
gated at a later stage. 5 Under that doctrine, an appellate court’s
holdings on issues presented to it conclusively settle all matters
ruled upon, either expressly or by necessary implication. 6 The
doctrine applies with greatest force when an appellate court
remands a case to an inferior tribunal. 7 Upon remand, a district
court may not render a judgment or take action apart from that
which the appellate court’s mandate directs or permits. 8
[6] Under the mandate branch of the law-of-the-case doc-
trine, a decision made at a previous stage of litigation, which
could have been challenged in the ensuing appeal but was not,
becomes the law of the case; the parties are deemed to have
waived the right to challenge that decision. 9 But an issue is not
considered waived if a party did not have both an opportunity
and an incentive to raise it in a previous appeal. 10
The Nebraska Court of Appeals discussed the intersection
of prejudgment interest and the mandate branch of the law-of-
the-case doctrine in Valley Cty. Sch. Dist. 88-0005 v. Ericson
State Bank. 11 In that case, a bank (found liable below) appealed
from, among other things, the district court’s award of
5
deNourie & Yost Homes v. Frost, 295 Neb. 912, 893 N.W.2d 669 (2017).
6
Id.
7
Id.
8
Id.
9
Id.
10
Id.
11
Valley Cty. Sch. Dist. 88-0005 v. Ericson State Bank, 18 Neb. App. 624,
790 N.W.2d 462 (2010).
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Cite as 312 Neb. 647
prejudgment interest at a rate of 12 percent per annum. The
Court of Appeals affirmed. On remand, the district court
entered an order in conformity with the Court of Appeals’
opinion and awarded postjudgment interest at the same rate.
The bank again appealed. 12
In defending the district court’s award, the appellee con-
tended that the law-of-the-case doctrine operated to prevent
the bank from challenging the 12-percent rate applied to the
postjudgment amount. The Court of Appeals disagreed:
In Valley Cty. I . . . , we specifically stated that § 45-104
applied “[b]ecause there was no ‘otherwise agreed’ upon
rate for prejudgment interest” and that [the appellee] was
entitled to the 12–percent prejudgment interest until the
entry of judgment. Neither the district court’s judgment
nor our opinion stated that the 12–percent interest rate
would continue to be applied after entry of judgment;
thus, the [b]ank did not have a reason to raise the issue
of the appropriate postjudgment interest rate at that time.
Had the district court’s initial judgment expressly stated
a postjudgment interest rate, [the appellee’s] argument
would have had merit. But because the judgment was
silent on the matter of postjudgment interest, we reject
[the appellee’s] argument that the matter should have
been raised in the prior appeal. 13
Also relevant to our determination is Neb. Ct. R. Pldg.
§ 6-1108(a), which states:
A pleading which sets forth a claim for relief, whether an
original claim, counterclaim, cross-claim, or third-party
claim, shall contain (1) a caption, (2) a short and plain
statement of the claim showing that the pleader is entitled
to relief, and (3) a demand for judgment for the relief the
pleader seeks. Relief in the alternative or of several dif-
ferent types may be demanded. If the recovery of money
12
See id.
13
Id., 18 Neb. App. at 628-29, 790 N.W.2d at 466.
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Cite as 312 Neb. 647
be demanded, the amount of special damages shall be
stated but the amount of general damages shall not be
stated; and if interest thereon be claimed, the time from
which interest is to be computed shall also be stated.
(Emphasis supplied.)
In Albrecht v. Fettig, 14 the Court of Appeals discussed
whether the failure to request interest in a complaint precluded
a litigant from recovering interest, 15 noting that the purpose of
compliance with § 6-1108 was to provide notice of the relief
that the plaintiff was attempting to obtain. 16 In AVG Partners I,
this court expanded the Albrecht holding to note that “compli-
ance with § 6-1108(a) is not determinative where entitlement
to interest is based on statute and the adverse party had notice
and an opportunity to be heard prior to judgment.” 17 Based on
this, we concluded that although prejudgment interest was not
requested in the complaint, it was “the subject of extensive
argument prior to judgment” 18 and thus was recoverable.
The county court and the parties frame the issue presented
by this appeal primarily as one involving the law-of-the-case
doctrine. The parties ask us to determine whether the fact that
this court’s mandate failed to order prejudgment interest means
that to do so would be outside of that prior mandate.
Generally speaking, a lower court may do nothing other than
what a higher court has ordered it to do via the higher court’s
mandate. And in this case, we ordered the lower court to rede-
termine the damages award once we concluded that the statute
of limitations operated to prevent the Estate from recovering
some of the farm income that had been awarded to it by the
county court. This did not include interest.
14
Albrecht v. Fettig, 27 Neb. App. 371, 932 N.W.2d 331 (2019).
15
See AVG Partners I v. Genesis Health Clubs, 307 Neb. 47, 948 N.W.2d
212 (2020) (quoting Albrecht, supra note 14).
16
Id.
17
Id., 307 Neb. at 64, 948 N.W.2d at 230.
18
Id.
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Cite as 312 Neb. 647
As noted above, there are some instances where issues out-
side of the mandate may be raised on remand—namely, if there
was no opportunity or incentive to appeal from the issue now
raised. But we need not decide here whether the Estate should
have appealed from the county court’s failure to award interest
below. Rather, we find dispositive the Estate’s failure to seek
interest in its pleading or otherwise raise the issue of interest
prior to judgment.
The purpose behind compliance with § 6-1108 of the plead-
ing rules is to provide notice to other litigants that prejudgment
interest is at issue. If there was notice, the failure to comply
with § 6-1108 might be excusable. But here, there was no
compliance with § 6-1108, nor was there notice to Kent on the
issue of prejudgment interest prior to the entry of judgment
in the Estate’s favor. On these facts, we find no error in the
district court’s refusal to award interest on remand. Finding no
merit to the Estate’s assignment of error, albeit for a different
reason than that stated by the county court, we affirm. We need
not reach Kent’s assignment of error on cross-appeal.
CONCLUSION
The decision of the county court is affirmed.
Affirmed.
Miller-Lerman, J., participating on briefs.
Funke, J., not participating. | 01-04-2023 | 11-18-2022 |
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11/18/2022 08:06 AM CST
- 456 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
STATE V. SPACE
Cite as 312 Neb. 456
State of Nebraska, appellant,
v. Tracy L. Space, appellee.
___ N.W.2d ___
Filed September 16, 2022. No. S-21-837.
1. Judgments: Speedy Trial: Appeal and Error. Generally, a trial court’s
determination as to whether charges should be dismissed on speedy trial
grounds is a factual question which will be affirmed on appeal unless
clearly erroneous.
2. Statutes: Appeal and Error. Statutory interpretation presents a ques-
tion of law, for which an appellate court has an obligation to reach
an independent conclusion irrespective of the decision made by the
court below.
3. Speedy Trial. Under Nebraska’s speedy trial statutes, criminal defend
ants must be brought to trial by a 6-month deadline, but certain periods
of delay are excluded and thus can extend the deadline.
4. ____. The primary burden is on the State to bring an accused person to
trial within the time provided by law.
5. ____. If a defendant is not brought to trial by the 6-month speedy trial
deadline, as extended by any excluded periods, he or she is entitled to
absolute discharge from the offense charged and for any other offense
required by law to be joined with that offense.
6. Speedy Trial: Proof. When a motion for absolute discharge is filed, the
State bears the burden to show, by the greater weight of the evidence,
that one or more of the excluded time periods under Neb. Rev. Stat.
§ 29-1207(4) (Reissue 2016) are applicable.
7. Speedy Trial. To calculate the time for speedy trial purposes, a court
must exclude the day the complaint was filed, count forward 6 months,
back up 1 day, and then add any time excluded under Neb. Rev. Stat.
§ 29-1207(4) (Reissue 2016) to determine the last day the defendant can
be tried.
8. Statutes. Statutory interpretation begins with the text, and the text is to
be given its plain and ordinary meaning. A court will not read meaning
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STATE V. SPACE
Cite as 312 Neb. 456
into a statute that is not warranted by the legislative language or read
anything plain, direct, or unambiguous out of a statute.
9. Statutes: Intent. When interpreting a statute, a court must give effect,
if possible, to all the several parts of a statute and no sentence, clause,
or word should be rejected as meaningless or superfluous if it can
be avoided.
10. Words and Phrases. A legal term of art is a word or phrase having
a specific, precise meaning in a given specialty apart from its general
meaning in ordinary contexts.
11. Statutes: Words and Phrases. When legal terms of art are used in stat-
utes, they are to be construed according to their term of art meaning.
12. Speedy Trial: Words and Phrases. The term “continuance,” as used
in Neb. Rev. Stat. § 29-1207(4)(b) (Reissue 2016), refers to the cir-
cumstance where a court proceeding set for one date is postponed to a
future date.
13. Speedy Trial. The text of Neb. Rev. Stat. § 29-1207(4)(b) (Reissue
2016) plainly requires that a “continuance” must be granted at the
request or with the consent of the defendant or his or her counsel, before
the resulting period of delay is excludable.
14. Criminal Law: Appeal and Error. Under the invited error doctrine, a
defendant in a criminal case may not take advantage of an alleged error
which the defendant invited the trial court to commit.
15. Criminal Law: Speedy Trial: Waiver. A criminal defendant’s failure
to demand a trial within the 6-month statutory speedy trial period, or to
object to a trial date set beyond such period, does not constitute a waiver
of his or her speedy trial rights.
Appeal from the District Court for Buffalo County: Ryan C.
Carson, Judge. Exception overruled.
Shawn R. Eatherton, Buffalo County Attorney, and Kari R.
Fisk for appellant.
Lydia Davis, Buffalo County Public Defender, for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Stacy, J.
During a scheduling hearing in a felony criminal case, the
district court proposed a trial date and asked defense counsel,
“does that work?” to which counsel replied, “Yes, thank you.”
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STATE V. SPACE
Cite as 312 Neb. 456
The court then scheduled trial for that date. No one mentioned
speedy trial during the scheduling hearing, but it is undisputed
that the proposed trial date was more than 6 months after the
date the information was filed.
Shortly before the scheduled trial date, the defendant moved
for absolute discharge, asserting she had not been brought to
trial before the running of the 6-month speedy trial period
under Neb. Rev. Stat. § 29-1207 (Reissue 2016). The district
court granted absolute discharge, and the State filed this excep-
tion proceeding.
The State’s primary argument is that by agreeing to an initial
trial date that was outside the 6-month statutory speedy trial
period, the defendant consented to an excludable “period of
delay resulting from a continuance granted” within the mean-
ing of § 29-1207(4)(b). Alternatively, the State argues the
defendant “invit[ed] the Court to commit error in scheduling” 1
and should not have been allowed to rely on such error to
obtain absolute discharge. Finding no merit to the State’s argu-
ments, we overrule the exception.
BACKGROUND
In a two-count information filed on March 5, 2021, Tracy
L. Space was charged with aggravated driving under the influ-
ence, third offense (a Class IIIA felony), and refusal to submit
to a preliminary breath test (a Class V misdemeanor). On
March 9, Space filed a motion for discovery, which the court
granted in an order entered the following day.
On March 25, 2021, the court entered a progression order
setting arraignment for May 24, and a “final plea hearing” for
July 22. The progression order stated that “[a]t the conclusion
of the final plea hearing . . . the Court will schedule trial.”
Before the scheduled arraignment on May 24, Space filed a
written waiver of arraignment and entered a plea of not guilty.
All parties appeared for the final plea hearing on July 22,
2021, during which the following exchange took place:
1
Brief for appellant at 8.
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STATE V. SPACE
Cite as 312 Neb. 456
THE COURT: . . . We are set for final plea/pretrial.
[Defense counsel], what is the status?
[Defense counsel:] She is asking — she’s standing on
her not guilty plea, Your Honor.
THE COURT: September 20, 2021, for jury trial; does
that work?
[Defense counsel:] Yes. Thank you.
THE COURT: We’ll set the matter also for final status
hearing the Friday before, September 17th at 11:30 a.m.
Does that also work?
[Defense counsel:] Yes. Thank you.
THE COURT: Ms. Space, we’re going to set your
matter for jury trial on September 20, 2021, at 9 a.m.,
and also for a final status hearing the Friday before,
September 17th at 11:30 a.m. It’s important that you be
here on both times; do you agree to do that?
DEFENDANT: Yes, Your Honor.
THE COURT: [Defense counsel], I’ll ask that you
write those dates and times down for Ms. Space so she
doesn’t forget.
Ms. Space, you need to understand that today was the
deadline for discovery and also the deadline to [accept
any] plea offers that may be made by the State. Absent a
showing of good cause, the matter will proceed to trial at
your request; do you understand that?
DEFENDANT: Yes, Your Honor.
THE COURT: The Court will allow you to remain out
on your current bond, subject to all the terms and condi-
tions; do you understand?
DEFENDANT: Yes, Your Honor.
THE COURT: And do you have any questions for me?
DEFENDANT: No, Your Honor.
THE COURT: [Defense counsel], anything else?
[Defense counsel:] No. Thank you.
THE COURT: [Counsel for the State]?
[Counsel for the State:] No, Your Honor.
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The issue of speedy trial was not raised or discussed when
the trial date was selected, nor at any other point during the
final plea hearing. After the hearing, the court entered an order,
styled as a journal entry, memorializing the dates set for the
final status hearing and trial.
On September 13, 2021, Space filed a motion for absolute
discharge, asserting a violation of both her statutory and consti-
tutional speedy trial rights. At the hearing on Space’s motion,
the court took judicial notice of the information, the progres-
sion order, Space’s written not guilty plea, the journal entry
memorializing the trial date, and the remainder of the court
file. The State offered a transcript of the July 22 hearing into
evidence, which the court received without objection.
The court then gave counsel an opportunity to present argu-
ment, beginning with the defense. Defense counsel argued that
Space was entitled to absolute discharge because the State
failed to bring her to trial within 6 months of the date the
information was filed and because she had not waived her right
to a speedy trial. Anticipating the State’s argument, defense
counsel urged:
[I]t is improper . . . to allege that some type of responsi-
bility was on the defendant because that’s simply not the
case. It’s not the defendant’s burden to notify the Court
of the speedy trial date, and quite frankly, it’s not the
Court’s burden either. According to the law, the duty is
on the county attorney, it’s on the State, to bring a person
to trial, again, within six months of the filing of the trial
information.
. . . I would remind the Court that at no time in this
case did Ms. Space ask for a continuance. At the final
plea hearing she simply stood on her not guilty plea at
that time. I would submit to the Court that that was not a
request for a continuance because, quite frankly, it wasn’t.
There was no evidence that she wasn’t immediately ready
for trial.
The State urged the court to overrule the motion for discharge,
reasoning that Space’s acceptance of the September 20, 2021,
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trial date rendered the period between the July 22 hearing
and September 20 excludable under § 29-1207(4)(b). The
State argued:
A period of delay resulting from a continuance granted
at the request or with the consent of the defendant — or
of his or her counsel is what the State’s relying on here,
Your Honor.
....
So when the Court sets that date and the Court asks
[defense counsel] if that’s okay, I don’t know that it
would be appropriate for the State at that point to try to
overrule defense counsel in picking that particular date
because perhaps there were strategic reasons she would
want to have it on [September] 20th. . . .
Regardless of the subjective reasons for why [defense
counsel] said [September 20] would work, the objective
fact is that the period of time from July 22nd through
September 20th, in the State’s view, was a mutually
agreed upon trial date by and through defense counsel
. . . with the consent of defense counsel; and therefore,
under [§] 29-1207(4)(b), an excludable period up through
September 20th, meaning, then, that the motion for dis-
charge was filed in a time period that the speedy trial
clock had not run. So the motion for discharge in the
State’s view should be overruled, Judge.
The court took the matter under advisement.
Thereafter, the court entered an order granting Space’s
motion for absolute discharge. It found the 6-month speedy
trial period had run on September 6, 2021, and it expressly
rejected the State’s argument that by agreeing to the September
20 trial date, Space had consented to a “continuance” of trial.
It reasoned:
[T]he cases [the State] referenced all involved requests
for a continuance, as opposed to initial trial settings.
See State v. Curry, 18 Neb. App. 284, 790 N.W.2d 441
(2010); State v. Turner, 252 Neb. 620, 564 N.W.2d 231
(1997). Moreover, the Nebraska Supreme Court addressed
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this issue more specifically in State v. Alvarez, 189 Neb.
281, 291-92, 202 N.W.2d 604, 610 (1972), wherein it
concluded that the “failure by a defendant to demand a
trial within the time he is required to be brought to trial
. . . or to object at the time trial date is set does not con-
stitute a waiver of his rights[.]” The Court further noted
that “[p]revious holdings of this court that failure of the
accused to demand trial constitutes a waiver of the statu-
tory right are overruled[.]” Id. (citing Barker v. Wingo,
407 U.S. 514 (1972)). While the Court further noted that
the defendant’s inaction may be considered along with
other circumstances when determining whether “good
cause” exists, it cannot alone constitute good cause. Id.
No additional evidence of “good cause” was offered in
this matter.
Presumably because the motion for absolute discharge was
granted on statutory grounds, the court’s order did not address
Space’s constitutional speedy trial claim. The State was granted
leave to docket this exception proceeding pursuant to Neb.
Rev. Stat. § 29-2315.01 (Cum. Supp. 2020). We moved the
matter to our docket on our own motion.
ASSIGNMENT OF ERROR
The State assigns that the district court erred in granting
Space’s motion for absolute discharge.
STANDARD OF REVIEW
[1,2] Generally, a trial court’s determination as to whether
charges should be dismissed on speedy trial grounds is a fac-
tual question which will be affirmed on appeal unless clearly
erroneous. 2 But statutory interpretation presents a question of
law, for which an appellate court has an obligation to reach an
independent conclusion irrespective of the decision made by
the court below. 3
2
State v. Abernathy, 310 Neb. 880, 969 N.W.2d 871 (2022).
3
State v. Chase, 310 Neb. 160, 964 N.W.2d 254 (2021).
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ANALYSIS
Statutory Speedy Trial Principles
[3] The sole question presented is whether the district court
erred in granting Space’s motion for absolute discharge on stat-
utory speedy trial grounds. The statutory right to a speedy trial
is set out in § 29-1207 and Neb. Rev. Stat. § 29-1208 (Reissue
2016). 4 Under these statutes, criminal defendants must be
brought to trial by a 6-month deadline, but certain periods
of delay are excluded and thus can extend the deadline. 5 The
excludable periods are set out in § 29-1207(4)(a) through (f).
In this case, the State’s primary argument rests on the exclud-
able time period set out in subsection (4)(b) of § 29-1207,
which provides:
(4) The following periods shall be excluded in comput-
ing the time for trial:
....
(b) The period of delay resulting from a continuance
granted at the request or with the consent of the defendant
or his or her counsel. . . . A defendant is deemed to have
waived his or her right to speedy trial when the period of
delay resulting from a continuance granted at the request
of the defendant or his or her counsel extends the trial
date beyond the statutory six-month period.
[4-6] We have long recognized that the primary burden is
on the State to bring an accused person to trial within the time
provided by law. 6 If a defendant is not brought to trial by the
6-month speedy trial deadline, as extended by any excluded
periods, he or she is entitled to absolute discharge from the
offense charged and for any other offense required by law to be
joined with that offense. 7 When a motion for absolute discharge
is filed, the State bears the burden to show, by the greater
4
See Abernathy, supra note 2.
5
Id.
6
State v. Coomes, 309 Neb. 749, 962 N.W.2d 510 (2021).
7
Abernathy, supra note 2.
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weight of the evidence, that one or more of the excluded time
periods under § 29-1207(4) are applicable. 8
[7] To calculate the time for speedy trial purposes, a court
must exclude the day the complaint was filed, count forward 6
months, back up 1 day, and then add any time excluded under
§ 29-1207(4) to determine the last day the defendant can be
tried. 9 In this case, the information was filed March 5, 2021,
so absent any excludable time, the State had until September 5,
2021, to bring Space to trial.
The district court found there was 1 excludable day resulting
from Space’s motion for discovery, which was filed on March
9, 2021, and granted the next day. 10 Accounting for this single
excluded day, the court determined the statutory speedy trial
period expired on September 6. Space filed her motion for
absolute discharge approximately 1 week later, on September
13. After concluding the State had proved no excludable time
other than the 1 day related to Space’s discovery motion, the
district court granted absolute discharge.
In this exception proceeding, the State contends the dis-
trict court erred by not also excluding the time period from
July 22 to September 20, 2021. In doing so, it presents two
theories. First, the State suggests that when Space’s counsel
agreed to the September 20 trial date, the period of time lead-
ing up to that date became excludable under § 29-1207(4)(b)
as a “period of delay resulting from a continuance granted at
the request or with the consent of the defendant or his or her
counsel.” Alternatively, the State argues that by accepting the
September 20 trial date, Space “invit[ed] the Court to commit
error,” 11 and she should not have been allowed to rely on such
8
See Coomes, supra note 6.
9
State v. Gnanaprakasam, 310 Neb. 519, 967 N.W.2d 89 (2021).
10
See State v. Washington, 269 Neb. 728, 695 N.W.2d 438 (2005). See, also,
State v. Covey, 267 Neb. 210, 217, 673 N.W.2d 208, 213 (2004) (final
disposition under § 29-1207(4)(a) occurs on date motion is “‘granted or
denied’”).
11
Brief for appellant at 8.
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error to support absolute discharge. We consider each argument
in turn, and ultimately, we reject them both.
Period of Delay Resulting From
Continuance Granted
The State argues that the period between July 22 and
September 20, 2021, was excludable under § 29-1207(4)(b)
as a “period of delay resulting from a continuance granted at
the request or with the consent of the defendant or his or her
counsel.” Space responds that § 29-1207(4)(b) does not apply
because this case did not involve the granting of a “continu-
ance,” but, rather, involved the initial setting of a trial date.
The parties’ competing positions present a question of statutory
interpretation regarding the meaning of the term “continuance”
as used in § 29-1207(4)(b).
Our cases have not expressly defined the term “continu-
ance,” presumably because the term is so commonplace in
legal vernacular that ordinarily there is no confusion sur-
rounding its meaning. As observed by the Nebraska Court of
Appeals, “[I]f it looks like a continuance and sounds like a
continuance, it is a continuance.” 12 But to analyze whether the
State is correct that the period of delay between July 22 and
September 20, 2021, resulted from a “continuance,” we must
first determine the meaning of that term.
According to the State, a “continuance” under § 29-1207(4)(b)
means “any delay or postponement of the 6-month statutory
period that has been requested by or consented to by the
defendant or defense counsel.” 13 We disagree with the State’s
interpretation.
[8,9] Statutory interpretation begins with the text, and the
text is to be given its plain and ordinary meaning. 14 A court
12
State v. Craven, 17 Neb. App. 127, 134, 757 N.W.2d 132, 137 (2008)
(rejecting contention that defense counsel’s request to “reset” hearing was
not request to “continue” hearing within meaning of § 29-1207(4)(b)).
13
Brief for appellant at 11 (emphasis omitted).
14
Nebraska Republican Party v. Shively, 311 Neb. 160, 971 N.W.2d 128
(2022).
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will not read meaning into a statute that is not warranted by
the legislative language or read anything plain, direct, or unam-
biguous out of a statute. 15 When interpreting a statute, a court
must give effect, if possible, to all the several parts of a statute
and no sentence, clause, or word should be rejected as mean-
ingless or superfluous if it can be avoided. 16
[10,11] These settled principles guide our analysis, but we
also observe that the term “continuance” is a legal term of art.
A legal term of art is a word or phrase having a specific, pre-
cise meaning in a given specialty apart from its general mean-
ing in ordinary contexts. 17 When legal terms of art are used
in statutes, they are to be construed according to their term of
art meaning. 18
[12] Black’s Law Dictionary defines “continuance” as the
“adjournment or postponement of a trial or other proceed-
ing to a future date.” 19 This definition is generally consistent
with our cases applying the continuance provision found in
the first sentence of § 29-1207(4)(b), 20 and such a definition
necessarily presumes that before there can be a “continuance”
of a proceeding, there must have been an initial setting. Stated
differently, “continuance,” as it is used in § 29-1207(4)(b),
15
See, id.; State v. Liming, 306 Neb. 475, 945 N.W.2d 882 (2020).
16
State v. Amaya, 305 Neb. 36, 938 N.W.2d 346 (2020).
17
Stone Land & Livestock Co. v. HBE, 309 Neb. 970, 962 N.W.2d 903
(2021); State ex rel. Peterson v. Creative Comm. Promotions, 302 Neb.
606, 924 N.W.2d 664 (2019).
18
Id.
19
Black’s Law Dictionary 400 (11th ed. 2019).
20
See, e.g., Coomes, supra note 6, 309 Neb. at 754, 962 N.W.2d at 516
(finding consent for continuance under § 29-1207(4)(b) when State orally
moved to continue matter for further status hearing “‘a month down the
road,’” and defense counsel said “‘Judge, that’s fine with me’”); Liming,
supra note 15 (finding continuance under § 29-1207(4)(b) when State
asked to continue court-ordered settlement conference to future date and
defendant agreed); State v. Lovvorn, 303 Neb. 844, 932 N.W.2d 64 (2019)
(finding continuance under § 29-1207(4)(b) when defendant moved to
continue pretrial hearing to future date).
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does not broadly refer to the continuous passage of time.
Instead, we hold that “continuance” refers to the circumstance
where a court proceeding set for one date is postponed to a
future date.
We thus reject the State’s invitation to construe
§ 29-1207(4)(b) to apply to any period of delay granted with
the consent of the defendant or defense counsel. The State’s
construction would effectively read the phrase “continuance
granted” out of the statutory text and would allow the trial
court to stop the speedy trial clock between court appearances
simply by asking whether the next scheduled appearance is
agreeable to the defense.
[13] The text of § 29-1207(4)(b) plainly requires that a
“continuance” must be granted at the request or with the con-
sent of the defendant or his or her counsel, before the resulting
period of delay is excludable. No continuance was granted in
this case.
During the July 22, 2021, hearing, defense counsel con-
sented to setting the initial trial date on September 20, but prior
to that hearing, there was no scheduled trial date, so counsel
was not consenting to a continuance of trial or any other previ-
ously scheduled matter. Consequently, the time period between
the July 22 hearing and the September 20 trial date was not a
“period of delay resulting from a continuance granted at the
request or with the consent of the defendant or his or her coun-
sel” and was not excludable under § 29-1207(4)(b).
For the sake of completeness, we also reject any sug-
gestion that Space’s consent to the initial trial date impli-
cated the waiver provision contained in the last sentence of
§ 29-1207(4)(b). That sentence provides: “A defendant is
deemed to have waived his or her right to speedy trial when
the period of delay resulting from a continuance granted at the
request of the defendant or his or her counsel extends the trial
date beyond the statutory six-month period.” 21 Interpreting
this language, we have said, “‘[I]f a defendant requests a
21
§ 29-1207(4)(b).
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continuance that moves a trial date which has been set within
the statutory 6-month period to a date that is outside the
6-month period, that request constitutes a permanent waiver of
the statutory speedy trial right.’” 22 But here, the waiver provi-
sion of § 29-1207(4)(b) was inapplicable, because Space con-
sented to an initial trial date set outside the 6-month period;
she did not request to continue a trial date that was originally
set within the statutory period. 23 There may be a compelling
policy argument that a defendant who accepts an initial trial
date outside the statutory 6-month period is acting in a way
that is fundamentally inconsistent with asserting his or her
statutory speedy trial rights and should therefore be under-
stood to have waived these rights. But expanding the statutory
waiver provision to address such a scenario is a policy matter
properly left to the Legislature.
Invited Error Doctrine
[14] The State’s alternative argument relies on the invited
error doctrine. Under that doctrine, “[a] defendant in a crimi-
nal case may not take advantage of an alleged error which the
defendant invited the trial court to commit.” 24
The State argues that Space invited the trial court to commit
error by agreeing to an initial trial date set outside the 6-month
speedy trial period. Space responds that she did not “invite”
the court to commit a scheduling error, generally noting it was
the judge who proposed the initial trial date, and further noting
22
State v. Riessland, 310 Neb. 262, 266-67, 965 N.W.2d 13, 16 (2021),
quoting State v. Mortensen, 287 Neb. 158, 841 N.W.2d 393 (2014).
23
See State v. Gill, 297 Neb. 852, 901 N.W.2d 679 (2017).
24
State v. Gutierrez, 260 Neb. 1008, 1013, 620 N.W.2d 738, 742 (2001).
See, also, State v. Brock, 245 Neb. 315, 318, 512 N.W.2d 389, 391 (1994)
(“[w]e decide this case on the basis that a defendant in a criminal case
may not take advantage of an alleged error which defendant invited the
court to commit”); State v. Zima, 237 Neb. 952, 956, 468 N.W.2d 377,
380 (1991) (“[i]t is a well-established principle of appellate practice that
a party cannot complain of error which he or she invited the trial court
to commit”).
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the defendant has no duty to object on speedy trial grounds
when the court sets a trial date outside the 6-month speedy
trial period. 25
We find no merit to the State’s suggestion that the doctrine
of invited error should have either estopped Space from mov-
ing for absolute discharge or precluded the court from granting
absolute discharge. As an initial matter, we question whether
the invited error issue is properly before us, as it is not clear
the issue was expressly presented to and considered by the dis-
trict court. 26 But even assuming the issue of invited error was
properly preserved for appellate review, we are not persuaded
it has any application in this case.
First, it is debatable what role, if any, principles like the
invited error doctrine should play in our statutory speedy trial
analysis. The statutory scheme mandated by the Legislature
establishes when the speedy trial period begins to run, how
that period is to be computed, which periods of delay are
excludable, when a defendant is entitled to absolute discharge,
and when a defendant is deemed to have waived the statutory
right to speedy trial. This statutory scheme contains no provi-
sion permitting excludable time to arise as a result of invited
error, nor does it contain any provision forbidding a defend
ant from moving for absolute discharge if that defendant
has “invited” a speedy trial violation. And because it is not
the proper role of the courts to modify the statutory speedy
trial scheme through judicial construction, 27 we question the
25
See State v. Alvarez, 189 Neb. 281, 202 N.W.2d 604 (1972).
26
See State v. Thomas, 303 Neb. 964, 982, 932 N.W.2d 713, 727 (2019)
(“[a]n appellate court will not consider an issue on appeal that was not
presented to or passed upon by the trial court”).
27
See State v. Kinstler, 207 Neb. 386, 299 N.W.2d 182 (1980) (explaining
that courts have no discretion to ignore provisions in §§ 29-1207 and
29-1208). See, also, State v. Williams, 277 Neb. 133, 139, 761 N.W.2d
514, 521 (2009) (recognizing courts will not “change the law because of
what the State perceives as abuse by criminal defendants” in speedy trial
context); Williams, supra note 27 (Wright, J., concurring) (fixing flaws in
statutory speedy trial scheme is proper task for Legislature, not courts).
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propriety of using the invited error doctrine to circumvent
the absolute discharge and waiver provisions established by
the Legislature.
But this case does not require us to decide whether the
invited error doctrine could ever apply to prevent absolute
discharge under the speedy trial statutes. Because even if the
doctrine could be used as the State suggests, this record would
not support a finding that Space “invited” the court to commit
error in setting the trial date.
At the final plea hearing, Space’s counsel advised the court
that her client was standing on her plea of not guilty. The court
reasonably understood this to mean it would be necessary to
set a trial date. But there is nothing in our record suggesting
that Space requested a specific trial date, and certainly nothing
suggesting that she requested a trial date outside the statutory
6-month period. Nor can we infer such a request from the col-
loquy between the court and defense counsel regarding the
proposed trial date.
When the court asked “September 20, 2021, for jury trial;
does that work?” it was asking a scheduling question, not a
speedy trial question. And when defense counsel responded,
“Yes. Thank you,” she was answering that scheduling question.
Defense counsel was neither commenting on the speedy trial
calculation nor agreeing not to move for absolute discharge
once the 6-month period expired. At least for purposes of the
invited error doctrine, we find it significant that the issue of
speedy trial was not raised, expressly or impliedly, when the
court was proposing a trial date.
We pause here to observe that if the issue of speedy trial had
been expressly raised by either the State or the trial court dur-
ing the scheduling discussion, then the series of events which
culminated in absolute discharge could have been averted. A
discussion of speedy trial would presumably have alerted the
court to the fact that the trial date it was proposing was beyond
the 6-month deadline. The court could then have explored with
Space whether she was willing to freely and voluntarily waive
speedy trial until the September 20, 2021, date. If she was not,
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the court could have set trial for a date within the 6-month
speedy trial period.
[15] Finally, we reject the State’s suggestion that defense
counsel “manipulate[d] the Court” 28 by agreeing to a trial date
that was plainly outside the speedy trial period. It is true that
both the prosecutor and the defense counsel owe a duty of
candor to the court, 29 and here, neither attorney advised the
court that the trial date it proposed was outside the 6-month
speedy trial period. But our cases do not require a defendant
to either demand a speedy trial or object to a trial date on
such grounds. 30 As we recognized long ago, a criminal defend
ant’s failure to demand a trial within the 6-month statutory
speedy trial period, or to object to a trial date set beyond such
period, does not constitute a waiver of his or her speedy trial
rights. 31 And here, it is notable that the information necessary
to calculate the speedy trial deadline was equally available to
the court and the prosecutor. On this record, we cannot find
that defense counsel manipulated the court or misrepresented
any material fact regarding the speedy trial clock. Instead, we
question why the State did not alert the trial court to the fact
that the proposed trial date fell outside the 6-month speedy
trial period.
We have long recognized the State has the primary burden
of bringing an accused person to trial within the time pro-
vided by law. 32 And the Legislature has made it “the duty of
the county attorney to bring to the attention of the trial court”
any cases entitled to preferential treatment under the speedy
trial statutes. 33 It follows, then, that in addition to carefully
28
Brief for appellant at 8.
29
See Neb. Ct. R. of Prof. Cond. § 3-503.3 (rev. 2016) (providing that
lawyers shall not knowingly make false statements to tribunal or fail to
correct false statement of material fact or law made to tribunal by lawyer).
30
Alvarez, supra note 25.
31
Id.
32
State v. Hernandez, 309 Neb. 299, 959 N.W.2d 769 (2021).
33
See Neb. Rev. Stat. § 29-1205 (Reissue 2016).
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monitoring the speedy trial deadline, the prosecution should
promptly bring to the trial court’s attention any potential con-
cerns regarding the defendant’s right to a speedy trial.
On this record, the trial court correctly found there was just
1 day of excludable time under § 29-1207(4), and it correctly
concluded the State failed to bring Space to trial before the
running of the 6-month speedy trial period. Under § 29-1208,
Space was entitled to absolute discharge.
CONCLUSION
For the foregoing reasons, the exception is overruled.
Exception overruled.
Freudenberg, J., dissenting.
I respectfully dissent from the majority opinion based upon
the reasoning in my concurring opinions in State v. Coomes,
309 Neb. 749, 962 N.W.2d 510 (2021), and State v. Bixby, 311
Neb. 110, 971 N.W.2d 120 (2022). Through judicial construc-
tion, this court has improperly created a statutory speedy trial
scheme that is unsupported by the language of the relevant
statutes. The majority opinion in this matter further expands
the application of such improperly created scheme.
To fully understand the genesis of our judicially created
speedy trial scheme, we must recall situations represented by
cases like that decided by the U.S. Supreme Court in Barker
v. Wingo, 407 U.S. 514, 92 S. Ct. 2182, 33 L. Ed. 2d 101
(1972). In that matter, a Kentucky prosecuting authority did
not bring a murder suspect to trial for more than 5 years after
his arrest. The significant delay was due in large part to tacti-
cal continuances sought by the prosecutors. This and similar
situations refocused federal and state judiciaries upon the
meaningful enforcement of constitutional speedy trial rights.
It further spurred state legislatures to pass statutory speedy
trial legislation.
In 1971, Nebraska passed 1971 Neb. Laws, L.B. 436, cre-
ating the State’s first statutory speedy trial right which was
separate and distinct from existing constitutional speedy trial
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provisions. Since that time, only a few revisions to the statu-
tory framework have occurred, none of which are material to
this matter or the basis of this dissent.
The Nebraska statutory speedy trial scheme is set forth in
Neb. Rev. Stat. §§ 29-1201 through 29-1209 (Reissue 2016
& Cum. Supp. 2020). The nuts and bolts of the speedy trial
scheme are found in § 29-1207, which states:
(1) Every person indicted or informed against for any
offense shall be brought to trial within six months, and
such time shall be computed as provided in this section.
(2) Such six-month period shall commence to run from
the date the indictment is returned or the information
filed . . . .
(3) If a defendant is to be tried again following a mis-
trial, an order for a new trial, or an appeal or collateral
attack, such period shall commence to run from the date
of the mistrial, order granting a new trial, or the mandate
on remand.
Subsection (4) of § 29-1207 sets forth a number of events
which create periods of excludable time under the statutory
speedy trial calculations.
Section 29-1208 creates the remedy of “absolute discharge”
if a defendant is not brought to trial within the 6-month period
established in § 29-1207, as “extended by excluded periods.”
Section 29-1205 directs the trial courts to give preference to
criminal cases over civil cases in its trial settings and directs
county attorneys “to bring to the attention of the trial court
any cases falling within this subdivision, and he [or she] shall
generally advise the court of facts relevant in determining the
order of cases to be tried.”
The first time this court interpreted the new statutory speedy
trial scheme was in State v. Alvarez, 189 Neb. 281, 202 N.W.2d
604 (1972). In Alvarez, the defendant’s trial was set more
than 6 months after the applicable statutory starting point of
the speedy trial clock. The record was “completely silent as
to what, if anything, occurred between the court, defendant,
and his counsel at the time the order setting the trial date was
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entered.” Id. at 285, 202 N.W.2d at 607. The defendant moved
for absolute discharge pursuant to § 29-1208 after expiration
of the applicable 6-month period. A hearing was held, and
the court found that “‘good cause’” existed for the court’s
delayed trial setting. Alvarez, 189 Neb. at 286, 202 N.W.2d
at 607. Pursuant to the excludable periods established under
§ 29-1207(4), “good cause” could be the basis for “[o]ther
periods of delay not specifically enumerated” in that section.
The defendant in Alvarez ultimately appealed the trial court’s
ruling to this court, which upheld the trial court’s finding of
good cause in affirming the defendant’s conviction. In doing
so, this court took the opportunity to address several issues
relating to Nebraska’s recently passed speedy trial statutes.
This court established that “[t]he primary burden is upon the
State, that is, the prosecutor and the court, to bring the accused
person to trial within the time provided by law.” Id. at 291,
202 N.W.2d at 610. This court also placed the burden of proof
upon the prosecution to prove the existence of one or more of
excludable periods of time provided for by § 29-1207(4). See
Alvarez, supra.
However, this court then went well beyond what was
required for the establishment of necessary procedures to affect
the reasonable application of this new statutory speedy trial
scheme when discussing what does and does not constitute a
defendant’s waiver of the statutory right to absolute discharge.
Our discussion of waiver was unmoored from the relevant
statutory language and inconsistent with this court’s recognized
implementation of “waiver” principles applicable to other stat-
utorily created rights.
In the Alvarez opinion, this court identified one of the issues
to be addressed as follows: “When the trial court sets a trial
date which is more than 6 months after the filing of the infor-
mation, must the defendant immediately take exception thereto,
or may he wait for the 6-month period to elapse and then file
a motion for discharge?” Id. at 287-88, 202 N.W.2d at 608. In
answering, this court stated:
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A failure by a defendant to demand a trial within the time
he [or she] is required to be brought to trial as provided
by sections 29-1205 to 29-1209, R. S. Supp., 1971, or to
object at the time trial date is set does not constitute a
waiver of [the defendant’s] rights under either the statutes
or the Constitution of Nebraska, but is a factor which,
while not constituting good cause by itself, may be con-
sidered along with other circumstances in determining
whether there was “good cause” for a delay . . . .
State v. Alvarez, 189 Neb. 281, 291-92, 202 N.W.2d 604, 610
(1972).
This court cited Barker v. Wingo, 407 U.S. 514, 92 S. Ct.
2182, 33 L. Ed. 2d 101 (1972), to support that position. Barker
placed “the primary burden on the courts and the prosecutors
to assure that cases are brought to trial.” 407 U.S. at 514.
Further, the Court in Barker pointed out that a defendant’s
constitutional speedy trial right is not viewed in the same man-
ner as other fundamental constitutional rights when weighing a
defendant’s inaction to enforce such right:
We reject, therefore, the rule that a defendant who fails
to demand a speedy trial forever waives [the] right.
This does not mean, however, that the defendant has no
responsibility to assert [the] right. We think the better rule
is that the defendant’s assertion of or failure to assert [the]
right to a speedy trial is one of the factors to be consid-
ered in an inquiry into the deprivation of the right.
407 U.S. at 528. Later, in discussing the “defendant’s responsi-
bility to assert [the] right,” the Barker Court stated:
The defendant’s assertion of [the] speedy trial right, then,
is entitled to strong evidentiary weight in determining
whether the defendant is being deprived of the right. We
emphasize that failure to assert the right will make it dif-
ficult for a defendant to prove that he [or she] was denied
a speedy trial.
407 U.S. at 531-32.
Even though the U.S. Supreme Court in Barker was clearly
reviewing a fundamental right under the Constitution rather
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
STATE V. SPACE
Cite as 312 Neb. 456
than a statutory right, it presented a more balanced approach
than that adopted by this court in Alvarez, supra, for a statuto-
rily created right. By describing in Alvarez the failure to assert
the speedy trial right as only a consideration of unspecified
weight in a good cause analysis, rather than a consideration of
strong evidentiary weight that will make it difficult to prove
the denial of the right, this court in Alvarez relieved a defend
ant of a duty to assert the right to an extent that is incon
sistent with Barker.
This approach to a defendant’s failure to assert the speedy
trial right is especially untenable in the context of a statutory
right to speedy trial. The 6-month statutory speedy trial right
is separate from the constitutional speedy trial right. State v.
Lee, 282 Neb. 652, 807 N.W.2d 96 (2011). Thus, for example,
outside the lens of ineffective assistance claims, the statutory
right to a speedy trial is not cognizable in a postconviction
proceeding, because the statutory speedy trial right is not a
constitutional right. Id. Thus, not only did we misunderstand
Barker, but our reliance on Barker was wholly misplaced. We
must construe the statutory speedy trial scheme the same way
we would any other set of statutory rights. Our holdings in this
case and its primogenitors are directly contrary to the plain
language of the speedy trial statutes and the traditional notions
of waiver that the Legislature would have considered when
drafting the statutory language.
We have long held that statutory rights are within the
classification of those rights that can be waived by silence
or acquiescence. State v. Meers, 257 Neb. 398, 598 N.W.2d
435 (1999); Sedlacek v. State, 147 Neb. 834, 25 N.W.2d 533
(1946). Even when statutory rights relate in some way to con-
stitutional rights, silence or inaction can traditionally waive
those rights.
Thus, by failing to make a challenge for cause, a defendant
can waive objections to the competency of a juror. See Fillion
v. State, 5 Neb. 351 (1877). By remaining silent and failing
to object, a defendant can waive the introduction of evidence
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312 Nebraska Reports
STATE V. SPACE
Cite as 312 Neb. 456
unconstitutionally obtained and used against the defendant
at trial. See State v. Howard, 182 Neb. 411, 155 N.W.2d 339
(1967). By failing to object, a defendant can waive prosecuto-
rial misconduct and the impartiality of a judge due to ex parte
communications. See, State v. Watt, 285 Neb. 647, 832 N.W.2d
459 (2013), disapproved on other grounds, State v. Vann, 306
Neb. 91, 944 N.W.2d 503 (2020); State v. Lotter, 255 Neb.
456, 586 N.W.2d 591 (1998), modified on denial of rehear-
ing 255 Neb. 889, 587 N.W.2d 673 (1999). Through silence,
a defendant can waive the unconstitutionality of a charging
statute. A defendant’s failure to object can waive the right to
confrontation. See State v. Nadeem, 284 Neb. 513, 822 N.W.2d
372 (2012). A defendant’s failure to object waives alleged vio-
lations of procedural due process. Id.
In this context, we have generally said that the “‘[d]efense
may not remain silent in hopes that trial court will fall into
reversible error where possible error could have been passed
upon and cured, if need be, by a properly timed objection.’”
State v. Howard, 182 Neb. at 418, 155 N.W.2d at 344. In
State v. Leon-Simaj, 300 Neb. 317, 329, 913 N.W.2d 722, 731
(2018), we condemned the use of silence as a constitutional
sword of gamesmanship:
[W]e have rejected defendants’ use of constitutional
shields as swords of gamesmanship. Particularly, we have
found that defendants who remain silent in the face of
trial error impacting important constitutional rights, and
who gamble on a favorable outcome or raise the objection
only once the alleged error can no longer be remedied,
have waived the error.
We also explained in Leon-Simaj how silence can give the
“false impression of acquiescence [and thereby] lull the court
into taking actions that could not later be undone.” 300 Neb. at
329-30, 913 N.W.2d at 731 (internal quotation marks omitted).
This court’s position in State v. Alvarez, 189 Neb. 281, 202
N.W.22d 604 (1972), and its progeny promotes gamesmanship
by encouraging the defense to remain silent in the hopes that
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STATE V. SPACE
Cite as 312 Neb. 456
the court will not realize any small miscalculation that could
lead to statutory absolute discharge—an error that cannot later
be undone. Indeed, the scheme this court shaped in Alvarez
places defense counsel in a difficult position when a court sets
an untimely trial date and asks for counsel’s input. Defense
counsel must choose between properly exercising a party’s
expected duty of candor to the court and doing what might be
most beneficial for the defendant by giving a false impression
of acquiescence in the hopes that the miscalculation will con-
tinue to go unnoticed.
In no way do I suggest that counsel for the defense in the
case at bar intentionally misled the court or acted inappropri-
ately under the scheme that this court has created. My point,
however, is that with the scheme this court has created, even
if defense counsel knows that the date set by the trial court is
beyond the statutory 6-month limit, there is no duty to advise
the court of the error so a timely trial date can be set. Instead,
the opposite is true; our statutory speedy trial scheme discour-
ages candor and arguably even makes raising a speedy trial
objection before the statutory period has run a potential subject
of ineffective assistance claims.
Such a system is contrary to what we expect from attorneys
appearing before our courts. Without justification, it encour-
ages gamesmanship that procedurally derails our criminal jus-
tice system from reaching the merits of the defendant’s guilt
or innocence.
The more reasonable approach would be the application
of the waiver principles that govern other statutorily created
rights, as previously set forth. When the court sets a trial date,
the defense’s failure to timely assert that the date falls outside
of the statutory 6-month period should constitute a waiver of
the statutory right to absolute discharge based on that trial date.
This still empowers criminal defendants to make demands for
trials within the 6-month time limit but does not turn criminal
proceedings into a game of “gotcha” by defendants not assert-
ing the statutory right to speedy trial until after the expiration
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STATE V. SPACE
Cite as 312 Neb. 456
of the speedy trial time limit. The language of the speedy trial
statutes clearly created a right for criminal defendants to push
proceedings forward to trial if they wish to do so. This court
has twisted that right into a procedural trap for trial courts.
Until recently, because either the record was silent on the
issue, see State v. Alvarez, 189 Neb. 281, 202 N.W.2d 604
(1972), or the issue simply had not been raised, a defendant’s
participation in setting a trial date had not been evaluated under
our statutory speedy trial scheme. Such issue has been squarely
raised here, and the majority opinion moves our flawed system
one step further in the wrong direction.
Here, the defendant and her counsel were present when the
court discussed the trial date with the parties and they agreed
to a trial date that fell outside of the allowable speedy trial time
limit. After the statutory time limit had passed but before the
agreed-upon trial date, the defendant filed a motion for abso-
lute discharge, which was granted. Even under a constitutional
analysis as used in Barker v. Wingo, 407 U.S. 514, 92 S. Ct.
2182, 33 L. Ed. 2d 101 (1972), the defendant had a responsibil-
ity to assert the right to a speedy trial prior to his or her request
for discharge.
The majority opinion now allows participation by the defense
in the setting of an untimely trial date and then a successful
motion to discharge under § 29-1208 based upon the very date
the defense agreed upon. Under the majority’s understanding
of the current statutory speedy trial scheme, the safest path for
trial courts is to establish progression orders with set trial dates
that will require knowing continuances if they are to be moved
beyond the established 6-month limit. Extra caution should be
taken in situations where initial appearances are waived by the
entry of written not guilty pleas.
Instead of expanding on our previous misstep, we should
correct the error this court committed in Alvarez as described
herein. For the foregoing reason, I respectfully dissent. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487093/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
ANTONIO SALAZAR, No. 85313
Petitioner,
vs.
THE FOURTH JUDICIAL DISTRICT FILE
COURT OF THE STATE OF NEVADA,
IN AND FOR THE COUNTY OF ELKO; NOV 1 6 2022
AND THE HONORABLE MASON E.
SIMONS, DISTRICT JUDGE,
Respondents,
and
THE STATE OF NEVADA,
Real Party in Interest.
ORDER DENYING PETITION
This original petition for a writ of mandamus, or alternatively
prohibition, challenges the district court's denial of a pretrial petition for a
writ of habeas corpus and motion for reduction of bail or own recognizance
release.
Traditionally, a writ of mandamus is available to compel the
performance of an act which the law requires as a duty resulting from an
office or to control a manifest abuse or arbitrary or capricious exercise of
discretion.1 NRS 34.160; Round Hill Gen. Improvement Dist. v. Newman,
97 Nev. 601, 603-04, 637 P.2d 534, 536 (1981). A manifest abuse of
discretion occurs when there is a clearly erroneous interpretation or
application of the law, and "[a]n arbitrary or capricious exercise of discretion
1Petitioner alternatively seeks a writ of prohibition. However, "[a]
writ of prohibition . . . will not issue if the court sought to be restrained had
jurisdiction to hear and determine the matter under consideration."
Goicoechea v. Fourth Judicial Dist. Court, 96 Nev. 287, 289, 607 P.2d 1140,
1141 (1980).
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(0) I947A 4464.
22-
is one founded on prejudice or preference rather than on reason, or contrary
to the evidence or established rules of law." State v. Eighth Judicial Dist.
Court (Armstrong), 127 Nev. 927, 931-32, 267 P.3d 777, 780 (2011) (internal
quotation marks and citations omitted). "[T]raditional mandamus relief
does not lie where a discretionary lower court decision results from a mere
error in judgment." Walker v. Second Judicial Dist. Court, 136 Nev. 678,
680, 476 P.3d 1194, 1197 (2020) (internal quotation marks omitted). Even
when the requirements of a traditional writ of mandamus are not met, this
court may consider advisory mandamus relief "[w]here the circumstances
establish urgency or strong necessity, or an important issue of law requires
clarification and public policy is served by this court's exercise of its original
jurisdiction." Schuster v. Eighth Judicial Dist. Court, 123 Nev. 187, 190,
160 P.3d 873, 875 (2007). It is solely within this court's discretion whether
to entertain a mandamus petition. Gathrite v. Eighth Judicial Dist. Court,
135 Nev. 405, 407, 451 P.3d 891, 893 (2019).
Having considered the pleadings and record, we conclude that
extraordinary relief is not warranted in this case. Petitioner's challenge to
whether sufficient identification evidence was presented at the preliminary
hearing is the type of challenge disfavored by this court because it does not
present a purely legal issue. See Kussman v. Eighth Judicial Dist. Court,
96 Nev. 544, 545-46, 612 P.2d 679, 680 (1980) (explaining that review of
pretrial probable cause determination through an original writ petition is
disfavored); Ostman v. Eighth Judicial Dist. Court, 107 Nev. 563, 565, 816
P.2d 458, 459-60 (1991) (entertaining a pretrial challenge where the
petition presented a purely legal issue). Petitioner further has not
demonstrated a manifest abuse or arbitrary or capricious exercise of
discretion in the denial of his motion to reduce bail. Petitioner has not
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presented a cogent argument explaining how the district colirt abused its
discretion in denying his motion to reduce bail. See Maresca v. State, 103
Nev. 669, 673, 748 P.2d 3, 6 (1987). And even were we to examine the justice
court's decision, we discern no manifest abuse or arbitrary or capricious
exercise of discretion in its decision setting bail in this case. See Valdez-
Jimenez v. Eighth Judicial Dist. Court, 136 Nev. 155, 163-67, 460 P.3d 976,
985-88 (2020). Accordingly, we
ORDER the petition DENIED.2
j
Oarraguirre -
"ekty'444.0 , Sr.J.
Stiglich
cc: Hon. Mason E. Simons, District Judge
Evenson Law Office
Attorney General/Carson City
Elko County District Attorney
Elko County Clerk
2The Honorable Mark Gibbons, Senior Justice, participated in the
decision of this matter under a general order of assignment.
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(0) I 947A | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487091/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
RICHARD AFRAND, No. 85589
Appellant,
vs.
NEVADA PROPERTY 1, LLC,
FILE
Respondent. NOV 1 7 2022
48ETH BROWN
- SUI ME COURT
ORDER DISMISSING APPEAL
This is a pro se appeal from multiple district court orders and
other filings. Eighth Judicial District Court, Clark County; Nancy L. Allf,
Judge.
Appellant identified the notice of appeal in this matter as a
third amended notice of appeal to be filed in Docket No. 84103. However,
because the notice of appeal challenges several new documents not
identified in appellant's previous notices of appeal, the notice was docketed
as a new appeal and assigned Docket No. 85589. This court's review of the
notice of appeal and documents before this court in Docket No. 85589
reveals jurisdictional defects regarding the new documents challenged in
this notice of appeal.'
No statute or court rule allows an appeal from all but one of the
newly challenged documents. See Brown v. MHC Stagecoach, LLC, 129
Nev. 343, 345, 301 P.3d 850, 851 (2013) (this court "may only consider
appeals authorized by statute or court rule"). The district court's September
"This court's jurisdiction over the appeal of the documents that are
challenged in Docket No. 84103 will be determined in the context of that
appeal.
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(01 1947A
3
6, 2022, "Order Sustaining Objection to Defendant's Claim of Exemption
from Execution" appears substantively appealable. See NRAP 3A(b)(8).
However, the notice of appeal was untimely filed from service of notice of
entry of that order. In particular, notice of entry of the order was served on
appellant on September 6, 2022. The notice of appeal was not filed in the
district court until October 25, 2022, well past the 30-day deadline
established by NRAP 4(a)(1). This court lacks jurisdiction over an untimely
filed notice of appeal. Healy v. Volkswagenwerk Aktiengesellschaft, 103
Nev. 329, 330, 741 P.2d 432, 432 (1987). Accordingly, this court
ORDERS this appeal DISMISSED.
Hardesty
Al; 1/4.111G1.4 114r =3=r) , J.
Stiglich Herndon
cc: Hon. Nancy L. Allf, District Judge
Richard Afrand
Snell & Wilmer, LLP/Las Vegas
Eighth District Court Clerk
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(0) I 947A 4031. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487092/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
SFR INVESTMENTS POOL 1, LLC, A No. 82771
NEVADA LIMITED LIABILITY
COMPANY,
Appellant, FILED
vs.
MARCHAI B.T., A NEVADA BUSINESS NOV 1 6 2022
TRUST,
Respondent/Cross-Appellant.
vs.
WYETH RANCH COMMUNITY
ASSOCIATION,
Cross-Res • ondent.
SFR INVESTMENTS POOL 1, LLC, No. 83175
Appellant,
vs.
MARCHAI B.T.,
Res iondent.
ORDER OF AFFIRMANCE
These are consolidated appeals from a district court judgment
and postjudgment order after remand in a real property action. Eighth
Judicial District Court, Clark County; Elizabeth Goff Gonzalez, Judge. We
review a district court's legal conclusions following a bench trial de novo,
but we will not set aside the district court's factual findings unless they are
clearly erroneous or not supported by substantial evidence.' Wells Fargo
Bank, N.A. v. Radecki, 134 Nev. 619, 621, 426 P.3d 593, 596 (2018).
In 9352 Cranesbill Trust u. Wells Fargo Bank, N.A., 136 Nev.
76, 81, 459 P.3d 227, 232 (2020), we held that payments made by a
homeowner can cure the default on the superpriority portion of an HOA lien
'Pursuant to NRAP 34(f)(1), we have determined that oral argument
is not warranted in this appeal.
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such that the HOA's foreclosure sale would not extinguish the first deed of
trust on the subject property.2 We also held in Cranesbill Trust that
whether a homeowner's payments cured a superpriority default depends
upon the actions and intent of the homeowner and the HOA. Id. at 80-81,
459 P.3d at 231.
In applying Crane,sbill Trust following a remand from this
court,3 the district court found that the HOA applied the homeowner's
payments to the assessments comprising the superpriority portion of the
lien. We conclude that substantial evidence supports this finding. Radecki,
134 Nev. at 621, 426 P.3d at 596. Although an employee of the HOA's
management company testified that the HOA applied the homeowner's
payments to the most recent assessments first such that the payments did
not cure the default on the superpriority lien, documentary evidence
contradicted that testimony. We will not disturb the district court's
weighing of that evidence. Quintero v. McDonald, 116 Nev. 1181, 1183, 14
P.3d 522, 523 (2000) (refusing to reweigh evidence on appeal). Thus,
consistent with Cranesbill Trust, the district court correctly determined
that the homeowner's payments cured the superpriority default such that
the foreclosure sale did not extinguish the first deed of trust. Based on this
conclusion, we need not address the district court's equitable analysis. And
although SFR argues that it is protected as a bona fide purchaser, we have
2We decline SFR Investments Pool 1, LLC's invitation to reconsider
Cranesbill Trust.
3 SFR Invs.Pool 1, LLC v. Marchai B.T., No. 74416, 2020 WL 1328985
SUPREME COURT
(Nev. Mar. 18, 2020) (Order Vacating Judgment and Remanding).
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previously rejected a similar argument.4 Bank of Am., N.A. v. SFR Inv.s.
Pool 1, LLC, 134 Nev. 604, 612-13, 427 P.3d 113, 121 (2018).
Based on the foregoing, we
ORDER the judgment of the district court AFFIRMED.5
Parraguirre
J. , Sr.J.
Stiglich Gibbons
cc: Chief Judge, Eighth Judicial District
Department 11, Eighth Judicial District
Thomas J. Tanksley, Settlement Judge
Hanks Law Group
Lipson Neilson P.C.
David J. Merrill, P.C.
Eighth District Court Clerk
4In its cross-appeal, Marchai raises arguments that only need to be
considered if we do not affirm the district court's judgment. As we are
affirming, we do not address those arguments. And although SFR also
appealed from a postjudgment order regarding the retaxing and settlement
of costs, it presents no argument regarding that order such that we
necessarily affirm it.
5The Honorable Mark Gibbons, Senior Justice, participated in the
SUPREME COURT
decision of this matter under a general order of assignment.
OF
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(0) I947A | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487098/ | IN THE SUPREM.E COURT OF THE STATE OF NEVADA
SHANDA NICOLE BRUMBY, N/K/A No. 85533
SHANDA NICOLE ARMSTRONG,
Appellant,
vs. F L
JANAE S. BRUMBY, NOV 1 6 2022
Respondent.
ORDER DISMISSING APPEAL
This appeal was docketed on October 21, 2022, without
payment of the requisite filing fee. See NRAP 3(e). That same day, this
court issued a notice directing appellant to pay the required filing fee or
demonstrate compliance with NRAP 24 within 14 days. The notice advised
that failure to comply would result in the dismissal of this appeal. To date,
appellant has not paid the filing fee or otherwise responded to this court's
notice. Accordingly, this appeal is dismissed. See NRAP 3(a)(2).
It is so ORDERED.
CLERK OF THE SUPREME COURT
ELIZABETH A. BROWN
BY:
cc: Hon. Bill Henderson, :District judge, Family Court Division
Shanda Nicole Brumby
Janae S. Brurnby
Eighth District Court Clerk
SUPREME COURT
OF
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CLERK'S ORDER
0} 1947 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487089/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
IN THE MATTER OF DISCIPLINE OF No. 85325
JUDE E. NAZARETH, BAR NO. 10695
FILE
NOV 1 7 202
ELI
CLE
ORDER OF SUSPENSION BY
MP DEPUTY CLERK
This is an automatic review of a Sonthern Neva a Disciplinary
Board hearing panel's recommendation that attorney Jude E. Nazareth be
suspended from the practice of law for six months for violating RPC 1.1
(competence), RPC 1.2 (scope of representation and allocation of authority
between client and lawyer), RPC 1.3 (diligence), RPC 1.4 (communication),
RPC 1.5 (fees), RPC 1.15 (safekeeping property), RPC 1.16 (declining or
terminating representation), RPC 3.2 (expediting litigation), and RPC 8.1
(Bar admission and disciplinary matters).
Nazareth and the State Bar originally entered into a
conditional guilty plea agreement in which Nazareth admitted to the facts
and violations alleged in the disciplinary complaint. The hearing panel
rejected the parties' agreed-upon discipline—a stayed six-month
suspension—and instead recommended an actual six-month suspension. At
the hearing, Nazareth accepted this change to the agreed-upon discipline.
Under these circumstances, we treat as admitted the facts and above-listed
violations.' The record therefore establishes that he violated the above-
'In future cases where an attorney accepts the hearing panel's
proposed change to a conditional guilty plea agreement, best practices
would be for the State Bar and the attorney to enter into an amended
SUPREME COURT
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7,1-3t7i9if
10) I947A
cited rules by failing to perform work for two clients, including appearing
at a court hearing and filing documents; failing to keep the clients apprised
of the status of their cases or otherwise respond to client communications;
and failing to respond to State Bar inquiries.
The issue for this court is whether the agreed-upon discipline
sufficiently protects the public, the courts, and the legal profession. See
State Bar of Nev. u. Claiborne, 104 Nev. 115, 213, 756 P.2d 464, 527-28
(1988) (explaining the purpose of attorney discipline). In determining the
appropriate discipline, we weigh four factors: "the duty violated, the
lawyer's mental state, the potential or actual injury caused by the lawyer's
misconduct, and the existence of aggravating or mitigating factors." In re
Discipline of Lerner, 124 Nev. 1232, 1246, 197 P.3d 1067, 1077 (2008).
Nazareth admitted that he knowingly violated duties owed to
clients and to the profession. Two clients suffered injury and further
potential injury when Nazareth failed to diligently complete the work for
which they hired him.2 Further, his actions caused harm to the legal
profession. The baseline sanction for such misconduct, before considering
aggravating or mitigating circumstances, is disbarment. Standards for
Imposing Lawyer Sanctions, Compendium of Professional Responsibility
Rules and Standards, Standard 4.41 (Am. Bar Ass'n 2018) (providing that
disbarment is appropriate "when a lawyer abandons the practice,"
"knowingly fails to perform services for a client," or "engages in a pattern of
neglect with respect to client matters," causing "serious or potentially
serious injury to a client"). The record supports the panel's findings of two
conditional guilty plea agreement reflecting those changes that becomes
part of the record submitted to this court pursuant to SCR 113.
2 Nazareth fully refunded one of the clients.
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aggravating circumstances (substantial experience in the practice of law
and multiple offenses) and four mitigating circumstances (absence of a prior
disciplinary record, absence of a dishonest or selfish motive, personal
problems, and remorse for his actions). Considering all four factors, we
conclude that the discipline agreed upon at the discipline hearing is
appropriate.
Accordingly, we hereby suspend Jude E. Nazareth for six
months commencing from the date of this order. Nazareth shall also pay
the costs of the disciplinary proceedings, including $1,500 under SCR 120,
within 30 days from the date of this order, if he has not done so already.3
The parties shall comply with SCR 115 and SCR 121.1.
It is so ORDER
Parraguirre
ANIC44-4 , Sr.J.
Stiglich
cc: Chair, Southern Nevada Disciplinary Board
The Augustus Firm
Bar Counsel, State Bar of Nevada
Executive Director, State Bar of Nevada
Perry Thompson, Admissions Office, U.S. Supreme Court
3WhileSCR 120 provides that costs for a suspension are $2,500,
Nazareth and the State Bar agreed to limit such costs to $1,500 for this
matter.
4The Honorable Mark Gibbons, Senior Justice, participated in the
decision of this matter under a general order of assignment.
SUPREME COURT
or
NEVADA
3
(0) I947A | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487096/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
EZRA KEMP,- No. 84639
Petitioner,
vs.
THE FIFTH JUDICIAL DISTRICT
COURT OF THE STATE OF
NEVADA, IN AND FOR THE
FIL
COUNTY OF ESMERALDA; AND NOV 16 222
THE HONORABLE KIMBERLY A.
WANKER, DISTRICT JUDGE,
Respondents,
and
THE STATE OF NEVADA,
Real Party in Interest.
ORDER DENYING PETITION
This original petition for a writ of mandamus seeks an order
directing the district court to remand Count 3 to the justice court for a
preliminary hearing after the district court rejected the plea negotiations.
A writ of mandamus is available to compel the performance of
an act which the law requires as a duty resulting from an office or to control
a manifest abuse or arbitrary or capricious exercise of discretion. NRS
34.160; Round Hill Gen. Improvement Dist. v. Newman, 97 Nev. 601, 603;
04, 637 P.2d 534, 536 (1981). A writ of mandamus will not issue when there
is a plain, speedy, and adequate remedy at law, NRS 34.170, and it is within
the discretion of this court to determine if a petition for extraordinary relief
will be considered, Poulos v. Eighth Judicial Dist. Court, 98 Nev. 453, 455,
652 P.2d 1177, 1178 (1982).
Although no particular deadline is specified for filing a
mandamus petition that challenges a lower court's decision, the doctrine of
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21,-300
laches applies.' State v. Eighth Judicial Dist. Court (Hedland), 116 Nev.
127, 135, 994 P.2d 692, 697 (2000). In considering whether to apply the
doctrine of laches, this court will consider "whether `(1) there was an
inexcusable delay in seeking the petition; (2) an implied waiver arose from
petitioners' knowing acquiescence in existing conditions; and, (3) there were
circumstances causing prejudice to respondent." Id. (quoting Buckholt v.
Eighth Judicial Dist. Court, 94 Nev. 631, 633, 584 P.2d 672, 673-74 (1978)).
Applying these factors, we conclude that petitioner's delay
militates against entertaining this petition. In July 2015, petitioner
unconditionally waived a preliminary hearing on Count 3, one of many drug
charges set forth in the criminal complaint, pursuant to plea negotiations.2
After the district court rejected the plea agreement, petitioner moved to
have Count 3 remanded for a preliminary hearing.3 The district court
denied petitioner's motion on March 1, 2016, and a motion to reconsider on
October 4, 2016, because the waiver was unconditional.4 In September
2021, the district court scheduled trial for May 2022, with a calendar call in
April. In April 2022, petitioner filed this mandamus petition challenging
'The State addresses laches in its answer to the petition. Petitioner
did not respond to that argument.
2 Thebind-over order was limited to Count 3 and made no mention of
the other charges in the criminal complaint.
3The decision to reject the plea agreement is not before this court.
4The district court entered two orders of remand for a preliminary
hearing as to the other charges in the criminal complaint. As the other
charges had not been bound over to the district court, it is not clear that an
order of remand was necessary. However, we share the district court's
concern that no action had been taken on those counts in the justice court
after the negotiations were rejected. It further appears that when the
petition was filed with this court, the justice court still had not conducted a
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preliminary hearing on the other charges.
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(0) I947A
the March 2016 decision to deny his motion for remand. Under these
circumstances, we conclude the over-six-year delay in challenging the
district court's decision to deny the motion for remand is inexcusable and
that petitioner knowingly acquiesced to the district court's decision to deny
his motion for remand. And although the State has not identified any
specific prejudice, further delay in bringing this matter to trial could make
a trial more difficult as witnesses may become unavailable and memories
fade over time. Therefore, we decline to exercise our discretion to consider
this petition, and we
ORDER the petition DENIED.5
C.J.
Parraguirre
A'kibc,1%.0 J. Sr.J.
Stiglich
cc: Hon. Kimberly A. Wanker, District Judge
Jason Earnest Law, LLC
Attorney General/Carson City
Esmeralda County District Attorney
Esmeralda County Clerk
5The Honorable Mark Gibbons, Senior Justice, participated in the
SUPREME COURT
decision of this matter under a general order of assignment.
OF
NEVADA
3
(0) 1447A | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487095/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
THE LAW OFFICE OF DANIEL S. No. 84367
SIMON,
Petitioner,
vs.
THE EIGHTH JUDICIAL DISTRICT FILED
COURT OF THE STATE OF NEVADA,
IN AND FOR THE COUNTY OF NOV 1 6 21322
CLARK; AND THE HONORABLE
TIERRA DANIELI.:E JONES, 'DISTRICT
JUDGE,
Respondents,
and
EDGEWORTH FAMILY TRUST; AND
AMERICAN GRATING, LLC,
Real Parties in Interest.
ORDER DENYING PETITION
This original petition for a writ of prohibition or mandamus
challenges a district court order awarding petitioner Daniel Simon attorney
fees in quantum meruit. Simon argues the district court incorrectly
calculated the attorney fee award. But we already reviewed the challenged
district court order in a direct appeal, Edgeworth Family Tr. v. Simon, Nos.
83258/83260, 2022 WL 4298625 (Nev. Sept. 16, 2022) (Order Vacating
Judgment and Remanding),1 where we vacated the fee award and remanded
for further proceedings. As a result, Sinion has no order to challenge, and
his petition is thus moot. See Nat'l CollegiateAthletic Ass'n v. Univ. of Nev.,
Reno, 97 Nev. 56, 58, 624 P.2d 10, 11 (1981) CA moot case is one which seeks
to determine an abstract question which does not rest upon existing facts or
'We denied real parties in interest's petition for rehearing on October
31., 2022.
SUPREME COURT
OF
NEVADA
If I ) I 947A
rights."). We decline to hear this moot petition. See Smith v. Eighth
Judicial Dist. Court, 107 Nev. 674, 677, 818 P.2d 849, 851 (1991) (holding
that whether to consider a writ petition is discretionary). Accordingly, we
. ORDER the petition DENIED.
/
Hardesty
Stiglich
j.
Herndon
cc: Hon. Tierra Danielle Jones, :District Judge
Steve Morris
Rosa Solis-Rainey
Morris Law Group
James R. Christensen
Eighth District Court Clerk
2 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487116/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
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Nebraska Supreme Court Advance Sheets
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DOE V. STATE
Cite as 312 Neb. 665
John Doe, appellant, v.
State of Nebraska et al., appellees.
___ N.W.2d ___
Filed October 21, 2022. No. S-21-472.
1. Tort Claims Act: Appeal and Error. Whether a complaint alleges a
cause of action under the State Tort Claims Act, or alleges a claim which
is precluded by an exemption under the State Tort Claims Act, presents
a question of law.
2. Jurisdiction. Subject matter jurisdiction is a question of law. When a
jurisdictional question does not involve a factual dispute, the issue is a
matter of law.
3. Judgments: Appeal and Error. An appellate court reviews questions of
law independently of the lower court’s conclusion.
4. Jurisdiction: Immunity: Appeal and Error. A state’s sovereign immu-
nity from suit is a matter of subject matter jurisdiction that an appellate
court cannot ignore.
5. Jurisdiction. Whether a court has subject matter jurisdiction is a thresh-
old issue that should be resolved prior to an examination of the merits.
6. Negligence: Liability: Public Officers and Employees. A state is not
liable to a person injured by the negligence of its employees, unless
there is a statute or constitutional provision permitting recovery.
7. Constitutional Law: Legislature: Immunity: Waiver. Nebraska’s
Constitution provides that “[t]he state may sue and be sued, and the
Legislature shall provide by law in what manner and in what courts
suits shall be brought.” But this constitutional provision is not self-
executing, and it requires legislative action to waive the State’s sover-
eign immunity.
8. Jurisdiction: Legislature: Immunity: Waiver. Absent legislative action
waiving sovereign immunity, a trial court lacks subject matter jurisdic-
tion over an action against the State.
9. Statutes: Immunity: Waiver. A waiver of sovereign immunity is found
only where stated by the most express language of a statute or by such
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overwhelming implication from the text as will allow no other reason-
able construction.
10. ____: ____: ____. Statutes purporting to waive the protection of sover-
eign immunity are to be strictly construed in favor of the sovereign and
against waiver.
11. Tort Claims Act: Legislature: Immunity: Waiver. Through the State
Tort Claims Act, the Legislature has waived the State’s sovereign immu-
nity with respect to some, but not all, types of tort claims.
12. Tort Claims Act: Immunity: Waiver. The definition of “tort claim” in
Neb. Rev. Stat. § 81-8,210(4) (Reissue 2014) fundamentally limits the
type of tort claims that are subject to the State Tort Claims Act’s limited
waiver of immunity.
13. Tort Claims Act: Legislature: Immunity: Waiver. Under Neb. Rev.
Stat. § 81-8,210(4) (Reissue 2014), the Legislature has waived the
State’s sovereign immunity for those tort claims that (1) seek money
damages only; (2) are on account of property damage, personal injury,
or death; (3) are caused by the negligent or wrongful act or omission of
a state employee acting within the scope of his or her office or employ-
ment; and (4) occur under circumstances in which a private person
would be liable to the claimant.
14. Tort Claims Act: Immunity: Waiver: Liability. Under the plain lan-
guage of Neb. Rev. Stat. §§ 81-8,210(4) and 81-8,215 (Reissue 2014),
the State Tort Claims Act’s limited waiver of sovereign immunity
applies only to tort claims for which a private person, under like circum-
stances, would be liable in tort to the plaintiff.
15. Tort Claims Act: Jurisdiction: Motions to Dismiss. Plaintiffs bringing
an action under the State Tort Claims Act must plausibly allege a “tort
claim” as that term is defined under the act, both to survive a motion
to dismiss for failure to state a claim and to establish subject matter
jurisdiction.
16. Tort Claims Act: Negligence: Proof. A negligence action brought
under the State Tort Claims Act has the same elements as a negligence
action brought against a private individual—a plaintiff must show a
legal duty owed by the defendant to the plaintiff, a breach of such duty,
causation, and damages.
17. Tort Claims Act: Jurisdiction: Negligence: Liability: Proof. To estab-
lish subject matter jurisdiction under the State Tort Claims Act, a plain-
tiff must plausibly allege a “tort claim” as defined under the act. That
requires, inter alia, plausibly alleging that the State, if a private person,
would be liable to the plaintiff for the negligent or wrongful act or omis-
sion under like circumstances.
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18. Statutes: Legislature: Intent: Torts: Liability. A court may determine
that a statute gives rise to a tort duty to act in the manner required by
the statute where (1) the statute is enacted to protect a class of persons
which includes the plaintiff, (2) the statute is intended to prevent the
particular injury that has been suffered, and (3) the statute is intended
by the Legislature to create a private liability as distinguished from one
of a public character.
19. Statutes: Legislature: Torts: Liability: Courts. Where the Legislature
has not by its express terms or by implication provided for civil tort
liability for failure to comply with a statute, under principles of judicial
restraint, it is prudent that courts not do so.
20. Statutes: Legislature: Intent: Torts: Courts. When considering
whether a statute gives rise to a tort duty, courts should consider the
express remedy, if any, imposed for violating the statute, and whether
such a remedy is inconsistent with a purported legislative intention to
create a tort duty.
21. Statutes: Torts: Liability. Neb. Rev. Stat. § 29-3523 (Cum. Supp.
2020) does not give rise to a legal duty that would subject a private
person to civil tort liability for failing to act in the manner prescribed by
statute.
22. Negligence. Nebraska does not recognize a common-law duty not to
disclose sealed criminal history information.
23. Appeal and Error. An appellate court is not obligated to engage in an
analysis that is not necessary to adjudicate the case and controversy
before it.
Appeal from the District Court for Lancaster County: Kevin
R. McManaman, Judge. Affirmed.
Zachary W. Lutz-Priefert and John A. McWilliams, of Gross
& Welch, P.C., L.L.O., for appellant.
Douglas J. Peterson, Attorney General, and James A.
Campbell, Solicitor General, for appellees.
Kevin Ruser and Ryan P. Sullivan, of University of Nebraska
Civil Clinical Law Program, and Deena Keilany and Alicia
Christensen, Senior Certified Law Students, for amicus curiae
Nebraska College of Law Civil Clinic.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
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Stacy, J.
Relying exclusively on the State Tort Claims Act (STCA), 1
John Doe filed suit against the State of Nebraska, the Nebraska
State Patrol (NSP), the Nebraska Department of Correctional
Services (DCS), and DCS director Scott Frakes, alleging they
negligently disclosed and reviewed his sealed criminal history
record information in violation of Neb. Rev. Stat. § 29-3523
(Cum. Supp. 2020). The district court dismissed the action on
a number of grounds, including that Doe’s claim was barred
by the doctrine of sovereign immunity. Doe appealed, and we
granted the appellees’ petition to bypass the Nebraska Court
of Appeals.
We affirm the dismissal of Doe’s tort action on sovereign
immunity grounds, but our reasoning differs somewhat from
that of the district court. We conclude that Doe has not alleged
a tort claim as that term is defined in the STCA, and the State
has therefore not waived its sovereign immunity with respect
to Doe’s claim.
I. BACKGROUND
Because this case was dismissed at the pleading stage, the
facts recited below are taken from the allegations of Doe’s
complaint and the attachments thereto. Doe was convicted of
a felony in 2000, and a few years later, he was convicted of a
misdemeanor. Sometime thereafter, Doe applied for pardons. In
2016, the Nebraska Board of Pardons granted his application
and issued pardons for both convictions.
After receiving the pardons, Doe filed a motion asking the
sentencing court to seal his criminal history record information
pursuant to § 29-3523(5). The court granted Doe’s motion and
sealed the criminal history record information relating to both
of his pardoned convictions. Because Doe’s negligence claim
is premised on alleged violations of § 29-3523, we provide
1
Neb. Rev. Stat. §§ 81-8,209 to 81-8,235 (Reissue 2014 & Cum. Supp.
2020).
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a brief overview of that statute now and address the relevant
statutory text in more detail later in our analysis.
Section 29-3523 authorizes a court to order the seal-
ing of criminal history record information under certain
circumstances, and it is part of the Security, Privacy, and
Dissemination of Criminal History Information Act (Criminal
History Act). 2 As relevant here, that act imposes certain obli-
gations on “[c]riminal justice agenc[ies]” 3 once “[c]riminal
history record information” 4 has been ordered sealed pursu-
ant to § 29-3523. Ordinarily, criminal history records are con-
sidered public records. 5 But in 2019, the Legislature amended
§ 29-3523 to provide that once a court has ordered criminal
history records to be sealed, they “are not part of the public
record and shall not be disseminated to persons other than
criminal justice agencies,” 6 except in certain limited circum-
stances. Moreover, § 29-3523 instructs that when responding
to a public inquiry about criminal history records which have
been sealed, a criminal justice agency “shall respond . . . in
the same manner as if there were no criminal history record
information and criminal history record information shall not
be disseminated to any person other than a criminal justice
agency.” 7 The statute also provides that in “any application
for employment . . . a person cannot be questioned with
respect to any offense for which the record is sealed” 8 and
2
See Neb. Rev. Stat. §29-3501 (Reissue 2016) (providing that Neb. Rev.
Stat. §§ 29-209, 29-210, 29-3501 to 29-3528, and 81-1423 (Reissue 2016
& Cum. Supp. 2020) “shall be known and may be cited as the Security,
Privacy, and Dissemination of Criminal History Information Act”).
3
See § 29-3509.
4
See § 29-3506.
5
See § 29-3520.
6
§ 29-3523(7).
7
§ 29-3523(1).
8
§ 29-3523(8).
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that if such an inquiry is made, the applicant may “respond
as if the offense never occurred.” 9
1. Doe Applies for Job With DCS
In September 2019, Doe applied for a job as a caseworker
at DCS. A question on the application form asked whether
Doe had a criminal history, and Doe responded, “[N]o.” DCS
interviewed Doe for the position, and thereafter, it requested
a criminal history background check as part of the applica-
tion process. According to the allegations of the complaint,
NSP wrongfully provided DCS with criminal history record
information that included Doe’s sealed records. Doe was sub-
sequently advised by DCS that he was not being hired for the
caseworker position due to his criminal history.
2. Doe Files Suit
In July 2020, Doe filed this negligence action in the district
court for Lancaster County against the State of Nebraska,
NSP, DCS, Frakes, and “Unknown Employees of the State
of Nebraska.” The district court permitted Doe to file the
complaint using a pseudonym, and he proceeds likewise on
appeal.
The complaint alleged a single cause of action against all
named defendants, described as “Negligent Disclosure and
Review of Sealed Records in Violation of Neb. Rev. Stat.
§ 29-3523.” Doe alleged that when DCS requested his criminal
history records, it was not acting in its capacity as a criminal
justice agency, but instead was making a public inquiry into
Doe’s criminal history. Doe alleged that in response to this
public inquiry, NSP “negligently disclosed” his sealed crimi-
nal history records to DCS in violation of § 29-3523. He also
alleged that DCS’ “consideration” of his sealed records was
negligent and a violation of § 29-3523. The complaint alleged
that this negligence “harmed” Doe and resulted in “lost income,
9
Id.
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and benefits, including retirement benefits which he would
have earned had he been employed by [DCS].” The complaint
prayed for monetary damages in an amount to be determined
at trial, an injunction prohibiting NSP from disclosing Doe’s
criminal history records “except where explicitly allowed by
statute,” and “expungement” of Doe’s criminal history records
“to prevent future harms and injustices.”
Doe did not serve the unknown defendants, and we do not
address them further. The remaining defendants were served,
and they responded as follows.
DCS and Frakes moved to dismiss Doe’s complaint on two
grounds: (1) The complaint failed to state a claim upon which
relief could be granted, and (2) the claim was barred by sover-
eign immunity. NSP did not join in the motion to dismiss and
instead filed an answer. NSP’s answer expressly denied that
it had disclosed Doe’s criminal history record information to
DCS, and it alleged, as affirmative defenses, the same grounds
on which the other defendants moved for dismissal.
At the hearing on the motion to dismiss, the parties pre-
sented only argument. DCS and Frakes argued that Doe’s com-
plaint failed to state a claim because it contained no factual
allegations showing they owed Doe a legal duty actionable
in tort. Alternatively, they argued that even if a legal duty
was owed, the discretionary function exemption to the STCA
applied and barred Doe’s tort claim. In response, Doe argued
that § 29-3523 created an actionable tort duty, and he argued
that the discretionary function exemption did not apply to bar
his claim because the Criminal History Act prescribed a spe-
cific course of conduct that DCS and Frakes were required to
follow regarding his sealed records.
(a) Claims Against DCS and Frakes Dismissed
In December 2020, the district court entered an order dis-
missing the claims against DCS and Frakes. The court’s order
recited various grounds for dismissal, but we recount only
those pertaining to jurisdiction.
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DOE V. STATE
Cite as 312 Neb. 665
In that regard, the district court determined that Doe’s
tort claim against DCS and Frakes was essentially one for
common-law failure to hire and was barred by the STCA’s dis-
cretionary function exemption. 10 After dismissing the claims
against DCS and Frakes, the court, sua sponte, 11 directed the
remaining parties to brief two additional issues bearing on
its subject matter jurisdiction: (1) whether Doe pled a “tort
claim” as defined under the STCA and (2) whether a viola-
tion of § 29-3523 is actionable in tort. The court held a hear-
ing to take up these jurisdictional questions once the briefing
was complete.
At the hearing on jurisdiction, the State and NSP argued
the court lacked subject matter jurisdiction under the STCA
because Doe had not alleged a “[t]ort claim” as defined in
§ 81-8,210(4). In relevant part, that statute provides:
Tort claim means any claim against the State of Nebraska
for money only on account of damage to or loss of prop-
erty or on account of personal injury or death caused
by the negligent or wrongful act or omission of any
employee of the state, while acting within the scope of
his or her office or employment, under circumstances in
which the state, if a private person, would be liable to the
claimant for such damage, loss, injury, or death . . . . 12
The State and NSP argued that Doe had not alleged a “tort
claim” as defined under the STCA because (1) his claim was
not for money only, (2) he had not alleged a personal injury,
and (3) the alleged violation of § 29-3523 was not a claim for
which a private person could be liable under similar circum-
stances. Additionally, the State and NSP argued that under
10
See § 81-8,219(1).
11
See Moser v. State, 307 Neb. 18, 22, 948 N.W.2d 194, 199 (2020) (holding
State’s waiver of sovereign immunity under STCA is jurisdictional matter
that “a court may consider sua sponte”).
12
§ 81-8,210(4).
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the test articulated in Claypool v. Hibberd, 13 § 29-3523 did
not create an actionable tort duty which could support a claim
for negligence.
Doe disagreed. He argued the complaint sufficiently alleged
a plausible “tort claim” under the STCA because it sought
money damages, on account of a personal injury, caused by
the negligent dissemination and consideration of his sealed
criminal history records in violation of § 29-3523. Doe also
argued that § 29-3523 created a tort duty which applies to gov-
ernmental employees and private persons alike. Alternatively,
he argued that if the court did not agree § 29-3523 created a
tort duty, then it should find that Nebraska recognizes a general
common-law duty prohibiting the dissemination and consider-
ation of sealed criminal history records.
(b) Sua Sponte Dismissal for
Lack of Jurisdiction
After considering arguments of the parties, the court entered
an order dismissing Doe’s complaint, in its entirety, for lack of
subject matter jurisdiction. The court recited several reasons
why it lacked jurisdiction.
First, the court concluded that Doe had not pled a “tort
claim” under the STCA, reasoning primarily that Doe’s com-
plaint failed to allege a “personal injury” within the mean-
ing of § 81-8,210(4). Additionally, the court concluded that
the Legislature did not create a tort duty when it enacted
§ 29-3523 of the Criminal History Act, so the alleged viola-
tion of that statute did not present a tort claim for which the
State had waived immunity under the STCA. The court also
rejected Doe’s assertion that Nebraska recognized a common-
law duty prohibiting the dissemination of truthful information
about a person’s criminal history. Lastly, the court concluded
that to the extent Doe’s complaint sought injunctive relief
13
Claypool v. Hibberd, 261 Neb. 818, 626 N.W.2d 539 (2001).
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and “expungement” of his criminal records, those remedies
fell outside the STCA’s waiver of sovereign immunity. 14 The
court thus determined it lacked subject matter jurisdiction over
Doe’s claim under the STCA, and it dismissed the complaint in
its entirety on that basis.
Doe filed a timely appeal, and we granted the appellees’
petition to bypass. After oral argument before this court, we
requested supplemental briefing addressing whether, under
Nebraska tort law, a private person under like circumstances
would be liable to Doe. Supplemental briefs were received and
considered, and we discuss the parties’ jurisdictional arguments
later in our analysis.
II. ASSIGNMENTS OF ERROR
Doe assigns five errors which we consolidate and restate
into two: (1) The district court erred when it determined Doe
had not alleged a “tort claim” within the meaning of the STCA
and thus dismissed the complaint for lack of subject matter
jurisdiction, and (2) the district court erred when it determined
the discretionary function exemption applied to bar Doe’s
claim against DCS and Frakes.
In support of his first assignment of error, Doe presents sev-
eral arguments. First, he asserts that § 29-3523 of the Criminal
History Act created a tort duty to conform to the requirements
of the act and that the district court erred in concluding other-
wise. Alternatively, he argues Nebraska recognizes a common-
law duty to not disseminate or consider sealed criminal history
information. Next, he argues the complaint alleged a plausible
claim for personal injury, and the district court erred in con-
cluding otherwise. And finally, he argues the district court
14
See Zawaideh v. Nebraska Dept. of Health & Human Servs., 285 Neb. 48,
58, 825 N.W.2d 204, 213 (2013) (holding definition of tort claim under
STCA is for “‘money only’” and thus “exclude[s] nonmonetary claims,
such as actions for injunctive relief”).
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erred in concluding that the remedies of injunctive relief and
expungement are barred by sovereign immunity.
III. STANDARD OF REVIEW
[1] Whether a complaint alleges a cause of action under the
STCA, or alleges a claim which is precluded by an exemption
under the SCTA, presents a question of law. 15
[2] Subject matter jurisdiction is a question of law. 16 When
a jurisdictional question does not involve a factual dispute, the
issue is a matter of law. 17
[3] An appellate court reviews questions of law indepen-
dently of the lower court’s conclusion. 18
IV. ANALYSIS
1. Sovereign Immunity and
Subject Matter Jurisdiction
[4,5] A state’s sovereign immunity from suit is a matter
of subject matter jurisdiction that an appellate court cannot
ignore. 19 Whether a court has subject matter jurisdiction is a
threshold issue that should be resolved prior to an examination
of the merits. 20 We therefore begin our analysis by reviewing
familiar principles of sovereign immunity which bear on the
court’s subject matter jurisdiction in this case.
[6-8] Nebraska has long recognized the “‘rule that a state
is not liable to a person injured by the negligence of its
employees, unless there is a statute or constitutional provision
15
See, Williams v. State, 310 Neb. 588, 967 N.W.2d 677 (2021); Brown v.
State, 305 Neb. 111, 939 N.W.2d 354 (2020). Accord Edwards v. Douglas
County, 308 Neb. 259, 953 N.W.2d 744 (2021) (whether allegations of
complaint set forth claims which are precluded by exemptions under
Political Subdivisions Tort Claims Act presents question of law).
16
See id.
17
See id.
18
See id.
19
See Edwards, supra note 15.
20
Lambert v. Lincoln Public Schools, 306 Neb. 192, 945 N.W.2d 84 (2020).
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permitting recovery.’” 21 Nebraska’s Constitution provides that
“[t]he state may sue and be sued, and the Legislature shall
provide by law in what manner and in what courts suits
shall be brought.” 22 But this constitutional provision is not
self-executing, and it requires legislative action to waive the
State’s sovereign immunity. 23 Absent legislative action waiv-
ing sovereign immunity, a trial court lacks subject matter
jurisdiction over an action against the State. 24
[9,10] A waiver of sovereign immunity is found only where
stated by the most express language of a statute or by such
overwhelming implication from the text as will allow no other
reasonable construction. 25 Nebraska courts follow the rule that
statutes purporting to waive the protection of sovereign immu-
nity are to be strictly construed in favor of the sovereign and
against waiver. 26
Doe’s complaint relies exclusively on the STCA for jurisdic-
tion in this case. He alleged no other statutory basis for juris-
diction over his tort claim, and he argued no other statutory
basis for jurisdiction before the district court. We thus limit our
jurisdictional analysis to the STCA.
(a) STCA’s Limited Waiver
of Sovereign Immunity
[11] Under the plain language of the STCA, no tort claim
“shall be maintained against the state, any state agency, or any
employee of the state on any tort claim except to the extent,
and only to the extent, provided by the [STCA].” 27 We have
21
See Jill B. & Travis B. v. State, 297 Neb. 57, 66, 899 N.W.2d 241, 250
(2017).
22
Neb. Const. art. V, § 22.
23
See Jill B. & Travis B., supra note 21.
24
Burke v. Board of Trustees, 302 Neb. 494, 924 N.W.2d 304 (2019).
25
Edwards, supra note 15.
26
Id.
27
§ 81-8,209.
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recognized that through the STCA, the Legislature has waived
the State’s sovereign immunity with respect to some, but not
all, types of tort claims. 28
When considering whether a particular tort claim falls
within the STCA’s limited waiver of sovereign immunity, our
reported opinions often focus on the applicability of the statu-
tory exemptions set out in § 81-8,219. 29 This is because when
one of those exemptions applies, the tort claim is not one for
which the State has consented to be sued. 30 But, as we discuss
next, the STCA also contains another, more fundamental, limi-
tation on the waiver of sovereign immunity for tort claims—the
statutory definition of “tort claim.”
(i) Definition of “Tort Claim”
For purposes of the STCA, the Legislature has defined “tort
claim” in § 81-8,210(4). We quoted the relevant portions of
that definition earlier in this opinion, and we repeat it here for
convenience:
Tort claim means any claim against the State of Nebraska
for money only on account of damage to or loss of prop-
erty or on account of personal injury or death caused
by the negligent or wrongful act or omission of any
employee of the state, while acting within the scope of
his or her office or employment, under circumstances in
which the state, if a private person, would be liable to the
claimant for such damage, loss, injury, or death . . . . 31
[12,13] The STCA’s definition of “tort claim” fundamentally
limits the type of tort claims that are subject to the STCA’s
limited waiver of sovereign immunity. Under this statutory
28
See, Williams, supra note 15; Moser, supra note 11; Brown, supra note 15.
29
See, e.g., Wizinsky v. State, 308 Neb. 778, 957 N.W.2d 466 (2021) (discre
tionary function exemption); Moser, supra note 11 (analyzing applicability
of intentional tort exemption); Brown, supra note 15 (recreational activity
exemption); Zawaideh, supra note 14 (misrepresentation exemption).
30
See Edwards, supra note 15.
31
§ 81-8,210(4) (emphasis supplied).
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definition, the Legislature has waived the State’s sovereign
immunity for those tort claims that (1) seek money damages
only; (2) are on account of property damage, personal injury,
or death; (3) are caused by the negligent or wrongful act or
omission of a state employee acting within the scope of his or
her office or employment; and (4) occur under circumstances
in which a private person would be liable to the claimant.
On appeal, the appellees argue that the claim alleged in Doe’s
complaint failed to satisfy any of the definitional requirements
for a tort claim under § 81-8,210(4). But we do not address all
of the definitional requirements; instead, we focus our analy-
sis on the last requirement, which limits tort claims under the
STCA to those torts occurring under circumstances “in which
the state, if a private person, would be liable to the claimant.” 32
Similar language appears in § 81-8,215 of the STCA, which
sets out the general waiver of sovereign immunity and provides
that “[i]n all suits brought under the [STCA] the state shall be
liable in the same manner and to the same extent as a private
individual under like circumstances . . . .” Similar provisions
appear in the Political Subdivisions Tort Claims Act. 33 As
stated, our settled rules of statutory construction require that
we strictly construe these waivers of sovereign immunity in
favor of the sovereign.
The “private person” provision in § 81-8,210(4) and the
related “private individual” provision in § 81-8,215 have been
part of the STCA since its adoption in 1969. 34 This court long
ago recognized that through these statutory provisions, the
Legislature consented to tort “liability on the part of the State
under the same circumstances under which a private person
would be liable.” 35 Our opinions discussing the STCA routinely
32
§ 81-8,210(4).
33
See Neb. Rev. Stat. §§ 13-903(4) and 13-908 (Reissue 2012).
34
See §§ 81-8,210(4) and 81-8,215 (Cum. Supp. 1969).
35
Cortes v. State, 191 Neb. 795, 798, 218 N.W.2d 214, 216 (1974).
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recite the “private person” provisions, 36 but we have not previ-
ously addressed the jurisdictional import of such provisions on
the STCA’s waiver of immunity. This case affords an opportu-
nity to develop our case law on this jurisdictional issue.
In their supplemental briefing to this court, the parties agree
that under the plain language of §§ 81-8,210(4) and 81-8,215
(Reissue 2014), the Legislature’s waiver of the State’s sover-
eign immunity is limited to claims for which a private person
under like circumstances would be liable in tort to the claimant
under Nebraska law. Both parties point to a dearth of Nebraska
case law addressing this aspect of the STCA, and, as a result,
they devote considerable discussion to federal cases address-
ing similar “private person” provisions within the Federal Tort
Claims Act (FTCA). 37
The FTCA provides, in relevant part, that the “United States
shall be liable, respecting the provisions of this title relating to
tort claims, in the same manner and to the same extent as a pri-
vate individual under like circumstances . . . .” 38 Additionally,
§ 1346(b)(1) gives the federal district courts
36
See, e.g., Davis v. State, 297 Neb. 955, 970, 902 N.W.2d 165, 181 (2017)
(reciting both provisions and noting that “the state defendants could not
have committed the tortious acts set out in [plaintiff’s] complaint as
private individuals”). See, also, Moser, supra note 11, 307 Neb. at 23, 948
N.W.2d at 199 (“[a]s pertinent here, the STCA waives the State’s sovereign
immunity for tort claims against the State on account of personal injury
caused by the negligent or wrongful act or omission of any employee of
the State, while acting within the scope of his or her office or employment,
under circumstances in which the State, if a private person, would be liable
to the claimant for such injury”); Northland Ins. Co. v. State, 242 Neb.
10, 14, 492 N.W.2d 866, 869 (1992) (holding “an action for contribution
is covered under [the STCA], but only if a private person would be liable
to the claimant for the damage, loss, injury, or death”); Blitzkie v. State,
228 Neb. 409, 415, 422 N.W.2d 773, 777 (1988) (“[s]ubject to certain
exempted claims, the [STCA] provides for the State’s liability for its torts
the same as a private person may be liable for torts”).
37
See 28 U.S.C. §§ 1346(b) and 2671 to 2680 (2018).
38
§ 2674.
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exclusive jurisdiction of civil actions on claims against
the United States, for money damages, . . . for injury or
loss of property, or personal injury or death caused by the
negligent or wrongful act or omission of any employee
of the Government while acting within the scope of his
office or employment, under circumstances where the
United States, if a private person, would be liable to the
claimant in accordance with the law of the place where
the act or omission occurred.”
The U.S. Supreme Court has construed these federal statu-
tory provisions “to mean what they say, namely, that the
United States waives sovereign immunity ‘under circum-
stances’ where local law would make a ‘private person’ liable
in tort.” 39 The Supreme Court has referred to this as the
FTCA’s “‘private person’ standard,” 40 and other federal courts
have described it as the “private analogue” requirement of the
FTCA. 41 Regardless of nomenclature, federal courts have con-
sistently held that the private person requirement is jurisdic-
tional in nature and must be satisfied for the FTCA’s limited
waiver of sovereign immunity to apply. 42 As the U.S. Supreme
Court succinctly stated recently in Brownback v. King, 43 when
bringing a claim under the FTCA, “a plaintiff must plausi-
bly allege that ‘the United States, if a private person, would
be liable to the claimant’ under state law both to survive [a
39
United States v. Olson, 546 U.S. 43, 44, 126 S. Ct. 510, 163 L. Ed. 2d 306
(2005) (emphasis in original).
40
Id., 546 U.S. at 46.
41
See, e.g., Green Acres Enterprises, Inc. v. U.S., 418 F.3d 852, 855 (8th Cir.
2005). See, also, D.J.C.V. v. United States, No. 20 Civ. 5747, 2022 WL
1912254 (S.D.N.Y. June 3, 2022).
42
See, e.g., Smith v. U.S., 14 F.4th 1228 (11th Cir. 2021); Gutrejman v. U.S.,
527 F. Supp. 3d 1 (D.C. 2021); In re Marjory Stoneman Douglas High
School, 482 F. Supp. 3d 1273 (S.D. Fla. 2020); McGonagle v. U.S., 155 F.
Supp. 3d 130 (D. Mass. 2016).
43
Brownback v. King, ___ U.S. ___, 141 S. Ct. 740, 749, 209 L. Ed. 2d 33
(2021).
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motion to dismiss for failure to state a claim] and to establish
subject-matter jurisdiction.”
The Nebraska Legislature patterned the STCA after the
FTCA, 44 and the “private person” language under the STCA
largely mirrors the private person language under the FTCA.
Consequently, when discussing the jurisdictional impact of
the private person requirement under the STCA, both Doe
and the appellees argue in their supplemental briefing that the
jurisdictional reasoning of the federal courts, as it pertains to
the private person requirement under the FTCA, is instructive.
We generally agree, with the caveat that the federal courts do
not always adhere to the same rules of strict construction that
Nebraska courts follow when considering statutes that purport
to waive sovereign immunity. 45
[14,15] Considering the plain language of §§ 81-8,210(4)
and 81-8,215 under our settled rule of strict construction, we
now expressly recognize what has been the case since the
enactment of the STCA: The STCA’s limited waiver of sov-
ereign immunity applies only to tort claims for which a pri-
vate person, under like circumstances, would be liable in tort
to the plaintiff. This means that plaintiffs bringing an action
under the STCA must plausibly allege a “tort claim” as that
term is defined under the STCA, both to survive a motion to
dismiss for failure to state a claim and to establish subject mat-
ter jurisdiction.
[16,17] To clarify, it remains true as a general principle that
a negligence action brought under the STCA or the Political
Subdivisions Tort Claims Act 46 has the same elements as
a negligence action brought against a private individual—a
44
See Jill B. & Travis B., supra note 21.
45
See, e.g., Moser, supra note 11, 307 Neb. at 29, 948 N.W.2d at 202
(observing that U.S. Supreme Court “has not uniformly used the same
strict construction canon with respect to waivers of sovereign immunity”
that Nebraska follows).
46
Neb. Rev. Stat. § 13-901 et seq. (Reissue 2012 & Cum. Supp. 2020).
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plaintiff must show a legal duty owed by the defendant to
the plaintiff, a breach of such duty, causation, and damages. 47
However, to establish subject matter jurisdiction under the
STCA, a plaintiff must also plausibly allege a “tort claim” as
defined under the STCA. That requires, inter alia, plausibly
alleging that the State, if a private person, would be liable
to the plaintiff for the negligent or wrongful act or omission
under like circumstances.
(ii) Has Doe Alleged Tort Claim Under STCA?
The district court concluded that it lacked subject matter
jurisdiction over Doe’s action because he had not alleged a
“tort claim” as defined under the STCA. On appeal, the parties
present arguments going to each of the definitional require-
ments for a tort claim under § 81-8,210(4). However, because
we conclude the “private person” definitional requirement is
dispositive, we confine our analysis to that issue and do not
reach the parties’ other jurisdictional arguments. 48
(b) Private Person Analogue
We turn now to the dispositive jurisdictional issue in this
STCA appeal: whether Doe has alleged a tort claim for which
a private person, under like circumstances, would be liable.
In Doe’s complaint, all of the negligent or wrongful acts or
omissions relate to the defendants’ alleged failure to comply
with the provisions of § 29-3523. The jurisdictional question
under the STCA, then, is whether a private person under like
circumstances would be liable in tort for failing to comply with
§ 29-3523.
In his supplemental briefing, Doe argues that a private person
would be liable in tort for disseminating and considering his
47
See, e.g., Reiber v. County of Gage, 303 Neb. 325, 928 N.W.2d 916
(2019).
48
State v. Webb, 311 Neb. 694, 974 N.W.2d 317 (2022) (appellate court not
obligated to engage in analysis that is not necessary to adjudicate case and
controversy before it).
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sealed criminal history records under either of two theories.
His primary argument is that § 29-3523 creates a tort duty
that applies to private persons. Alternatively, he argues that
Nebraska law recognizes a common-law duty to not disclose
criminal history records. We address each argument below, but
first we recite the relevant text of § 29-3523.
Section 29-3523 provides:
(1) After . . . the granting of a motion [to seal criminal
history record information] under subsection (4), (5), or
(6) of this section, a criminal justice agency shall respond
to a public inquiry in the same manner as if there were
no criminal history record information and criminal his-
tory record information shall not be disseminated to any
person other than a criminal justice agency, except as pro-
vided in subsection (2) of this section or when the subject
of the record:
(a) Is currently the subject of prosecution or correc-
tional control as the result of a separate arrest;
(b) Is currently an announced candidate for or holder
of public office;
(c) Has made a notarized request for the release of such
record to a specific person; or
(d) Is kept unidentified, and the record is used for pur-
poses of surveying or summarizing individual or collec-
tive law enforcement agency activity or practices, or the
dissemination is requested consisting only of release of
criminal history record information showing (i) dates of
arrests, (ii) reasons for arrests, and (iii) the nature of the
dispositions including, but not limited to, reasons for not
prosecuting the case or cases.
(2) That part of criminal history record information
described in subsection (7) of this section may be dissem-
inated to individuals and agencies for the express purpose
of research, evaluative, or statistical activities pursuant to
an agreement with a criminal justice agency that specifi-
cally authorizes access to the information, limits the use
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of the information to research, evaluative, or statistical
activities, and ensures the confidentiality and security of
the information.
....
(5) Any person who has received a pardon may file a
motion with the sentencing court for an order to seal the
criminal history record information and any cases related
to such charges or conviction. Upon a finding that the
person received a pardon, the court shall grant the motion
and issue an order as provided in subsection (7) of this
section.
....
(7) Upon acquittal or entry of an order dismissing a
case described in subdivision (3)(c) of this section, or
after granting a motion under subsection (4), (5), or (6) of
this section, the court shall:
(a) Order that all records, including any information
or other data concerning any proceedings relating to the
case, including the arrest, taking into custody, petition,
complaint, indictment, information, trial, hearing, adjudi-
cation, correctional supervision, dismissal, or other dis-
position or sentence, are not part of the public record and
shall not be disseminated to persons other than criminal
justice agencies, except as provided in subsection (1) or
(2) of this section;
(b) Send notice of the order (i) to the Nebraska
Commission on Law Enforcement and Criminal Justice,
(ii) to the Nebraska State Patrol, and (iii) to law enforce-
ment agencies, county attorneys, and city attorneys refer-
enced in the court record;
(c) Order all parties notified under subdivision (7)(b)
of this section to seal all records pertaining to the case;
and
(d) If the case was transferred from one court to
another, send notice of the order to seal the record to the
transferring court.
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(8) In any application for employment, bonding,
license, education, or other right or privilege, any appear-
ance as a witness, or any other public inquiry, a person
cannot be questioned with respect to any offense for
which the record is sealed. If an inquiry is made in viola-
tion of this subsection, the person may respond as if the
offense never occurred.
(i) Does § 29-3523 Create Tort Duty?
As stated, Doe argues that § 29-3523 of the Criminal
History Act creates a tort duty to act in the manner required
by the statute, and he argues that such a duty is imposed on
governmental employees and private persons alike. The appel-
lees argue that § 29-3523 does not create a tort duty, and in any
event, the pertinent requirements of § 29-3523 are not directed
at private individuals.
[18] We have not yet had occasion to consider whether
§ 29-3523 gives rise to a tort duty. But in Claypool, we set out
the test for determining when a statute creates such a duty:
A court may determine that a statute gives rise to a tort
duty to act in the manner required by the statute where
[1] the statute is enacted to protect a class of persons
which includes the plaintiff, [2] the statute is intended to
prevent the particular injury that has been suffered, and
[3] the statute is intended by the Legislature to create
a private liability as distinguished from one of a public
character. 49
The appellees appear to concede that Doe, as someone
whose criminal history records have been sealed as a result of
pardons, is generally within the class of persons that § 29-3523
was enacted to protect. But they argue that under the third
Claypool factor, there is nothing to suggest the Legislature
intended § 29-3523 to create private tort liability. We agree.
[19,20] We have described the third Claypool factor as
“central to the analysis of whether the statute defines a duty in
49
Claypool, supra note 13, 261 Neb. at 825, 626 N.W.2d at 545.
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tort,” 50 and we have explained that “where the Legislature has
not by its express terms or by implication provided for civil
tort liability [for failure to comply with a statute], under prin-
ciples of judicial restraint, it is prudent that we not do so.” 51
Moreover, we have said that courts should consider the express
remedy, if any, imposed for violating the statute, and whether
such a remedy is “inconsistent with a purported legislative
intention to create a tort duty.” 52
The legislative purpose of the Criminal History Act is stated
in § 29-3502:
The purposes of [the Criminal History Act] are (1) to
control and coordinate criminal offender record keep-
ing within this state, (2) to establish more efficient and
uniform systems of criminal offender record keeping,
(3) to assure periodic audits of such record keeping
in order to determine compliance with sections 29-209,
29-210, 29-3501 to 29-3528, and 81-1423, (4) to estab-
lish a more effective administrative structure for the
protection of individual privacy in connection with such
record keeping, and (5) to preserve the principle of the
public’s right to know of the official actions of criminal
justice agencies.
It is apparent from the plain text of § 29-3502 that the pur-
poses of the Criminal History Act are primarily administrative
in nature; the act is aimed at ensuring uniformity, efficiency,
accuracy, and transparency in criminal history recordkeeping.
We see nothing in § 29-3502 which suggests the Legislature
intended the Criminal History Act to create a tort duty to act in
accordance with the statutory scheme.
Presumably recognizing that the legislative purpose recited
in § 29-3502 is of little help to his argument under the Claypool
50
Stonacek v. City of Lincoln, 279 Neb. 869, 880, 782 N.W.2d 900, 909
(2010).
51
Id.
52
Id. at 881, 782 N.W.2d at 910.
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factors, Doe asks us to focus more specifically on the provi-
sions of § 29-3523, which govern how sealed criminal history
records are to be handled. But the plain language of § 29-3523
does not expressly or impliedly create private tort liability
for failing to comply with the statutory provisions governing
sealed criminal history records. In fact, as we discuss next, the
Legislature has provided express statutory remedies for viola-
tions of the Criminal History Act which are inconsistent with a
purported legislative intent to create a private tort duty.
We identify two statutes providing express remedies for
violations of the Criminal History Act. Section 29-3527 estab-
lishes criminal liability for “[a]ny person” who commits certain
violations of the Criminal History Act, including the know-
ing dissemination of “nondisclosable criminal history record
information in violation of [the Criminal History Act].” 53
Additionally, § 29-3528 authorizes an aggrieved person to
compel governmental actors to comply with the requirements
of the Criminal History Act and provides:
Whenever any officer or employee of the state, its
agencies, or its political subdivisions, or whenever any
state agency or any political subdivision or its agencies
fails to comply with the requirements of [the Criminal
History Act] or of regulations lawfully adopted to imple-
ment [the Criminal History Act], any person aggrieved
may bring an action, including but not limited to an action
for mandamus, to compel compliance and such action
may be brought in the district court of any district in
which the records involved are located or in the district
court of Lancaster County. The commission may request
the Attorney General to bring such action.
53
See § 29-3527(1) through (3) (providing any person who permits
unauthorized direct access to criminal history information, who knowingly
fails to disseminate public criminal history information, or who knowingly
disseminates “nondisclosable criminal history record information” is guilty
of Class IV misdemeanor).
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Based on the express statutory remedies created by the
Legislature—one which imposes criminal penalties on any
person who violates the act, and another which authorizes
mandamus and similar actions against governmental actors
“to compel compliance” with the act—we cannot find that the
Legislature intended the Criminal History Act generally, or
§ 29-3523 specifically, to give rise to any tort duty, let alone a
duty that would apply to a private person. 54
[21] We thus reject Doe’s argument and hold that § 29-3523
does not give rise to a legal duty that would subject a private
person to civil tort liability for failing to act in the manner pre-
scribed by statute. But that does not end our analysis.
Although Doe’s complaint identifies § 29-3523 as the pri-
mary source of the alleged duty not to disclose or consider his
sealed criminal history records, he also argues that if the statute
does not give rise to a tort duty, then Nebraska recognizes a
common-law duty of reasonable care not to disclose crimi-
nal history records. The district court rejected this argument,
reasoning that Doe had provided “no authority for a common
law duty prohibiting the dissemination of truthful information
about a person’s criminal history” and concluding that “no
such duty exists.”
Doe has not assigned error to this aspect of the trial court’s
duty ruling. But in his supplemental briefing, he argues that
Nebraska common law provides a private analogue for the
negligence claims he alleged against the State. We consider this
argument next, and find it lacks merit.
(ii) Would Private Person Owe Common-Law
Duty Under Like Circumstances?
Doe argues that Nebraska law recognizes what he describes
as a common-law “duty to act with reasonable care when in
custody of sealed or sensitive information, the disclosure of
54
See Smith, supra note 42, 14 F.4th at 1232 (holding FTCA “does not cover
breaches of federal statutory or regulatory duties that do not apply to
private parties”).
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which would have a detrimental effect on the life and liveli-
hood of an individual.” 55 He directs us to no Nebraska case
recognizing such a common-law duty, and we find none.
Instead, Doe refers us to a case from 1994, Merrick v
Thomas, 56 which he argues recognized a general common-
law duty of reasonable care. In that case, the plaintiff sued
the sheriff under the Political Subdivisions Tort Claims Act,
alleging that the sheriff had a duty to score her admissions
test accurately and fairly and that he had breached that duty.
This court concluded the plaintiff’s complaint, liberally con-
strued, alleged sufficient facts to establish the sheriff “owed
her a duty to score her test with due care.” 57 In reaching this
conclusion, the Merrick court recited the general proposition
that “[a] common-law duty exists to use due care so as not to
negligently injure another person.” 58 Doe relies on this state-
ment in Merrick to argue that under Nebraska law, a private
person owes a general common-law duty of reasonable care
to others. But our more recent cases expressly disavow the
suggestion that Nebraska recognizes “a general duty of rea-
sonable care to all others at all times.” 59 Instead, since our
2010 decision in A.W. v. Lancaster Cty. Sch. Dist. 0001, 60
Nebraska has consistently followed the general duty frame-
work set out in § 7 of the Restatement (Third) of Torts. 61 The
duty principles recited in Merrick do not reflect current tort
law in Nebraska.
55
Brief for appellant at 22.
56
Merrick v. Thomas, 246 Neb. 658, 522 N.W.2d 402 (1994).
57
Id. at 662, 522 N.W.2d at 406.
58
Id. at 661, 522 N.W.2d at 406.
59
Bell v. Grow With Me Childcare & Preschool, 299 Neb. 136, 154, 907
N.W.2d 705, 718 (2018).
60
A.W. v. Lancaster Cty. Sch. Dist. 0001, 280 Neb. 205, 784 N.W.2d 907
(2010).
61
See Bell, supra note 59 (discussing 1 Restatement (Third) of Torts:
Liability for Physical and Emotional Harm § 7 (2010)).
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[22] We thus reject Doe’s suggestion that Nebraska’s
common-law recognizes a duty not to disclose sealed criminal
history information. Indeed, if such a common-law duty did
exist, it seems unlikely the Legislature would have amended
the Criminal History Act in 2019 to enact laws prohibiting the
dissemination of sealed criminal history record information
under certain circumstances.
(iii) No Private Analogue
For the above reasons, we conclude that Doe has failed
to establish that a private person would owe him a legal
duty under circumstances like those alleged in his complaint.
Without a legal duty, a private person could not be liable in
negligence under like circumstances. Stated differently, there is
no “private analogue” for his claim, and Doe has thus failed to
allege a tort claim under § 81-8,210(4) for which the State has
waived its sovereign immunity.
For the sake of completeness, however, we note that Doe’s
appellate briefing also argues that even if there is not a private
person analogue for his negligence claim under § 29-3523 or
Nebraska’s common law, there are other possible tort claims,
such as invasion of privacy or “Interference with Economic
Expectation,” 62 for which a private person may be liable. We
do not address these arguments, however, because Doe neither
pled such tort claims nor alleged conduct that would plausibly
support such tort claims. Instead, Doe’s complaint alleged a
negligence claim premised exclusively on conduct which he
says failed to comply with § 29-3523, and we have already
explained why no private analogue exists for that claim.
2. Doe’s Remaining Assignments
and Arguments
[23] Our conclusion that Doe has not alleged a tort claim
under the STCA for which the State has waived its sovereign
immunity makes it unnecessary to address any of his remain-
ing assignments of error. An appellate court is not obligated
62
Brief for appellant at 19.
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to engage in an analysis that is not necessary to adjudicate the
case and controversy before it. 63
Similarly, we do not address Doe’s argument, raised for the
first time in his reply brief, that even if the STCA’s limited
waiver of sovereign immunity does not apply to his claims,
the district court should have construed his tort action as one
to enforce compliance with the Criminal History Act under
§ 29-3528. Doe has not assigned this as error on appeal, 64
nor could he. His complaint relied exclusively on the STCA
for jurisdiction over his tort claim. The complaint neither ref-
erenced § 29-3528 nor alleged it as a possible jurisdictional
basis. The district court did not consider Doe’s unpled juris-
dictional theory, and we will not consider it for the first time
on appeal. 65
V. CONCLUSION
Because Doe has not shown that a private person would be
liable under Nebraska law for the allegedly tortious conduct
alleged in the complaint, the STCA’s limited waiver of sov-
ereign immunity does not apply. The district court therefore
correctly concluded that Doe has not alleged a “tort claim”
under the STCA for which the State has waived its sovereign
immunity. The district court’s dismissal of the complaint for
lack of subject matter jurisdiction was correct and is affirmed.
Affirmed.
63
Schmid v. Simmons, 311 Neb. 48, 970 N.W.2d 735 (2022).
64
See Adair Holdings v. Johnson, 304 Neb. 720, 936 N.W.2d 517 (2020)
(alleged error must be both assigned and argued to be addressed by
appellate court).
65
See Wisner v. Vandelay Investments, 300 Neb. 825, 841, 916 N.W.2d 698,
714 (2018) (“[a]n argument not presented to or decided by the trial court
is not appropriate for consideration on appeal”).
Cassel, J., concurring.
Our dissenting colleague relies upon a “broad interpretation”
endorsed by the U.S. Supreme Court in determining the reach
of the private person analogue in the Federal Tort Claims Act
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addressing liability of the national sovereign. But, as the major-
ity opinion makes clear, Nebraska adheres to strict construction
of waivers of sovereign immunity as to the state sovereign.
Thus, a “broad interpretation” is inconsistent with Nebraska
law. And because the district court’s subject matter jurisdiction
depended upon a waiver of sovereign immunity, this court was
not free to avoid the jurisdictional analysis. Judicial restraint
does not permit or justify judicial abdication.
Miller‑Lerman, J., concurring in part, and in part dissenting.
I respectfully concur in part, and in part dissent. I agree
with the majority that, given the remedies in the Security,
Privacy, and Dissemination of Criminal History Act (Act),
Neb. Rev. Stat. §§ 29‑209, 29‑210, 29‑3501 to 29‑3538, and
81‑1423 (Reissue 2016 & Cum. Supp. 2020), the responsi-
bilities of the Act do not create the duty element of the tort of
negligence and that therefore, Doe has failed to state a claim
for negligence under Neb. Rev. Stat. § 81-8,210(4) (Reissue
2014) of the State Tort Claims Act (STCA). But STCA permits
“tort claims” in addition to the tort claim of negligence. Other
actions which lie in tort can be brought, such as interference
with a business expectancy, which may be applicable here
based on the events giving rise to the complaint. Doe should
be permitted to amend. Further, albeit recast by the majority as
a failure of the State to waive immunity, the majority affirmed
the district court’s order, which concluded that there was a fail-
ure of subject matter jurisdiction. Not every failing is a juris-
dictional defect. I dissent from these rulings. I see the case as
a simple matter of failure to state a claim for negligence, and
the district court should permit Doe leave to attempt to replead
another tort.
The alleged facts are not repeated here. In summary, Doe
alleged that notwithstanding the fact that Doe’s criminal record
was sealed under § 29-3523(5), and after Doe’s job interview,
the Nebraska State Patrol improperly transmitted the records
identified as “Sealed Info” to the Department of Correctional
Services and its director, Scott Frakes, in connection with
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Doe’s application for employment. Frakes acknowledged that
the department should not have considered Doe’s sealed record
in connection with its rejection of Doe’s job application. Doe
alleged negligence under STCA.
According to the Act, among the objectives of sealing crim-
inal records is “the protection of individual privacy.” See
§ 29-3502. Following a pardon, and sealing of a person’s
records, the aim of the Act is to keep records private and
protect the pardoned individual from harm due to improper
dissemination and reliance on the sealed criminal record. The
statutory remedies for failure to abide by the Act are provided
by §§ 29-3527 and 29-3528 and include criminal liability and
mandamus. See State ex rel. Rhiley v. Nebraska State Patrol,
301 Neb. 241, 917 N.W.2d 903 (2018) (stating sovereign
immunity does not bar mandamus under § 29-3528 against
public officer). Because the Legislature has already provided
explicit remedies to enforce the Act, it would be inconsistent
for the court to create a separate private cause of action for
negligence, based on a breach of the responsibilities described
in the Act. This conclusion is similar to this court’s analysis
in Stonacek v. City of Lincoln, 279 Neb. 869, 782 N.W.2d 900
(2010). By this reasoning, I concur with the majority’s conclu-
sion that the Act does not create a duty in negligence or a cause
of action for negligence.
At this point, the analysis of whether Doe alleged a cause
of action for negligence under STCA is complete, and in my
view, the majority’s analysis of the private person analogue
and its segue into sovereign immunity are unnecessary and
not consistent with the widespread jurisprudence in this area.
In my view, firstly, the analysis improperly casts the issue as
jurisdictional, and secondly, the majority misreads the federal
jurisprudence as requiring a too exacting private equivalence
instead of an analogue.
I see a pleading failure, but unlike the majority, I do not
see a jurisdictional failure. There is no dispute that the district
court has subject matter jurisdiction to entertain an STCA
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action. Just because Doe did not allege a viable negligence
“[t]ort claim,” see § 81-8,210(4), for the particular tort of neg-
ligence does not bar him from attempting to plead another tort
under STCA. In my view, the defect in the complaint identified
by the trial court and this appellate court is not incurable as a
matter of law. As I have observed in the past, not every failing
is jurisdictional and we should be careful with our invocation
of the concept of jurisdiction. State v. Crawford, 291 Neb.
362, 865 N.W.2d 360 (2015), disapproved on other grounds,
State v. Burries, 310 Neb. 688, 969 N.W.2d 96 (2022). See
State v. Ryan, 287 Neb. 938, 845 N.W.2d 287 (2014), disap-
proved on other grounds, State v. Allen, 301 Neb. 560, 919
N.W.2d 500 (2018). See, also, Akutowicz v. U.S., 859 F.2d
1122 (2d Cir. 1988) (holding that where plaintiff has not satis-
fied private analogue requirement, plaintiff has failed to state
cause of action under Federal Tort Claims Act). But see Geico
General Ins. Co. v. U.S., 581 F. Supp. 3d 847 (E.D. Ky. 2022)
(stating because plaintiff failed to plead analogue facts suf-
ficient to state plausible claim under Federal Tort Claims Act,
court lacked jurisdiction). In my view, we should not recast an
inartful pleading as a jurisdictional defect merely to provide a
vehicle to dismiss. I dissent from this approach of the major-
ity opinion.
As I have urged, discussion of the doctrine of a private
person analogue is not necessary to the disposition of this
case, and I would exercise judicial restraint in this regard. Just
because the court can write about private person analogue does
not mean it should. To the extent dicta by the majority consid-
ers the private person analogue, I disagree with the majority’s
analysis that the analogue must be so precise.
As the majority notes, STCA is patterned after the Federal
Tort Claims Act (hereinafter FTCA), see 28 U.S.C. § 2680(h)
(2018), which to some extent, we follow. Compare Moser
v. State, 307 Neb. 18, 948 N.W.2d 194 (2020). FTCA’s pri-
vate person analogue is found at 28 U.S.C. § 1346 (2018).
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Nebraska’s private person analogue is found at § 81-8,210(4),
which provides:
Tort claim means any claim against the State of Nebraska
for money only on account of damage to or loss of prop-
erty or on account of personal injury or death caused
by the negligent or wrongful act or omission of any
employee of the state, while acting within the scope of
his or her office or employment, under circumstances in
which the state, if a private person, would be liable to the
claimant for such damage, loss, injury, or death . . . .
In evaluating whether a private person analogue exists
for the plaintiff’s federal tort claim, the U.S. Supreme
Court has stated that the State is not immune from suit
solely because it was engaged in a uniquely governmental
function. See, United States v. Olson, 546 U.S. 43, 126
S. Ct. 510, 163 L. Ed. 2d 306 (2005); Rayonier, Inc. v.
United States, 352 U.S. 315, 77 S. Ct. 374, 1 L. Ed. 2d
354 (1957); Indian Towing Co. v. United States, 350 U.S.
61, 76 S. Ct. 122, 100 L. Ed. 48 (1955). A court applying
the private person standard is not restricted to “narrow”
inquiries into the same circumstances, but must look fur-
ther afield. United States v. Olson, 546 U.S. at 46.
The U.S. Supreme Court declared that it “would be attribut-
ing bizarre motives to Congress . . . to hold that it was predi-
cating liability on such a completely fortuitous circumstance—
the presence or absence of identical private activity.” Indian
Towing Co. v. United States, 350 U.S. at 67. The U.S. Supreme
Court found no evidence in FTCA that Congress “intended to
draw distinctions so finespun and capricious as to be almost
inescapable of being held in the mind for adequate formula-
tion.” Indian Towing Co. v. United States, 350 U.S. at 68.
It has been observed that FTCA’s private person analogue
provision, § 1346, has been given
generous development by the Supreme Court. [FTCA]
is given a broad interpretation to effectuate the legisla-
tive aim of putting citizen and national sovereign in tort
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claims suits on a footing of equality as between private
parties within that state. Nice pieces of casuistry and
hypersensitive legalisms are avoided.
Roelofs v. United States, 501 F.2d 87, 92 (5th Cir. 1974). These
authorities illustrate why the majority has too narrowly applied
the private person analogue and why I dissent from such nar-
row understanding in this and future cases.
Turning to the complaint, Doe alleged a violation of the
responsibilities outlined in the Act by the State Patrol, Frakes,
and the Department of Correctional Services. According to the
allegations, Doe suffered the financial harm of being rejected
for a job as a result of state actors’ wrongful conducts, i.e.,
by both the improper dissemination of his sealed record and
the subsequent knowing reliance on the sealed record. I read
the events giving rise to the complaint as potentially involv-
ing tortious interference with Doe’s business expectancy or
another tort. See Denali Real Estate v. Denali Custom Builders,
302 Neb. 984, 926 N.W.2d 610 (2019) (setting forth ele-
ments of interference with business relationship or expec-
tancy). Employing the “broad interpretation” of the private
person analogue endorsed by the federal courts, see Roelofs v.
United States, 501 F.2d at 92, Doe has alleged a “[t]ort claim”
on account of the “wrongful act or omission of any employee
of the state, while acting within the scope of his or her office
or employment, under circumstances in which the state, if a
private person, would be liable to the claimant for such dam-
age, loss, injury or death . . . .” § 81-8,210(4). So, although I
think it unnecessary to engage in the private person analogue
exercise, were I to do so, I would find that Doe had alleged
facts which may indicate the existence of the private analogue
tort of interference with a business expectancy and thus should
be permitted to amend his pleading to attempt to make such
“tort claim” more explicit.
For the foregoing reasons, I concur in part, and in part
dissent. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487118/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
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MILLARD GUTTER CO. V. SHELTER MUT. INS. CO.
Cite as 312 Neb. 606
Millard Gutter Company, a corporation
doing business as Millard Roofing and
Gutter, appellant, v. Shelter Mutual
Insurance Company, appellee.
___ N.W.2d ___
Filed October 14, 2022. No. S-20-907.
1. Motions to Dismiss: Pleadings: Appeal and Error. A district court’s
grant of a motion to dismiss on the pleadings is reviewed de novo by
an appellate court, accepting the factual allegations in the complaint as
true and drawing all reasonable inferences of law and fact in favor of the
nonmoving party.
2. Actions: Parties: Standing: Judgments: Jurisdiction: Appeal and
Error. Whether a party who commences an action has standing and is
therefore the real party in interest presents a jurisdictional issue. When a
jurisdictional question does not involve a factual dispute, determination
of the issue is a matter of law which requires an appellate court to reach
a conclusion independent from the trial court.
3. Pleadings: Judges: Words and Phrases: Appeal and Error. An order
of the district court requiring a complaint to be made more definite and
certain will be sustained on appeal unless it clearly appears that the
court abused its discretion. A judicial abuse of discretion exists when the
reasons or rulings of a trial judge are clearly untenable, unfairly depri
ving a litigant of a substantial right and denying just results in matters
submitted for disposition.
4. Actions: Parties: Standing. Whether a party who commences an action
has standing, and is therefore the real party in interest, presents a juris-
dictional issue.
5. Actions: Parties. The purpose of Nebraska’s real party in interest
statute, Neb. Rev. Stat. § 25-301 (Reissue 2016), is to prevent the
prosecution of actions by persons who have no right, title, or interest in
the cause.
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6. Actions: Parties: Standing. 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.
7. Standing. The focus of a court’s standing inquiry is not on whether
the claim being advanced has merit; it is on whether the plaintiff is the
proper party to assert the claim.
8. Assignments: Parties. Generally, if there has been a valid and complete
assignment of rights, then the assignee is the real party in interest, but
if the assignment is invalid, then the purported assignor remains the real
party in interest.
9. Assignments: Words and Phrases. An assignment is the transfer of
some identifiable property, claim, or right from the assignor to the
assignee.
10. Assignments. Fundamental to the law of assignments is the concept
that an assignee takes nothing more by an assignment than the assignor
had; an assignor cannot assign any rights greater than that which he or
she held.
11. Assignments: Intent. The intention of the assignor must be to transfer a
present interest in a debt or fund or subject matter.
12. Insurance: Breach of Contract: Assignments: Standing. In the
absence of a statute to the contrary, an insured may validly assign a
postloss breach of contract claim for insurance proceeds due under a
homeowner’s policy, and the assignee of such a claim has standing to
bring the breach of contract claim in its own name.
13. Standing: Pleadings: Evidence: Words and Phrases. When standing
is challenged at the pleadings stage, before an evidentiary hearing and
before any evidence outside of the pleadings is admitted, it is deemed a
facial challenge.
14. Standing: Pleadings: Proof. When considering a facial challenge to
standing, the trial court will typically review only the pleadings to
determine whether the plaintiff has alleged sufficient facts to establish
standing.
15. Torts: Insurance: Contracts. The general theory underlying the tort of
bad faith is that the law implies a covenant of good faith and fair deal-
ing as a result of the contractual relationship between the insurer and
the insured.
16. Torts: Insurance: Claims: Proof. To establish a claim of first-party bad
faith, a policyholder must show both an absence of a reasonable basis
for denying benefits of the insurance policy and the insurer’s knowl-
edge or reckless disregard of the lack of a reasonable basis for denying
the claim.
17. Torts: Intent. An action for first-party bad faith is an intentional tort.
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18. Actions: Insurance: Contracts. A cause of action for insurer bad faith
is separate from, and not dependent on, a cause of action for breach of
the insurance policy, although the two may share facts in common.
19. Claims: Torts: Insurance: Damages: Proximate Cause. Because
claims of bad faith are grounded in tort, traditional tort damages, includ-
ing damages for mental distress and for economic loss, are recover-
able when they are proximately caused by the insurer’s tortious bad
faith conduct.
20. Torts: Insurance: Claims. Only (1) an injured policyholder who is also
a covered person or (2) a policyholder who is also a beneficiary may
bring a cause of action in tort against the policyholder’s insurer for fail-
ure to settle the policyholder’s insurance claim.
21. Torts: Claims: Assignments: Death: Abatement, Survival, and
Revival. The common-law rule is that a right of action is not assignable
where the tort causes a strictly personal injury and does not survive the
death of the person injured.
22. Torts: Assignments: Statutes. Where only the proceeds of personal
injury tort litigation, and not control of the litigation, have been assigned,
such assignments are valid and enforceable under Nebraska law unless
there is a statute prohibiting such assignment.
23. Torts: Insurance: Claims: Assignments. A policyholder cannot val-
idly assign the right to prosecute or control a tort action for first-party
bad faith.
24. Torts: Insurance: Assignments. A policyholder’s postloss assignment
of insurance proceeds neither increases nor changes the insurer’s obliga-
tions under the insurance policy.
25. Pleadings. Motions to make more definite and certain are addressed to
the sound discretion of the trial court.
26. Pleadings: Time: Dismissal and Nonsuit. A plaintiff’s failure to file
an amended pleading within the time specified by the court’s order is a
basis for dismissing the action without prejudice under Neb. Rev. Stat.
§ 25-601(5) (Reissue 2016).
27. Courts: Dismissal and Nonsuit. In addition to the statutory authority
under Neb. Rev. Stat. § 25-601 (Reissue 2016), courts have inherent
authority to dismiss an action for violation of a court order. And pur-
suant to their inherent authority, courts can dismiss the action with or
without prejudice.
Appeal from the District Court for Douglas County: Shelly
R. Stratman, Judge. Affirmed.
Theodore R. Boecker, Jr., of Boecker Law, P.C., L.L.O., for
appellant.
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Michael T. Gibbons, Raymond E. Walden, and Christopher
D. Jerram, of Woodke & Gibbons, P.C., L.L.O., for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Stacy, J.
In connection with a 2013 storm, Millard Gutter Company
(Millard Gutter) obtained assignments from various policy
holders of Shelter Mutual Insurance Company (Shelter).
Millard Gutter then filed suit against Shelter in its own name,
as assignee, seeking to recover damages for breach of the
insurance contracts and for first-party bad faith in failing to
settle the claims. The district court dismissed the action, and
Millard Gutter appeals. The primary question on appeal is
whether Millard Gutter has standing to assert first-party bad
faith claims against Shelter. We affirm the judgment of the
district court.
I. BACKGROUND
1. Complaint
On April 9, 2018, Millard Gutter filed a complaint against
Shelter in the district court for Douglas County. Millard Gutter
brought the action in its own name as “the assignee of vari-
ous insured property owners” who purchased insurance from
Shelter and whose property “sustained loss due to a storm
occurring in 2013.” The assignments were not attached to the
complaint, but were described therein as “valid assignments
of the right to proceeds under an insurance policy issued
by Shelter.”
The complaint alleged that Millard Gutter provided Shelter
with copies of the assignments and made claims for storm dam-
age to the insured properties. The complaint broadly alleged
that all of the Shelter policies were in full force and effect, the
storm damage was covered, and all conditions precedent under
the policies had been met. The complaint did not identify the
addresses or locations of the insured properties, the dates of
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the alleged storm damage, or the dates the assignments were
made. Millard Gutter alleged that Shelter breached the policies
when it “failed to make direct payment to [Millard Gutter]”
and failed to include Millard Gutter “as a payee on any checks
or other payments for the loss.” The complaint also alleged
that Shelter’s failure to pay Millard Gutter amounted to “bad
faith and constitutes a separate violation of the implied cov-
enant of good faith and fair dealing owed under the insurance
contracts.” The complaint prayed for unspecified general and
special damages in an amount to be determined at trial.
2. Preanswer Motions
Shelter moved to dismiss the bad faith claims pursuant to
Neb. Ct. R. Pldg. § 6-1112(b)(6), arguing the complaint failed
to state a claim because Millard Gutter lacked standing to
assert a first-party bad faith claim. Additionally, Shelter moved
for a more definite statement under § 6-1112(e), arguing that
without more detail identifying the insured properties and the
nature and scope of the alleged assignments, Shelter could
not reasonably form a responsive pleading. More specifically,
Shelter argued that it could not discern, from the allegations of
the complaint, which claims the policyholders had purportedly
assigned, where the insured properties were located, whether
all named insureds had executed the assignments, or whether
the assignments were made preloss or postloss.
In an order entered March 26, 2019, the district court sus-
tained the motion for a more definite statement, finding the
original complaint was “insufficient to identify the homeown-
ers and put [Shelter] on notice of each individual homeowner’s
claim.” Millard Gutter was ordered to file, within 14 days, an
amended complaint which identified the pertinent policy num-
bers and attached the assignments upon which it relied. Millard
Gutter never filed an amended complaint.
In a separate order entered April 8, 2019, the court granted
Shelter’s motion to dismiss the bad faith claims for lack of
standing. The court recited the rule from Braesch v. Union Ins.
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Co. 1 that only a policyholder who is also a covered person or
beneficiary under the policy has standing to bring a tort action
against an insurer for first-party bad faith. The court then rea-
soned that Millard Gutter, a nonpolicyholder, lacked standing
under Braesch to assert claims for first-party bad faith in its
own name.
The court also considered, and rejected, Millard Gutter’s
argument that it had standing to assert the bad faith claims
by virtue of the alleged assignments. First, the court recited
the general rule that only a present interest may be validly
assigned, 2 and it noted that the complaint contained no fac-
tual allegations suggesting that any Shelter policyholder had
an existing bad faith claim at the time the assignments were
made. Additionally, the court reasoned that even if the assign-
ments purported to include an existing claim for first-party bad
faith, allowing Millard Gutter to bring such claims in its own
name would violate the rule announced in Mutual of Omaha
Bank v. Kassebaum, 3 which held that the proceeds of personal
injury tort litigation may be validly assigned, but control of
the litigation may not. The court therefore concluded that
Millard Gutter’s complaint did not contain sufficient factual
allegations to establish standing to assert claims of first-party
bad faith.
3. Show Cause and Dismissal
With Prejudice
After the court ruled on the preanswer motions, the case
remained pending with no apparent activity for about 17
months. Then, in August 2020, the court sua sponte issued an
1
Braesch v. Union Ins. Co., 237 Neb. 44, 464 N.W.2d 769 (1991), dis
approved on other grounds, Wortman v. Unger, 254 Neb. 544, 578 N.W.2d
413 (1998).
2
Krohn v. Gardner, 248 Neb. 210, 533 N.W.2d 95 (1995) (holding assign
ment must transfer present interest in debt, fund, or subject matter).
3
Mutual of Omaha Bank v. Kassebaum, 283 Neb. 952, 814 N.W.2d 731
(2012).
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order for the parties to appear and show cause why the action
should not be dismissed for lack of progression.
Our bill of exceptions does not include the show cause hear-
ing, so it is not clear what, if any, evidence or argument was
offered by Millard Gutter. But other portions of the record
reflect that during the hearing, Millard Gutter advised the court
it would not be filing an amended complaint despite the court’s
prior rulings. In response, Shelter moved to dismiss the entire
action with prejudice.
After a hearing on Shelter’s motion, the court entered an
order dismissing the entire action with prejudice. The court
recited the procedural history of the case, including the basis
for the court’s prior rulings dismissing the bad faith claims
and ordering that Millard Gutter file an amended complaint on
the remaining breach of contract claims. The dismissal order
also stated:
[Millard Gutter] has not at any time filed an Amended
Complaint in this case. Nor has [it] filed anything else
in this case, despite the Court’s Order on August 10,
2020 directing that the parties appear at a hearing on
September 1, 2020 and show cause why the action should
not be dismissed for lack of prosecution. At that hearing,
[Millard Gutter’s] counsel advised that [Millard Gutter] is
standing on its original Complaint.
. . . The court agrees with [Shelter] that it is necessary
under the circumstances to go beyond dismissal for lack
of prosecution and dismiss the action on the basis that
[Millard Gutter] failed to comply with the Court’s specific
Order to file an Amended Complaint by April 24, 2019,
and has instead chosen to stand on the Complaint that the
Court found to be insufficient without a more definite
statement[,] and on the bad faith claims that the Court
also found to be insufficient.
. . . The Court determines that it is appropriate to dis-
miss the breach of contract claims as a sanction for non-
compliance with that Order . . . .
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MILLARD GUTTER CO. V. SHELTER MUT. INS. CO.
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. . . The Court also finds that without the assignments
and specific identifying information about the alleged
homeowners executing the assignments, the Court cannot
determine that [Millard Gutter] has standing to assert the
claims of homeowners alleged to be insured by [Shelter]
and therefore finds that the Court lacks subject matter
jurisdiction over this action.
. . . The Court also reaffirms its dismissal of the bad
faith claims, which were not included in the leave to
amend.
Millard Gutter timely moved to alter or amend the order
of dismissal, arguing that under Neb. Rev. Stat. § 25-601
(Reissue 2016), the dismissal should have been without preju-
dice. After a hearing, the court entered a slightly modified
order of dismissal, which generally recited the same rationale
for dismissal and, once again, dismissed the entire action with
prejudice.
Millard Gutter filed a timely notice of appeal. We moved the
appeal to our docket on our motion. 4
II. ASSIGNMENTS OF ERROR
Millard Gutter assigns, restated and consolidated, that the
district court erred in (1) granting the motion to dismiss the
bad faith claims for lack of standing, (2) granting the motion
to make more definite as to the breach of contract claims and
ordering Millard Gutter to file an amended complaint identify-
ing the policies and attaching the assignments, and (3) dismiss-
ing the entire action with prejudice once Millard Gutter elected
to stand on its original complaint.
III. STANDARD OF REVIEW
[1] A district court’s grant of a motion to dismiss on the
pleadings is reviewed de novo by an appellate court, accepting
4
See, Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2020); Neb. Ct. R. App.
Prac. § 2-102(C) (rev. 2022).
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the factual allegations in the complaint as true and drawing all
reasonable inferences of law and fact in favor of the nonmov-
ing party. 5
[2] Whether a party who commences an action has standing
and is therefore the real party in interest presents a jurisdic-
tional issue. 6 When a jurisdictional question does not involve
a factual dispute, determination of the issue is a matter of law
which requires an appellate court to reach a conclusion inde-
pendent from the trial court. 7
[3] An order of the district court requiring a complaint to
be made more definite and certain will be sustained on appeal
unless it clearly appears that the court abused its discretion. 8
A judicial abuse of discretion exists when the reasons or rul-
ings of a trial judge are clearly untenable, unfairly depriving a
litigant of a substantial right and denying just results in matters
submitted for disposition. 9
IV. ANALYSIS
1. Standing to Assert Claim
of First-Party Bad Faith
[4] In Millard Gutter’s first assignment of error, it argues
the district court erroneously concluded that Millard Gutter
did not have standing to assert claims of first-party bad faith
against Shelter. Whether a party who commences an action has
standing, and is therefore the real party in interest, presents a
jurisdictional issue. 10
5
SID No. 67 v. State, 309 Neb. 600, 961 N.W.2d 796 (2021).
6
Valley Boys v. American Family Ins. Co., 306 Neb. 928, 947 N.W.2d 856
(2020).
7
Id.
8
See Christianson v. Educational Serv. Unit No. 16, 243 Neb. 553, 501
N.W.2d 281 (1993).
9
George Clift Enters. v. Oshkosh Feedyard Corp., 306 Neb. 775, 947
N.W.2d 510 (2020).
10
Valley Boys, supra note 6.
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[5-7] Nebraska’s real party in interest statute provides in
part that “[e]very action shall be prosecuted in the name of the
real party in interest.” 11 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. 12 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. 13
The focus of our standing inquiry is not on whether the claim
being advanced has merit; it is on whether Millard Gutter is the
proper party to assert the claim. 14
(a) Assignee as Real Party in Interest
[8-11] As a general proposition, we have recognized that if
there has been a valid and complete assignment of rights, then
the assignee is the real party in interest, but if the assignment
is invalid, then the purported assignor remains the real party
in interest. 15 An assignment is the transfer of some identifiable
property, claim, or right from the assignor to the assignee. 16
Fundamental to the law of assignments is the concept that
an assignee takes nothing more by an assignment than the
assignor had; 17 an assignor cannot assign any rights greater
than that which he or she held. 18 The intention of the assignor
must be to transfer a present interest in a debt or fund or sub-
ject matter. 19
11
Neb. Rev. Stat. § 25-301 (Reissue 2016).
12
Valley Boys, supra note 6.
13
Id.
14
See Egan v. County of Lancaster, 308 Neb. 48, 952 N.W.2d 664 (2020).
15
See Valley Boys, supra note 6.
16
6A C.J.S. Assignments § 2 (2016).
17
Id., § 91.
18
Id.
19
See, Krohn, supra note 2; Craig v. Farmers Mut. Ins. Co., 239 Neb. 271,
476 N.W.2d 529 (1991).
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[12] In Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins.
Co., 20 we held that in the absence of a statute to the contrary,
an insured may validly assign a postloss breach of contract
claim for insurance proceeds due under a homeowner’s policy.
We also held that the assignee of such a claim has standing to
bring the breach of contract claim in its own name. Notably,
Millard Gutter limited its holding to assignments made after
the occurrence of a loss, reasoning that “‘[a]fter a loss occurs,
the indemnity policy is no longer an executory contract of
insurance [but rather] a vested claim against the insurer and
can be freely assigned or sold like any other chose in action . .
. .’” 21 After concluding that postloss assignments of property
damage claims were valid and enforceable, Millard Gutter sug-
gested that “[i]f postloss assignments of storm damage claims
are having a deleterious effect on insurers, they should present
their concerns to the Legislature.” 22
In 2018, the Legislature responded by amending the Insured
Homeowner’s Protection Act, 23 to add specific provisions gov-
erning the validity of postloss assignments of benefits under
property and casualty insurance policies covering residential
real estate. Postloss assignments that do not comply with all
the provisions of the act are deemed void. 24 However, because
the events which gave rise to this action occurred before the
effective date of such amendments, we leave for another day
a detailed discussion of the act’s provisions governing post-
loss assignments.
(b) Facial Challenge to Standing
[13,14] In this case, Shelter’s challenge to Millard Gutter’s
standing was raised and resolved at the pleadings stage. When
20
Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins. Co., 295 Neb. 419,
889 N.W.2d 596 (2016).
21
Id. at 429, 889 N.W.2d at 603.
22
Id. at 433, 889 N.W.2d. at 605.
23
See Neb. Rev. Stat. §§ 44-8605 to 44-8608 (Cum. Supp. 2020).
24
See § 44-8608.
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standing is challenged at the pleadings stage, before an evi-
dentiary hearing and before any evidence outside of the plead-
ings is admitted, it is deemed a “‘facial challenge.’” 25 When
considering a facial challenge to standing, the trial court will
typically review only the pleadings to determine whether the
plaintiff has alleged sufficient facts to establish standing. 26
The complaint alleged that Millard Gutter “obtained valid
assignments of rights under the policies issued by Shelter” and
specifically described the nature of the rights assigned as “the
right to proceeds under an insurance policy issued by Shelter.”
On appeal, Millard Gutter argues these allegations were suffi-
cient to establish its standing, as an assignee, to assert not only
breach of contract claims for insurance proceeds, 27 but also to
assert tort claims for first-party bad faith against Shelter.
Regarding the claims of first-party bad faith, we understand
Millard Gutter to advance two separate standing theories. First,
Millard Gutter argues it has standing, as assignee, to assert any
existing bad faith claims that Shelter’s policyholders had when
the assignments were made. Alternatively, Millard Gutter relies
on the assignments to argue it can assert its own claims for
first-party bad faith based on Shelter’s postassignment conduct.
We address each standing argument in turn.
(c) Assignability of First-Party
Bad Faith Claims
Millard Gutter broadly argues that the policyholders’ exist-
ing first-party bad faith claims are assignable because there is
“not a single Nebraska appellate court decision, which states
that an assignee of a post-casualty loss claim cannot state a
claim for bad faith.” 28 Millard Gutter is correct that we have
not previously addressed whether a policyholder can validly
25
SID No. 67, supra note 5, 309 Neb. at 606, 961 N.W.2d at 802.
26
Id.
27
See, Millard Gutter Co., supra note 20; Valley Boys, supra note 6.
28
Brief for appellant at 18.
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assign an existing tort claim of first-party bad faith. We do so
now, and begin by reviewing the relevant principles from our
first-party bad faith cases.
(i) First-Party Bad Faith
This court judicially recognized the tort of third-party bad
faith in the 1962 case of Olson v. Union Fire Ins. Co. 29 and
recognized the tort of first-party bad faith almost 30 years later
in Braesch. 30 In Braesch, the court described the difference
between the two torts as follows:
[A] first-party bad faith cause of action is based upon alle-
gations that the insurer, in bad faith, refuses to settle with
its own policyholder insured, who thereby suffers some
type of direct loss. . . . In contrast, a traditional third-party
bad faith claim arises when an insurer wrongfully fails to
settle a claim by a third party against an insured. 31
[15] In Braesch, we said the general theory underlying the
tort of bad faith is that the law implies a covenant of good
faith and fair dealing as a result of the contractual relation-
ship between the insurer and the insured. 32 In a later case,
we emphasized that it is the breach of the covenant of good
faith and fair dealing from which the insurer’s tort liability
springs, and we said the tort of first-party bad faith “embraces
any number of bad faith settlement tactics, such as inadequate
investigation, delays in settlement, false accusations, and so
forth.” 33
[16,17] To establish a claim of first-party bad faith, a policy
holder must show both an absence of a reasonable basis for
denying benefits of the insurance policy and the insurer’s
knowledge or reckless disregard of the lack of a reasonable
29
Olson v. Union Fire Ins. Co., 174 Neb. 375, 118 N.W.2d 318 (1962).
30
Braesch, supra note 1.
31
Id. at 54-55, 464 N.W.2d at 776.
32
See Braesch, supra note 1.
33
Ruwe v. Farmers Mut. United Ins. Co., 238 Neb. 67, 74, 469 N.W.2d 129,
135 (1991).
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basis for denying the claim. 34 Based on these elements, we
have characterized first-party bad faith as an intentional
tort, reasoning that “‘“[b]ad faith” by definition cannot be
unintentional.’” 35
[18,19] We have explained that a cause of action for insurer
bad faith is separate from, and not dependent on, a cause of
action for breach of the insurance policy, although the two
may share facts in common. 36 The damages recoverable for
bad faith differ too; because claims of bad faith are grounded
in tort, 37 traditional tort damages, including damages for men-
tal distress 38 and for economic loss, 39 are recoverable when
they are proximately caused by the insurer’s tortious bad faith
conduct. 40 Indeed, one of the justifications for recognizing
the intentional tort of bad faith was concern that recoverable
damages for breach of the insurance contract are inadequate
to compensate policyholders for personal injuries suffered as a
result of an insurer’s tortious bad faith. 41
[20] In Nebraska, only a policyholder has standing to bring
a first-party bad faith claim against an insurer. 42 More specifi-
cally, “only (1) an injured policyholder who is also a ‘covered
person’ or (2) a policyholder who is also a beneficiary may
bring a cause of action in tort against the policyholder’s insurer
for failure to settle the policyholder’s insurance claim.” 43 In this
case, Millard Gutter does not allege or argue that it is a Shelter
policyholder. Instead, Millard Gutter argues that, by virtue of
34
See Ruwe, supra note 33.
35
Braesch, supra note 1, 237 Neb. at 57, 464 N.W.2d at 777.
36
See Braesch, supra note 1.
37
See id.
38
Id.
39
See Ruwe, supra note 33.
40
See, Braesch, supra note 1; Ruwe, supra note 33.
41
See, e.g., id.
42
Braesch, supra note 1.
43
Id. at 56, 464 N.W.2d at 776.
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the postloss assignments from Shelter’s policyholders, it has
standing to bring any existing claims for first-party bad faith
the policyholders had when they executed the assignments.
It is a question of first impression whether a policyholder
can validly assign, to a nonpolicyholder, a cause of action
for the tort of first-party bad faith. At oral argument, Millard
Gutter suggested the question could be answered by applying
the reasoning from Millard Gutter Co. v. Farm Bureau Prop.
& Cas. Ins. Co., 44 but that case answered a different question,
and our analysis was limited to the assignability of postloss
breach of contract claims. To determine whether a policyholder
can validly assign a tort claim for first-party bad faith, we
must examine our jurisprudence governing the assignability of
tort actions.
(ii) Assignability of Tort Actions
Not all tort claims are assignable under Nebraska law. A
wrongful death cause of action cannot be assigned because it
is authorized by statute, and “[t]he plain language of the stat-
ute allows only the personal representative to bring the action
and only the widow, widower, or next of kin to benefit.” 45
Moreover, although the law generally supports the assign-
ability of rights, it does not permit assignments for matters
of personal trust or confidence, or for personal services. 46
Applying this rule, we have held that claims for legal malprac-
tice cannot be validly assigned in Nebraska because of public
policy considerations concerning the personal nature and con-
fidentiality of the attorney-client relationship. 47 And we have
explained that if an assignment “grants both the proceeds of
44
Millard Gutter Co., supra note 20.
45
Spradlin v. Dairyland Ins. Co., 263 Neb. 688, 692, 641 N.W.2d 634, 637
(2002). See Neb. Rev. Stat. § 30-810 (Reissue 2016).
46
See Earth Science Labs. v. Adkins & Wondra, P.C., 246 Neb. 798, 523
N.W.2d 254 (1994).
47
Id. Accord, Community First State Bank v. Olsen, 255 Neb. 617, 587
N.W.2d 364 (1998).
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[a legal malpractice] action and the right to prosecute it, it is
an assignment of the cause of action” which is void as against
public policy. 48
[21] In Kassebaum, we considered whether an assignment
of the unliquidated proceeds from a personal injury action was
valid and enforceable under Nebraska law. 49 We described this
as an issue of first impression and began our analysis by recit-
ing the common-law rule that a right of action is not assignable
where the tort causes a strictly personal injury and does not
survive the death of the person injured. 50 We said this prohibi-
tion is grounded on two principles: (1) that prior to more recent
statutory amendments, personal claims did not survive the
death of the victim, and (2) that prohibiting the assignment of
tort claims prevents champerty and maintenance. 51
[22] In Kassebaum, we observed there was a split of author-
ity in other jurisdictions regarding whether a party could assign
the proceeds of personal injury litigation without violating this
common-law prohibition. And after discussing the reasons in
favor of and against allowing such assignments, we determined
“the cases holding that an assignment of proceeds is enforce-
able to be the better reasoned position.” 52 We thus adopted the
rule that “[w]here only the proceeds of [tort] litigation, and not
control of the litigation, have been assigned,” such assignments
are valid and enforceable under Nebraska law. 53 In other words,
absent a statute to the contrary, Nebraska law generally allows
a party to assign the proceeds from personal injury actions, but
it does not allow assignment of the right to prosecute or control
such actions.
48
Community First State Bank, supra note 47, 255 Neb. at 622-23, 587
N.W.2d at 368.
49
Kassebaum, supra note 3.
50
Id. See, also, Earth Science Labs., supra note 46.
51
Kassebaum, supra note 3.
52
Id. at 959, 814 N.W.2d at 737.
53
See id.
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Here, the district court held that tort actions for first-party
bad faith are subject to the assignability rule for personal injury
actions announced in Kassebaum, and we agree. Actions for
first-party bad faith are intentional torts, and plaintiffs in such
actions are entitled to seek and recover traditional personal
injury damages. 54 We conclude it is appropriate to apply the
same assignability rules to actions for first-party bad faith as
are applied to other strictly personal torts. And under that rule,
the proceeds from such an action are assignable absent a statute
to the contrary, but the right to prosecute or control such an
action cannot be validly assigned. 55
[23] As such, even assuming without deciding that the pro-
ceeds from first-party bad faith actions can be validly assigned
under Nebraska law, we hold that a policyholder cannot val-
idly assign the right to prosecute or control such an action.
So, regardless of the validity for other purposes, the postloss
assignments from Shelter’s policyholders could not, as a mat-
ter of law, give Millard Gutter standing to prosecute the poli-
cyholders’ tort actions for first-party bad faith against Shelter.
Millard Gutter’s arguments to the contrary are without merit.
(d) Argument Based on Implied
Covenant of Good Faith
Millard Gutter’s alternative standing theory appears to be
that it is asserting its own claim for first-party bad faith against
Shelter. More specifically, Millard Gutter argues that once it
obtained postloss assignments from Shelter’s policyholders,
it “stood in the shoes of each of the insureds.” 56 And, as the
assignee of the policyholders’ rights to proceeds under the
Shelter policies, Millard Gutter argues that Shelter owed it the
same covenant of good faith and fair dealing that it owed its
policyholders. Thus, according to Millard Gutter, it can assert
a claim for first-party bad faith based on Shelter’s failure “to
54
See, Ruwe, supra note 33; Braesch, supra note 1.
55
See Kassebaum, supra note 3.
56
Brief for appellant at 14.
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adjust the claim[s] in good faith and make prompt payment to
Millard Gutter.” 57
There is no merit to Millard Gutter’s alternative standing
theory, because there is no legal basis for its contention that
Shelter owed Millard Gutter any obligation of good faith and
fair dealing. The implied covenant of good faith and fair deal-
ing that Nebraska law imposes on insurers “is dependent upon
a contractual relationship between the [policyholder] and the
insurer.” 58 There is no contractual relationship between Shelter
and Millard Gutter, and the postloss assignments did not cre-
ate one.
[24] Moreover, we soundly reject any suggestion that a
policyholder’s postloss assignment of insurance proceeds to
a nonpolicyholder can somehow alter or expand the insurer’s
implied covenant of good faith and fair dealing under the pol-
icy, or create any contractual relationship between the insurer
and the assignee. Our cases allowing postloss assignment
of insurance proceeds plainly hold that “such an assignment
neither increases nor changes the insurer’s obligations under
the policy.” 59
Here, the postloss assignments could not alter Shelter’s
obligations under the insurance policy or change the fact that
Millard Gutter has no contractual relationship with Shelter.
Consequently, there is no doctrinal basis for Millard Gutter
to claim that Shelter owes it a covenant of good faith and fair
dealing. And absent such a duty, there is no legal basis on
which Millard Gutter can assert its own claim of first-party
bad faith against Shelter. As we explained in Braesch, the tort
of first-party bad faith does not extend to nonpolicyholder
beneficiaries—even those who claim to have been harmed by
57
Id.
58
Braesch, supra note 1, 237 Neb. at 55, 464 N.W.2d at 776.
59
Valley Boys, supra note 6, 306 Neb. at 939, 947 N.W.2d at 865 (emphasis
supplied). Accord, Kasel v. Union Pacific RR. Co., 291 Neb. 226, 231, 865
N.W.2d 734, 738 (2015) (“[a]n assignment does not affect or change any
of the provisions of the contract”).
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an insurer’s failure to settle with them—because nonpolicy-
holders lack a contractual relationship with the insurer. 60 As
a nonpolicyholder, Millard Gutter lacks standing to bring an
action for first-party bad faith against Shelter.
In sum, both of Millard Gutter’s standing theories fail as
a matter of law. The district court correctly concluded that
the allegations of Millard Gutter’s complaint, even accepted
as true, failed to establish that Millard Gutter has standing to
assert first-party bad faith claims against Shelter.
For the sake of completeness, we note that under Nebraska’s
real party in interest statute, an action “shall not be dismissed
on the ground that it is not prosecuted in the name of the
real party in interest until a reasonable time has been allowed
after objection for joinder or substitution of the real party in
interest.” 61 But here, Millard Gutter has not assigned or argued
that the district court erred by failing to allow Millard Gutter a
reasonable opportunity to file an amended complaint joining or
substituting the Shelter policyholders as plaintiffs for purposes
of the first-party bad faith claims. And on this record, we can
find no plain error related to § 25-301, particularly where, as
we discuss later, it is apparent that Millard Gutter would have
refused to file an amended complaint if allowed to do so.
2. No Abuse of Discretion in Ordering
More Definite Statement
In its second assignment of error, Millard Gutter argues the
court erred in granting Shelter’s motion to provide a more defi-
nite statement. According to § 6-1112(e) of the pleading rules:
If a pleading to which a responsive pleading is permitted
is so vague or ambiguous that a party cannot reasonably
60
See Braesch, supra note 1.
61
§ 25-301. See, also, North Star Mut. Ins. Co. v. Stewart, 311 Neb. 33,
47, 970 N.W.2d 461, 471 (2022) (holding when plaintiff is not real
party in interest with standing to sue, “better practice” is to allow
plaintiff reasonable period of time to amend complaint by either joining or
substituting real party in interest before dismissing action).
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be required to frame a responsive pleading, the party
may move for a more definite statement before interpos-
ing a responsive pleading. The motion shall point out
the defects complained of and the details desired. If the
motion is granted and the order of the court is not obeyed
within 10 days or within such time as the court may fix,
the court may strike the pleading or make such order as
it deems just.
[25] Motions to make more definite and certain are addressed
to the sound discretion of the trial court. 62 Rule 6-1112(e)
requires the movant to identify the alleged deficiencies in the
pleading and to specify the details that are reasonably needed
to draft a responsive pleading. Shelter argued it could not tell
from the complaint which claims had been assigned, whether
the assignments were made preloss or postloss, whether all
named insureds had executed the assignments, or whether the
insured properties were located in the county where suit had
been filed. It asserted that without knowing these details, it
was unable to draft a responsive pleading or identify available
policy defenses.
The district court granted the motion, but did not require
all of the additional details requested by Shelter. Instead, the
court ordered Millard Gutter to amend the complaint within
14 days to “include policy numbers and attach the assignment
associated with each homeowner.” This additional detail would
presumably allow Shelter to identify the insured properties, the
named insureds, and the assignors so it could draft a respon-
sive pleading. On this record, we find no abuse of discretion in
granting the motion to make more definite.
3. No Error in Dismissal With Prejudice
In its final assignment of error, Millard Gutter argues it
was error to dismiss the entire action with prejudice. Millard
62
See Vodehnal v. Grand Island Daily Independent, 191 Neb. 836, 218
N.W.2d 220 (1974).
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Gutter argues that, pursuant to § 25-601, the dismissal should
have been without prejudice. Section 25-601 provides in rel-
evant part:
An action may be dismissed without prejudice to a
future action . . . (3) by the court for want of necessary
parties; . . . (5) by the court for disobedience by the plain-
tiff of an order concerning the proceedings in the action.
In all other cases on the trial of the action the decision
must be upon the merits.
[26,27] We have said the plaintiff’s failure to file an
amended pleading within the time specified by the court’s
order is a basis for dismissing the action without prejudice
under § 25-601(5). 63 But in addition to the statutory author-
ity under § 25-601, we have long recognized that courts have
inherent authority to dismiss an action for violation of a court
order. 64 And pursuant to their inherent authority, courts have
discretion to dismiss the action with or without prejudice. 65
Additionally, § 6-1112(e) of the pleading rules authorizes a
trial court to “strike the pleading or make such order as it
deems just” if an order to make more definite is not obeyed
within the time fixed by the court. Dismissal with prejudice is
63
See Bert Cattle Co. v. Warren, 238 Neb. 638, 471 N.W.2d 764 (1991).
64
Id. at 641-42, 471 N.W.2d at 767 (internal quotation marks omitted)
(explaining “[i]t has almost universally been held or recognized that courts
have the inherent power to dismiss an action for disobedience of a court
order. . . . Without this right, a court could not control its dockets; business
before it would become congested; its functions would be impaired; and
speedy justice to litigants would largely be denied”).
65
See, Scudder v. Haug, 197 Neb. 638, 250 N.W.2d 611 (1977) (finding no
error in dismissing cross-claim with prejudice where defendant was given
repeated opportunities to comply with court’s order to bring pleading
into proper form, yet failed to do so); Ferson v. Armour & Co., 109
Neb. 648, 651, 192 N.W. 125, 127 (1923) (finding no error in dismissing
action with prejudice after four pleadings were stricken for failure to
comply with pleading rules, though such dismissal “should be sparingly
exercised”).
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Cite as 312 Neb. 606
generally considered an available sanction under such a provi-
sion and is reviewed for an abuse of discretion. 66
Moreover, the inherent authority of a trial court to dismiss
an action with prejudice for failure to prosecute is also well
established:
The authority of a . . . trial court to dismiss a plaintiff’s
action with prejudice because of [a] failure to prosecute
cannot seriously be doubted. The power to invoke this
sanction is necessary in order to prevent undue delays in
the disposition of pending cases and to avoid congestion
in the calendars of the District Courts. The power is of
ancient origin, having its roots in judgments of nonsuit
and non prosequitur entered at common law, e. g., 3
Blackstone, Commentaries (1768), 295-296, and dismis-
sals for want of prosecution of bills in equity . . . . 67
Our record shows that Millard Gutter’s failure to comply
with the order to make more definite was intentional, not inad-
vertent. Then, when the case showed no activity for a period of
almost 17 months and the court sua sponte issued an order to
show cause why the case should not be dismissed for failure to
prosecute, Millard Gutter offered no explanation, and instead,
it advised the court for the first time that it was going to stand
on its original complaint despite the court’s prior orders. After
the show cause hearing, the district court granted Shelter’s
motion to dismiss the entire action with prejudice, finding that
Millard Gutter’s delay “entirely stalled the case for nearly [a]
year and a half at the initial pleading stage” and that Millard
Gutter had no intention of filing an amended complaint to
remedy the deficiencies the court had identified in the origi-
nal complaint.
66
See, e.g., Nystrom v. Melcher, 262 Mont. 151, 864 P.2d 754 (1993); Clay
v. City of Margate, 546 So. 2d 434 (Fla. App. 1989); Medved v. Baird, 58
Wis. 2d 563, 207 N.W.2d 70 (1973).
67
Link v. Wabash Railroad Co., 370 U.S. 626, 629-30, 82 S. Ct. 1386, 8 L.
Ed. 2d 734 (1962) (emphasis omitted).
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Although dismissal with prejudice pursuant to a court’s
inherent authority is a severe sanction which should be exer-
cised sparingly, 68 we cannot say on this record that it was
an abuse of discretion. The record in this case supports the
trial court’s determination that Millard Gutter deliberately dis-
obeyed the order to make more definite, stalled progression of
the case by waiting almost 17 months to advise the court of its
decision to stand on the original complaint, and failed to show
good cause for the resulting failure to prosecute. We find no
merit to any of Millard Gutter’s arguments that it was an abuse
of discretion to dismiss the case with prejudice.
V. CONCLUSION
For the foregoing reasons, the judgment of the district court
is affirmed.
Affirmed.
68
See Ferson, supra note 65. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487087/ | IN THE SUPREME COURT OF THE STATE OF NEVADA
AMBER JOHNSON, No. 85633
Appellant,
vs.
CHRISTOPHER M. HORODESKY,
Respondent.
FILE
NOV 1 7 AVZ
E VAR A. SROWN
C eF = COURT
ORDER DISMISSING APPEAL BY
DEPUTY CLERK
-
This is a pro se appeal from an order sealing the documents and
record, apart from the final judgment, in this case. Eighth Judicial District
Court, Family Court Division, Clark County; Michele Mercer, Judge.
Review of the documents submitted to this court pursuant to
NRAP 3(g) reveals a jurisdictional defect. Specifically, the order designated
in the notice of appeal is not substantively appealable. See NRAP 3A(b).
This court has jurisdiction to consider an appeal only when the appeal is
authorized by statute or court rule. Brown v. MHC Stagecoach, LLC, 129
Nev. 343, 345, 301 P.3d 850, 851 (2013) (this court may only consider
appeals authorized by statute or court rule). No statute or court rule
provides for an appeal from an order such as that challenged by appellant.
This court lacks jurisdiction and
ORDERS this appeal DISMISSED.
Hardesty
, J. J.
Stiglich Herndon
SUPREME COURT
OF
NEVADA
(0) I 947A 44SPID
Z-Z- 36/ea
cc: Hon. Michele Mercer, District Judge, Family Court Division
Amber Johnson
Carman & Price
Eighth District Court Clerk
SUPREME COURT
OF
NEVADA
2
(0) 1947A | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487100/ | IN THE SUPREME COURT OF THE STATE OF DELAWARE
TRANSPERFECT GLOBAL, INC., §
§ No. 132, 2022
Plaintiff Below, §
Appellant, § Court Below—Court of Chancery
§ of the State of Delaware
v. §
§ C.A. No: 2021-0065
ROSS ARONSTAM & MORITZ §
LLP and GARRETT B. MORITZ, §
§
Defendants Below, §
Appellee. §
Submitted: October 26, 2022
Decided: November 17, 2022
Before VALIHURA, VAUGHN, and TRAYNOR, Justices.
ORDER
This 17th day of November, 2022 after consideration of the parties’ briefs and
the record on appeal, it appears to the Court that:
1. Although the jurisdiction of the Court of Chancery would not, under
ordinary circumstances, extend to the professional-negligence action Appellant
TransPerfect Global, Inc. filed against Ross Aronstam & Moritz LLP and Garrett B.
Moritz, (collectively, “RAM”) the circumstances presented here are extraordinary.
By the terms of two separate orders, the Court of Chancery retained exclusive
jurisdiction over “actions or proceedings . . . challenging any action,
recommendation or decision” of a court-appointed custodian1 and over the parties,
1
In re TransPerfect Global, Inc., 2016 WL 3949840, at *6 (Del. Ch. July 18, 2016).
including TransPerfect, “for all matters relating to” the civil actions surrounding the
court-ordered sale of TransPerfect.2
2. We agree with the Chancellor’s conclusion that “[n]o court could
possibly evaluate the propriety of [RAM’s] alleged actions or inactions [as alleged
in TransPerfect’s professional negligence complaint] without reference to the
propriety of the Custodian’s actions, recommendations, or decisions.”3
TransPerfect’s claims against RAM, moreover, include a challenge to the
Custodian’s authority to retain and direct the activities of counsel on TransPerfect’s
behalf; as such, they fall squarely within the exclusive-jurisdiction provisions of the
Court of Chancery’s prior orders.
3. We also agree with the Chancellor that “it is not reasonably conceivable
that [RAM has] breached a professional obligation, and [that] TransPerfect has
therefore failed to state a claim for legal malpractice upon which relief can be
granted.”4
NOW, THEREFORE, IT IS ORDERED that the judgment of the Court of
Chancery be AFFIRMED on the basis of its March 17, 2022 Memorandum Opinion.
BY THE COURT:
/s/ Gary F. Traynor
Justice
2
In re TransPerfect Global, Inc., 2018 WL 992994, at *7 (Del. Ch. Feb. 15, 2018).
3
TransPerfect Global, Inc. v. Ross Aronstam & Moritz LLP, 2022 WL 803484, at *8 (Del. Ch.
Mar. 17, 2022).
4
Id. at *12.
2 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487106/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:05 AM CST
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
CENTRAL STATES DEV. V. FRIEDGUT
Cite as 312 Neb. 909
Central States Development, LLC, and
Saint James Apartment Partners, LLC,
appellants, v. Elizabeth Friedgut
and DLA Piper, LLP, appellees.
___ N.W.2d ___
Filed November 18, 2022. No. S-21-818.
1. Motions to Dismiss: Jurisdiction: Pleadings: Evidence. When a trial
court relies solely on pleadings and supporting affidavits in ruling on a
motion to dismiss for want of personal jurisdiction, the plaintiff need
only make a prima facie showing of jurisdiction to survive the motion.
However, if the court holds an evidentiary hearing on the issue or
decides the matter after trial, then the plaintiff bears the burden of dem-
onstrating personal jurisdiction by a preponderance of the evidence.
2. Jurisdiction: Appeal and Error. An appellate court examines the ques-
tion of whether the nonmoving party has established a prima facie case
of personal jurisdiction de novo.
3. Motions to Dismiss: Appeal and Error. In reviewing the grant of a
motion to dismiss, an appellate court must look at the facts in the light
most favorable to the nonmoving party and resolve all factual conflicts
in favor of that party.
4. Jurisdiction: Words and Phrases. Personal jurisdiction is the power of
a tribunal to subject and bind a particular entity to its decisions.
5. Due Process: Jurisdiction: States. Before a court can exercise personal
jurisdiction over a nonresident defendant, the court must determine,
first, whether the long-arm statute is satisfied and, second, whether
minimum contacts exist between the defendant and the forum state for
personal jurisdiction over the defendant without offending due process.
6. Jurisdiction: States: Legislature: Intent. It was the intention of the
Legislature to provide for the broadest allowable jurisdiction over non-
residents under Nebraska’s long-arm statute.
7. Due Process: Jurisdiction: States. When a state construes its long-
arm statute to confer jurisdiction to the fullest extent constitutionally
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Cite as 312 Neb. 909
permitted, the inquiry collapses into the single question of whether
jurisdiction comports with due process.
8. Jurisdiction: States. To constitute sufficient minimum contacts, a
defendant’s conduct and connection with the forum state must be such
that he or she should reasonably anticipate being haled into court there.
9. ____: ____. A court exercises two types of personal jurisdiction depend-
ing upon the facts and circumstances of the case: general personal juris-
diction or specific personal jurisdiction.
10. Jurisdiction. General personal jurisdiction arises where a defendant’s
affiliations with a state are so continuous and systematic as to render the
defendant essentially at home in the forum state.
11. Jurisdiction: Words and Phrases. Specific personal jurisdiction
requires that a claim arise out of or relate to the defendant’s contacts
with the forum.
12. ____: ____. For specific personal jurisdiction, there must be a substan-
tial connection between the defendant’s contacts with the forum state
and the operative facts of the litigation.
13. ____: ____. Specific personal jurisdiction is confined to adjudication of
issues deriving from, or connected with, the very controversy that estab-
lishes jurisdiction.
14. Jurisdiction: States: Contracts. The existence of a contract with a
party in a forum state does not, in and of itself, provide the necessary
contacts for personal jurisdiction.
Appeal from the District Court for Douglas County: Marlon
A. Polk, Judge. Affirmed.
Richard P. McGowan, of McGowan Law Firm, P.C., L.L.O.,
for appellants.
Joseph S. Daly and Mary M. Schott, of Evans & Dixon,
L.L.C., and Martin J. O’Hara, of Much Shelist, P.C., pro hac
vice, for appellees.
Heavican, C.J., Cassel, Stacy, Funke, Papik, and
Freudenberg, JJ.
Funke, J.
INTRODUCTION
Central States Development, LLC (Central States), and Saint
James Apartment Partners (SJ Apartment) appeal the dismissal
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CENTRAL STATES DEV. V. FRIEDGUT
Cite as 312 Neb. 909
of their complaint against Elizabeth Friedgut and the law firm
of DLA Piper, LLP.
Friedgut, as an employee of DLA Piper, represented Central
States and SJ Apartment in a dispute with the U.S. Department
of Housing and Urban Development (HUD). Central States
and SJ Apartment sued Friedgut and DLA Piper in connection
with that representation, alleging legal malpractice. The district
court found Friedgut and DLA Piper did not have the requisite
minimum contacts with Nebraska for the court to have personal
jurisdiction. Central States and SJ Apartment appeal. For the
reasons set forth herein, we affirm.
BACKGROUND
Central States is a limited liability company operating in
Nebraska and elsewhere. Its activities include developing and
managing low- and moderate-income housing. Central States
owns and operates apartment complexes that contract with
HUD. HUD provides funds to Central States through “Housing
Assistance Payment” (HAP) contracts that amount to all or a
significant portion of a tenant’s rent. Resultingly, a specific
complex’s primary source of revenue can consist of these pay-
ments by HUD rather than payments by tenants.
SJ Apartment is a Nebraska limited liability company. At
all relevant times, Central States was the managing member
of SJ Apartment and John Foley was the sole manager of
Central States. Foley created SJ Apartment to acquire and
develop an Omaha, Nebraska, apartment complex known as St.
James Manor.
The prior owner of St. James Manor operated the complex
in connection with a HAP contract. Central States and SJ
Apartment applied for and were awarded tax credits from the
Nebraska Investment Finance Authority to buy and develop
St. James Manor. As part of the project, the prior owner
assigned its interest in its HAP contracts for the property to
SJ Apartment.
Foley solicited Friedgut’s legal representation in order to
obtain HUD’s approval of the HAP assignment. Friedgut’s
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CENTRAL STATES DEV. V. FRIEDGUT
Cite as 312 Neb. 909
practice focused on federal law, and she had experience work-
ing as legal counsel at HUD and with HAP contracts. Central
States had a preexisting relationship with Friedgut insofar as
it had initially retained her after its Missouri-based mortgage
lender recommended it seek her services on an issue involving
another property. Foley initially contacted Friedgut for assist
ance with a HUD-related issue involving a property in Iowa.
He did so by calling her office in Chicago, Illinois.
Friedgut is a resident of Illinois and a former employee of
DLA Piper’s office in Chicago, Illinois. Central States and SJ
Apartment’s allegations concern Friedgut’s representation of
them while she was an employee of DLA Piper. Friedgut has
never been licensed to practice law in Nebraska, has never been
admitted pro hac vice in Nebraska, and has never appeared in
any Nebraska court. Friedgut stated in her affidavit that she
represented Central States and SJ Apartment without setting
foot in Nebraska in relation to them or St. James Manor.
The director of operations for the office of general counsel
at DLA Piper stated in his affidavit that DLA Piper was orga-
nized in Maryland and that its principal place of business is
in Maryland. It does not have a Nebraska office, nor does it
own or lease property in Nebraska, have a registered agent in
Nebraska, have any employees or partners living in Nebraska,
or have any attorneys with an active license to practice law in
Nebraska. DLA Piper has a website that is generally accessible
but that is not directed at Nebraska or Nebraska residents.
HUD is a federal agency, and HAP is a federal program.
Friedgut communicated with Foley regarding HUD issues
involving properties in Nebraska, Kansas, Iowa, and Colorado.
She communicated with HUD on Foley’s behalf in connec-
tion with St. James Manor and other properties outside of
Nebraska. Her affidavit provides that she communicated with
HUD exclusively through HUD’s regional office in Kansas
City, Kansas, and headquarters in Washington, D.C. Friedgut
has no recollection of communicating with HUD’s local
office in Omaha on behalf of Central States or SJ Apartment.
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Cite as 312 Neb. 909
The Kansas City office was her primary point of contact with
HUD. Friedgut was not involved in Central States and SJ
Apartment’s acquisition of St. James Manor or the award of
tax credits by the Nebraska Investment Finance Authority.
She maintains that her involvement relating to each of Central
States’ properties was specific to issues with HUD. Foley did,
at some point, have Nebraska counsel, and Friedgut’s affidavit
provides that Foley “increasingly relied on his Nebraska coun-
sel” in 2019.
Friedgut and DLA Piper regularly billed Central States and
SJ Apartment for Friedgut’s services by mailing invoices to
Foley in Omaha, and Foley made payments on those invoices.
Foley’s affidavit provides that Friedgut communicated with
him orally and in writing, participating in “dozens” of phone
calls with him while he was in Omaha. Friedgut also partici-
pated in phone calls with other Nebraska-based parties in her
representation of Central States and SJ Apartment, including
the property manager and employees of St. James Manor, the
prior owner of St. James Manor, and other counsel. She did not
interact with Nebraska state officials or tenants of St. James
Manor. Friedgut and DLA Piper never sent Foley an engage-
ment letter or written services agreement, suggested a need for
independent counsel, or otherwise expressly disavowed per-
sonal jurisdiction in Nebraska.
Friedgut was representing Central States and SJ Apartment
when HUD indicated that it would not approve the prior
owner’s assignment of its HAP contract. Central States and
SJ Apartment allege that HUD’s unwillingness to approve the
HAP assignment was “arbitrary and capricious,” “completely
irrational,” and “contrary to HUD policy goals.” Despite that,
Central States and SJ Apartment allege that Friedgut did not
seek reconsideration of the decision, a further meeting, or any
appeal; when Foley asked about appeal, Friedgut responded
she was unaware of any such process even though an appeal
process was available; and no timely appeal was brought.
Central States and SJ Apartment further allege that because
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CENTRAL STATES DEV. V. FRIEDGUT
Cite as 312 Neb. 909
the HAP assignment was not approved, SJ Apartment was
unable to receive any meaningful rental income through HUD
payments or otherwise and filed for bankruptcy protection;
SJ Apartment sued HUD through Nebraska counsel and con-
vinced HUD to retroactively approve the HAP assignment;
and by that time, retroactive approval was futile because SJ
Apartment had already lost St. James Manor to foreclosure in
bankruptcy proceedings.
In December 2020, Central States and SJ Apartment filed a
complaint in the district court for Douglas County, Nebraska,
against Friedgut and DLA Piper alleging legal malpractice.
Friedgut and DLA Piper subsequently moved to dismiss, argu-
ing a lack of personal jurisdiction over themselves in the State
of Nebraska.
The district court held a hearing to address the jurisdictional
issue, and evidence was received. At the hearing, Friedgut and
DLA Piper emphasized that Friedgut did not initiate or solicit
contact with Foley to commence the parties’ relationship.
Friedgut and DLA Piper argued that Friedgut’s representation
of Central States and SJ Apartment exclusively concerned fed-
eral law and HUD. Friedgut and DLA Piper maintained that
the location of St. James Manor was not determinative.
At the hearing, the district court compared the case to
Yeransian v. Willkie Farr 1 in explaining its conclusion that
Friedgut and DLA Piper “[had] not purposefully availed them-
selves to the jurisdiction of Nebraska and would not expect
to be haled into court [in the state].” The district court found
it important that Foley initially reached out to Friedgut in
Chicago to solicit her services.
The district court dismissed Central States and SJ
Apartment’s complaint on September 13, 2021. This appeal
followed. Before the Court of Appeals addressed the appeal,
we moved it to our docket. 2
1
Yeransian v. Willkie Farr, 305 Neb. 693, 942 N.W.2d 226 (2020).
2
See Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2020).
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CENTRAL STATES DEV. V. FRIEDGUT
Cite as 312 Neb. 909
ASSIGNMENT OF ERROR
Central States and SJ Apartment assign, restated, that the
district court erred in finding that the court lacked personal
jurisdiction over Friedgut and DLA Piper.
STANDARD OF REVIEW
[1] When a trial court relies solely on pleadings and sup-
porting affidavits in ruling on a motion to dismiss for want
of personal jurisdiction, the plaintiff need only make a prima
facie showing of jurisdiction to survive the motion. 3 However,
if the court holds an evidentiary hearing on the issue or decides
the matter after trial, then the plaintiff bears the burden of
demonstrating personal jurisdiction by a preponderance of
the evidence. 4
[2,3] An appellate court examines the question of whether
the nonmoving party has established a prima facie case of per-
sonal jurisdiction de novo. 5 In reviewing the grant of a motion
to dismiss, an appellate court must look at the facts in the light
most favorable to the nonmoving party and resolve all factual
conflicts in favor of that party. 6
ANALYSIS
[4,5] Because the district court’s hearing was on the issue
of personal jurisdiction and the evidence received was limited
to affidavits with accompanying exhibits, we review de novo
the legal question of whether a prima facie case of personal
jurisdiction has been established. 7 Personal jurisdiction is the
power of a tribunal to subject and bind a particular entity to
its decisions. 8 The Due Process Clause of the 14th Amendment
to the U.S. Constitution bars a court from exercising personal
3
RFD-TV v. WildOpenWest Finance, 288 Neb. 318, 849 N.W.2d 107 (2014).
4
Id.
5
Yeransian, supra note 1.
6
RFD-TV, supra note 3.
7
See id.
8
See Yeransian, supra note 1.
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Cite as 312 Neb. 909
jurisdiction over an out-of-state defendant, served with process
outside the state, unless that defendant has sufficient ties to the
forum state. 9 Thus, before a court can exercise personal juris-
diction over a nonresident defendant, the court must determine,
first, whether the state’s long-arm statute is satisfied and, sec-
ond, whether minimum contacts exist between the defendant
and the forum state for the court to exercise personal jurisdic-
tion over the defendant without offending due process. 10 When
contested, the burden of proving a forum court has personal
jurisdiction falls on the plaintiffs. 11
[6,7] Nebraska’s long-arm statute extends its courts’ juris-
diction over a person who falls into one of the categories
enumerated under the statute or who has “any other contact
with or maintains any other relation to this state to afford a
basis for the exercise of personal jurisdiction consistent with
the Constitution of the United States.” 12 It was the intention of
the Legislature to provide for the broadest allowable jurisdic-
tion over nonresidents under Nebraska’s long-arm statute. 13
When, like here, a state construes its long-arm statute to
confer jurisdiction to the fullest extent constitutionally permit-
ted, the inquiry collapses into the single question of whether
jurisdiction comports with due process. 14 Therefore, the issue
is whether Friedgut and DLA Piper had sufficient minimum
contacts with Nebraska so that the exercise of personal juris-
diction would not offend traditional notions of fair play and
substantial justice. 15
9
Hand Cut Steaks Acquisitions v. Lone Star Steakhouse, 298 Neb. 705, 905
N.W.2d 644 (2018).
10
Yeransian, supra note 1.
11
See Nimmer v. Giga Entertainment Media, 298 Neb. 630, 905 N.W.2d 523
(2018).
12
See Neb. Rev. Stat. § 25-536 (Reissue 2016).
13
Yeransian, supra note 1.
14
Id.
15
See id.
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Cite as 312 Neb. 909
Minimum Contacts
[8-11] To constitute sufficient minimum contacts, a defend
ant’s conduct and connection with the forum state must be
such that he or she should reasonably anticipate being haled
into court there. 16 In other words, a Nebraska court’s ability
to impose liability should be predictable to the parties before
the court based on their own actions. 17 A court exercises two
types of personal jurisdiction depending upon the facts and
circumstances of the case: general personal jurisdiction or spe-
cific personal jurisdiction. 18 General personal jurisdiction arises
where a defendant’s affiliations with a state are so continuous
and systematic as to render the defendant essentially at home
in the forum state. 19 Specific personal jurisdiction, by contrast,
requires that a claim arise out of or relate to the defendant’s con-
tacts with the forum. 20 Friedgut and DLA Piper do not appear to
have “continuous and systematic” connections with Nebraska;
nor are they “essentially at home” in the state. Rather, Central
States and SJ Apartment maintain that the district court had spe-
cific personal jurisdiction over Friedgut and DLA Piper.
Specific Personal Jurisdiction
[12,13] Where a defendant’s contacts with the forum state
are insufficient to exercise general personal jurisdiction, spe-
cific personal jurisdiction is available if the claim arises out
of or sufficiently relates to the defendant’s contacts with
the forum in a way that creates a substantial connection
between the defendant’s connections to the forum state and the
16
Id.
17
See, e.g., World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100
S. Ct. 559, 62 L. Ed. 2d 490 (1980) (“[t]he Due Process Clause . . . gives a
degree of predictability to the legal system that allows potential defendants
to structure their primary conduct with some minimum assurance as to
where that conduct will and will not render them liable to suit”).
18
Yeransian, supra note 1.
19
Id.
20
Id.
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Cite as 312 Neb. 909
operative facts of the litigation. 21 Naturally, then, specific per-
sonal jurisdiction is confined to adjudication of issues deriving
from, or connected with, the very controversy that establishes
jurisdiction. 22 Purposeful availment is essential to any finding
of personal jurisdiction. 23 Accordingly, here, we must consider
the quality and type of Friedgut’s and DLA Piper’s activities
and determine whether their actions create substantial connec-
tions with Nebraska, resulting in their purposeful availment of
Nebraska’s benefits, protections, and laws.
[14] Central States and SJ Apartment correctly argue that
physical presence in the forum state is not always necessary
to establish personal jurisdiction. In Williams v. Gould, Inc., 24
we explained: “Despite lack of physical presence in the state
where a contract is to be performed, a nonresident defendant,
who purposefully directs activities toward a forum state’s resi-
dents, through such contract, may be constitutionally subjected
to suit in the state where the contract is to be performed.”
Pointing to Williams, Central States and SJ Apartment con-
tend that Friedgut and DLA Piper purposefully availed them-
selves of the privileges of conducting activity in Nebraska by
entering into an attorney-client relationship with “Nebraska
entities” for which they billed their services. 25 However, the
existence of a contract with a party in a forum state does not,
in and of itself, provide the necessary contacts for personal
jurisdiction. 26
In Williams, an out-of-state physician contacted a lead refin-
ery and proposed terms for a contract engaging his serv
ices as a long-term consultant regarding lead poisoning. 27 We
21
See id.
22
Id.
23
Id.
24
Williams v. Gould, Inc., 232 Neb. 862, 879, 443 N.W.2d 577, 588 (1989).
25
Brief for appellant at 11.
26
Yeransian, supra note 1.
27
See Williams, supra note 24.
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c oncluded that under the facts and circumstances, a Nebraska
court’s exercise of specific personal jurisdiction over the physi-
cian was appropriate. 28 In examining similar cases from other
jurisdictions, we found that it was the defendant’s purposeful
act of soliciting patients from the forum state which provided
the necessary foreseeability of being haled into court in the
forum state and allowed personal jurisdiction to attach. 29 We
emphasized, however, that the residence and activities of a
physician’s patient cannot, unilaterally, supply the minimum
contacts necessary for due process. 30
Here, the parties agree that Foley reached out to Friedgut
at her Chicago office after a third party recommended her.
Friedgut represented Nebraska entities, but she did not solicit
Nebraska residents or entities as clients. Neither, in this case,
did DLA Piper. The district court noted this point when distin-
guishing the case from Williams.
[In] determining whether our courts have jurisdiction over
a plaintiff’s current or former out-of-state attorney, and inso-
far as it informs our “purposeful availment” analysis, we may
consider which party’s actions effectively initiated an attorney-
client relationship. 31 Pointedly, a Nebraska-based client will
not provide a sufficient basis for specific personal jurisdic-
tion over a nonresident attorney absent the solicitation of
Nebraska-based clients or something else linking the attorney
to the state. 32
Outside of Nebraska, “case law overflows on the point
that providing out-of-state legal representation is not enough
28
See id.
29
See id.
30
See id.
31
Cf. Williams, supra note 24, 232 Neb. at 881, 443 N.W.2d at 589 (“when
a health care provider, such as a physician or hospital, purposefully directs
activities toward a resident of the forum state, the provider is subject
to the personal jurisdiction of courts in the state where the health care
recipient resides”).
32
See Yeransian, supra note 1.
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Cite as 312 Neb. 909
to subject an out-of-state lawyer or law firm to the personal
jurisdiction of the state in which a client resides.” 33 Other
jurisdictions generally support the proposition that a non-
resident attorney providing expertise specific to federal law or
another state’s law is not subject to a state’s jurisdiction solely
based on a client’s or third party’s residency and activities in
the forum state. 34 As noted by Friedgut and DLA Piper, the
plaintiff cannot be the only link between the defendant and
the forum. 35 Rather, it is the defendant’s conduct that must
form the necessary connection with the forum State that is the
basis for its jurisdiction over the defendant. 36
In a case factually similar to the matter before us, the
Indiana Supreme Court rejected an argument that specific per-
sonal jurisdiction should attach. 37 In Boyer v. Smith, employers
brought claims, including malicious prosecution and abuse of
process, against a Kentucky-based attorney. 38 The employers’
33
Cape v. von Maur, 932 F. Supp. 124, 128 (D. Md. 1996) (citing Sher v.
Johnson, 911 F.2d 1357 (9th Cir. 1990); Austad Co. v. Pennie & Edmonds,
823 F.2d 223 (8th Cir. 1987); Kowalski v. Doherty, Wallace, Pillsbury &
Murphy, 787 F.2d 7 (1st Cir. 1986); and Mayes v. Leipziger, 674 F.2d 178
(2d Cir. 1982)).
34
See, e.g., Companion Property and Cas. Ins. Co. v. Palermo, 723 F.3d 557
(5th Cir. 2013); Boyer v. Smith, 42 N.E.3d 505 (Ind. 2015); Fulbright &
Jaworski v. Eighth Jud. Dist., 131 Nev. 30, 342 P.3d 997 (2015); Cerberus
Partners v. Gadsby & Hannah, LLP, 836 A.2d 1113 (R.I. 2003). See, also,
Sawtelle v. Farrell, 70 F.3d 1381 (1st Cir. 1995); Porter v. Berall, 142 F.
Supp. 2d 1145 (W.D. Mo. 2001), affirmed 293 F.3d 1073 (8th Cir. 2002);
Ex parte Dill, Dill, Carr, Stonbraker, 866 So. 2d 519 (Ala. 2003).
35
See Walden v. Fiore, 571 U.S. 277, 134 S. Ct. 1115, 188 L. Ed. 2d 12
(2014).
36
See id. See, also, Helicopteros Nacionales de Colombia v. Hall, 466
U.S. 408, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984) (unilateral activity
of another person not appropriate consideration in determining whether
defendant has sufficient contacts with forum to justify assertion of
jurisdiction).
37
See Boyer, supra note 34.
38
See id.
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suit was filed in Indiana and related to the attorney’s repre-
sentation of a former employee in a federal employment dis-
crimination lawsuit. 39 In the underlying matter, the attorney
had requested and received a notice of right to sue from the
Indianapolis, Indiana, office of the U.S. Equal Employment
Opportunity Commission (EEOC), a federal agency, after her
client’s pro se claim was transferred from the Ohio EEOC
office. 40 The attorney then filed the lawsuit in a Kentucky
federal district court. 41 The employers argued that the attorney
had subjected herself to Indiana jurisdiction by communicating
with the Indiana EEOC, corresponding with and sending docu-
ments to the employers’ Indiana attorney, and representing her
client at a deposition in Indiana. 42 But the Indiana Supreme
Court disagreed, finding the attorney’s contacts with Indiana
far too minimal to warrant specific personal jurisdiction. 43 In
so holding, the Indiana Supreme Court noted that the attor-
ney had never practiced law in Indiana, had never sought or
obtained a license to practice law in Indiana, and was not solic-
iting business in Indiana. 44
The Eighth Circuit Court of Appeals conducted a com-
parable analysis in Austad Co. v. Pennie & Edmonds. 45 In
Austad Co., a South Dakota business sued a New York-based
law firm, alleging legal malpractice and breach of fiduciary
duty. 46 The claim was based on the firm’s representation of
39
See id.
40
See id.
41
See id. See, also, Boyer v. Smith, 24 N.E.3d 435 (Ind. App. 2014), vacated
37 N.E.3d 960 (Ind. 2015), and affirmed in part and in part vacated 42
N.E.3d 505 (Ind. 2015).
42
Id.
43
Id.
44
Id.
45
Austad Co., supra note 33.
46
Id.
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the business in patent litigation in Maryland. 47 The firm’s
contacts with South Dakota included numerous phone calls
into the state, monthly bills mailed into the state, checks paid
by a South Dakota bank, and a 3-day visit to South Dakota by
agents of the firm to inspect documents. 48 The Eighth Circuit
found these contacts insufficient to establish that the firm
purposefully availed itself of the benefits of South Dakota
law. 49 In affirming the district court’s dismissal of the claim,
the Eighth Circuit noted, among other factors, that the firm
did not maintain an office, advertise, or solicit business in
South Dakota. 50
Central States and SJ Apartment emphasize that St. James
Manor is in Nebraska and that “the damage to the Nebraska
clients occurred in Nebraska, when they lost their Nebraska
development project to foreclosure in Nebraska.” 51 This same
“effects of misconduct” approach has been rejected by other
courts. 52 Further, as the U.S. Supreme Court held in Walden 53:
[A]n injury is jurisdictionally relevant only insofar as it
shows that the defendant has formed a contact with the
forum State. The proper question is not where the plain-
tiff experienced a particular injury or effect but whether
the defendant’s conduct connects him to the forum in a
meaningful way.
47
Id.
48
Id.
49
Id.
50
Id.
51
Brief for appellant at 11.
52
See, e.g., Sawtelle v. Farrell, 70 F.3d 1381 (1st Cir. 1995) (legal
malpractice); Federal Deposit Ins. Corp. v. Malmo, 939 F.2d 535 (8th
Cir. 1991) (legal malpractice); Wright v. Yackley, 459 F.2d 287 (9th Cir.
1972) (medical malpractice); Poole v. Sasson, 122 F. Supp. 2d 556 (E.D.
Pa. 2000) (accountant malpractice); State ex rel. Sperandio v. Clymer, 581
S.W.2d 377 (Mo. 1979) (medical malpractice).
53
Walden, supra note 35, 571 U.S. at 290.
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We are not persuaded that the location of St. James Manor
provided Friedgut and DLA Piper with a meaningful connec-
tion to Nebraska when the legal benefit their clients sought was
a contract with a federal agency and through a federal program,
under which St. James Manor could just as well have been in
another state. We are also not persuaded that the Nebraska-
specific injuries alleged by Central States and SJ Apartment,
including the loss of St. James Manor, provided Friedgut and
DLA Piper a meaningful connection to Nebraska.
Central States and SJ Apartment have not met their burden
of demonstrating that a Nebraska court can constitutionally
exercise specific personal jurisdiction over Friedgut and DLA
Piper. The facts show that Foley reached out to Friedgut at
her Chicago office, hoping she could help Central States and
SJ Apartment navigate a dispute with a federal agency and
facilitate approval of a contract through a federal program.
Further, Friedgut performed all of her work from Illinois, she
was never licensed to practice law in Nebraska, she never trav-
eled to Nebraska for the case, she never filed suit in Nebraska,
and she never provided in-court representation in Nebraska.
Additionally, neither Friedgut nor DLA Piper had offices in
Nebraska or ever advertised in or solicited any business from
Nebraska. This informs a finding that Friedgut and DLA Piper
did not purposefully avail themselves of the privilege of trans-
acting business in Nebraska. Further, it appears that Friedgut’s
representation was specific to HUD and federal law; as such,
we are unconvinced that she and DLA Piper reasonably antici-
pated being haled into a Nebraska court in connection with
this representation.
Central States and SJ Apartment further argue that Friedgut
and DLA Piper should have anticipated being haled into a
Nebraska court because, as a sophisticated attorney and an
international law firm, they could easily have provided Central
States and SJ Apartment with an engagement letter expressly
disavowing Nebraska jurisdiction. We are not persuaded that
the sophistication of legal professionals contorts the applicable
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analysis in such a way, and we are unwilling to impose the
high standard suggested.
Finally, Foley’s affidavit maintains that Friedgut’s represen-
tation of Central States and SJ Apartment “went beyond mere
HUD matters.” Without more, however, conclusory statements
such as these provide an insufficient basis for an exercise of
specific personal jurisdiction. Due process requires more than
the attenuated contacts before us. 54
CONCLUSION
The district court did not err in dismissing Central States
and SJ Apartment’s complaint for lack of personal jurisdiction.
Affirmed.
Miller-Lerman, J., participating on briefs.
54
See Walden, supra note 35. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487112/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
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LANCASTER CTY. BD. OF EQUAL. V. MOSER
Cite as 312 Neb. 757
Lancaster County Board of Equalization,
appellant, v. Brad Moser and
Mary Moser, appellees.
___ N.W.2d ___
Filed October 28, 2022. No. S-21-774.
1. Taxation: Judgments: Appeal and Error. Appellate courts review
decisions rendered by the Tax Equalization and Review Commission for
errors appearing on the record.
2. Judgments: Appeal and Error. When reviewing a judgment for errors
appearing on the record, an appellate court’s inquiry is whether the deci-
sion conforms to the law, is supported by competent evidence, and is
neither arbitrary, capricious, nor unreasonable.
3. Administrative Law: Judgments: Words and Phrases. Agency action
is arbitrary, capricious, and unreasonable if it is taken in disregard of the
facts or circumstances of the case, without some basis which would lead
a reasonable and honest person to the same conclusion.
4. Taxation: Valuation: Presumptions: Evidence. A presumption exists
that a board of equalization has faithfully performed its official duties in
making an assessment and has acted upon sufficient competent evidence
to justify its action. That presumption remains until there is competent
evidence to the contrary presented.
5. ____: ____: ____: ____. If the challenging party overcomes the pre-
sumption of validity by competent evidence, the reasonableness of the
valuation fixed by the board of equalization becomes one of fact based
upon all of the evidence presented.
6. Taxation: Valuation: Proof: Appeal and Error. The burden of show-
ing that a valuation is unreasonable or arbitrary rests upon the taxpayer
on appeal from the action of the board of equalization.
7. Taxation: Valuation: Proof. The burden of persuasion imposed on
a complaining taxpayer is not met by showing a mere difference of
opinion unless it is established by clear and convincing evidence that
the valuation placed upon the property, when compared with valuations
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placed on other similar property, is grossly excessive and is the result of
a systematic exercise of intentional will or failure of plain duty, and not
mere errors of judgment.
8. Taxation: Valuation: Words and Phrases. Equalization is the process
of ensuring that all taxable property is placed on the assessment rolls
at a uniform percentage of its actual value. The purpose of equalization
of assessments is to bring the assessment of different parts of a taxing
district to the same relative standard, so that no one of the parts may be
compelled to pay a disproportionate part of the tax.
9. Taxation. While absolute uniformity of approach for taxation may not
be possible, there must be a reasonable attempt at uniformity.
10. Taxation: Valuation: Constitutional Law. The object of the uniformity
clause is accomplished if all of the property within the taxing jurisdic-
tion is assessed and taxed at a uniform standard of value.
11. Taxation: Valuation: Public Policy. No difference in the method of
determining the valuation or rate of tax to be imposed can be allowed
unless separate classifications rest on some reason of public policy or
some substantial difference of situation or circumstance that would natu-
rally suggest justice or expediency of diverse legislation with respect to
the objects classified.
12. Taxation: Valuation. Generally, taxpayers are entitled to have their
property assessed uniformly and proportionately, even though the result
may be that it is assessed at less than the actual value.
13. Taxation: Valuation: Proof. The burden of proof is on the taxpayer to
establish that the value of the property has not been fairly and propor-
tionately equalized with all other properties, resulting in a discrimina-
tory, unjust, and unfair assessment.
14. Taxation: Valuation: Constitutional Law: Statutes. The county board
of equalization has a statutory duty to fairly and impartially equalize
the values of all items of real property in the county so that all real
property is assessed uniformly and proportionately. This statutory duty
is informed, in turn, by the constitutional principles of uniformity and
proportionality set out in Neb. Const. art. VIII, § 1.
15. Taxation: Valuation: Constitutional Law. In carrying out its duty to
correct and equalize individual discrepancies and inequalities in assess-
ments within the county, a county board of equalization must give effect
to the constitutional requirement that taxes be levied uniformly and
proportionately upon all taxable property in the county.
16. ____: ____: ____. The rule of uniformity applies to both the rate of
taxation and the valuation of property.
17. Taxation: Valuation: Constitutional Law: Intent. When property
owners contend their property has been disproportionately valued as
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compared to other comparable property, such contention must be sus-
tained by evidence that the valuation is arbitrary or capricious, or so
wholly out of line with actual values as to give rise to an inference
that the assessor and county board of equalization have not properly
discharged their duties. Mere errors of judgment do not sustain a claim
of discrimination. There must be something more, something which in
effect amounts to an intentional violation of the essential principle of
practical uniformity.
Appeal from the Tax Equalization and Review Commission.
Reversed and remanded with directions.
Patrick Condon, Lancaster County Attorney, and Daniel J.
Zieg for appellant.
David C. Solheim, of Solheim Law Firm, for appellees.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Stacy, J.
In 2018, 2019, and 2020, Mary Moser and Brad Moser
protested the valuation of their agricultural land, and the
Lancaster County Board of Equalization (County Board)
affirmed the valuations. The Mosers appealed to the Tax
Equalization and Review Commission (TERC), and after a
consolidated evidentiary hearing, TERC affirmed the County
Board’s decision regarding the 2020 tax year, but reversed its
decisions for the 2018 and 2019 tax years. For both 2018 and
2019, TERC reduced the value of the Mosers’ irrigated acres
to equalize those acres with a nearby parcel of agricultural
property. The County Board timely petitioned for review of
TERC’s decision, 1 and we moved the case to our docket. We
now reverse the decision of TERC and remand the matter with
directions to affirm the decision of the County Board.
1
See Neb. Rev. Stat. § 77-5019(2)(a)(i) (Reissue 2018).
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I. BACKGROUND
The facts in this matter are largely undisputed. The Mosers
own approximately 116 acres of agricultural land located in
Lancaster County. The parcel number of the subject property
is 02-36-400-001-000, and it is referred to by the parties as
“Mary’s Farm.”
At all relevant times, Mary’s Farm was classified as unim-
proved agricultural land, and the acres were inventoried into
different subclasses. 2 During the 2018, 2019, and 2020 tax
years, Mary’s Farm had a center pivot irrigator, so some of the
acres were subclassified as irrigated cropland. Other acres were
subclassified as dryland cropland, grassland, and wasteland.
Under the assessment methodology and schedule of values
used by Lancaster County during the relevant tax years, the
actual value of an acre of irrigated cropland was higher than
the actual value of an acre of dryland cropland, grassland, and
wasteland, but all subclasses were assessed at the same per-
centage of actual value. 3
1. 2018 Protest
For tax year 2018, the Lancaster County assessor determined
the taxable value of Mary’s Farm was $612,500. This valuation
was based in part on property records subclassifying 88.09 of
the acres as irrigated cropland. In protesting the 2018 valu-
ation, the Mosers focused on the acres of irrigated cropland,
asserting that “[c]omparable ground 1 mile west is valued
much lower than this property.” As authorized by Neb. Rev.
Stat. § 77-1502.01 (Reissue 2018), the County Board used a
referee to hear the protest.
2
See, generally, Neb. Rev. Stat. § 77-1363 (Cum. Supp. 2020) (requiring
agricultural and horticultural land to be divided into classes and subclasses
for purposes of valuation, including, but not limited to, irrigated cropland,
dryland cropland, grassland, wasteland, nursery, feedlot, or orchard); Betty
L. Green Living Trust v. Morrill Cty. Bd. of Equal., 299 Neb. 933, 911
N.W.2d 551 (2018).
3
See, generally, Neb. Rev. Stat. § 77-201(2) (Reissue 2018) (agricultural
land “shall be valued at seventy-five percent of its actual value”).
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In support of their protest, the Mosers submitted the 2018
property record for a neighboring parcel of agricultural land,
referred to by the parties as the “Morrison property.” This
evidence showed the Morrison property had been classified
as improved agricultural land, with some acres subclassified
as dryland cropland and other acres subclassified as grassland
and wasteland. The Morrison property record did not show
any acres of irrigated cropland, but the Mosers claimed that
the Morrison property had two center pivot irrigators. In sup-
port, they offered a “Google Earth” image which purportedly
showed center pivot irrigators, but no crop circles, in a field
represented to be the Morrison property. Based on that evi-
dence, the Mosers argued that Mary’s Farm and the Morrison
property were “comparable in soil type and both have irrigated
and dryland acres.” They argued that because the irrigated
acres on the Morrison property had been subclassified and val-
ued as dryland, the irrigated acres on Mary’s Farm should be
revalued as dryland, too.
The referee rejected the Mosers’ argument, reasoning that
the evidence adduced did not support a reduction in the valua-
tion of the irrigated acres of Mary’s Farm. The County Board
agreed with the referee. However, pursuant to an unrelated
2017 settlement between the Mosers and TERC, the County
Board reduced the 2018 assessed value of Mary’s Farm to
$598,900.
2. 2019 Protest
A similar protest process occurred in 2019. In that year, the
county assessor determined the taxable value of Mary’s Farm
was $570,300, based in part on 90.69 acres which were sub-
classified and valued as irrigated cropland. The Mosers filed
a protest, again asking that their irrigated cropland be valued
as dryland. In support, they provided the 2019 property record
file for the Morrison property, which again showed that none
of the acres on the Morrison property were subclassified or
valued as irrigated cropland. The Mosers also provided color
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photographs of an operating center pivot in a cropfield they
represented was part of the Morrison property. And, as they
had done in 2018, the Mosers asked that the irrigated cropland
on Mary’s Farm be revalued as dryland cropland.
After reviewing the evidence provided by the Mosers, the
referee found that the Morrison property was “irrigated by
2 pivots[,] but taxed as dryland,” and recommended that the
assessor’s data on the Morrison property be corrected. However,
the referee concluded that the error in subclassifying and valu-
ing the Morrison property did “not support a valuation error
within [the] current assessment” of Mary’s Farm. The County
Board agreed with the referee and affirmed the assessor’s 2019
valuation of Mary’s Farm.
3. 2020 Protest
For the 2020 tax year, the assessor determined the taxable
value of Mary’s Farm was $551,300. The Mosers protested this
valuation, but this time they did not challenge the valuation of
the irrigated acres. Instead, they argued that their wasteland
acres were valued higher than wasteland acres in surround-
ing counties. In support, the Mosers offered information on
the standard land values for the different subclasses and soil
types in Saline County. The referee concluded that the infor-
mation provided by the Mosers did not support a valuation
error with the current assessment of Mary’s Farm. The County
Board agreed with the referee and affirmed the assessor’s
2020 valuation.
4. TERC Appeal
The Mosers appealed the 2018, 2019, and 2020 valuations
of Mary’s Farm to TERC, and a consolidated evidentiary hear-
ing was held on April 5, 2021. Mary testified on behalf of the
Mosers. She explained that in 2018 and 2019, they protested
the valuation of the irrigated acres on Mary’s Farm because
the Morrison property was located nearby and was “valued so
much lower than ours.” In support, Mary offered the evidence,
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described above, that the Mosers had presented to the County
Board in 2018 and 2019 regarding pivot irrigators on the
Morrison property. Mary testified that the Morrison property
records for 2018 and 2019 did not show that any portion of
the Morrison property was irrigated, and she asked that the
property record for Mary’s Farm be changed to “also reflect
non-irrigated land,” because that would be “equal.”
Derrick Niederklein, the chief field deputy for the Lancaster
County assessor’s office, testified on behalf of the County
Board. Niederklein testified that in 2018 and 2019 the asses-
sor’s office did not know the Morrison property had any irri-
gated acres. He explained that usually, a property owner reports
adding a pivot irrigator, 4 and the assessor’s office also uses
aerial and oblique imagery to identify pivots. Niederklein testi-
fied that “leaving the pivot off the Morrisons’ property [was]
not an intentional act by the assessor’s office.” He admitted
that it was “not uncommon” for the assessor’s office to learn
that something was incorrect in its property records because
conditions can change from year to year, but he testified that
generally, the property records were “accurate.” Niederklein
also testified that beginning in the 2020 tax year, the irrigated
acres on the Morrison property were correctly subclassified
and valued as irrigated cropland.
In an order entered on August 24, 2021, TERC made a
finding that the irrigated acres on the Morrison property were
“comparable to irrigated acres” on Mary’s Farm. TERC further
found that the documents the Mosers had submitted to the
County Board during their 2018 and 2019 protests provided
“compelling evidence” that the Morrison property had pivot
irrigation, even though the county’s property records for 2018
and 2019 did not show that any portion of the Morrison prop-
erty was irrigated. TERC recited the rule that
4
See Neb. Rev. Stat. § 77-1318.01(1) (Reissue 2018) (requiring owner of
real property to report improvement valued at $2,500 or more to assessor).
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[i]f taxable values are to be equalized it is necessary for
a Taxpayer to establish by clear and convincing evidence
that the valuation placed on the property[,] when com-
pared with valuations placed on other similar properties[,]
is grossly excessive and is the result of systematic exer-
cise of intentional will or failure of plain legal duty, and
not mere errors of judgment. 5
TERC then reasoned:
In the context of an appeal to this Commission, the
systematic exercise of intentional will or failure of a plain
duty is that of the County Board, not the County Assessor.
During the protest process, the [Mosers] presented the
County Board with clear evidence that the Morrison Farm
included irrigated land that was not being assessed as
irrigated land. At that point, the County Board had a plain
legal duty to equalize the assessments, even though the
result may have been that [Mary’s Farm] was assessed at
less than the actual value.
Based on this reasoning, TERC found there was clear and
convincing evidence that the County Board’s decisions in 2018
and 2019 were arbitrary or unreasonable. TERC ordered that
the irrigated acres on Mary’s Farm must be revalued as dryland
for both the 2018 and 2019 tax years. Using the county asses-
sor’s scheduled value for dryland cropland, TERC reduced the
total assessed value of Mary’s Farm by $125,715 for 2018 and
by $119,605 for 2019.
TERC concluded that no equalization was necessary for
the 2020 tax year “[b]ecause the irrigated parcels on the
Morrison farm were assessed as irrigated land” for that tax
year. Additionally, TERC rejected the Mosers’ contention that
they were entitled to have any subclass of agricultural land
in Lancaster County equalized with comparably subclassified
property in Saline County, reasoning that the scheduled values
5
See Newman v. County of Dawson, 167 Neb. 666, 94 N.W.2d 47 (1959).
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in another taxing district did not constitute sufficient evidence
that the assessment of the Mosers’ property was incorrect, arbi-
trary, or unreasonable.
5. Petition for Judicial Review
The County Board filed this timely petition for judicial
review in the Nebraska Court of Appeals. 6 The petition chal-
lenges only TERC’s decision to reduce the valuation of Mary’s
Farm for the 2018 and 2019 tax years. We moved the matter to
our docket on our own motion.
II. ASSIGNMENTS OF ERROR
The County Board assigns, restated, that TERC erred in
reducing the valuation of Mary’s Farm because there was not
clear and convincing evidence that the value, when compared
to similar property, was grossly excessive and was the result of
a systematic exercise of intentional will or failure of plain legal
duty and not mere errors of judgment.
III. STANDARD OF REVIEW
[1-3] Appellate courts review decisions rendered by TERC
for errors appearing on the record. 7 When reviewing a judg-
ment for errors appearing on the record, an appellate court’s
inquiry is whether the decision conforms to the law, is sup-
ported by competent evidence, and is neither arbitrary, capri-
cious, nor unreasonable. 8 Agency action is arbitrary, capricious,
and unreasonable if it is taken in disregard of the facts or cir-
cumstances of the case, without some basis which would lead a
reasonable and honest person to the same conclusion. 9
6
See § 77-5019.
7
Wheatland Indus. v. Perkins Cty. Bd. of Equal., 304 Neb. 638, 935 N.W.2d
764 (2019).
8
Id.
9
Id.
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IV. ANALYSIS
The ultimate question presented in this appeal is whether
TERC’s decision to revalue the irrigated cropland on Mary’s
Farm as dryland cropland conformed to the law, was supported
by competent evidence, and was neither arbitrary, capricious,
nor unreasonable. 10 Before addressing that question, we first
review the taxpayer’s burden of proof in an appeal before
TERC. We then review the foundational principles of taxing
agricultural land in Nebraska, as well as the constitutional
requirements of uniformity and proportionality that govern our
analysis.
1. Presumption of Validity and Burden of Proof
When reviewing appeals from decisions of county boards of
equalization, TERC must follow the standard set out in Neb.
Rev. Stat. § 77-5016(9) (Reissue 2018), which provides:
In all appeals, excepting those arising [from a county tax
levy], if the appellant presents no evidence to show that
the order, decision, determination, or action appealed
from is incorrect, [TERC] shall deny the appeal. If the
appellant presents any evidence to show that the order,
decision, determination, or action appealed from is incor-
rect, such order, decision, determination, or action shall
be affirmed unless evidence is adduced establishing that
the order, decision, determination, or action was unrea-
sonable or arbitrary.
[4,5] We have held that the language of § 77-5016(9) creates
a presumption in an appeal to TERC that a board of equaliza-
tion has faithfully performed its official duties in making an
assessment and has acted upon sufficient competent evidence
to justify its action. 11 That presumption remains until there is
10
See id.
11
E.g., Wheatland Indus., supra note 7; Betty L. Green Living Trust, supra
note 2; JQH La Vista Conf. Ctr. v. Sarpy Cty. Bd. of Equal., 285 Neb. 120,
825 N.W.2d 447 (2013); Brenner v. Banner Cty. Bd. of Equal., 276 Neb.
275, 753 N.W.2d 802 (2008); Ideal Basic Indus. v. Nuckolls Cty. Bd. of
Equal., 231 Neb. 653, 437 N.W.2d 501 (1989).
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competent evidence to the contrary presented. 12 If the chal-
lenging party overcomes the presumption of validity by com-
petent evidence, the reasonableness of the valuation fixed by
the board of equalization becomes one of fact based upon all
of the evidence presented. 13
[6,7] The burden of showing that a valuation is unreason-
able or arbitrary rests upon the taxpayer on appeal from the
action of the board. 14 And the burden of persuasion imposed on
a complaining taxpayer is not met by showing a mere differ-
ence of opinion unless it is established by clear and convincing
evidence that the valuation placed upon the property, when
compared with valuations placed on other similar property, is
grossly excessive and is the result of a systematic exercise of
intentional will or failure of plain duty, and not mere errors
of judgment. 15
2. Taxation of Agricultural Land
Mary’s Farm and the Morrison property are both classified
as agricultural land. 16 According to § 77-1363, agricultural land
is to be inventoried and valued by class and subclass:
Agricultural land and horticultural land shall be
divided into classes and subclasses of real property under
section 77-103.01, including, but not limited to, irri-
gated cropland, dryland cropland, grassland, wasteland,
nurseries, feedlots, and orchards, so that the categories
reflect uses appropriate for the valuation of such land
according to law. Classes shall be inventoried by sub-
classes of real property based on soil classification stan-
dards developed by the Natural Resources Conservation
Service of the United States Department of Agriculture as
12
Id.
13
See Wheatland Indus., supra note 7. See, also, Betty L. Green Living Trust,
supra note 2; JQH La Vista Conf. Ctr., supra note 11.
14
See id.
15
Id.
16
See § 77-201 and Neb. Rev. Stat. § 77-1359 (Reissue 2018).
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converted into land capability groups by the Property Tax
Administrator. Land capability groups shall be Natural
Resources Conservation Service specific to the applied
use and not all based on a dryland farming criterion.
County assessors shall utilize soil surveys from the
Natural Resources Conservation Service of the United
States Department of Agriculture as directed by the
Property Tax Administrator. Nothing in this section shall
be construed to limit the classes and subclasses of real
property that may be used by county assessors or the Tax
Equalization and Review Commission to achieve more
uniform and proportionate valuations.
And according to Neb. Rev. Stat. § 77-103.01 (Reissue 2018):
Class or subclass of real property means a group of
properties that share one or more characteristics typically
common to all the properties in the class or subclass, but
are not typically found in the properties outside the class
or subclass. Class or subclass includes, but is not limited
to, the classifications of agricultural land or horticultural
land listed in section 77-1363 . . . .
It is undisputed that during the 2018 and 2019 tax years, the
irrigated acres on Mary’s Farm were correctly subclassified as
irrigated cropland, while the irrigated acres on the Morrison
property were erroneously subclassified as dryland cropland.
It is also undisputed that the erroneous subclassification of
the Morrison property resulted in a lower assessed value than
if the acres had been correctly subclassified as irrigated crop-
land. We find no prior cases in our equalization jurisprudence
presenting a similar fact pattern. To analyze the duty of the
County Board under these unique facts, we rely on settled
principles of uniform and proportionate taxation.
3. Uniform and Proportionate Taxation
Uniform and proportionate taxation, sometimes referred to
as “equalization,” is a constitutional requirement in Nebraska.
Article VIII, § 1(1), of the Nebraska Constitution provides
in relevant part that “[t]axes shall be levied by valuation
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uniformly and proportionately upon all real property . . . except
as otherwise provided in or permitted by this Constitution.”
And article VIII, § 1(4), governs how agricultural and horti-
cultural land is to be uniformly and proportionately valued and
taxed. It provides:
[T]he Legislature may provide that agricultural land and
horticultural land, as defined by the Legislature, shall
constitute a separate and distinct class of property for pur-
poses of taxation and may provide for a different method
of taxing agricultural land and horticultural land which
results in values that are not uniform and proportion-
ate with all other real property and franchises but which
results in values that are uniform and proportionate upon
all property within the class of agricultural and horticul-
tural land. 17
[8] We have explained the process and purpose of equaliza-
tion as follows:
“Equalization is the process of ensuring that all taxable
property is placed on the assessment rolls at a uniform
percentage of its actual value. The purpose of equaliza-
tion of assessments is to bring the assessment of different
parts of a taxing district to the same relative standard, so
that no one of the parts may be compelled to pay a dispro-
portionate part of the tax.” 18
[9-12] We have also recognized that while “absolute uni-
formity of approach for taxation may not be possible, there
must be a reasonable attempt at uniformity.” 19 The object of
the uniformity clause is accomplished “‘if all of the prop-
erty within the taxing jurisdiction is assessed and taxed at a
uniform standard of value.’” 20 No difference in the method
17
Neb. Const. art. VIII, § 1(4) (emphasis supplied).
18
Krings v. Garfield Cty. Bd. of Equal., 286 Neb. 352, 357, 835 N.W.2d 750,
754 (2013), quoting Brenner, supra note 11.
19
Constructors, Inc. v. Cass Cty. Bd. of Equal., 258 Neb. 866, 873, 606
N.W.2d 786, 792 (2000).
20
Id. at 873, 606 N.W.2d at 792, quoting County of Gage v. State Board of
Equalization & Assessment, 185 Neb. 749, 178 N.W.2d 759 (1970).
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of determining the valuation or rate of tax to be imposed
can be allowed unless “separate classifications rest on some
reason of public policy or some substantial difference of
situation or circumstance that would naturally suggest jus-
tice or expediency of diverse legislation with respect to the
objects classified.” 21 Generally, taxpayers are entitled to have
their property assessed uniformly and proportionately, even
though the result may be that it is assessed at less than the
actual value. 22
In this case, we consider an issue of first impression in
Nebraska: whether constitutional principles of uniform and
proportionate taxation require that an isolated error in the
subclassification and undervaluation of one taxpayer’s prop-
erty must be replicated through the equalization process. As
we explain, we find no such requirement in the Nebraska
Constitution, Nebraska statutes, or Nebraska case law.
4. Facts and Law Do Not Support
TERC’s Decision
(a) Presumption of Validity
In any appeal before TERC, the threshold determination
should be whether the taxpayer presented competent evidence
to rebut the presumption of validity in favor of the board
of equalization. 23 Here, TERC made an express finding that
the Mosers had presented “competent evidence to rebut the
presumption that the County Board faithfully performed its
duties and had sufficient competent evidence to make its deter-
mination.” In arriving at this conclusion, TERC did not find
any error in the assessor’s valuation of Mary’s Farm. Rather,
TERC concluded the Mosers had presented “compelling evi-
dence of pivot irrigation on the Morrison farm” in 2018 and
2019 and had shown that the assessor’s property records for
those years taxed the Morrison property as dryland cropland.
21
Constructors, Inc., supra note 19, 258 Neb. at 874, 606 N.W.2d at 793.
22
Constructors, Inc., supra note 19.
23
See Wheatland Indus., supra note 7.
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As such, we understand TERC to have concluded that the pre-
sumption of validity was rebutted by photographic evidence
that the Morrison property contained irrigated cropland that
was erroneously valued as dryland cropland.
The County Board has not challenged TERC’s conclusion
that the Mosers’ evidence sufficiently rebutted the presump-
tion, and we express no opinion in that regard. Because, as we
explain next, even if the Mosers’ evidence was sufficient to
rebut the presumption of validity, they did not ultimately sat-
isfy their burden to prove by clear and convincing evidence that
the valuation of Mary’s Farm was unreasonable or arbitrary. 24
(b) Mosers Did Not Meet Burden of Proof
To prove the value placed on Mary’s Farm was unreason-
able or arbitrary, 25 the Mosers had to show that when compared
to the valuations placed on similar property, the valuation of
Mary’s Farm was grossly excessive and was the result of either
a systematic exercise of intentional will or the failure of a plain
legal duty, and not a mere error of judgment. 26
(i) Grossly Excessive Valuation
We question whether the Mosers proved by clear and con-
vincing evidence that the valuation of their irrigated acres
was grossly excessive when compared to similar property. We
agree the Mosers’ evidence showed that the irrigated acres on
Mary’s Farm were valued higher than the irrigated acres on
the Morrison property. But the Mosers did not compare the
irrigated acres on Mary’s Farm to any of the irrigated acres
in the taxing district which, like their property, had been
subclassified and valued as irrigated cropland. Instead, they
compared their valuation to the valuation of irrigated acres
which had been erroneously subclassified and valued as dry-
land cropland.
24
See § 77-5016(9).
25
See id.
26
See Betty L. Green Living Trust, supra note 2.
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But even if we set aside the different land classification
groups of Mary’s Farm and the Morrison property and assume,
without deciding, that the Mosers proved their valuation was
grossly excessive when compared to similar property, we
nevertheless conclude they failed to prove their valuation was
the result of either a systematic exercise of intentional will
or the failure of a plain legal duty, and not a mere error of
judgment. 27
(ii) Insufficient Evidence of Systematic
or Intentional Action
The Mosers offered no evidence of a systematic or inten-
tional misclassification and undervaluation of irrigated acres
in Lancaster County. Instead, they offered evidence of a single
parcel—the Morrison property—where irrigated cropland had
been erroneously subclassified and valued as dryland. And it
was undisputed that such error was unintentional and resulted
from an improvement to the property of which the asses-
sor’s office was unaware, despite its use of aerial and oblique
imagery to identify pivot irrigators. The evidence also showed
that when the county became aware of the erroneous subclas-
sification via the Mosers’ tax protests, the error was corrected
for the 2020 tax year. On this record, the Mosers failed to
prove the valuation was the result of a systematic exercise of
intentional will.
(iii) No Plain Legal Duty to Equalize
Mary’s Farm and Morrison Property
Similarly, the Mosers did not carry their burden of proving
that the valuation of Mary’s Farm resulted from the failure of
a plain legal duty and not a mere error of judgment. TERC’s
order did not explain why it determined the County Board had
“a plain legal duty to equalize the assessments” by revaluing
the irrigated acres on Mary’s Farm as dryland cropland. But
in its appellate briefing, TERC argues that once the Mosers
presented evidence that their irrigated acres were assessed at
27
See id.
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a higher value than the irrigated acres on the Morrison prop-
erty, it “trigger[ed] a duty to equalize.” 28 We thus understand
TERC to contend that these circumstances implicated constitu-
tional principles of uniform and proportionate taxation. On this
record, we disagree.
TERC appears to have ignored the fact that a subclassifica-
tion error regarding the Morrison property was the reason for
the disparate valuations, but we cannot. When determining
whether principles of uniformity and proportionality have been
violated by disparate valuations, we have said it is appropriate
to consider the reasons offered for “why a particular valua-
tion is what it is” because, without such context, evidence of
disparate valuations “indicates nothing.” 29 Here, the irrigated
acres on the Morrison property were valued lower because they
had been erroneously subclassified as dryland. It was that error
in subclassification, and only that error, which caused the dis
parate valuation about which the Mosers complain.
[13-15] The burden of proof is on the taxpayer to establish
that the value of the property has not been fairly and pro-
portionately equalized with all other properties, resulting in
a discriminatory, unjust, and unfair assessment. 30 The county
board of equalization has a statutory duty to “fairly and impar-
tially equalize the values of all items of real property in the
county so that all real property is assessed uniformly and
proportionately.” 31 This statutory duty is informed, in turn, by
the constitutional principles of uniformity and proportionality
set out in Neb. Const. art. VIII, § 1. In carrying out its duty to
correct and equalize discrepancies and inequalities in assess-
ments within the county, a county board of equalization “‘must
give effect to the constitutional requirement that taxes be
28
Brief for appellee at 8.
29
County of Franklin v. Tax Equal. & Rev. Comm., 296 Neb. 193, 201, 892
N.W.2d 142, 147 (2017).
30
Lincoln Tel. & Tel. Co. v. County Board of Equalization, 209 Neb. 465,
308 N.W.2d 515 (1981).
31
Neb. Rev. Stat. § 77-1501 (Reissue 2018).
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levied uniformly and proportionately upon all taxable property
in the county.’” 32 We see no evidence that these constitutional
principles were implicated by the County Board’s decision to
affirm the valuation of Mary’s Farm.
[16] The rule of uniformity applies to both the rate of tax
ation and the valuation of property. 33 And the object of the
uniformity clause is accomplished “‘if all of the property
within the taxing jurisdiction is assessed and taxed at a uni-
form standard of value.’” 34 The evidence presented in this
case and relied upon by TERC showed that in 2018 and 2019,
all agricultural land within the taxing district was assessed
and taxed at a uniform standard of value based on land clas-
sification group and soil type. Under that methodology, which
no one challenges as unreasonable or arbitrary, the scheduled
value of an acre of dryland cropland was lower than the
scheduled value of an acre of irrigated cropland of the same
soil type. The same assessment methodology was applied to
both Mary’s Farm and the Morrison property, but due to an
unknown improvement on the Morrison property, the irrigated
acres on that property were mistakenly subclassified and
valued as dryland cropland in 2018 and 2019. As such, this
case does not present a uniformity problem; rather, it presents
a classification problem that equalization would exacerbate,
not correct.
[17] A property owner’s contention that property has been
disproportionately valued as compared to other comparable
property
must be sustained by evidence that the valuation is arbi-
trary or capricious, or so wholly out of line with actual
values as to give rise to an inference that the assessor
and county board of equalization have not properly dis-
charged their duties. Mere errors of judgment do not
32
Krings, supra note 18, 286 Neb. at 358, 835 N.W.2d at 754.
33
Gordman Properties Co. v. Board of Equal., 225 Neb. 169, 403 N.W.2d
366 (1987).
34
Constructors, Inc., supra note 19, 258 Neb. at 873, 606 N.W.2d at 792.
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sustain a claim of discrimination. There must be some-
thing more, something which in effect amounts to an
intentional violation of the essential principle of practi-
cal uniformity. 35
Here, there was no evidence of something more. The only
reason for the lower valuation of the irrigated acres on the
Morrison property was that the cropland had been erroneously
subclassified and valued as dryland because the assessor’s
office was unaware the parcel had center pivots. Our record
contains no evidence of an intentional violation of the essential
principles of uniformity or proportionality and no evidence that
would give rise to an inference that either the assessor’s office
or the County Board failed to properly discharge its duties
under the law.
We reject TERC’s suggestion that constitutional principles
of uniformity and proportionality require a county board of
equalization to replicate what has been shown to be an isolated
and unintentional error in the subclassification and undervalua-
tion of one taxpayer’s property. Were we to adopt such a rule,
it would have far-reaching consequences to our equalization
jurisprudence. As the County Board argues:
Under [TERC’s] order, all a taxpayer must do is locate a
single unknown or unreported improvement to receive a
reduction on their property value. A taxpayer with a fin-
ished basement would only need to locate a single house
with a finished basement that is unknown to a county
assessor and by the TERC’s standard, the taxpayer would
have met their burden for proving a lack of equalization.
Similarly, a residence that is built and unreported to a
county assessor would result in all improvements being
removed from the assessment roll under the TERC’s
standard. 36
And we generally agree with the County Board’s observation
that by ordering equalization in response to evidence that a
35
Newman, supra note 5, 167 Neb. at 672, 94 N.W.2d at 50.
36
Brief for appellant at 10-11.
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single irrigated parcel was misclassified and thus undervalued,
“TERC created two parcels that are undervalued [and] imper-
missibly shifted the tax burden to every other irrigated parcel
that did not protest.” 37
The dissent suggests the County Board had a plain legal duty
to value the irrigated acres on Mary’s Farm as dryland under
the reasoning of the U.S. Supreme Court in Sioux City Bridge
v. Dakota County. 38 In that case, the Court was reviewing a
decision of the Nebraska Supreme Court which had affirmed
the denial of a tax protest over the valuation of a bridge in
Dakota County. 39 The bridge company had argued it was enti-
tled to have the valuation of the bridge reduced to 55 percent
of its true value because “other property in the district [was]
assessed at 55 [percent] of its true value.” 40 The Nebraska
Supreme Court rejected that argument and held that “when
property is assessed at its true value, and other property in the
district is assessed below its true value, the proper remedy is
to have the property assessed below its true value raised, rather
than to have the property assessed at its true value reduced.” 41
The U.S. Supreme Court granted certiorari and reversed. 42
Relying on the Due Process and Equal Protection Clauses of
the 14th Amendment to the U.S. Constitution, the Supreme
Court reasoned it was “utterly impossible for [the protesting
taxpayer] by any judicial proceeding to secure an increase in
the assessment of the great mass of under-assessed property
in the taxing district.” 43 The Court held that under such cir-
cumstances, “the right of the taxpayer whose property alone is
37
Id. at 9.
38
Sioux City Bridge v. Dakota County, 260 U.S. 441, 43 S. Ct. 190, 67 L.
Ed. 340 (1923).
39
Sioux City Bridge Co. v. Dakota County, 105 Neb. 843, 182 N.W. 485
(1921).
40
Id. at 848, 182 N.W. at 487.
41
Id.
42
Sioux City Bridge, supra note 38.
43
Id., 260 U.S. at 446.
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taxed at 100 [percent] of its true value is to have [the] assess-
ment reduced to the percentage of that value at which others
are taxed even though this is a departure from the requirement
of the statute.” 44
Sioux City Bridge is readily distinguishable from this case.
First, the holding was grounded in the 14th Amendment, not
the uniformity clause of the Nebraska Constitution, and we
do not understand the Mosers to have raised or preserved a
due process or equal protection claim in this case. Moreover,
the underassessment of property in Sioux City Bridge was
intentional and systematic—the bridge was being taxed at
100 percent of its actual value, while the “great mass” 45 of
property in the district was being taxed at 55 percent of its
actual value. That is nothing like the situation here, where the
evidence showed that dryland cropland and irrigated cropland
were taxed at the same percentage of actual value, and the
same assessment methodology and uniform valuation standards
were applied to all agricultural land in the taxing district. And
finally, although the taxpayer in Sioux City Bridge apparently
had no way to secure an increase in the intentionally under
assessed property, the Mosers point to nothing that prevented
them from protesting the misclassification of the irrigated acres
on the Morrison property. 46 Indeed, the record indicates that
the Mosers’ protests resulted in correcting the misclassification
of irrigated acres on the Morrison property for the 2020 tax
year. We are not persuaded that the holding or the reasoning in
Sioux City Bridge has application here.
The dissent also relies on a settled proposition from our
equalization jurisprudence which states, “‘“The constitution
forbids any discrimination whatever among taxpayers, thus, if
the property of one citizen is valued for taxation at one-fourth
44
Id.
45
Id.
46
See Neb. Rev. Stat. § 77-1502 (Cum. Supp. 2022) (directing county clerk
to mail copy of protest to owner when person filing protest is not owner
of property).
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its value, others within the taxing district have the right to
demand that their property be assessed on the same basis.”’” 47
But this proposition is not implicated here either, because
the Mosers’ property and the Morrison property were both
assessed at the same percentage of actual value based on sub-
classification. Again, the only reason shown for the valuation
differences between these two properties was their different
subclass. And we do not understand the dissent to be suggest-
ing that constitutional principles of uniformity and propor-
tionality are offended by a tax assessment methodology under
which each subclass of agricultural land has a different sched-
uled actual value. The Mosers have not shown unconstitutional
discrimination in the valuation of their property as compared to
the Morrison property.
We find no principled support for TERC’s conclusion that
an unintentional error in subclassifying the Morrison property
as dryland cropland imposed on the County Board a plain legal
duty to replicate that error through equalization by applying a
factually false subclassification to reduce the valuation of the
cropland on Mary’s Farm.
We instead conclude, on this record, that the Mosers failed
to prove by clear and convincing evidence that the valuation
of Mary’s Farm, when compared to the valuation of similar
property, was grossly excessive and was the result of a sys-
tematic exercise of intentional will or failure of plain duty,
and not mere errors of judgment. 48 Nor did the Mosers adduce
sufficient evidence to establish that the County Board’s deci-
sion to affirm the Mosers’ assessments in 2018 and 2019 was
unreasonable or arbitrary. 49
47
Gamboni v. County of Otoe, 159 Neb. 417, 435, 67 N.W.2d 489, 501
(1954), overruled in part on other grounds, Hansen v. County of Lincoln,
188 Neb. 461, 197 N.W.2d 651 (1972). See State v. Savage, 65 Neb. 714,
91 N.W. 716 (1902).
48
See, Betty L. Green Living Trust, supra note 2; JQH La Vista Conf. Ctr.,
supra note 11.
49
See § 77-5016(9).
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TERC’s conclusion that the County Board had a plain legal
duty to equalize the 2018 and 2019 assessments by treating
irrigated cropland on Mary’s Farm as dryland cropland was
factually incorrect, was not supported by competent evidence,
failed to conform to the law, was unreasonable, and must
be reversed. 50
V. CONCLUSION
For the foregoing reasons, we reverse TERC’s decision
to the extent it ordered that the irrigated cropland on Mary’s
Farm be valued as dryland cropland for the 2018 and 2019 tax
years, and we remand the matter with directions to affirm the
County Board’s assessments on parcel 02-36-400-001-000 for
both tax years.
Reversed and remanded with directions.
50
See Wheatland Indus., supra note 7.
Cassel, J., dissenting.
Although the majority concedes that irrigated acres on the
Morrison property were incorrectly classified as dryland and
that as a result, the Morrison property was erroneously given a
lower value than the comparable property of Brad Moser and
Mary Moser, the majority concludes that this triggered no plain
duty to equalize the two properties. I respectfully disagree. The
Nebraska Constitution compels otherwise.
Neb. Const. art. VIII, § 1(4), plainly commands that prop-
erties within the class of agricultural land and horticultural
land must be equalized despite being in separate subclasses.
The majority effectively holds that an error in subclassifica-
tion relieved the county board of its duty to equalize. This
court thereby fails to enforce the plain duty imposed by the
constitution.
For the sake of completeness, and at the risk of some
duplication of the majority opinion, I set forth this plain con-
stitutional language, the principle commanding adherence to
the constitutional mandate, and the history of the uniformity
clause and the amendments permitting separate classification
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of agricultural land and horticultural land. The majority here
effectively deprives an agricultural-land taxpayer of any
remedy for the misclassification of comparable agricultural
property. Because the organic law of this state requires the
action taken by the Tax Equalization and Review Commission
(TERC), I respectfully dissent.
For convenience, I refer generally to the language of article
VIII, § 1, as the uniformity clause. Insofar as it relates to the
case before this court, the uniformity clause states as follows:
The necessary revenue of the state and its governmen-
tal subdivisions shall be raised by taxation in such manner
as the Legislature may direct. Notwithstanding Article I,
section 16, Article III, section 18, or Article VIII, sec-
tion 4, of this Constitution or any other provision of this
Constitution to the contrary: (1) Taxes shall be levied by
valuation uniformly and proportionately upon all real
property and franchises as defined by the Legislature
except as otherwise provided in or permitted by this
Constitution; [and] (4) the Legislature may provide that
agricultural land and horticultural land, as defined by the
Legislature, shall constitute a separate and distinct class
of property for purposes of taxation and may provide for a
different method of taxing agricultural land and horticul-
tural land which results in values that are not uniform and
proportionate with all other real property and franchises
but which results in values that are uniform and propor-
tionate upon all property within the class of agricultural
land and horticultural land; . . . Each actual property tax
rate levied for a governmental subdivision shall be the
same for all classes of taxed property and franchises. 1
To the extent pertinent here, one can readily discern that § 1
addresses uniformity in two clauses. First, § 1(1) imposes a
general duty to levy taxes by valuation uniformly and propor-
tionately upon all real property except as otherwise allowed by
the Nebraska Constitution. Then, § 1(4) permits classification
1
Neb. Const. art. VIII, § 1 (emphasis supplied).
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of agricultural land and horticultural land as “a separate and
distinct class of property” and imposes a uniformity require-
ment upon “all property within the class of agricultural land
and horticultural land.”
This court, TERC, and the county boards of equalization
are all bound by the Nebraska Constitution. As this court has
said:
“A written Constitution is not only the direct and basic
expression of the sovereign will, but is the absolute rule
of action and decision for all departments and offices of
government with respect to all matters covered by it and
must control as it is written until it shall be changed by
the authority that established it. . . .” 2
As I explain below, article VIII, § 1(4), commands that all agri-
cultural land and horticultural land be equalized with all other
agricultural and horticultural lands, regardless of subclasses.
Neither this court nor the tribunals below may ignore this con-
stitutional mandate.
The uniformity clause has ancient roots. It originated in
the constitution of 1875. 3 The modern language began with
the constitutional revisions of 1920, which, as relevant here,
required simply that “taxes shall be levied by valuation uni-
formly and proportionately upon all tangible property.” 4
The rules as to uniformity and equal protection of the laws
apply not only to acts of the legislative department but also
to the valuation by the assessing officers. 5 Discrimination in
valuation, where it exists, does not necessarily result from the
terms of the tax statute, but may be caused by the acts of the
taxing officer or officers. 6
2
State ex rel. Caldwell v. Peterson, 153 Neb. 402, 408, 45 N.W.2d 122, 127
(1950) (quoting 11 Am. Jur. Constitutional Law § 44).
3
See Neb. Const. art. IX, § 1 (1875).
4
Neb. Const. art. VIII, § 1 (1920).
5
Constructors, Inc. v. Cass Cty. Bd. of Equal., 258 Neb. 866, 606 N.W.2d
786 (2000).
6
Id.
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This court has long said that the paramount object of the
constitution and the laws relative to taxation is to raise all
needful revenues by valuation of the taxable property so that
each owner of property taxed will contribute his, her, or its
just proportion of the public revenues. 7 The object of the law
of uniformity is accomplished if all property within the taxing
jurisdiction is assessed at a uniform standard of value, as com-
pared with its actual market value. 8 “Thus if the property of
one citizen is valued for taxation at one-fourth its value, others
within the taxing district have the right to demand that their
property be assessed on the same basis.” 9 In other words, this
court said, the constitution forbids any discrimination whatever
among taxpayers. 10 Numerous cases have applied the uniform
ity clause in this way. 11
As to most real estate, Nebraska law still mandates equal-
ization with all other real estate subject to taxation. Above, I
quoted article VIII, § 1(1), which commands that “[t]axes shall
be levied by valuation uniformly and proportionately upon all
real property . . . as defined by the Legislature except as other-
wise provided in or permitted by this Constitution.” Likewise,
7
See State v. Savage, 65 Neb. 714, 91 N.W. 716 (1902).
8
See id.
9
Id. at 744, 91 N.W. at 720.
10
Id.
11
See, e.g., County of Douglas v. Nebraska Tax Equal. & Rev. Comm., 262
Neb. 578, 635 N.W.2d 413 (2001); AT&T Information Sys. v. State Bd.
of Equal., 237 Neb. 591, 467 N.W.2d 55 (1991); Konicek v. Board of
Equalization, 212 Neb. 648, 324 N.W.2d 815 (1982); County of Buffalo
v. State Board of Equalization & Assessment, 158 Neb. 353, 63 N.W.2d
468 (1954); Laflin v. State Board of Equalization and Assessment, 156
Neb. 427, 56 N.W.2d 469 (1953); Homan v. Board of Equalization, 141
Neb. 400, 3 N.W.2d 650 (1942); Continental Ins. Co. v. Smrha, 131 Neb.
791, 270 N.W. 122 (1936); Chicago, R. I. & P. R. Co. v. State, 111 Neb.
362, 197 N.W. 114 (1923); State v. Fleming, 70 Neb. 523, 97 N.W. 1063
(1903); State v. Savage, supra note 7; State v. Osborn, 60 Neb. 415, 83
N.W. 357 (1900); High School District v. Lancaster County, 60 Neb. 147,
82 N.W. 380 (1900); State, ex rel. Ahern, v. Walsh, 31 Neb. 469, 48 N.W.
263 (1891); Clother v. Maher, 15 Neb. 1, 16 N.W. 902 (1883).
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a Nebraska statute requires that “[t]he county board of equal-
ization shall fairly and impartially equalize the values of all
items of real property in the county so that all real property
is assessed uniformly and proportionately.” 12 The purpose of
equalization of assessments is to bring the assessment of dif-
ferent parts of a taxing district to the same relative standard, so
that no one of the parts may be compelled to pay a dispropor-
tionate part of the tax. 13
But through amendments begun in 1984, 14 revised in 1989, 15
and completed in 1992, 16 the constitution was amended to allow
agricultural and horticultural lands to be valued disproportion-
ately from other types of real property but to require them to
be valued uniformly and proportionately with other agricultural
and horticultural lands. 17 For the reader’s convenience, I repeat
that portion of the constitution, which now reads,
the Legislature may provide that agricultural land and
horticultural land, as defined by the Legislature, shall
constitute a separate and distinct class of property for pur-
poses of taxation and may provide for a different method
of taxing agricultural land and horticultural land which
results in values that are not uniform and proportion-
ate with all other real property and franchises but which
results in values that are uniform and proportionate upon
all property within the class of agricultural land and hor-
ticultural land. 18
The principles of interpreting a constitutional provision are
well settled. The words in a constitutional provision must be
interpreted and understood in their most natural and obvious
12
Neb. Rev. Stat. § 77-1501 (Reissue 2018).
13
Krings v. Garfield Cty. Bd. of Equal., 286 Neb. 352, 835 N.W.2d 750
(2013).
14
See 1984 Neb. Laws, L.R. 7, § 1.
15
See 1989 Neb. Laws, L.R. 2, § 1.
16
See 1992 Neb. Laws, L.R. 219CA, § 1.
17
See Neb. Const. art. VIII, § 1(4).
18
Neb. Const. art. VIII, § 1(4) (emphasis supplied).
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meaning unless the subject indicates or the text suggests that
they are used in a technical sense. 19 If the meaning of a consti-
tutional provision is clear, the court will give to it the meaning
that obviously would be accepted and understood by layper-
sons. 20 Constitutional provisions are not subject to strict con-
struction and receive a broader and more liberal construction
than do statutes. 21 It is the duty of courts to ascertain and to
carry into effect the intent and purpose of the framers of the
constitution or of an amendment thereto. 22
Here, the plain language requires uniformity within the
entire class of agricultural land and horticultural land. This
court is not permitted to read into this clause words which
are not there or to omit words. I respectfully submit that the
majority does so, at least implicitly. But the plain constitutional
language commands that “all property within the class of agri-
cultural land and horticultural land” be equalized.
First, the beginning part of § 1(4) states the singular—“a
separate and distinct class”—and not a plural—“one or more
separate and distinct classes.” (Emphasis supplied.) Second,
the words “all property” immediately precede the words
“within the class.” 23 Third, the last phrase reads, “uniform
and proportionate upon all property within the class of agri-
cultural land and horticultural land”—a construction using
singular and not plural. 24 This provides a plain command to
equalize all property within the class of agricultural land and
horticultural land, and it simply does not permit equalization
only within an agricultural subclass. My reading is, I respect-
fully suggest, the way these words and phrases would be read
by a layperson.
19
State ex rel. Peterson v. Shively, 310 Neb. 1, 963 N.W.2d 508 (2021).
20
Id.
21
Id.
22
Id.
23
Neb. Const. art. VIII, § 1(4).
24
Id. (emphasis supplied).
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The Legislature reads § 1(4) the same way that I do. A
statute proclaims, “The Legislature finds and declares that
agricultural land and horticultural land shall be a separate and
distinct class of real property for purposes of assessment.” 25 It
then states, “The assessed value of agricultural land and hor-
ticultural land shall not be uniform and proportionate with all
other real property, but the assessed value shall be uniform and
proportionate within the class of agricultural land and horti-
cultural land.” 26 Thus, the legislative language, consistent with
that of the constitution, mandates that assessed value shall be
uniform and proportionate within the class of agricultural land
and horticultural land.
Our previous case law construed this constitutional lan-
guage the same way. We said that after the amendments to
article VIII, § 1, and the enactment of statutes pursuant to such
authority providing for a different method of taxing agricultural
and horticultural land, the constitution does not require uni
formity between the class of agricultural and horticultural land
and other types of real estate. 27 From this development, we
drew two principles: (1) “[I]t is no longer required or proper
to equalize the value of nonagricultural, nonhorticultural land
with the value of agricultural and horticultural land,” and (2)
“[e]qualization is still required within the class of agricultural
and horticultural land, because the constitution still requires
uniformity within that class.” 28
For the sake of completeness, I note that during floor debate
of the 1984 legislation submitting an amendment of article
VIII, § 1, to the voters, senators read the phrase the same
way. Admittedly, that language was slightly different, in that
it added a sentence stating, “The Legislature may provide that
agricultural land and horticultural land used solely for agricul-
tural or horticultural purposes shall constitute a separate and
25
Neb. Rev. Stat. § 77-1359 (Reissue 2018).
26
Id.
27
Krings v. Garfield Cty. Bd. of Equal., supra note 13.
28
Id. at 361, 835 N.W.2d at 756.
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distinct class of property for purposes of taxation.” 29 One sena-
tor stated:
If you read the language very carefully, it says, I’ll just
read the last part, “shall constitute a separate and distinct
class.” Very singular. It says there will be one class, a class.
What it says is, “agricultural land and horticultural land
taken together as a group will constitute a single class.” I
think we could probably diagram that on the blackboard
and all but I believe it is very clear that it is singular and
it is just a class. We’re not creating two classes. 30
Another senator agreed “100 percent.” 31 Although the 1984
language differed slightly, it closely resembles the current con-
stitutional wording.
While another statute further divides agricultural land and
horticultural land into classes and subclasses, nothing in that
other statute suggests that a misclassification protects an assess-
ment from the requirements of uniformity and proportionality. 32
Here, TERC was reviewing the refusal of the county board
of equalization to equalize comparable agricultural proper-
ties within the same taxing district in Lancaster County. The
majority suggests that the county board had no plain duty to
correct an individual discrepancy. But our case law teaches
otherwise.
In Bartlett v. Dawes Cty. Bd. of Equal., 33 this court reiterated
three important principles. First, a county board of equalization
has the duty to correct and equalize individual discrepancies
and inequalities in assessments within the county. 34 Second, in
29
1984 Neb. Laws, L.R. 7, § 1.
30
Floor Debate, L.R. 7, 88th Leg., 1st Spec. Sess. 340 (Aug. 29, 1984)
(remarks of Senator Ron Withem).
31
Id. (remarks of Senator Peter Hoagland).
32
See Neb. Rev. Stat. § 77-1363 (Cum. Supp. 2020).
33
Bartlett v. Dawes Cty. Bd. of Equal., 259 Neb. 954, 613 N.W.2d 810
(2000) (superseded by statute on other grounds as stated in Cain v. Custer
Cty. Bd. of Equal., 298 Neb. 834, 906 N.W.2d 285 (2018)).
34
See id.
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carrying out this function, the county board must give effect to
the constitutional requirement that taxes be levied uniformly
and proportionately upon all taxable property in the coun-
ty. 35 Finally, this basic duty of county boards of equalization
remains unchanged by enactment of the Tax Equalization and
Review Commission Act. 36
The correct remedy for equalization was recognized by the
U.S. Supreme Court nearly 100 years ago in Sioux City Bridge
v. Dakota County, 37 which reversed a decision of this court. 38
There, this court found that a property, which had a valuation
disproportionately higher than comparable property, should
not have its valuation lowered. 39 This court ruled that when a
property is assessed at its true value, and other property in the
district is assessed below its true value, the proper remedy is
to have the property assessed below its true value raised, rather
than to have property assessed at its true value reduced. 40
The U.S. Supreme Court reversed this court’s decision and
remanded the case for further proceedings. 41 The high court
stated that “such a result as that reached by [this court] is
to deny the injured taxpayer any remedy at all because it is
utterly impossible for him by any judicial proceeding to secure
an increase in the assessment of the great mass of under-
assessed property in the taxing district.” 42 The Court further
stated, “The conclusion is based on the principle that where
it is impossible to secure both the standard of the true value,
35
See id.
36
See id.
37
Sioux City Bridge v. Dakota County, 260 U.S. 441, 43 S. Ct. 190, 67 L.
Ed. 340 (1923).
38
See Sioux City Bridge Co. v. Dakota County, 105 Neb. 843, 182 N.W. 485
(1921).
39
See id.
40
See id.
41
See Sioux City Bridge v. Dakota County, supra note 37.
42
Id., 260 U.S. at 446.
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and the uniformity and equality required by law, the latter
requirement is to be preferred as the just and ultimate purpose
of the law.” 43
Because the high court applied federal constitutional law,
the majority attempts to discredit the remedy. But the basic
principle of that case is instructive. Where it is impossible to
increase the misclassified agricultural land to its true value, the
preferred remedy is to reduce the injured taxpayer’s property
value to achieve the uniformity required. To refuse to do so
deprives the taxpayer of a remedy.
This court’s more recent uniformity clause jurisprudence
has also provoked criticism. 44 The majority’s implicit applica-
tion of the uniformity clause only within a subclass is fraught
with the danger of unintended consequences. Surely, this recent
experience counsels that in interpreting the uniformity clause,
this court should strictly adhere to the constitutional text, the
enabling legislation, and our previous case law—all of which
require application of the uniformity clause to all property
within the class of agricultural land and horticultural land.
After all, “Those who cannot remember the past are con-
demned to repeat it.” 45
Properly understood, § 1(4) accomplishes two related goals.
First, it permits agricultural and horticultural lands not to be
valued uniformly and proportionately with other types of real
estate, such as residential, commercial, or industrial lands.
Second, it imposes a uniformity requirement for all lands
within the separate class of agricultural land and horticul-
tural land.
Here, the assessments were not equalized. Mary’s Farm was
comparable to the Morrison property: they were located in
close proximity to one another and both were used as irrigated
43
Id.
44
See George Kilpatrick, Personal Property Tax Post Mortem: What Lies
Ahead for Nebraska, 27 Creighton L. Rev. 25 (1993).
45
George Santayana, The Life of Reason: Reason in Common Sense 284
(Scribner’s 1905).
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cropland. Though comparable, the Morrison property was mis-
classified as dry cropland. This led to its having a lower tax
valuation. Because the irrigated acres on the Morrison property
were assessed at a lower rate than the irrigated acres on Mary’s
Farm, the Mosers’ property was not “equalized” with the value
of other agricultural land in Lancaster County. As a result, the
Mosers paid a disproportionate part of the tax.
If a taxpayer’s property is assessed at a value in excess of
its actual value, or in excess of that value at which others are
taxed, then the taxpayer has a right to relief. 46 The right is to
have the taxpayer’s property assessment reduced to the per-
centage of the property’s value at which others are taxed. 47
TERC’s decision enforced that right.
The majority incorrectly contends that application of our
long-established uniformity clause jurisprudence would have
“far-reaching consequences.” It quotes the county board’s brief
regarding equalization that might be required due to a protest
based on a “finished basement” or a “residence that is built and
unreported.” 48
But these examples would not result in reduction of the val-
ues of all other properties. Only a taxpayer who protested and
persisted in that protest would receive equalization and only if
that taxpayer’s property were significantly overvalued in com-
parison to the undervalued property. In other words, the situa-
tion here did not require the county board to lower all irrigated
farmland valuations to the Morrison property’s level. But it did
require the county board to equalize the Mosers’ property with
the Morrison property.
This is a natural consequence of equalization at the local
level, in order to provide a remedy for a protesting taxpayer
disadvantaged by another taxpayer’s undervaluation. Here,
46
See, AT&T Information Sys. v. State Bd. of Equal., supra note 11; Zabawa
v. Douglas Cty. Bd. of Equal., 17 Neb. App. 221, 757 N.W.2d 522 (2008).
47
See, Chief Indus. v. Hamilton Cty. Bd. of Equal., 228 Neb. 275, 422
N.W.2d 324 (1988); Konicek v. Board of Equalization, supra note 11.
48
See brief for appellant at 11.
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equalization would reduce the protesting taxpayers’ burden in
a way not required for other similarly situated taxpayers who
failed to file protests or to appeal from the denial of their pro-
tests. This matters not. Other taxpayers’ failure to exercise their
rights is no defense to granting such relief to a taxpayer who
did so exercise such taxpayer’s rights. 49
The majority purports to avoid this clear constitutional com-
mand, but it cannot hide from the reality. The majority suggests
the Mosers should have protested the Morrison property’s valu-
ation. Nothing in the statute cited by the majority 50 or in that
statute’s 2018 amendment 51 suggests an intention to displace
the traditional equalization remedy. Nothing in the county
board’s brief makes any such argument. Nor has any decision
of this court or the Nebraska Court of Appeals so held. And
this notion flies in the face of long-settled uniformity clause
jurisprudence. I have already cited our numerous cases requir-
ing equalization. And this court has repeatedly said that if the
property of one citizen is valued for taxation at one-fourth its
value, others within the taxing district have the right to demand
that their property be assessed on the same basis. 52 Here, the
owners of the Morrison property are the “one citizen” and the
Mosers are the “others within the taxing district.” The Mosers
had the right to demand assessment on the same basis.
In this situation, the county board had the plain duty to
equalize. TERC was perhaps charitable in relying only on
plain duty and not systemic discrimination. The county board’s
49
84 C.J.S. Taxation § 42 (2022) (citing Kuiters v. County of Freeborn, 430
N.W.2d 461 (Minn. 1988)).
50
See Neb. Rev. Stat. § 77-1502 (Cum. Supp. 2022).
51
See 2018 Neb. Laws, L.B. 885, § 1 (adding requirement that protest “indi-
cate whether the person signing the protest is an owner of the property or
a person authorized to protest on behalf of the owner”).
52
See, Gamboni v. County of Otoe, 159 Neb. 417, 67 N.W.2d 489 (1954),
overruled in part on other grounds, Hansen v. County of Lincoln, 188 Neb.
461, 197 N.W.2d 651 (1972); State v. Back, 72 Neb. 402, 100 N.W. 952
(1904); State v. Savage, supra note 7; State v. Karr, 64 Neb. 514, 90 N.W.
298 (1902); State v. Osborn, supra note 11.
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failure to correct the misclassification after hearing the taxpay-
ers’ protest for the first year suggests, at best, bureaucratic
ineptitude, or, worse, a disdain for taxpayers’ rights in the
equalization process. Our traditional equalization jurisprudence
places the incentive for diligence where it belongs—upon the
taxing authority.
The majority purports to limit its refusal to equalize to
“error in the subclassification and undervaluation of one tax-
payer’s property.” But there is no principled distinction, based
in law, between errors in misclassification involving multiple
tracts. Perhaps at some point, such errors might be described
as systemic. But the majority does not announce a principle
which can guide county boards of equalization and TERC in
distinguishing when misclassifications are merely “isolated
error.” And I respectfully urge that the uniformity clause does
not condone this notion. Our case law teaches otherwise.
TERC was required to faithfully apply Neb. Const. art.
VIII, § 1(4), and it did so. TERC’s decision conforms to the
law, is supported by competent evidence, and is neither arbi-
trary, capricious, nor unreasonable. I would affirm its deci-
sion. Because the majority takes a different course, I respect-
fully dissent.
Papik and Freudenberg, JJ., join in this dissent. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487102/ | USCA11 Case: 21-13660 Date Filed: 11/18/2022 Page: 1 of 13
[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 21-13660
Non-Argument Calendar
____________________
WASEEM DAKER,
Plaintiff-Appellant,
versus
TIMOTHY WARD,
GDC Assistant Commissioner,
et al.,
Defendants,
USCA11 Case: 21-13660 Date Filed: 11/18/2022 Page: 2 of 13
2 Opinion of the Court 21-13660
ROBERT TOOLE,
GDC Field Operations Director,
GEORGIA DEPARTMENT OF CORRECTIONS,
GREGORY MCLAUGHLIN,
Former Warden at Macon State Prison,
PETER EADDIE,
Macon State Prison Warden of Security,
TIMOTHY SALES,
Macon State Prison Warden of Security,
et al.,
Defendants-Appellees.
____________________
Appeal from the United States District Court
for the Middle District of Georgia
D.C. Docket No. 5:19-cv-00126-MTT-CHW
____________________
Before ROSENBAUM, JILL PRYOR, and BRASHER, Circuit Judges.
PER CURIAM:
Waseem Daker, a Georgia state prisoner proceeding pro se,
brought this action against six dozen defendants who currently or
formerly worked for the Georgia Department of Corrections
(“GDC”) in various state facilities where Mr. Daker was (or
USCA11 Case: 21-13660 Date Filed: 11/18/2022 Page: 3 of 13
21-13660 Opinion of the Court 3
continues to be) held in custody. Mr. Daker is a Muslim man, and
his complaint alleged, among other things, that the GDC main-
tained an unconstitutional grooming policy by requiring male pris-
oners to wear a beard no longer than one-half inch. He further al-
leged that the GDC had a policy of using force to administer the
one-half-inch beard restriction. He claimed that these policies vio-
lated the First Amendment, Eighth Amendment, and the Religious
Land Use and Institutionalized Persons Act (“RLUIPA”), 42 U.S.C.
§§ 2000cc, et seq.
On appeal, Mr. Daker challenges the district court’s dismis-
sal of his claims related to four forced-shaving incidents as frivo-
lous, duplicative, or malicious under the screening provision of the
Prison Litigation Reform Act (“PLRA”), 28 U.S.C. § 1915A. He also
challenges the district court’s dismissal of the remaining claims in
his complaint for failure to timely serve the defendants under Fed-
eral Rule of Civil Procedure 4(m). After careful review, we con-
clude that the district court did not dismiss the claims related to the
forced-shaving incidents about which Mr. Daker complains on ap-
peal, and thus did not err. Regarding the district court’s dismissal
for failure to timely serve the defendants, we conclude that the dis-
trict court abused its discretion in dismissing the complaint without
considering whether there were circumstances that warranted an
extension of time for Mr. Daker to properly serve them. We there-
fore affirm in part, vacate in part, and remand to the district court
for further consideration.
3
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4 Opinion of the Court 21-13660
I. BACKGROUND
Waseem Daker is a prisoner in Georgia state custody. Ac-
cording to Mr. Daker, as a Muslim man, he is required to wear a
beard at least the length of his fist. For him, a fist-length beard
would measure three inches. But GDC’s grooming policy prohibits
Mr. Daker from growing a beard longer than one-half inch. Mr.
Daker filed a complaint bringing claims under 42 U.S.C. § 1983 and
the RLUIPA against numerous current and former GDC officials,
alleging that this policy violated his constitutional rights under the
First Amendment and Eighth Amendment and his rights under the
RLUIPA.
In his complaint, Mr. Daker alleged that on at least 15 occa-
sions between 2015 and 2019, GDC officials used threats and actual
force, including pepper spray and tasers, to shave or attempt to
shave his beard. He further alleged that GDC officials used dam-
aged, broken, and unsanitary clippers to do the shaving, contrary
to GDC’s own standard operating procedures, and that this con-
duct placed Mr. Daker in danger of contracting an infection. Ac-
cording to the complaint, in one incident, he was left with multiple
injuries after he was handcuffed, dragged, held down, and choked
while a fellow prisoner shaved him with dirty clippers. Following
another forced shaving, a GDC official allegedly reported Mr.
Daker for failing to follow instructions and assaulting staff. As a re-
sult, Mr. Daker was put in solitary confinement.
As required by the PLRA’s screening provision, the magis-
trate judge sua sponte reviewed Mr. Daker’s complaint. See 28
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21-13660 Opinion of the Court 5
U.S.C. § 1915A(a). The magistrate judge recommended that Mr.
Daker’s claims related to four forced-shaving incidents—on June
13, 2018; September 18, 2018; February 18, 2019; and July 12,
2019—be permitted to proceed for further factual development.
The magistrate judge recommended that all other claims should be
dismissed without prejudice because they were frivolous, duplica-
tive, malicious, or failed to state a claim upon which relief may be
granted under 1915A(b)(1). For the claims that survived screen-
ing—those related to the four forced-shaving incidents—Mr. Daker
was ordered to serve all the defendants within 90 days.
The magistrate judge entered this recommendation on Jan-
uary 5, 2021. The magistrate judge advised that failure to object
would “waive[] the right to challenge on appeal the district judge’s
order based on factual and legal conclusions to which no objection
was timely made.” Doc. 41 at 31. 1 Although Mr. Daker initially had
14 days to file any objections to the magistrate judge’s recommen-
dation, the district court granted Mr. Daker’s motion for an exten-
sion and allowed him until March 24 to object.
On April 1, 2021, the district court issued an order adopting
the magistrate judge’s recommendation in full, dismissing many of
Mr. Daker’s claims but allowing the claims related to the four
forced-shaving incidents to proceed. In its order, the district court
noted that Mr. Daker had not objected to the magistrate judge’s
recommendation. About two weeks later, the district court
1 “Doc.” numbers refer to the district court’s docket entries.
5
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6 Opinion of the Court 21-13660
received an objection from Mr. Daker, which he had signed and
dated on March 23. As relevant here, Mr. Daker objected that his
claims related to the forced-shaving incidents were not duplicative,
and that his claims concerning GDC’s forced-shaving policy were
not vexatious and harassing.
The district court entered a new order on May 26 that ad-
dressed Mr. Daker’s objection. The court first explained that Mr.
Daker’s objection was untimely then affirmed its conclusions in the
April 1 order, stating that even if it considered the objection, it still
would adopt the magistrate judge’s recommendation to dismiss
some of Mr. Daker’s claims and allow those related to the four
forced-shaving incidents to proceed.
With respect to the court’s direction that the remaining
claims be served on the defendants within 90 days of the January 5,
2021 order, Mr. Daker moved for service by the United States Mar-
shals Service (“USMS”). See Fed. R. Civ. P. 4(c)(3) (providing that
a district court may order the U.S. Marshal to effectuate service).
He argued that, due to his incarceration, he lacked access to re-
sources, including a phone, with which to identify and contact pro-
cess servers. In addition, he did not have the defendants’ home ad-
dresses and was not likely to obtain them because they were cor-
rectional officials and he would have to serve them at their work
addresses, to which private process servers would not have access.
The district court denied his request in February.
Three months later, when Mr. Daker still had not served the
defendants, the district court ordered that he show cause why the
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21-13660 Opinion of the Court 7
entire case should not be dismissed for failure to serve the defend-
ants. In response to the order to show cause, Mr. Daker renewed
his request that the court order the USMS to effectuate service.
Finally, in October, when Mr. Daker still had not served the
defendants, the district court denied his renewed request for the
USMS to effectuate service and dismissed the case for failure to
serve the defendants. After acknowledging that under Rule 4(m)
courts must extend the time for service if a plaintiff shows good
cause, the district court rejected Mr. Daker’s arguments. The court
considered his argument that he did “not have the ability to serve
the defendants because he [was] in prison” and did “not have any-
one to help him contact process servers” or locate addresses for the
defendants. Doc. 63 at 3–4. But the court rejected the argument
and denied Mr. Daker’s motion, explaining that Mr. Daker had
“demonstrated that he [was] capable of perfecting service” in the
past and found that he had “the financial means to hire an attorney”
to assist him in serving defendants, as he had in past cases. Id. Fur-
ther, because he failed to show “good cause why he has failed to
serve the defendants,” and more than 90 days had passed since the
court ordered that service be completed, the district court dis-
missed all the remaining claims—that had previously survived
§ 1915A screening—without prejudice. Id. at 5.
Mr. Daker now appeals the district court’s order dismissing
with prejudice some of his claims under § 1915A and dismissing
without prejudice the remaining claims for failure to serve the de-
fendants.
7
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8 Opinion of the Court 21-13660
II. STANDARD OF REVIEW
This Court reviews de novo a district court’s sua sponte dis-
missal for failure to state a claim under 28 U.S.C. 1915A(b)(1). See
Waldman v. Conway, 871 F.3d 1283, 1289 (11th Cir. 2017). A dis-
trict court’s dismissal of a complaint as frivolous under 1915A(b)(1)
is reviewed for abuse of discretion. Miller v. Donald, 541 F.3d 1091,
1100 (11th Cir. 2008).
We review for abuse of discretion both a district court’s sua
sponte dismissal for failure to timely serve a defendant under Fed-
eral Rule of Civil Procedure 4(m) and a district court’s decision to
grant or deny an extension of time to serve a defendant. Rance v.
Rocksolid Granit USA, Inc., 583 F.3d 1284, 1286 (11th Cir. 2009).
“The abuse of discretion review requires us to affirm unless we find
that the district court has made a clear error of judgment, or has
applied the wrong legal standard.” Id. (internal quotation marks
omitted).
III. DISCUSSION
We first address whether the district court erred in dismiss-
ing some of Mr. Daker’s claims under the PLRA’s screening provi-
sion, 28 U.S.C. § 1915A(b)(1). Next, we address whether the district
court abused its discretion when it denied Mr. Daker’s motions for
service by the USMS and dismissed his complaint for failure to
serve the defendants.
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21-13660 Opinion of the Court 9
A. The District Court Did Not Err Because It Allowed Mr.
Daker’s Forced-Shaving Claims to Proceed.
Mr. Daker contends that the district court erred by dismiss-
ing his claims related to forced-shaving incidents that occurred on
six dates: June 13, 2018; September 18, 2018; February 18, 2019; July
12, 2019; September 25, 2019; and April 3, 2020. Mr. Daker says the
district court dismissed these claims as duplicative, frivolous, or
malicious under the PLRA’s screening provision, 28 U.S.C.
1915A(b)(1). 2 But the operative complaint did not allege any claims
related to forced-shaving incidents on either September 25, 2019 or
April 3, 2020, so the magistrate judge’s recommendation and the
district court’s order did not address, let alone dismiss, such claims.
Notably, Mr. Daker does not dispute that his claims related to
forced-shaving incidents that were litigated in his earlier cases were
2 The PLRA requires a district court to review sua sponte a complaint in which
a prisoner seeks redress from a governmental entity or officer or employee of
a governmental entity. See 28 U.S.C. § 1915A(a). The statute directs a district
court to “dismiss the complaint, or any portion of the complaint” that “is friv-
olous, malicious, or fails to state a claim upon which relief may be granted.”
Id. § 1915A(b)(1). Mr. Daker’s arguments are primarily based upon the lan-
guage in 28 U.S.C. § 1915(e)(2)(B)(i), which applies to prisoner-plaintiffs who
are proceeding in forma pauperis and instructs courts to dismiss if the action
is “frivolous [or] malicious.” Section 1915A(b)(1)’s screening provision, which
applies to all prisoner-plaintiffs, uses the language “duplicative, frivolous or
malicious.” The magistrate judge’s recommendation, which the district court
adopted, properly screened Mr. Daker’s complaint under § 1915A.
9
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10 Opinion of the Court 21-13660
properly dismissed as duplicative. 3 Thus, there are only four
forced-shaving incidents at issue in this appeal.
Although Mr. Daker did not timely object to the magistrate
judge’s recommendation that the district court’s order adopted, we
nonetheless may, in the interests of justice, review for plain error
Mr. Daker’s challenge to the dismissal of his claims arising out of
the four forced-shaving incidents. See 11th Cir. R. 3-1. Here,
though, there was no error at all. The complex procedural history
in this case appears to have obscured which of Mr. Daker’s claims
were dismissed by the district court under § 1915A, and which were
allowed to proceed. The court did dismiss some of Mr. Daker’s
claims under § 1915A—but it did not dismiss the claims related to
the four forced-shaving incidents that Mr. Daker raises on appeal.
Instead, the district court did exactly what Mr. Daker asks for on
appeal: it determined that these claims were not duplicative and
should be allowed to proceed for further factual development.
Thus, there was no error here.
B. The District Court Abused Its Discretion in Dismissing
Mr. Daker’s Other Claims Based on Lack of Service.
Mr. Daker next argues the district court abused its discretion
by dismissing his complaint for failure to serve the defendants after
he filed multiple motions for service by the USMS.
3 Because Mr. Daker does not challenge the dismissal of these earlier-litigated
claims as duplicative, we affirm the district court’s dismissal of them.
USCA11 Case: 21-13660 Date Filed: 11/18/2022 Page: 11 of 13
21-13660 Opinion of the Court 11
When a defendant is not served within 90 days of the filing
of a complaint, the district court, either on motion or on its own
after notice to the plaintiff, “must dismiss the action without prej-
udice against that defendant or order that service be made within
a specified time.” Fed R. Civ. P. 4(m). But if a plaintiff shows “good
cause” for failure to timely serve, the court “must extend the time
for service for an appropriate period.” Id. “Good cause exists only
when some outside factor, such as reliance on faulty advice, rather
than inadvertence or negligence, prevented service.” Lepone-
Dempsey v. Carroll Cnty. Comm’rs, 476 F.3d 1277, 1281 (11th Cir.
2007) (alteration adopted) (internal quotation marks omitted). But
even when a plaintiff cannot demonstrate good cause, the district
court “must still consider whether any other circumstances war-
rant an extension of time based on the facts of the case.” Bilal v.
Geo Care, LLC, 981 F.3d 903, 919 (11th Cir. 2020) (internal quota-
tion marks omitted). In Bilal, we identified instances in which the
statute of limitations governing the claims brought by a plaintiff
would preclude refiling as a possible “other circumstance[]” that
might warrant an extension of time. Id. We further held that if a
district court dismissed a case under Rule 4(m) without considering
such other circumstances, the dismissal would be “premature.” Id.
(internal quotation marks omitted)
Whether a district court has discretion to order service by
the USMS under Rule 4(c)(3) hinges upon whether the plaintiff is
proceeding in forma pauperis (“IFP”). When a plaintiff who is not
proceeding IFP requests that a district court order that service be
11
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12 Opinion of the Court 21-13660
made by the USMS, the district court may grant such a request;
when a plaintiff is proceeding IFP, the district court must order that
service be made by the USMS. Fed. R. Civ. P. 4(c)(3). Mr. Daker
paid the filing fee in district court and on appeal; he did not seek
permission to proceed IFP. Thus, the decision whether to grant Mr.
Daker’s motions for service was within the district court’s discre-
tion.
Mr. Daker contends that the district court abused its discre-
tion in dismissing his case for failure to serve the defendants. To be
sure, the district court has discretion to grant or deny such a mo-
tion. But we have held that, even if the district court finds a plaintiff
has failed to show “good cause” under Rule 4(c)(3), prior to dis-
missing the complaint the district court must consider whether
other circumstances warrant an extension of time to effectuate ser-
vice. Bilal, 981 F.3d at 919. Here, the district court’s dismissal for
failure to serve was “premature, as it did not clearly consider, after
finding that plaintiff[] failed to demonstrate good cause, whether a
permissive extension of time was warranted under the facts of this
case.” Lepone-Dempsey, 476 F.3d at 1282. “Although the running
of the statute of limitations, which barred the plaintiffs from refil-
ing their claims, does not require that the district court extend time
for service of process under Rule 4(m), it was incumbent upon the
district court to at least consider this factor.” Id.
In this case, Mr. Daker’s repeated motions seeking an order
for service by the USMS explained the challenges thwarting his ef-
forts to locate the defendants’ addresses and timely effect service.
USCA11 Case: 21-13660 Date Filed: 11/18/2022 Page: 13 of 13
21-13660 Opinion of the Court 13
And by dismissing the complaint, the district court’s order effec-
tively barred Mr. Daker from re-filing due to the statute of limita-
tions. Under our decision in Bilal, the district court was required to
engage in a two-step analysis. It first needed to consider whether
the obstacles Mr. Daker faced constituted “good cause” for an ex-
tension under Rule 4(m). In the event the district court found that
Mr. Daker had failed to demonstrate good cause, the district court
was required under Bilal then to expressly consider whether the
statute of limitations, or any other circumstances, nevertheless
warranted at least an extension of time. By failing to complete step
two, the district court abused its discretion.
Accordingly, we vacate in part the district court’s order dis-
missing Mr. Daker’s complaint for failure to perfect service, and
remand for further consideration.
IV. CONCLUSION
For the reasons discussed above, we affirm in part, vacate in
part, and remand for further consideration consistent with this
opinion.
AFFIRMED IN PART, VACATED IN PART, AND
REMANDED.
13 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487108/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
- 792 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
REO Enterprises, LLC, a Nebraska limited
liability company, appellant, v. Village
of Dorchester, a Nebraska political
subdivision, appellee.
___ N.W.2d ___
Filed November 4, 2022. No. S-21-752.
1. Summary Judgment: Appeal and Error. An appellate court will
affirm a lower court’s grant of summary judgment if the pleadings
and admitted evidence show that there is no genuine issue as to any
material facts or as to the ultimate inferences that may be drawn from
the facts and that the moving party is entitled to judgment as a matter
of law.
2. Constitutional Law: Ordinances. The constitutionality of an ordinance
presents a question of law.
3. Judgments: Appeal and Error. An appellate court independently
reviews questions of law decided by a lower court.
4. Administrative Law: Statutes: Appeal and Error. The meaning
and interpretation of statutes and regulations are questions of law for
which an appellate court has an obligation to reach an independent
conclusion irrespective of the decision made by the court below.
5. Appeal and Error. Plain error is error plainly evident from the record
and of such a nature that to leave it uncorrected would result in damage
to the integrity, reputation, or fairness of the judicial process.
6. Special Legislation. A legislative act constitutes special legislation if
(1) it creates an arbitrary and unreasonable method of classification or
(2) it creates a permanently closed class.
7. Special Legislation: Public Policy. To be valid, a legislative clas-
sification must be based upon some reason of public policy, some
substantial difference in circumstances that would naturally suggest
the justice or expediency of diverse legislation regarding the objects to
be classified.
- 793 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
8. Special Legislation. Legislative classifications must be real and not
illusive; they cannot be based on distinctions without a substantial
difference.
9. ____. A legislative body’s distinctive treatment of a class is proper if
the class has some reasonable distinction from other subjects of a like
general character. And that distinction must bear some reasonable rela-
tion to the legitimate objectives and purposes of the legislative act.
Appeal from the District Court for Saline County: Vicky L.
Johnson, Judge. Affirmed.
Gregory C. Damman, of Blevens & Damman, for appellant.
Kelly R. Hoffschneider and Timothy J. Kubert, of
Hoffschneider Law, P.C., L.L.O., for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Per Curiam.
The Village of Dorchester, Nebraska, enacted an ordinance
providing that renters of property could receive utility services
from the village only if their landlord guaranteed that the land-
lord would pay any unpaid utility charges. REO Enterprises,
LLC (REO), an owner of rental property within the village,
filed an action seeking a declaration that the ordinance was
unenforceable for various reasons. The district court initially
granted the relief REO sought, declaring that the ordinance
violated the Equal Protection Clauses of the U.S. and Nebraska
Constitutions. In an appeal filed by the village, however, we
reversed the district court’s judgment on that question and
remanded the cause for the district court to consider REO’s
other claims. See REO Enters. v. Village of Dorchester, 306
Neb. 683, 947 N.W.2d 480 (2020) (REO I). On remand, the
district court found that the village was entitled to summary
judgment on each of REO’s other claims. The case now returns
to us, this time at the behest of REO. We find no error on the
part of the district court and therefore affirm.
- 794 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
BACKGROUND
The Ordinance.
The village enacted the ordinance at issue in this appeal in
2017. The ordinance addresses the village’s provision of utility
services, including water, sewer, and electricity. The ordinance
requires that all residents of the village “subscribe to [the]
[v]illage utility services” and provides terms for billing, collec-
tion of bills, and discontinuance of service.
The ordinance also sets forth the process by which persons
may apply to receive utility services. Under the ordinance,
an application for utility services must be submitted to the
village clerk, who is to require payment of “a service deposit
and tap fees for water and sewer service.” Of particular rel-
evance to this appeal, the ordinance provides the following
with respect to applications for utility services filed by rent-
ers of property: “Before a tenant’s utility application will be
accepted, the landlord shall be required to sign an owner’s
consent form and agree to pay all unpaid utility charges for
his or her property.”
REO’s Complaint.
Several months after the ordinance was enacted, REO filed
a lawsuit against the village in which it asked the district
court to declare the ordinance unenforceable. In its complaint,
REO alleged that when one of its tenants, Ange Lara, applied
to receive utility services and paid the requested deposit, the
village clerk told her that she would not be provided with
such services until REO signed a guarantee as required by the
ordinance. According to the complaint, when REO informed
the village that it would not sign the guarantee, the village pro-
vided utility services to the property, but through an account
held by a member of REO rather than through an account
in Lara’s name. Although REO’s complaint named Lara as a
third-party defendant, nothing in our record indicates that Lara
has participated in the proceedings as a party.
- 795 -
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REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
REO’s complaint alleged that the ordinance was unconsti-
tutional and in violation of state and federal statutes. REO
alleged that the ordinance violated the Equal Protection Clauses
of the U.S and Nebraska Constitutions, as well as article III,
§ 18, of the Nebraska Constitution. It also alleged that the
ordinance violated the federal Equal Credit Opportunity Act,
see 15 U.S.C. § 1691 et seq. (2018), and Nebraska’s Uniform
Residential Landlord and Tenant Act, see Neb. Rev. Stat.
§§ 76-1401 to 76-1449 (Reissue 2018 & Supp. 2021). REO
asked the district court to declare that the ordinance was void
and unenforceable on each of these grounds.
Summary Judgment Evidence.
REO and the village eventually filed cross-motions for sum-
mary judgment. At the summary judgment hearing, the district
court received an affidavit from the village clerk, Gloria Riley.
In her affidavit, Riley asserted that she was responsible for
managing utility accounts for the village. Riley stated that a
previous renter of the property REO rented to Lara failed to
pay a utility bill of over $500 and that the residency of that
former tenant was unknown. She also stated that the village
“has spent substantial resources in trying to locate former
residential tenant utilities customers that have left town with
unpaid utility account obligations” and that the village had
previously used collection agencies to assist in pursuing a
recovery for these unpaid bills, but that such agencies would
charge 50 percent of the amount collected. According to Riley,
the ordinance was adopted to “further the goal of collection
by reducing the possibility that [the village] will be faced
with the administrative expenses associated with repeatedly
resorting to cumbersome and expensive foreclosure or collec-
tion proceedings.”
The district court also received an affidavit of Lara. Lara’s
affidavit was consistent with the allegations in REO’s com-
plaint regarding the village’s response to Lara’s application
for utility services.
- 796 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
Initial District Court Order
and First Appeal.
After the hearing on the motions for summary judgment,
the district court entered an order granting summary judgment
in favor of REO. In its order, the district court found that the
ordinance violated the Equal Protection Clauses of the U.S.
and Nebraska Constitutions. It reasoned that the ordinance
treated residential owners of property and residential tenants
differently and that there was no rational relationship between
the difference in treatment and the village’s interest in collect-
ing unpaid utility bills. The district court did not address the
other grounds REO offered in support of its request that the
ordinance be declared invalid.
The village appealed the district court’s decision, and we
reversed. We held that although the ordinance classified resi-
dential tenants and residential owners separately, the classifica-
tion was subject to and satisfied rational basis scrutiny and thus
did not violate the Equal Protection Clauses of the U.S. and
Nebraska Constitutions. We found that ensuring the collection
of utility bills was a plausible policy reason for the requirement
that renters obtain a landlord guarantee and that the differential
treatment of renters and owners was sufficiently related to the
goal of ensuring payment of utility bills so as not to render
the treatment arbitrary or irrational.
Proceedings on Remand.
After receiving and spreading our mandate in REO I, the
district court entered an order addressing REO’s other claims.
It found that the village was entitled to summary judgment
on each of those claims and thus granted the village’s motion
for summary judgment, overruled REO’s motion for summary
judgment, and dismissed the case.
REO timely appealed. We moved the case to our docket
on our own motion pursuant to Neb. Rev. Stat. § 24-1106(3)
(Cum. Supp. 2020).
- 797 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
ASSIGNMENTS OF ERROR
REO assigns that the district court erred by finding that
the ordinance (1) did not violate article III, § 18, of the
Nebraska Constitution, (2) did not violate the federal Equal
Credit Opportunity Act, and (3) was not void as against the
public policy of Nebraska. REO also assigns that the district
court committed plain error by finding that the village had
statutory authority to enact the ordinance.
STANDARD OF REVIEW
[1] An appellate court will affirm a lower court’s grant of
summary judgment if the pleadings and admitted evidence
show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts
and that the moving party is entitled to judgment as a matter of
law. D-CO, Inc. v. City of La Vista, 285 Neb. 676, 829 N.W.2d
105 (2013).
[2,3] The constitutionality of an ordinance presents a ques-
tion of law. Dowd Grain Co. v. County of Sarpy, 291 Neb.
620, 867 N.W.2d 599 (2015). An appellate court independently
reviews questions of law decided by a lower court. Id.
[4] The meaning and interpretation of statutes and regula-
tions are questions of law for which an appellate court has
an obligation to reach an independent conclusion irrespec-
tive of the decision made by the court below. In re App. No.
P-12.32 of Black Hills Neb. Gas, 311 Neb. 813, 976 N.W.2d
152 (2022).
[5] Plain error is error plainly evident from the record and
of such a nature that to leave it uncorrected would result in
damage to the integrity, reputation, or fairness of the judicial
process. North Star Mut. Ins. Co. v. Miller, 311 Neb. 941, 977
N.W.2d 195 (2022).
ANALYSIS
Special Legislation.
REO first claims that the district court should have declared
the ordinance unenforceable on the grounds that it violates
- 798 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
article III, § 18, of the Nebraska Constitution. The text of
article III, § 18, prohibits “[t]he Legislature” from “pass[ing]
local or special laws” in a set of enumerated circumstances.
The section concludes, “In all other cases where a general law
can be made applicable, no special law shall be enacted.” Id.
We have described article III, § 18, as generally prohibiting
“special legislation.” Big John’s Billiards v. State, 288 Neb.
938, 944, 852 N.W.2d 727, 734 (2014). We have said that the
special legislation prohibition applies to municipal ordinances.
See, e.g., D-CO, Inc., supra.
[6] So what exactly is it that article III, § 18, prohibits? Our
precedent holds that a legislative act constitutes special legis-
lation if (1) it creates an arbitrary and unreasonable method
of classification or (2) it creates a permanently closed class.
D-CO, Inc., supra. REO’s sole argument is that the ordinance
creates an arbitrary and unreasonable classification, so we next
turn our attention to the tests we have developed to identify
such classifications.
[7-9] In order to withstand a special legislation challenge,
i.e., to be valid, a legislative classification must be based
upon some reason of public policy, some substantial difference
in circumstances that would naturally suggest the justice or
expediency of diverse legislation regarding the objects to be
classified. Id. Legislative classifications must be real and not
illusive; they cannot be based on distinctions without a sub-
stantial difference. Id. A legislative body’s distinctive treatment
of a class is proper if the class has some reasonable distinction
from other subjects of a like general character. Id. And that
distinction must bear some reasonable relation to the legitimate
objectives and purposes of the legislative act. Id.
REO argues that by requiring only renters’ applications for
utility services to be supported by the guarantee of a third
party, the ordinance treats renters differently than it treats
owners. And it argues that there is no substantial difference in
circumstances between renters applying for utility services and
owners doing the same that justifies the differential treatment.
- 799 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
REO observes that some renters may be very creditworthy
while some owners may have very poor credit, and thus argues
that requiring only renters’ applications to be supported by a
guarantee is arbitrary.
If the village was attempting to defend the ordinance based
on a claim about the relative creditworthiness of renters and
owners of property, REO’s argument might have some force.
But, in fact, the village does not claim that the ordinance
is justified based solely on a difference in creditworthiness
between those two groups. Instead, the village’s argument
and Riley’s affidavit focus on the time and expense associ-
ated with collecting unpaid utility bills from renters. As noted
above, Riley’s affidavit stated that the village had spent sub-
stantial resources trying to locate former renters of property
with unpaid utility bills and had resorted to using collection
agencies that would take half of any amount collected. The
ordinance’s requirement of a landlord guarantee, according to
Riley, was intended to minimize the time and expense associ-
ated with those efforts.
We agree with the village that there is a substantial difference
in circumstances between renters and owners as to the time and
expense that are likely necessary to collect unpaid utility bills.
On this point, we find our opinion in REO I instructive. In the
course of our equal protection analysis in that case, we found
compelling the village’s assertion that “administrative and col-
lection costs associated with unpaid utility bills are more likely
to increase when seeking payment for services provided to
tenants versus residential owners.” REO I, 306 Neb. 683, 693,
947 N.W.2d 480, 488 (2020). We observed that tenants are
connected to the property through only a lease agreement and
that their connection to the property thus ceases when they
are no longer acting under the agreement, while owners are
more “tied” to the serviced property and thus provide a “static
source” that can be more easily contacted and from which
collection can be more easily pursued. Id. at 693, 694, 947
N.W.2d at 488. We also noted that a landlord guarantee could
- 800 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
help the village minimize collection costs, because the guar-
antee provides another party to account for amounts due, but
concluded that “a third-party guarantee does not equally apply
to residential owners who do not have a landlord third-party
relationship and are already tied to the serviced propert y.” Id.
at 694, 947 N.W.2d at 488.
Although the foregoing analysis was conducted in the con-
text of an equal protection challenge in REO I, we find it also
supports the conclusion that there is a substantial difference
in circumstances between renters and owners that justifies the
ordinance’s differential treatment of the two groups. We have
previously acknowledged that special legislation analysis is
similar to an equal protection analysis and that, in some cases,
both issues can be decided on the same facts. See Hug v. City
of Omaha, 275 Neb. 820, 749 N.W.2d 884 (2008). As a result,
language normally applied to an equal protection analysis is
sometimes used to help explain the reasoning employed under
a special legislation analysis. Id. That is the case here.
We are not dissuaded from our conclusion that the ordinance
did not violate article III, § 18, by an alternative argument
raised by REO challenging the adequacy of Riley’s affidavit.
In support of this argument, REO compares Riley’s affidavit to
a commissioned study a municipality offered in defending an
ordinance regulating rental properties against a special legisla-
tion challenge in D-CO, Inc. v. City of La Vista, 285 Neb. 676,
829 N.W.2d 105 (2013). REO also contends that Riley’s affi-
davit failed to compare the resources the village had expended
pursuing unpaid utility bills of renters to unpaid utility bills
of property owners and failed to consider the effectiveness of
other means the village could have used to recover renters’
unpaid utility bills, such as requiring deposits or pursuing liens
imposed on the property.
We disagree with REO’s contention that Riley’s affidavit
was inadequate. Although the municipality in D-CO, Inc.,
supra, relied on a commissioned study, our opinion in that
case did not require that type of evidence in every special
- 801 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
legislation challenge. Moreover, in that case, we relied on
more than just the commissioned study to determine that there
were substantial differences in circumstances between rental
properties and owner-occupied properties that justified the
municipality’s rental property regulations. The study did not
specifically show that rental properties within the municipal-
ity were dilapidated, but we relied on evidence of complaints
the municipality received about the condition of some rental
properties and of code violations it had found in some rental
properties. This anecdotal evidence is not unlike the evidence
set forth in Riley’s affidavit.
We also disagree with REO that the village was required
to offer evidence comparing the resources it had expended
attempting to collect unpaid utility bills from renters as opposed
to owners or show that it had considered the effectiveness of
other potential means of pursuing renters’ unpaid utility bills.
REO’s argument that this information was required overlooks
aspects of our special legislation doctrine. Even assuming the
village had also invested significant time and money in pursu-
ing unpaid utility bills associated with owner-occupied proper-
ties, our special legislation jurisprudence would not preclude it
from attempting to minimize the resources it must expend to
pursue renters’ unpaid utility bills. As we said in D-CO, Inc.,
in response to an argument that there were also maintenance
problems associated with owner-occupied properties in the
relevant municipality, government entities are “not required to
solve every problem at once.” 285 Neb. at 685, 829 N.W.2d
at 112.
In addition, even if the village may have had other means
at its disposal to pursue renters’ unpaid utility bills, it does
not follow that the ordinance is prohibited special legisla-
tion. As we have explained, the special legislation inquiry
is focused on whether the distinctive treatment of classes is
based on a substantial difference in circumstances between
the classes that justifies the distinctive treatment. Because
we find that there was such a substantial difference here, we
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312 Nebraska Reports
REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
conclude that REO’s special legislation challenge to the ordi-
nance fails.
Equal Credit Opportunity Act.
We next consider REO’s contention that the ordinance is
unenforceable because it violates the federal Equal Credit
Opportunity Act (ECOA). The ECOA prohibits creditors from
discriminating against applicants for credit on various bases.
See 15 U.S.C. § 1691(a). REO’s argument that the ordinance
violates the ECOA is based on a regulation promulgated to
enforce that statute. The regulation REO relies upon provides
that creditors may not generally require “the signature of an
applicant’s spouse or other person” on a credit instrument “if
the applicant qualifies under the creditor’s standards of credit-
worthiness for the amount and terms of the credit requested.”
12 C.F.R. § 1002.7(d)(1) (2021). REO contends that when a
renter applies to receive utility services from the village, he or
she is applying for credit. And because the ordinance requires
that the renter’s application be supported by the guarantee of
his or her landlord without any consideration of the renter’s
creditworthiness, REO argues that the ordinance violates the
ECOA. As we will explain, however, it is not necessary for
us to determine whether the ordinance is inconsistent with
the ECOA, because REO was not entitled to seek relief under
that act.
REO claims that a provision of the ECOA, 15 U.S.C.
§ 1691e(c), authorized it to ask the district court to declare the
ordinance invalid. Section 1691e(c) of the ECOA provides that
“[u]pon application by an aggrieved applicant, the appropriate
United States district court or any other court of competent
jurisdiction may grant such equitable and declaratory relief as
is necessary to enforce the requirements imposed under this
subchapter.” REO focuses on the language authorizing courts
of competent jurisdiction to grant equitable and declaratory
relief, but it glosses over the fact that § 1691e(c) authorizes
only an “aggrieved applicant” to seek such relief.
- 803 -
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REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
The ECOA defines an “applicant” as “any person who
applies to a creditor directly for an extension, renewal, or con-
tinuation of credit, or applies to a creditor indirectly by use of
an existing credit plan for an amount exceeding a previously
established credit limit.” 15 U.S.C. § 1691a(b). For present
purposes, we will assume for the sake of argument that when
a person applies to the village to receive utility services, he
or she is requesting an extension of credit for purposes of the
ECOA. Having made this assumption, we would have no dif-
ficulty in finding that a renter seeking utility services is an
“applicant” under the ECOA. But, even with that assumption,
it is not so clear that REO is an “applicant” for purposes of
the statute.
REO asserts that the ordinance violates the ECOA by
requiring REO to serve as a guarantor. At least two federal
courts of appeal have expressly held that, notwithstanding a
regulation of the Federal Reserve Bank providing that “the
term [applicant] includes guarantors,” see 12 C.F.R. § 202.2(e)
(2021), a guarantor is not an “applicant” under the ECOA.
The U.S. Court of Appeals for the Eighth Circuit reached that
conclusion in Hawkins v. Community Bank of Raymore, 761
F.3d 937 (8th Cir. 2014), affirmed by an equally divided court,
577 U.S. 495, 136 S. Ct. 1072, 194 L. Ed. 2d 163 (2016). It
observed that to qualify as an “applicant” under the definition
provided in the ECOA, a person must “apply” for, that is,
request, credit. It reasoned that a guarantor is not an “appli-
cant,” because a guarantor agrees to pay the debt of another in
the event of default, but does not itself request credit. As the
Eighth Circuit put it, “[a] guarantor engages in different con-
duct, receives different benefits, and exposes herself to differ-
ent legal consequences than does a credit applicant.” Hawkins,
761 F.3d at 942.
More recently, the U.S. Court of Appeals for the Eleventh
Circuit also concluded that a guarantor was not an “applicant”
under the ECOA. See Regions Bank v. Legal Outsource PA,
936 F.3d 1184 (11th Cir. 2019). Relying on a number of legal
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REO ENTERS. V. VILLAGE OF DORCHESTER
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and other dictionaries, that court concluded that the ordinary
meaning of the term “applicant” under the ECOA is “one who
requests credit to benefit himself.” Regions Bank, 936 F.3d at
1191. The Eleventh Circuit concluded that a guarantor did not
fit within this definition, explaining that “[a]lthough a guaran-
tor makes a promise related to an applicant’s request for credit,
the guaranty is not itself a request for credit, and certainly not
a request for credit for the guarantor.” Id.
The U.S. Court of Appeals for the Seventh Circuit has also
expressed doubt about whether a guarantor qualifies as an
“applicant” under the ECOA in Moran Foods v. Mid-Atlantic
Market Development, 476 F.3d 436 (7th Cir. 2007). The court
ultimately decided that case on other grounds, but not before
observing that “there is nothing ambiguous about ‘applicant’
and no way to confuse an applicant with a guarantor.” Id.
at 441.
Although one other federal court of appeals has concluded
that for purposes of the ECOA, “applicant” could reasonably
be construed to include a guarantor, see RL BB Acquisition v.
Bridgemill Commons Dev. Group, 754 F.3d 380 (6th Cir. 2014),
we find the reasoning of the Seventh, Eighth, and Eleventh
Circuits persuasive. A guarantor may support an application
for credit, but, in our view, a guarantor does not itself apply
for credit and is thus not an “applicant” under the plain terms
of the ECOA.
Because REO did not qualify as an “applicant” under the
ECOA, it could not seek declaratory or equitable relief under
15 U.S.C. § 1691e(c). And, contrary to REO’s suggestion
otherwise, it could not obtain relief under the ECOA by nam-
ing Lara as a third-party defendant. As we have discussed,
§ 1691e(c) authorizes courts to grant relief to enforce the
ECOA “[u]pon application by an aggrieved applicant . . . .”
Even if Lara qualified as an “applicant” for credit under the
ECOA, she did not make an “application” to the district court
for relief. REO alone asked the district court to declare the
ordinance invalid.
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REO ENTERS. V. VILLAGE OF DORCHESTER
Cite as 312 Neb. 792
Because we find that REO was not entitled to seek relief
under the ECOA, we find no error in the district court’s entry
of summary judgment on REO’s claim that the ECOA rendered
the ordinance invalid.
Public Policy.
Next, we address REO’s argument that the district court
erred by rejecting REO’s claim that the ordinance violated
Nebraska public policy. REO alleged in its complaint and now
argues on appeal that the ordinance “violates public policy as
established by the Nebraska Uniform Residential Landlord
[and] Tenant Act.” Brief for appellant at 12. REO focuses on
a particular provision of the Uniform Residential Landlord and
Tenant Act, § 76-1416, which generally prohibits landlords
from demanding a security deposit exceeding 1 month’s rent.
REO argues that because state law caps the amount landlords
may demand as a security deposit, the ordinance cannot create
the potential for additional liability by requiring a landlord to
provide a guarantee in support of a tenant’s application for util-
ity services.
While REO clearly takes the position that the district court
should have declared the ordinance invalid given the statutory
limit on the amount landlords may require as a security deposit,
the precise legal theory it is relying on is less obvious. REO
claims that the ordinance is “void as against public policy.”
Brief for appellant at 26. The only case it relies on in support
of this argument is a New Jersey case that used that language
in finding a municipal ordinance unenforceable. See Economy
Enterprises, Inc. v. Township Committee, 104 N.J. Super. 373,
250 A.2d 139 (1969). REO does not, however, direct us to any
Nebraska authority holding that a municipal ordinance can be
“void as against public policy,” and we are not aware of any
such doctrine under Nebraska law.
Municipal ordinances can of course be preempted by state
law. See State ex rel. City of Alma v. Furnas Cty. Farms, 266
Neb. 558, 667 N.W.2d 512 (2003). This can occur in three
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Cite as 312 Neb. 792
different circumstances: (1) where the Legislature expressly
declares in explicit statutory language its intent to preempt
municipal ordinances, (2) where the Legislature’s intent to
preempt municipal ordinances may be inferred from a compre-
hensive scheme of legislation, and (3) where a municipal ordi-
nance actually conflicts with state law. See id. REO, however,
has not made a preemption argument of any kind, let alone
shown that the ordinance is preempted under the recognized
categories discussed above.
We find no error in the district court’s rejection of REO’s
claim that the ordinance violated Nebraska public policy.
Plain Error.
Finally, we come to REO’s argument that the district court
committed plain error. Here, REO contends that the village
lacked the statutory authority to enact the ordinance. And while
REO concedes that it did not raise this issue before the district
court, it asserts that the district court nonetheless plainly erred
by finding that the village had the statutory authority to enact
the ordinance. We disagree.
Plain error is error plainly evident from the record and
of such a nature that to leave it uncorrected would result in
damage to the integrity, reputation, or fairness of the judicial
process. North Star Mut. Ins. Co. v. Miller, 311 Neb. 941, 977
N.W.2d 195 (2022). While REO assigns that the district court
erred by finding that the village had the statutory authority to
enact the ordinance, the district court did not expressly con-
sider that issue. That is not surprising given REO’s concession
that it did not raise the issue of the village’s statutory authority
to enact the ordinance in the district court.
To the extent REO claims the district court committed plain
error by not finding that the village lacked statutory author-
ity, we would still disagree. As noted above, the district court
resolved the case on the parties’ cross-motions for summary
judgment. We have held, however, that a court may not enter a
summary judgment on an issue not presented by the pleadings.
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See, e.g., Green v. Box Butte General Hosp., 284 Neb. 243,
818 N.W.2d 589 (2012). Because the district court could not
properly enter summary judgment on an issue REO concedes
it did not raise in the district court, the district court obviously
did not commit plain error by not doing so.
CONCLUSION
We find no error in the district court’s entry of summary
judgment in favor of the village and against REO. Accordingly,
we affirm.
Affirmed.
Papik, J., concurring.
I agree with the majority opinion in all respects, including
its conclusion that under our current precedent, the ordinance
at issue does not qualify as special legislation prohibited by
article III, § 18, of the Nebraska Constitution. I write sepa-
rately, however, to suggest that certain aspects of our precedent
in this area may not be consistent with the text and original
meaning of that constitutional provision.
Application to Municipal Ordinances.
I have more than one concern with our current special leg-
islation precedent. The first is whether the limits on special
legislation expressed in article III, § 18, properly apply to
municipal ordinances like the one challenged in this case. This
court held that a municipal ordinance violated article III, § 18,
as early as 1964. See Midwest Employers Council, Inc. v. City
of Omaha, 177 Neb. 877, 131 N.W.2d 609 (1964). We have
since said on numerous occasions that article III, § 18, applies
to municipal ordinances. See, e.g., Dowd Grain Co. v. County
of Sarpy, 291 Neb. 620, 867 N.W.2d 599 (2015); D-CO, Inc. v.
City of La Vista, 285 Neb. 676, 829 N.W.2d 105 (2013). But,
as far as I can tell, we have never explored whether there is a
principled basis for interpreting the text of article III, § 18, to
do so. I am skeptical such a basis exists.
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Article III, § 18, provides that “[t]he Legislature shall not
pass local or special laws” in several enumerated circum-
stances. (Emphasis supplied.) After that list of enumerated
circumstances, article III, § 18, states as follows:
Provided, that notwithstanding any other provisions of
this Constitution, the Legislature shall have authority
to separately define and classify loans and installment
sales, to establish maximum rates within classifications
of loans or installment sales which it establishes, and to
regulate with respect thereto. In all other cases where a
general law can be made applicable, no special law shall
be enacted.
(Second emphasis supplied.)
Article III, § 18, thus contains three rules for three categories
of cases: (1) an absolute prohibition on local or special laws
in the specifically enumerated circumstances, (2) an explicit
authorization of certain special legislation regarding loans and
installment sales, and (3) for all other cases, a prohibition on
special laws if “a general law can be made applicable.” For
ease of reference, I will refer to these provisions respectively
as “the absolute prohibition,” “the loans and installment sales
exception,” and “the catchall prohibition.”
I can discern no textual basis for concluding that the abso-
lute prohibition applies to municipal ordinances. The text pro-
vides that only “the Legislature” shall not pass local or special
laws in the enumerated circumstances. No mention is made of
acts of other branches or levels of government.
As for the catchall prohibition, perhaps one could muster an
argument that it applies to municipal ordinances by emphasiz-
ing that the sentence in which it appears does not expressly
refer to the Legislature. But while the catchall prohibition
does not refer to any enacting authority, it immediately fol-
lows the absolute prohibition and the loans and installments
sales exception, both of which expressly refer only to the
Legislature. This context suggests to me that all of article
III, § 18, is aimed at laws passed by the Legislature. If that
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context were not enough, the placement of this constitutional
provision in article III, the article of the Nebraska Constitution
discussing the enactment of statewide legislation, provides
yet more evidence that article III, § 18, does not apply to
municipal ordinances. See, also, Robert D. Miewald et al., The
Nebraska State Constitution: A Reference Guide 156 (2d ed.
2009) (observing that text of article III, § 18, appears to limit
its application to Legislature).
I recognize that this court has held that another provi-
sion of the state Constitution that refers expressly only to the
Legislature—article III, § 19—nonetheless applies to political
subdivisions of the State. See Retired City Civ. Emp. Club of
Omaha v. City of Omaha Emp. Ret. Sys., 199 Neb. 507, 260
N.W.2d 472 (1977). In that case, we reasoned that to hold
otherwise would permit the State to evade this constitutional
restriction by creating a political subdivision and authoriz-
ing it to do what the Nebraska Constitution prohibited the
Legislature from doing.
Whatever the merits of that reasoning with respect to article
III, § 19, it seems a stretch to apply it to article III, § 18. In
addition to restricting the enactment of “special laws,” the
absolute prohibition of article III, § 18, forbids the enactment
of “local” laws on subjects including “[r]egulating [c]ounty
and [t]ownship offices”; “changing or amending the charter of
any [t]own, [c]ity, or [v]illage”; “[p]roviding for the bonding
of cities, towns, precincts, school districts or other munici-
palities”; and “[p]roviding for the management of [p]ublic
[s]chools.” If article III, § 18, applies to political subdivisions,
its terms would appear to prevent those political subdivisions
from governing themselves in several key areas. No such
problems arise if article III, § 18, is interpreted to apply only
to the Legislature.
Special Legislation Test.
I also have a more general concern about our special leg-
islation jurisprudence: I question whether the test we use to
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identify “special laws” is consistent with the original meaning
of that term.
Nebraska’s article III, § 18, is far from unique. Similar
provisions are found in the legislative articles of approx-
imately 30 other state constitutions. See Anthony Schutz,
State Constitutional Restrictions on Special Legislation as
Structural Restraints, 40 J. Legis. 39 (2013). A number of
jurists who have examined the history of such provisions have
concluded that the restrictions on “special laws” would have
been originally understood as restricting a then-common legis-
lative practice of passing legislation that, by its terms, applied
only to an individual person, corporation, or other entity.
See, Laurance B. VanMeter, Reconsideration of Kentucky’s
Prohibition of Special and Local Legislation, 109 Ky. L.J. 523,
524 (2021) (contending that original understanding of special
legislation prohibited by Kentucky constitution was legisla-
tion that “refer[red] only to a particular individual or entity”);
Schutz, 40 J. Legis. at 58 (contending that “the primary focus
of these provisions was on laws that identified an object and
singled it out for special treatment”); Robert M. Ireland, The
Problem of Local, Private, and Special Legislation in the
Nineteenth-Century United States, 46 Am. J. Legal Hist. 271
(2004). Under this conception, examples of special legislation
would be acts granting a legal remedy or benefit to a specifi-
cally identified party. See, also, Calloway Cty. Sheriff ’s Dep’t
v. Woodall, 607 S.W.3d 557, 572 (Ky. 2020) (concluding that
original understanding of local or special legislation is legisla-
tion that “applies exclusively to particular places or particu-
lar persons”).
If these scholars are correct about the original understand-
ing of the term “special laws,” our special legislation test
may be due for reconsideration. We have held that a legisla-
tive act will be found to constitute special legislation if it
creates an arbitrary and unreasonable method of classifica-
tion. See D-CO, Inc. v. City of La Vista, 285 Neb. 676, 829
N.W.2d 105 (2013). But a statute could create an unreasonable
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classification and be nothing like the type of individualized
statutes the scholars cited above contend were the original tar-
get of special legislation prohibitions. Taking this case as the
basis for an example, if a statute unreasonably or arbitrarily
treats property owners and property renters differently and
without sufficient justification, it would be special legislation
under our current precedent, but it is difficult to see how such
a statute looks anything like a law that singles out a specifi-
cally identified party for special treatment.
Instead of policing individualized legislation, it seems to
me that our current special legislation precedent’s focus on
the reasonableness of classifications provides an avenue for
parties to obtain something akin to heightened equal protec-
tion review. Our precedent says that to withstand a special
legislation challenge, a legislative classification “must rest
upon some reason of public policy, some substantial difference
in circumstances, which would naturally suggest the justice or
expediency of diverse legislation regarding the objects to be
classified.” Dowd Grain Co. v. County of Sarpy, 291 Neb. 620,
628, 867 N.W.2d 599, 606 (2015). To my ears, that sounds a
lot like the intermediate scrutiny test developed by the U.S.
Supreme Court under which certain types of classifications
“must serve important governmental objectives and must be
substantially related to achievement of those objectives.” See,
e.g., Friehe v. Schaad, 249 Neb. 825, 832, 545 N.W.2d 740,
746 (1996).
We have, I acknowledge, asserted that the focus of our spe-
cial legislation test is different from the tests used to evaluate
equal protection challenges. Specifically, we have said the
following:
The analysis under a special legislation inquiry focuses
on the Legislature’s purpose in creating the class and
asks if there is a substantial difference of circumstances
to suggest the expediency of diverse legislation. This
is different from an equal protection analysis under
which the state interest in legislation is compared to the
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statutory means selected by the Legislature to accomplish
that purpose.
Gourley v. Nebraska Methodist Health Sys., 265 Neb. 918, 939,
663 N.W.2d 43, 66 (2003).
With all due respect, I am not sure I grasp the difference the
foregoing quote purports to identify. Instead, I am sympathetic
to the view of a group of commentators who have called the
distinction identified above “somewhat fleeting.” Miewald et
al., supra at 159.
To the extent our special legislation jurisprudence allows
parties to obtain something like intermediate scrutiny equal
protection review by alleging that a classification is spe-
cial legislation, it is effectively a more expansive Equal
Protection Clause. Unless a legislative classification jeop-
ardizes the exercise of a fundamental right or categorizes
on the basis of an inherently suspect characteristic, an equal
protection challenge to that classification is analyzed using
the deferential rational basis standard. See REO Enters. v.
Village of Dorchester, 306 Neb. 683, 947 N.W.2d 480 (2020).
But this limitation does not apply to challenges brought to
legislation under article III, § 18: One need not allege the
jeopardization of a fundamental right or the use of a sus-
pect classification to trigger the arguably heightened review
required by our article III, § 18, precedent. It is not clear
to me, however, that the text or history of article III, § 18,
suggests that this provision should be policing the reason-
ableness of legislative classifications at all, let alone under a
heightened standard of scrutiny. See Schutz, 40 J. Legis. at
55 (“[t]he text of special-legislation provisions reveals little
in terms of a concern for substantive equality, whether it is
the minoritarian concerns of the mid- to late-1800s or some
broader notion of equality”).
Conclusion.
No party in this case asked us to reconsider whether article
III, § 18, properly applies to municipal ordinances. Neither
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were we asked to reconsider the tests we have developed to
identify special legislation under that constitutional provision.
In the absence of such arguments, the majority’s decision
to analyze this case under our current precedent makes per-
fect sense.
That said, this court has emphasized that the “main inquiry”
in interpreting the Nebraska Constitution is the original
meaning of its provisions. See State ex rel. State Railway
Commission v. Ramsey, 151 Neb. 333, 340, 37 N.W.2d 502,
507 (1949). We have also stressed the importance of adhering
to the text of constitutional provisions. See id. For the reasons
discussed in this concurrence, I believe our precedent under
article III, § 18, may not be entirely consistent with that pro-
vision’s original meaning and text. In an appropriate case, I
would be open to reconsidering that precedent. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487111/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
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SCHREIBER BROS. HOG CO. V. SCHREIBER
Cite as 312 Neb. 707
Schreiber Brothers Hog Company, LLC,
a Nebraska limited liability company,
and Steven Schreiber, an individual
member, appellees, v. Jerald
Schreiber, an individual
member, appellant.
___ N.W.2d___
Filed October 28, 2022. No. S-21-570.
1. Jurisdiction: Appeal and Error. A jurisdictional question that does not
involve a factual dispute is determined by an appellate court as a matter
of law.
2. Judgments: Appeal and Error. When reviewing questions of law, an
appellate court resolves the questions independently of the lower court’s
conclusions.
3. Jurisdiction: Appeal and Error. Appellate courts have an independent
obligation to ensure they have appellate jurisdiction.
4. Actions. A special proceeding includes every special statutory remedy
that is not itself an action.
5. Actions: Words and Phrases. An action is any proceeding in a court by
which a party prosecutes another for enforcement, protection, or deter-
mination of a right or the redress or prevention of a wrong involving and
requiring the pleadings, process, and procedure provided by statute and
ending in a judgment.
6. Final Orders: Words and Phrases. A substantial right is an essential
legal right, not a mere technical right.
7. Final Orders: Appeal and Error. A substantial right is affected if an
order affects the subject matter of the litigation, such as by diminishing
a claim or defense that was available to an appellant before the order
from which an appeal is taken.
8. Final Orders. It is not enough that the right itself be substantial; the
effect of the order on that right must also be substantial.
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Cite as 312 Neb. 707
9. Final Orders: Appeal and Error. A substantial right is not affected
when that right can be effectively vindicated in an appeal from the final
judgment.
10. Restitution: Unjust Enrichment. To recover under a theory of unjust
enrichment, the plaintiff must allege facts that the law of restitution
would recognize as unjust enrichment.
11. Contracts: Unjust Enrichment. One who is free from fault cannot be
held to be unjustly enriched merely because one has chosen to exercise
a contractual or legal right.
12. ____: ____. The doctrine of unjust enrichment is recognized only in the
absence of an agreement between the parties.
Appeal from the District Court for Platte County: Robert R.
Steinke, Judge. Appeal dismissed in part, and in part reversed
and remanded with directions.
David A. Domina, of Domina Law Group, P.C., L.L.O., for
appellant.
Jonathan M. Brown, of Walentine O’Toole, L.L.P., for
appellees.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Papik, J.
After Steven Schreiber filed a complaint asking for the dis-
solution of the limited liability company he owned in equal
shares with his brother, Jerald Schreiber, the district court
ordered dissolution and directed a receiver to liquidate the
company’s assets. Those assets included two buildings owned
by the company but located on land owned by Jerald. Jerald
made the only offer to purchase the buildings, but Steven
contended that if the buildings were sold to Jerald at the
price offered, Jerald would be unjustly enriched. The parties
later agreed that the district court should order the receiver to
accept Jerald’s offer, but that Steven and the company should
be allowed to continue to pursue a claim of unjust enrich-
ment. Following a trial, the district court found that Jerald
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Cite as 312 Neb. 707
was unjustly enriched and ordered him to pay an additional
$400,184 to the company. The district court also denied a
motion filed by Jerald asking the district court to provide fur-
ther directions to the receiver.
In Jerald’s appeal of these rulings, we find that we lack
jurisdiction to review the order denying the motion for further
directions but that the district court erred in its unjust enrich-
ment finding. We therefore dismiss in part, and in part reverse
and remand with directions.
I. BACKGROUND
1. Dissolution Action Filed;
Receiver Appointed
Jerald and Steven formed the Schreiber Brothers Hog
Company, LLC, in 2011. They each owned a 50-percent inter-
est in the company and managed it together for a number
of years.
This case began when Steven commenced an action in the
district court on behalf of the company and himself seeking the
judicial dissolution of the company pursuant to Neb. Rev. Stat.
§ 21-147(a)(5) (Cum. Supp. 2021). Jerald eventually agreed
that the company should be dissolved and that a receiver
should be appointed to wind up the company’s affairs. The
district court subsequently ordered dissolution and appointed a
receiver to wind up the company’s activities.
2. Complaint Amended to Raise Claims
Regarding Hog Buildings
After the receiver had begun his work and liquidated most of
the company’s assets, Steven and the company obtained leave
to file an amended complaint. The amended complaint added
several additional claims for relief, all of which pertained to
two buildings used in the company’s hog production busi-
ness which the receiver had not yet sold. The two buildings
are referred to by the parties as a “finishing building” and a
“nursery.” All agree that these buildings were owned by the
company, but located on land owned only by Jerald.
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Cite as 312 Neb. 707
In the amended complaint, Steven and the company requested
that the district court quiet title to the real property upon which
the buildings were located in the company’s name on the basis
of adverse possession. Alternatively, they requested that the
district court grant the company a prescriptive easement or
easement by necessity to allow it and any successors in interest
or grantees to enter the real property upon which the buildings
were located as the company had during its operation. As a
final alternative, Steven and the company alleged that if they
did not obtain any of the previously described relief, the com-
pany was entitled to a judgment for unjust enrichment against
Jerald in the amount of the fair market value of the property.
The amended complaint alleged that an appraisal obtained by
the receiver estimated the market value of the buildings to be
$450,000.
After conducting some discovery, Steven and the company
voluntarily dismissed their claims for adverse possession, pre-
scriptive easement, and easement by necessity.
3. Hearing on Disposition of
Hog Buildings
Before adjudicating the remaining claim of unjust enrich-
ment, the district court held a hearing regarding what action the
receiver should take as to the buildings. Prior to the hearing,
counsel for Steven and the company argued that the district
court should either enter an order declaring the buildings the
“de facto assets of Jerald” and ordering him to pay for their
reasonable value or order that the buildings be dismantled.
Counsel for Jerald argued that the buildings should be sold to
the highest bidder.
The district court received evidence at the hearing, including
testimony from Steven, Jerald, and the receiver. The evidence
established that when the buildings were constructed in 1994
and 1997, the company was not yet formed, and that Jerald and
Steven were working together as part of a general partnership.
Jerald testified that at the time the buildings were built on his
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property, Steven knew that the buildings were being built on
land that Jerald owned.
After the formation of the company, the buildings came to
be owned by the company, but Jerald continued to own the real
property where they were located. The receiver testified that he
attempted to sell the buildings along with the rest of the com-
pany’s assets, but that many parties who made initial inquiries
about purchasing the buildings lost interest upon learning that
the land upon which the buildings were located was not for
sale and that there was no legal right of ingress and egress to
access the buildings. The receiver testified that Jerald made
the only offer to purchase the buildings and that he offered to
purchase them for their assessed value, which was $18,000.
Jerald confirmed that he was willing to purchase the buildings
for $18,000. He also acknowledged that he was not willing to
grant an easement to allow a buyer of the buildings to access
them. He testified that he would not want to have “someone
else going in and out of there any time of the day or night on
their own accord.”
An appraiser hired by the receiver also testified. The
appraiser testified that in his opinion, the buildings were
worth $450,000. He testified that he formed this opinion
by calculating the difference between the value of the land
together with the buildings and the value of the land without
the buildings. The district court also received evidence about
whether or not the buildings were operational. On this point,
there was some disagreement by the witnesses. The receiver
described the buildings as operational, but Jerald and his son
testified the buildings were in a state of significant disrepair
from nonuse, termination of utilities, frost and thaw cycles,
and condensation damage.
At the conclusion of the hearing, the parties agreed that they
would submit written briefs to the district court and that the
district court would take the matter under advisement. The dis-
trict court also scheduled a trial on the remaining unjust enrich-
ment claim asserted by Steven and the company.
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4. Trial on Unjust Enrichment Claim
On the day the unjust enrichment claim was scheduled to
be tried, the district court stated on the record that the parties
had reached an agreement that the receiver should be directed
to accept Jerald’s offer to purchase the buildings for $18,000,
“with the understanding that nothing with respect to that stipu-
lation of the parties would be construed as a final determina-
tion on the [unjust enrichment claim,] which [Steven and the
company] then would pursue.” The district court later entered
a written order to the same effect.
With respect to the district court’s consideration of the
unjust enrichment claim, the parties agreed that the district
court could consider all evidence and testimony offered at the
prior hearing regarding the disposition of the buildings. Jerald
and Steven also provided additional limited testimony.
After taking the matter under advisement, the district court
entered a written order finding that judgment should be entered
in favor of the company and against Jerald on the unjust
enrichment claim. The district court relied heavily upon an
opinion of the Arkansas Court of Appeals, Trickett v. Spann,
2020 Ark. App. 552, 613 S.W.3d 773 (2020). We discuss this
case in more detail in the analysis section below.
The district court also found that because the buildings
could not be sold with a right to ingress and egress, they had
value only to Jerald. It reasoned that if Jerald were allowed to
obtain the property for only the price for which he offered to
purchase them, the company would not receive “reasonable
compensation” and Jerald would receive a “personal windfall
to which he is not entitled.”
On the issue of damages, the district court noted some
of Jerald’s evidence showing that the buildings would need
repairs before they could be used, but concluded that the
appraiser’s opinion was the only credible evidence of valua-
tion. The district court found that the reasonable value of the
buildings was just over $418,000 and ordered Jerald to pay the
difference between that amount and the $18,000 he previously
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tendered to purchase the buildings. Because the buildings were
owned by the company, the district court dismissed Steven’s
claim for unjust enrichment.
5. Motion for Further Directions
After the receiver was appointed, Jerald filed a motion pur-
suant to Neb. Rev. Stat. § 25-1087 (Reissue 2016) requesting
that the district court enter an order providing further direc-
tions to the receiver. Among other things, Jerald requested that
the district court order the receiver to pay certain bills Jerald
claims were incurred by the company, both before and after the
appointment of the receiver. The motion alleged that Jerald had
requested that the receiver pay the bills and that the receiver
had refused.
The district court held a hearing on the motion for further
directions on the same day it held trial on the unjust enrich-
ment claim. At the hearing, Jerald testified regarding several
bills he contended were incurred by the company, but the
receiver had refused to pay. The receiver also testified. When
asked by Jerald’s counsel about several of the bills for which
Jerald sought court direction to pay, the receiver testified that
he had not yet paid the bills, but he would consider paying
them. With respect to other bills, he testified that he did not
believe they were legitimate expenses of the company. In
response to a question about whether a bill should be paid,
the receiver stated that he had a “budget problem,” which
we understand to refer to the fact that the amount of the bills
Jerald was asking the district court to direct the receiver to pay
exceeded the funds held by the receiver.
In the same document in which the district court explained
its unjust enrichment finding, it denied the relief requested in
the motion for further directions without further explanation.
6. Appeal
Jerald filed an appeal within 30 days of the district court’s
order finding unjust enrichment and denying the motion for
further directions. We moved the case to our docket.
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II. ASSIGNMENTS OF ERROR
Jerald assigns several errors on appeal, but they can be con-
solidated and restated as three: He contends that the district
court erred (1) in its finding that the company was entitled to
recover on its unjust enrichment claim, (2) in its calculation
of the amount that Steven was unjustly enriched, and (3) in its
denial of Jerald’s motion for further directions regarding the
payment of bills.
III. STANDARD OF REVIEW
The parties disagree on the standard of review we should
apply to Jerald’s arguments concerning the unjust enrichment
judgment. Steven and the company contend that our opinion in
City of Scottsbluff v. Waste Connections of Neb., 282 Neb. 848,
809 N.W.2d 725 (2011), holds that claims of unjust enrich-
ment are actions at law and that thus, we should apply the
standard of review we would normally apply in reviewing a
bench trial of a law action, i.e., the court’s factual findings are
not disturbed unless clearly wrong, but questions of law are
reviewed independently. Jerald, on the other hand, contends
that because the unjust enrichment claims were raised in the
context of an action to dissolve the company and actions to
dissolve a limited liability company are actions in equity, we
should apply the standard of review applicable to appeals from
bench trials of equity actions, i.e., de novo on the record, with
this court independently resolving both questions of law and
questions of fact. See Schmid v. Simmons, 311 Neb. 48, 970
N.W.2d 735 (2022). We find that we need not resolve this dis-
pute as to the standard of review. Jerald’s unjust enrichment
arguments primarily turn on issues of law, and even under the
more deferential standard of review urged by Steven and the
company, we find that the district court’s unjust enrichment
finding is erroneous.
[1,2] A jurisdictional question that does not involve a fac-
tual dispute is determined by an appellate court as a matter of
law. In re Estate of Beltran, 310 Neb. 174, 964 N.W.2d 714
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(2021). When reviewing questions of law, an appellate court
resolves the questions independently of the lower court’s con-
clusions. Id.
IV. ANALYSIS
1. Appellate Jurisdiction
[3] While the issue of appellate jurisdiction was not initially
raised by the parties, we have an independent obligation to
ensure we have appellate jurisdiction. State v. Reames, 308
Neb. 361, 953 N.W.2d 807 (2021). With that duty in mind,
we ordered the parties to submit supplemental briefing on
the issue. We now consider that issue, first as to the denial of
the motion for further directions and then as to the finding of
unjust enrichment.
(a) Motion for Further Directions
We begin our analysis of our jurisdiction to review the
district court’s denial of Jerald’s motion for further directions
with Neb. Rev. Stat. § 25-1090 (Reissue 2016). That statute
provides that “[a]ll orders appointing receivers” and “giving
them further directions” may be appealed. Id. Jerald takes the
position that because the district court did not give further
directions but denied his request to do so, this statute does not
authorize our review. We agree. Jerald argues, however, that
we have jurisdiction to review the district court’s order because
it qualifies as a final order under Neb. Rev. Stat. § 25-1902
(Cum. Supp. 2020). We consider that issue next.
Section 25-1902 currently recognizes four categories of final
orders. In our view, however, the order denying the motion for
further directions could fit into only one such category: those
orders “affecting a substantial right made during a special pro-
ceeding.” § 25-1902(1)(b).
[4,5] A special proceeding occurs where the law confers a
right and authorizes a special application to a court to enforce
it. See In re Grand Jury of Douglas Cty., 302 Neb. 128,
922 N.W.2d 226 (2019). A special proceeding includes every
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special statutory remedy that is not itself an action. See Kremer
v. Rural Community Ins. Co., 280 Neb. 591, 788 N.W.2d 538
(2010). An action is any proceeding in a court by which a party
prosecutes another for enforcement, protection, or determina-
tion of a right or the redress or prevention of a wrong involving
and requiring the pleadings, process, and procedure provided
by statute and ending in a judgment. In re Grand Jury of
Douglas Cty., supra. Every other legal proceeding by which a
remedy is sought by original application to a court is a special
proceeding. Id.
Applying these rules, we find that once the district court
granted dissolution and appointed a receiver, a special pro-
ceeding commenced. Neb. Rev. Stat. § 21-148(e) (Reissue
2012) authorizes the district court, on application of a mem-
ber of a limited liability company (LLC), to “order judicial
supervision of the winding up of a dissolved [LLC], including
the appointment of a person to wind up the company’s activi-
ties.” Judicial supervision of the winding up an LLC is thus a
remedy that may be sought by application to a court, but it is
not an action. Treating judicial supervision of a receivership
as a special proceeding is also consistent with our precedent.
In Sutton v. Killham, 285 Neb. 1, 825 N.W.2d 188 (2013),
we held that we could review a district court’s determination
that a receiver could deny a claim for payment of services
as an action that affected a substantial right during a special
proceeding.
[6-9] The fact that the order denying the motion for further
directions was issued in a special proceeding does not, by
itself, make the order appealable. The order must have also
affected a substantial right. See § 25-1902(1)(b). A substantial
right is an essential legal right, not a mere technical right. In
re Estate of Beltran, 310 Neb. 174, 964 N.W.2d 714 (2021). A
substantial right is affected if an order affects the subject mat-
ter of the litigation, such as by diminishing a claim or defense
that was available to an appellant before the order from which
an appeal is taken. Id. It is not enough that the right itself
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be substantial; the effect of the order on that right must also
be substantial. Id. A substantial right is not affected when that
right can be effectively vindicated in an appeal from the final
judgment. In re Estate of Larson, 308 Neb. 240, 953 N.W.2d
535 (2021).
We have approvingly cited a commentator who has sug-
gested that in the context of multifaceted special proceedings
that are designed to administer the affairs of a person, an order
that ends a discrete phase of the proceedings affects a substan-
tial right because it finally resolves the issues raised in that
phase. See id., citing John P. Lenich, What’s So Special About
Special Proceedings? Making Sense of Nebraska’s Final Order
Statute, 80 Neb. L. Rev. 239 (2001). We have employed that
“discrete phase” rubric in a number of probate proceedings.
See, In re Estate of Severson, 310 Neb. 982, 970 N.W.2d 94
(2022); In re Estate of Beltran, supra; In re Estate of Larson,
supra; In re Estate of McKillip, 284 Neb. 367, 820 N.W.2d 868
(2012). We have also held that in probate cases, while an order
ending a discrete phase of the proceeding is appealable, one
that is merely preliminary to such an order is not. See In re
Estate of Larson, supra.
Although the judicial supervision of the winding up of an
LLC is not designed to administer the affairs of a person, it
can be a multifaceted proceeding that is designed to administer
the affairs of an LLC. Indeed, it bears substantial similarity to
a probate proceeding: Probate is the legal process by which
a deceased person’s debts are paid and assets distributed; the
judicial supervision of the winding up of an LLC is the legal
process by which a dissolved LLC’s debts are paid and assets
distributed. See § 21-148(b). We also note that the Nebraska
Court of Appeals has previously analyzed whether an order
entered in a receivership proceeding affected a substantial right
by applying the discrete phase analysis. See Sutton v. Killham,
22 Neb. App. 257, 854 N.W.2d 320 (2014). We find it appro-
priate to apply the discrete phase rubric to orders entered in the
judicial supervision of the winding up of an LLC.
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Applying that discrete phase rubric, we conclude that the
order denying the motion for special directions did not end
a discrete phase of the proceedings and thus did not affect a
substantial right. In the motion for further directions, Jerald
sought an order specifically directing the receiver to pay cer-
tain expenses. At the hearing on that motion, the receiver’s
testimony demonstrated that he had not made a final determi-
nation of the expenses that he would pay. Indeed, he testified
that he would consider paying some of the expenses that were
the subject of Jerald’s motion but that a “budget problem”
complicated that task.
Given the evidence adduced and the district court’s order,
contrary to the parties, we do not understand the district court’s
denial of the motion for further directions to be a final deter-
mination that the receiver need not pay the expenses at issue.
Rather, we understand the district court merely to have deter-
mined that additional, specific direction was not necessary at
that time. Because the district court’s order denying Jerald’s
motion for further directions did not affect a substantial right
of Jerald’s, we find that we lack jurisdiction under § 25-1902.
And because we can discern no other basis of appellate juris-
diction, we dismiss that portion of Jerald’s appeal.
(b) Unjust Enrichment
We now consider whether we have appellate jurisdiction to
review the district court’s resolution of the unjust enrichment
claims. We begin our analysis of that question by consider-
ing whether this case implicates Neb. Rev. Stat. § 25-1315
(Reissue 2016). Specifically, we consider whether the fact
that the judicial supervision of the winding up of the company
apparently remained ongoing at the time the appeal was filed
precludes appellate review of the district court’s resolution of
the unjust enrichment claim under § 25-1315.
Section 25-1315(1) provides, in relevant part:
When more than one claim for relief is presented in an
action, . . . or when multiple parties are involved, the
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court may direct the entry of a final judgment as to one or
more but fewer than all of the claims or parties only upon
an express determination that there is no just reason for
delay and upon an express direction for the entry of judg-
ment. In the absence of such determination and direction,
any order or other form of decision, however designated,
which adjudicates fewer than all the claims or the rights
and liabilities of fewer than all the parties shall not ter-
minate the action as to any of the claims or parties . . . .
As we have recently explained, § 25-1315(1) is implicated
only when a case presents more than one claim for relief or
involves multiple parties, and the court enters an order which
adjudicates fewer than all the claims or the rights and liabili-
ties of fewer than all the parties. See Mann v. Mann, ante p.
275, 978 N.W.2d 606 (2022). For purposes of determining
whether a case presents more than one “claim for relief” under
§ 25-1315(1), we have said the term is not synonymous with
“issue” or “theory of recovery,” but is instead the equivalent of
a cause of action. Mann v. Mann, supra.
We find in this circumstance that § 25-1315(1) is not impli-
cated. Although the parties have asserted more than one claim
for relief during the course of this case, the order adjudicat-
ing the unjust enrichment claim did not adjudicate fewer than
all the remaining claims in the case or leave claims asserted
against certain parties for future resolution. Steven initially
asserted a claim for judicial dissolution on behalf of the com-
pany, but that claim was resolved when the court ordered
dissolution. Steven and the company also asserted claims for
adverse possession, prescriptive easement, and easement by
necessity, but those claims were involuntarily dismissed. At the
time the district court decided the unjust enrichment claim, it
was the only claim remaining in the case.
Because we find that § 25-1315(1) is not implicated, we
have appellate jurisdiction to review the district court’s order
resolving the unjust enrichment claim if it satisfies § 25-1902.
Cf. Mann v. Mann, supra. We find that the order is appealable
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under § 25-1902, because it affects a substantial right in a spe-
cial proceeding.
We have already explained our conclusion that the judicial
supervision of the winding up of the company is a special
proceeding. We also find that the order resolving the unjust
enrichment claim was entered in that special proceeding. The
claim of unjust enrichment arose once the judicial supervi-
sion of the winding up process began and Jerald was the only
interested buyer for the buildings. The parties later agreed
that the receiver should be directed to sell the buildings to
Jerald at the price he offered to pay. The unjust enrichment
claim was then litigated under the theory that the sale to
Jerald at that price would result in his unjust enrichment.
The district court’s eventual order found unjust enrichment
and effectively ordered Jerald to pay additional amounts for
the buildings. The unjust enrichment claim was inextricably
bound up within the judicial supervision of the winding up
of the company. Under these circumstances, we find that the
order resolving the unjust enrichment claim was entered in a
special proceeding.
We recognize that a claim for unjust enrichment will, in the
vast majority of cases, be litigated in an action. After all, it is
usually a claim that one party prosecutes against another for
the enforcement, protection, or determination of a right or for
the redress or prevention of a wrong; is usually decided by way
of pleadings, process, and procedure provided by statute; and
usually ends in a judgment. See, e.g., Bloedorn Lumber Co. v.
Nielson, 300 Neb. 722, 915 N.W.2d 786 (2018). Under these
assuredly rare circumstances, however, we find that the unjust
enrichment claim was entered in a special proceeding.
Having determined that the order resolving the unjust enrich-
ment claim was entered in a special proceeding, we return to
the discrete phase rubric discussed above. Here, we find that
the order resolving the unjust enrichment claim ended a dis-
crete phase of the proceeding. It ended the phase of the pro-
ceeding dedicated to resolving the claims of Steven and the
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company that Jerald was unjustly enriched by his purchase
of the buildings and should be required to pay more to the
company. The district court held a trial on this issue and then
entered an order determining that Jerald was unjustly enriched
and ordering him to pay an additional $400,184 for the pur-
chase of the buildings. In this respect, the order is much like
the order we found appealable in Sutton v. Killham, 285 Neb.
1, 825 N.W.2d 188 (2013). In that case, we reviewed an order
of summary judgment finding that a receiver correctly denied
a claim for payment of services. We see no meaningful dif-
ference between the conclusive determination that a party in
receivership had no liability for a debt in Sutton v. Killham
and the district court’s conclusive determination that a party in
receivership was owed a debt here.
We also find similarity between this case and In re Estate of
McKillip, 284 Neb. 367, 820 N.W.2d 868 (2012). We described
that case as one in which a party sought partition of certain
real property within a probate proceeding. See id. at 372, 820
N.W.2d at 874 (“we are presented with the partition of real
property in an estate proceeding”). The testator left four tracts
of land to his three daughters, one of whom sought partition
of the property. The county court found that partition of the
property should be made and appointed a referee. The referee
concluded that the real property should be partitioned by sale;
however, one of the daughters opposed the partition by sale.
Ultimately, the court ordered partition by sale, and the daughter
appealed. Before we reached the merits of the case, we con-
sidered whether or not we had appellate jurisdiction. We con-
cluded that the circumstances qualified as an order that affected
a substantial right. We reasoned:
The county court’s order directing the referee to sell the
property would affect the right of the devisees to receive
the real estate in kind and would force them to sell their
interests in the land. The distribution of the real estate is
a discrete phase of the probate proceedings and would
finally resolve the issues in that phase of the probate of
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the estate. It could be months before an appeal from the
order of confirmation would be finally resolved. In the
interim, distribution of the assets of the estate would have
to wait until that phase of the probate was finally resolved
regarding distribution of the real estate. The sale of the
real estate would diminish the right of the devisees to
have the real estate distributed in kind.
Id. at 374, 820 N.W.2d at 876.
Similar reasoning applies in these circumstances. As in In
re Estate of McKillip, the district court here fully resolved an
issue presented within a multifaceted proceeding. And, like
the situation in In re Estate of McKillip, delaying review of
that finally resolved issue will complicate the resolution of the
entire proceeding. Here, the question of whether the company’s
unjust enrichment recovery will stand obviously affects the
resources the receiver will have available in completing the
winding up of the company’s affairs.
For these reasons, we find that the order of the district court
awarding the company an unjust enrichment recovery from
Jerald affected a substantial right during a special proceeding.
We turn to the merits of that issue now.
2. Unjust Enrichment Merits
The district court concluded that Jerald was unjustly enriched
at the company’s expense when he purchased the buildings
for $18,000. Unjust enrichment claims do not arise from an
express or implied agreement between the parties; rather, they
are imposed by law “when justice and equity require the
defendant to disgorge a benefit that he or she has unjustifi-
ably obtained at the plaintiff’s expense.” Bloedorn Lumber Co.
v. Nielson, 300 Neb. 722, 729, 915 N.W.2d 786, 792 (2018)
(internal quotation marks omitted).
Jerald attacks the district court’s unjust enrichment judg-
ment on a number of fronts. One such argument is that the
district court erred by basing its unjust enrichment finding on
the fact that the transfer of the buildings to Jerald for the price
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he offered would result in his receiving a windfall and the
company’s not receiving reasonable compensation. According
to Jerald, “financial disparity” in a transaction alone cannot
establish unjust enrichment liability. Brief for appellant at 3.
Jerald is undoubtedly correct that an unjust enrichment
recovery is not available solely because a court finds that one
party to an exchange obtained a better deal, or even a much
better deal, than another. Our cases and other authorities
confirm that unjust enrichment, while a flexible remedy, is a
narrower concept. This idea is helpfully summarized in the
comments to the Restatement (Third) of Restitution and Unjust
Enrichment:
[T]he law of restitution is very far from imposing liabil-
ity for every instance of what might plausibly be called
unjust enrichment. The law’s potential for intervention
in transactions that might be challenged as inequitable is
narrower, more predictable, and more objectively deter-
mined than the unconstrained implications of the words
“unjust enrichment.” . . .
The concern of restitution is not, in fact, with unjust
enrichment in any such broad sense, but with a narrower
set of circumstances giving rise to what might more
appropriately be called unjustified enrichment. Compared
to the open-ended implications of the term “unjust enrich-
ment,” instances of unjustified enrichment are both pre-
dictable and objectively determined, because the justifica-
tion in question is not moral but legal.
1 Restatement (Third) of Restitution and Unjust Enrichment
§ 1, comment b. at 5 (2011) (emphasis in original).
Consistent with these thoughts, we have emphasized that
“‘[t]he fact that a recipient has obtained a benefit without
paying for it does not of itself establish that the recipient
has been unjustly enriched,’” Kalkowski v. Nebraska Nat.
Trails Museum Found., 290 Neb. 798, 806, 862 N.W.2d 294,
301-02 (2015), quoting 1 Restatement (Third) of Restitution
and Unjust Enrichment, supra, § 2(1), and that the doctrine
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does not exist to rescue a party from the consequences of a
bad bargain, Washa v. Miller, 249 Neb. 941, 546 N.W.2d 813
(1996). Or, as the Texas Supreme Court has articulated the
same basic idea, “[u]njust enrichment is not a proper remedy
merely because it might appear expedient or generally fair
that some recompense be afforded for an unfortunate loss to
the claimant, or because the benefits to the person sought to
be charged amount to a windfall.” Heldenfels Bros. v. City of
Corpus Christi, 832 S.W.2d 39, 42 (Tex. 1992) (internal quota-
tion marks omitted).
[10,11] Rather than a tool that a court can use to correct any
transaction it might find unfair or unequal, the unjust enrich-
ment remedy can be taken off the shelf in more limited situ-
ations. As we have held, to recover under a theory of unjust
enrichment, the plaintiff must allege facts that the law of resti-
tution would recognize as unjust enrichment. City of Scottsbluff
v. Waste Connections of Neb., 282 Neb. 848, 809 N.W.2d 725
(2011). We have explained that this rule does not mean that
prior cases must have recognized a specific fact pattern as
unjust enrichment in order for an unjust enrichment recovery
to be available. It does mean, however, that an unjust enrich-
ment plaintiff must demonstrate that under the circumstances,
principles of the law of restitution would authorize a recovery.
We have said that it is a “bedrock principle of restitution”
that unjust enrichment occurs when there is a “transfer of a
benefit without adequate legal ground” or a “transaction that
the law treats as ineffective to work a conclusive alteration
in ownership rights.” Id. at 866, 809 N.W.2d at 743, quoting
Restatement (Third) of Restitution and Unjust Enrichment, § 1,
comment b. (internal quotation marks omitted). We have also
said one who is free from fault cannot be held to be unjustly
enriched merely because one has chosen to exercise a contrac-
tual or legal right. Kissinger v. Genetic Eval. Ctr., 260 Neb.
431, 618 N.W.2d 429 (2000).
Given the foregoing, we find that the company was not
entitled to an unjust enrichment recovery solely because the
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district court found that the transfer of the buildings to Jerald
at the price he offered was economically lopsided. Even assum-
ing the result of the transfer was a much better deal for Jerald
than the company, this alone does not demonstrate that the
transfer occurred without an adequate legal ground or that it
was ineffective to work a conclusive alteration in ownership
rights of the buildings. And while the district court appears to
have concluded that Jerald was able to benefit from the circum-
stances solely because he was not willing to grant an easement
on his property for ingress to and egress from the buildings,
we see no basis to find that Jerald was obligated to grant such
an easement.
Aside from the bare economics of the transaction, Steven
and the company argued and the district court found that an
unjust enrichment recovery was warranted based on the rea-
soning of the Arkansas Court of Appeals in Trickett v. Spann,
2020 Ark. App. 552, 613 S.W.3d 773 (2020). Again, we dis-
agree. In that case, plaintiffs, a husband and wife, paid for
the construction of a house on real property owned by their
daughter and her husband. Plaintiffs lived in the home for a
time, but moved away after their daughter died. After plain-
tiffs had moved away and their daughter’s husband refused to
pay them for the home, they filed a lawsuit claiming unjust
enrichment and prevailed in the trial court. The appellate court
upheld the unjust enrichment recovery, but did so based on
the theory that an unjust enrichment recovery was appropri-
ate when a plaintiff provides improvements to a defendant’s
property, the circumstances were such that the plaintiff rea-
sonably expected the defendant to pay for the value of the
improvements, and the defendant was aware the plaintiff was
providing the improvements with the expectation of being
paid. The appellate court pointed to specific evidence in the
record demonstrating that plaintiffs expected their daughter
and her husband to pay for the home and that the daughter’s
husband accepted the home knowing that his in-laws expected
to be paid.
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SCHREIBER BROS. HOG CO. V. SCHREIBER
Cite as 312 Neb. 707
While there is some surface similarity between this case and
Trickett v. Spann, the unjust enrichment rationale applied there
does not fit here. Unlike the plaintiffs in Trickett v. Spann,
Steven and the company can point to no evidence in the record
that the company constructed the buildings on Jerald’s land
with the expectation that Jerald would pay for them or that
Jerald allowed the buildings to be built there knowing that
the company expected to be paid. The company did not even
exist when the buildings were constructed. At that time, Jerald
and Steven were operating as a general partnership. And even
if that fact can be set to the side, there is also nothing in the
record that suggests that when the buildings were constructed,
Steven expected Jerald to pay him for the buildings, or that
Jerald allowed the construction of the buildings knowing that
such payment was expected.
Not only do we find the district court’s rationales for its
unjust enrichment judgment unpersuasive, we find that its
judgment is inconsistent with other principles of the law of
unjust enrichment. First, an unjust enrichment recovery is
generally unavailable when a party conferring a benefit has
the opportunity to form a contract with the party receiv-
ing the benefit, but neglects the opportunity to do so. See 1
Restatement (Third) of Restitution and Unjust Enrichment,
§ 2, comment d. (2011). The rationale for this principle is that
when voluntary transactions are feasible, it is preferable “to
require the parties to make their own terms [rather] than for
a court to try to fix them.” Indiana Lumbermens Mut Ins v.
Reinsurance Results, 513 F.3d 652, 657 (7th Cir. 2008). See,
also, 1 Dan B. Dobbs, Dobbs Law of Remedies § 4.9(4) at
690 (2d ed. 1993) (providing that “[i]f the parties could have
contracted but did not, the plaintiff generally is denied recov-
ery of the non-cash benefit”). Here, the company appears to
be claiming that it is entitled to an unjust enrichment recovery
because Jerald and Steven, through their partnership, conferred
a benefit on Jerald by constructing the buildings on his land
many years ago. But, at that time, Steven knew the buildings
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SCHREIBER BROS. HOG CO. V. SCHREIBER
Cite as 312 Neb. 707
were being constructed on Jerald’s land. As Steven’s counsel
conceded at oral argument, there was no evidence that Steven
was deceived as to the buildings being built on Jerald’s land;
rather, he “went into this eyes wide open.” Despite knowing
where the buildings were being constructed, Steven did not
insist on contractual terms, but, in the words of the U.S. Court
of Appeals for the Seventh Circuit, is asking “a court to try
to fix them.” Indiana Lumbermens Mut Ins v. Reinsurance
Results, 513 F.3d at 657.
[12] In addition, the doctrine of unjust enrichment is rec-
ognized only in the absence of an agreement between the par-
ties. Washa v. Miller, 249 Neb. 941, 546 N.W.2d 813 (1996).
Steven and the company claim, and the district court found,
that Jerald was unjustly enriched by receiving the buildings
for his offered price of $18,000 and that he should have to pay
more. But this overlooks the fact that the parties agreed that
the district court should order the receiver to sell the buildings
to Jerald for that price. To this, Steven and the company will
no doubt respond that both they and Jerald agreed that a sale
should take place on those terms with the reservation that the
sale would not preclude further pursuit of an unjust enrichment
claim. While this reservation certainly permitted Steven and
the company to pursue an unjust enrichment claim after the
sale, it did not change the law of unjust enrichment that gov-
erned it. And in our view, despite the parties’ agreement that
an unjust enrichment claim could still be pursued, the company
could not, consistent with unjust enrichment principles, agree
to sell the buildings to Jerald for one price and also ask that the
district court order him to pay more. Such an outcome results
in Jerald’s effectively purchasing the buildings for much more
than he offered and agreed to pay.
Because we find that the district court erred in entering
judgment for the company and against Jerald on the com-
pany’s unjust enrichment claim, we reverse that judgment and
remand the cause with directions to enter judgment in Jerald’s
favor.
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SCHREIBER BROS. HOG CO. V. SCHREIBER
Cite as 312 Neb. 707
Because we find that the unjust enrichment judgment was
erroneous, we need not consider Jerald’s contention that the
district court erred in its calculation of the amount Steven was
unjustly enriched. An appellate court is not obligated to engage
in an analysis that is not necessary to adjudicate the case and
controversy before it. Cain v. Lymber, 306 Neb. 820, 947
N.W.2d 541 (2020).
V. CONCLUSION
We find that we lack jurisdiction to review the district
court’s order denying Jerald’s motion for further directions.
We find that we have jurisdiction to review the district court’s
order finding that Jerald was unjustly enriched. On that issue,
we find the district court erred and therefore reverse, and
remand with directions to enter judgment in Jerald’s favor.
Appeal dismissed in part, and in
part reversed and remanded
with directions. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487110/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
Michael T. and Cathy D. Christensen, individually
and as parents and next friends of Chad M.
Christensen, and as Coguardians and
Coconservators of Chad M. Christensen,
a protected person, appellants and
cross-appellees, v. Broken Bow Public Schools,
also known as Broken Bow School District 25,
a political subdivision of the State of Nebraska,
defendant and third-party plaintiff, appellee
and cross-appellant, and Beverly L. Sherbeck,
Personal Representative of the Estate of
Albert F. Sherbeck, deceased, third-party
defendant, appellee and cross-appellant.
___ N.W.2d ___
Filed November 4, 2022. No. S-21-885.
1. Directed Verdict: Appeal and Error. In reviewing a trial court’s rul-
ing on a motion for directed verdict, an appellate court must treat the
motion as an admission of the truth of all competent evidence submit-
ted on behalf of the party against whom the motion is directed; such
being the case, the party against whom the motion is directed is entitled
to have every controverted fact resolved in its favor and to have the
benefit of every inference which can reasonably be deduced from
the evidence.
2. Statutes: Ordinances: Legislature: Intent: Torts: Liability. In deter-
mining whether a statute or ordinance creates a duty, a court may deter-
mine that a statute gives rise to a tort duty to act in the manner required
by the statute where the statute is enacted to protect a class of persons
which includes the plaintiff, the statute is intended to prevent the par-
ticular injury that has been suffered, and the statute is intended by the
Legislature to create a private liability as distinguished from one of a
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Cite as 312 Neb. 814
public character. Consideration of the Legislature’s purpose in enacting
a statute is central to the analysis of whether the statute defines a duty
in tort and creates private civil liability.
3. Negligence: Proof: Statutes. The violation of a statute alone does not
prove negligence.
4. Negligence: Proof: Probable Cause: Damages. A plaintiff in ordinary
negligence must prove all four essential elements of the claim: the
defendant’s duty not to injure the plaintiff, a breach of that duty, proxi-
mate causation, and damages.
5. Negligence: Proof. A cause of action for negligence depends not only
upon the defendant’s breach of duty to exercise care to avoid injury to
the plaintiff, but also depends upon a showing that the injury suffered
by the plaintiff was caused by the alleged wrongful act or omission of
the defendant.
6. Proximate Cause: Evidence. Neb. Rev. Stat. § 60-6,273 (Reissue 2021)
explicitly makes all “[e]vidence that a person was not wearing an occu-
pant protection system or a three-point safety belt system” inadmissible
for the issue of proximate cause.
7. Statutes. Statutory text is to be given its plain and ordinary meaning.
8. Statutes: Appeal and Error. An appellate court is not at liberty to add
language to the plain terms of a statute to restrict its meaning.
Appeal from the District Court for Custer County: Karin L.
Noakes, Judge. Affirmed.
David S. Houghton and Keith A. Harvat, of Houghton,
Bradford & Whitted, P.C., L.L.O., and James V. Duncan and
John O. Sennett, of Sennett, Duncan, Jenkins & Wickham,
P.C., L.L.O., for appellants.
Matthew B. Reilly and Thomas J. Culhane, of
Erickson | Sederstrom, P.C., L.L.O., for appellee Broken Bow
Public Schools.
Jared J. Krejci, of Smith, Johnson, Allen, Connick & Hansen,
for appellee Beverly L. Sherbeck.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
and Papik, JJ., and Stratman, District Judge.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
Miller-Lerman, J.
I. NATURE OF CASE
Appellants, Michael T. and Cathy D. Christensen, brought
this case in the district court for Custer County individually
and as parents of their son, Chad M. Christensen, who was
seriously injured when a Broken Bow Public Schools (BBPS)
activities van in which he was a passenger was hit head on by
a truck driven by Albert F. Sherbeck. Chad was not wearing a
seatbelt. The Christensens separately sued Sherbeck’s widow,
Beverly L. Sherbeck, as personal representative of Sherbeck’s
estate (the Sherbeck estate) and the cases were consolidated.
On remand from a memorandum opinion of the Nebraska
Court of Appeals that reversed a directed verdict in favor of
BBPS, the district court considered several additional argu-
ments by BBPS. Following due consideration, the district
court granted a directed verdict in favor of BBPS and against
the Christensens, dismissed the Christensens’ complaint, and
dismissed BBPS’ third-party complaint against the Sherbeck
estate as moot. These rulings give rise to the instant appeal
by the Christensens and the cross-appeals by BBPS and the
Sherbeck estate.
In its order directing a verdict in favor of BBPS, the dis-
trict court stated, inter alia, that despite the provision in Neb.
Rev. Stat. § 60-6,267(2) (Reissue 2021) that drivers ensure
seatbelt use for children, Neb. Rev. Stat. § 60-6,269 (Reissue
2021) “explicitly states, ‘violations of the provisions of sec-
tions 60-6,267 . . . shall not constitute prima facie evidence
of negligence.’” The district court noted that Neb. Rev. Stat.
§ 60-6,273 (Reissue 2021) prohibits “using evidence that
a person was not wearing a seatbelt to establish proximate
cause” and in the absence of other admissible evidence of
proximate cause, the Christensens’ claims failed and were dis-
missed. Because we agree with the district court’s reading of
the relevant statutes, we affirm its order of a directed verdict
in favor of BBPS and in addition dismiss the cross-appeals
as moot.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
II. STATEMENT OF FACTS
1. The Collision
On June 1, 2012, a BBPS activities van collided with
a truck driven by Sherbeck. The van was driven by Zane
Harvey, a high school basketball coach for BBPS. Another
coach, Anthony Blum, and eight students, including Chad,
were passengers in the van, which was returning from a
summer basketball clinic in Kearney, Nebraska. Sherbeck’s
vehicle crossed the centerline and collided head on with the
van. Sherbeck, Harvey, and Blum died at the scene. The
Christensens’ son, Chad, was riding in the van unrestrained by
a seatbelt and was seriously injured. Chad was age 17 at the
time of the accident.
2. Procedural History
The Christensens filed separate actions against BBPS and
against Sherbeck’s widow, as personal representative of the
Sherbeck estate. In the action against BBPS, the Christensens
asserted five separate theories of recovery, including claims
that (1) BBPS was negligent in its operation of the van and was
negligent in its supervision of the students because it failed to
ensure that students were wearing seatbelts and (2) BBPS vio-
lated § 60-6,267(2), which provides:
Any person in Nebraska who drives any motor vehicle
which has or is required to have an occupant protection
system or a three-point safety belt system shall ensure
that all children eight years of age and less than eighteen
years of age being transported by such vehicle use an
occupant protection system.
The district court consolidated the cases; the case against the
Sherbeck estate was tried to a jury and the case against BBPS
was tried to the court. The jury returned a verdict in favor of
the Sherbeck estate on the Christensens’ claims against it. The
Court of Appeals affirmed the judgment in the case against the
Sherbeck estate in Christensen v. Sherbeck, 28 Neb. App. 332,
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
943 N.W.2d 460 (2020), and we denied the Christensens’ peti-
tion for further review.
At the close of evidence in the Christensens’ case in chief
against BBPS, BBPS moved for a directed verdict. The dis-
trict court granted a directed verdict in favor of BBPS on
the grounds that Sherbeck’s vehicle’s crossing the centerline
constituted an efficient intervening cause that broke the causal
connection between Chad’s injuries and any failure on the part
of BBPS to ensure that Chad was wearing a seatbelt.
The Christensens appealed, and the Court of Appeals
reversed the district court’s decision to grant a directed verdict.
See Christensen v. Broken Bow Public Schools, No. A-19-125,
2020 WL 5785351 (Neb. App. Sept. 29, 2020) (selected for
posting to court website).
The Court of Appeals concluded that the district court erred
when it found, as a matter of law, that Sherbeck’s actions
constituted an efficient intervening cause. For purposes of its
analysis, the Court of Appeals assumed without deciding that
BBPS had a duty to ensure that Chad was wearing a seat-
belt while riding in the school activities van. Based on that
assumption, the Court of Appeals reasoned that the purpose
of such a duty would be to protect children in the event of
any sort of traffic accident and that therefore, the potential
for liability based on a violation of that duty did not rest on
the foreseeability of the exact circumstances of the collision.
The Court of Appeals concluded that because a head-on colli-
sion between the van and another vehicle was the sort of harm
against which a seatbelt was meant to protect, the collision
could not, as a matter of law, constitute an efficient intervening
cause to insulate BBPS from liability for failing to ensure that
Chad was wearing a seatbelt. The Court of Appeals remanded
the cause to the district court with directions to consider the
other arguments BBPS made in its motion for directed ver-
dict, and, if it rejected those other arguments, to proceed with
BBPS’ presentation of evidence in its defense.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
BBPS moved for rehearing and argued that the Court of
Appeals should have addressed its alternative argument that
§ 60-6,269 precluded the Christensens from establishing a neg-
ligence claim against BBPS based on the failure to ensure that
Chad was wearing a seatbelt. The Court of Appeals denied the
motion for rehearing, and we denied further review.
3. District Court Order
on Remand
Upon remand, the district court, as directed by the Court of
Appeals, considered BBPS’ other arguments for directed ver-
dict. The district court rejected BBPS’ argument that Harvey’s
and Blum’s actions related to the trip in the van were outside
the scope of their employment with BBPS because, as asserted
by BBPS, the trip occurred during the summer, which was out-
side the period of their teaching/coaching contracts. The court
reasoned that although their work was gratuitously provided
outside the time of their contracts, it was within the scope of
their employment, and that BBPS was not relieved of liability
on that basis.
The district court then considered BBPS’ argument regard-
ing the effect of § 60-6,269. The district court noted that
§ 60-6,269 “explicitly states, ‘violations of the provisions of
sections 60-6,267 and 60-6,268 shall not constitute prima facie
evidence of negligence.’” The court determined that given
the language of § 60-6,269, the Christensens’ claim based on
violation of § 60-6,267 must fail, and that BBPS’ motion for
directed verdict should be granted.
In its analysis, the district court noted that there was no
evidence that the actions of Harvey and Blum were deficient
in any way other than failing to ensure that the students were
wearing seatbelts. In considering the evidence of the elements
of the Chistensens’ negligence claim, the court noted the provi-
sions of § 60-6,273, which state:
Evidence that a person was not wearing an occupant
protection system or a three-point safety belt system at
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
the time he or she was injured shall not be admissible in
regard to the issue of liability or proximate cause but may
be admissible as evidence concerning mitigation of dam-
ages, except that it shall not reduce recovery for damages
by more than five percent.
The court stated that the plain language of § 60-6,273
“prohibits using evidence that a person was not wearing a
seatbelt to establish proximate cause” and that it also “clearly
prohibits evidence of non-use in regard to liability.” The
court determined that because § 60-6,273 “does not allow
evidence of non-use of a seatbelt to prove liability or proxi-
mate cause” and because the Christensens presented no other
evidence of proximate cause, their various claims for negli-
gence must fail.
Having determined that the Christensens had not presented
evidence to support their claims, the court dismissed all of
the Christensens’ claims against BBPS. The court later denied
the Christensens’ motion for a new trial and dismissed BBPS’
third-party complaint against the Sherbeck estate as moot.
The Christensens appeal, and BBPS and the Sherbeck estate
cross-appeal.
III. ASSIGNMENTS OF ERROR
The Christensens claim, summarized and restated, that
the district court erred when it interpreted §§ 60-6,269 and
60-6,273 to preclude their claims against BBPS and determined
that they had not presented evidence other than nonuse of seat-
belts to support their claims.
In its cross-appeal, BBPS claims, restated, that the district
court erred when it found that BBPS employed Harvey and
Blum on the date of the collision, and BBPS also asserts that it
was entitled to summary judgment on various defenses, includ-
ing assumption of risk and contributory negligence.
In its cross-appeal, the Sherbeck estate contends that all
claims against it in this case are barred by issue preclusion and
the law-of-the-case doctrine.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
IV. STANDARD OF REVIEW
[1] In reviewing a trial court’s ruling on a motion for
directed verdict, an appellate court must treat the motion as an
admission of the truth of all competent evidence submitted on
behalf of the party against whom the motion is directed; such
being the case, the party against whom the motion is directed
is entitled to have every controverted fact resolved in its favor
and to have the benefit of every inference which can reason-
ably be deduced from the evidence. de Vries v. L & L Custom
Builders, 310 Neb. 543, 968 N.W.2d 64 (2021).
V. ANALYSIS
The Christensens claim that the district court erred when
it granted a directed verdict and dismissed all of their claims
against BBPS. We conclude that through Nebraska’s statutes
addressing civil litigation and seatbelt use, the Legislature
has determined the legal significance of seatbelt nonuse and
specifically did not intend for evidence of seatbelt nonuse to
be admissible to show proximate cause and create civil liabil-
ity. As we explain below and given the record, we affirm the
order of the district court, which directed a verdict in favor of
BBPS. Consequently, the cross-appeals filed by BBPS and the
Sherbeck estate are moot.
1. Relevant Statutes
We begin by setting forth the statutes relevant to our analy-
sis. Section 60-6,267(2) describes a driver’s responsibility to
ensure seatbelt use by children. It provides:
Any person in Nebraska who drives any motor vehicle
which has or is required to have an occupant protection
system or a three-point safety belt system shall ensure
that all children eight years of age and less than eighteen
years of age being transported by such vehicle use an
occupant protection system.
Neb. Rev. Stat. § 60-6,268 (Reissue 2021) makes it an
infraction to violate subsections (1) or (2) of § 60-6,267 and
provides for a monetary fine.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
Section 60-6,269 provides for the legal significance of viola-
tions and compliance with seatbelt usage and states:
Violations of the provisions of sections 60-6,267 and
60-6,268 shall not constitute prima facie evidence of neg-
ligence nor shall compliance with such sections constitute
a defense to any claim for personal injuries to a child or
recovery of medical expenses for injuries sustained in
any motor vehicle accident. Violation of such sections by
a driver shall not constitute a defense for another person
to any claim for personal injuries to a child or recovery
of medical expenses for injuries sustained in any motor
vehicle accident.
Critical to our analysis is the evidentiary rule set forth in
§ 60-6,273:
Evidence that a person was not wearing an occupant
protection system or a three-point safety belt system at
the time he or she was injured shall not be admissible in
regard to the issue of liability or proximate cause but may
be admissible as evidence concerning mitigation of dam-
ages, except that it shall not reduce recovery for damages
by more than five percent.
2. Christensens’ Claims Against BBPS
Many of the Christensens’ arguments are based on their
linguistic examination of the statutory framework set forth
above that they contend distinguishes between seatbelt use by
adults, which is inadmissible in regard to liability or proximate
cause, and seatbelt use by children, which they contend may be
admitted to demonstrate the negligence of a driver who fails to
secure them. As we explain below, we reject these arguments.
Reading the statutes in harmony, we conclude that a driver’s
violation of a seatbelt statute does not form a prima facie case
of his or her negligence and that such evidence is inadmis-
sible on the issue of liability or proximate cause predicated
on seatbelt nonuse, including a claim on behalf of a child for
personal injuries.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
(a) Breach of a Statutory “Duty” and
Evidence of Proximate Cause
The Christensens assert that §§ 60-6,269 and 60-6,273 apply
only to seatbelt use by adults. They further contend that by
not securing a child, a driver has violated § 60-6,267(2) and
has thereby breached his or her duty to protect children from
collisions. That is, the Chistensens claim that failure to com-
ply with § 60-6,267(2) in and of itself forms the basis for a
breach of a statutory duty for purposes of negligence. The
Christensens contend that the policy goals of the Legislature
are tailored to protect an accident victim and not to protect a
driver who broke a child safety law from being held account-
able in civil court by the parents of an injured child.
[2] In determining whether a statute or ordinance creates
a duty, a court may determine that a statute gives rise to a
tort duty to act in the manner required by the statute where
the statute is enacted to protect a class of persons which
includes the plaintiff, the statute is intended to prevent the
particular injury that has been suffered, and the statute is
intended by the Legislature to create a private liability as
distinguished from one of a public character. Stonacek v. City
of Lincoln, 279 Neb. 869, 782 N.W.2d 900 (2010) (quoting
Claypool v. Hibberd, 261 Neb. 818, 626 N.W.2d 539 (2001)).
Consideration of the Legislature’s purpose in enacting a stat-
ute is central to the analysis of whether the statute defines a
duty in tort and creates private civil liability. Stonacek v. City
of Lincoln, supra.
We conclude that the plain statutory language does not sup-
port the Christensens’ theory of the Legislature’s intention.
The provision in § 60-6,269 that a violation of § 60-6,267
“shall not constitute prima facie evidence of negligence” is
antithetical to the prosecution of a negligence case based on a
driver’s failure to secure a child. The Legislature’s inclusion
of § 60-6,269 shows that the purpose of the statutory scheme
was decidedly not to create private civil liability.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
[3-5] Even if BBPS’ violation of § 60-6,267 breached a
statutory duty to ensure Chad was using an occupant protection
system, it is fundamental that the violation of a statute alone
does not prove negligence. A plaintiff in ordinary negligence
must prove all four essential elements of the claim: the defend
ant’s duty not to injure the plaintiff, a breach of that duty,
proximate causation, and damages. Susman v. Kearney Towing
& Repair Ctr., 310 Neb. 910, 970 N.W.2d 82 (2022). A cause
of action for negligence depends not only upon the defendant’s
breach of duty to exercise care to avoid injury to the plaintiff,
but also depends upon a showing that the injury suffered by
the plaintiff was caused by the alleged wrongful act or omis-
sion of the defendant. Id. In Susman, we recently recalled one
of our earliest negligence cases, which stated: “‘“The cause
of action in any case embraces not only the injury which the
complaining party has received, but it includes more. All the
facts which, taken together, are necessary to fix the responsi-
bility are parts of the cause of action.”’” 310 Neb. at 921, 970
N.W.2d at 91 (quoting Westover v. Hoover, 94 Neb. 596, 143
N.W. 946 (1913)).
[6-8] Even assuming that the violation of § 60-6,267
breached a duty of care, there is no admissible evidence that
violation of the child seatbelt requirement proximately caused
Chad’s injuries. To the contrary, § 60-6,273 explicitly makes
all “[e]vidence that a person was not wearing an occupant
protection system or a three-point safety belt system” inad-
missible for the issue of proximate cause. Statutory text is to
be given its plain and ordinary meaning. Dutcher v. Nebraska
Dept. of Corr. Servs., ante p. 405, 979 N.W.2d 245 (2022). An
appellate court is not at liberty to add language to the plain
terms of a statute to restrict its meaning. Id. The Legislature
has dictated that seatbelt nonuse is excluded on the issue of
proximate cause.
The Christensens urge us to factor in Chad’s age as a
child into our statutory analysis. This argument is unavailing.
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CHRISTENSEN V. BROKEN BOW PUBLIC SCHOOLS
Cite as 312 Neb. 814
We are aware that the Legislature imposed a fine on drivers
who fail to secure children in their vehicles. See § 60-6,268.
However, it did not distinguish the age or status of the “per-
son” without the seatbelt when setting forth the evidentiary
rule in § 60-6,273. According to the Legislature, all nonuse
evidence is inadmissible regarding proximate cause. Id. We
are not inclined to add language regarding age to change the
statute’s exclusionary plain meaning. See id. Indeed, we have
explained in the past that given the language of § 60-6,273,
evidence of seatbelt nonuse is admissible only for mitigation
of damages. Werner v. County of Platte, 284 Neb. 899, 824
N.W.2d 38 (2012); Fickle v. State, 273 Neb. 990, 735 N.W.2d
754 (2007), modified on denial of rehearing 274 Neb. 267,
759 N.W.2d 113.
In this case, aside from the failure to ensure Chad was
restrained by a seatbelt in the activities van, there was no evi-
dence that Harvey’s or Blum’s actions were deficient. Without
the seatbelt evidence, the Christensens’ claims based on BBPS’
violation of § 60-6,267, or even a purported breach of a statu-
tory duty based in § 60-6,267, were properly dismissed. We
find no error in the directed verdict in favor of BBPS.
(b) Evidence of BBPS’ Negligent
Supervision of Students
The Christensens attempt to circumvent §§ 60-6,267 and
60-6,269 by arguing that seatbelt nonuse by a student could
be direct evidence that the school breached its duty to exer-
cise reasonable care under the circumstances. We reject this
argument.
The circumstances of this case are unrestrained children in
a van which was hit head on by a truck. Evidence of a per-
son’s seatbelt nonuse is inadmissible for the issue of “liability
or proximate cause.” § 60-6,273. The district court prop-
erly excluded evidence of seatbelt nonuse. See § 60-6,273.
Without evidence of seatbelt nonuse, which evidence was
essential to the claim of negligent supervision, but which
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Cite as 312 Neb. 814
was properly excluded, the Christensens’ evidence failed
to show proximate cause. Taking every controverted fact
resolved in the Christensens’ favor and giving them the ben-
efit of every inference which can reasonably be deduced from
the admissible evidence, we agree with the district court that
the Christensens failed to show that BBPS caused Chad’s
injuries. We find no error in the directed verdict in favor
of BBPS.
3. Cross-Appeals and BBPS’ Third-Party
Complaint Against Sherbeck Estate
In view of our disposition affirming the directed verdict in
favor of BBPS, we determine that the district court correctly
dismissed as moot BBPS’ third-party complaint against the
Sherbeck estate.
VI. CONCLUSION
For the reasons explained above, we affirm the order of the
district court that directed the verdict in favor of BBPS and
dismissed the Christensens’ claims against BBPS. The issues
raised by the cross-appeals filed by BBPS and the Sherbeck
estate are now moot or without merit, and we decline to reach
them. See In re Maint. Fund of Sunset Mem. Park Chapel, 302
Neb. 954, 925 N.W.2d 695 (2019).
Affirmed.
Freudenberg, J., not participating. | 01-04-2023 | 11-18-2022 |
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CHILDS V. FRAKES
Cite as 312 Neb. 925
Moses Childs, appellant and
cross-appellee, v. Scott Frakes,
appellee and cross-appellant.
___ N.W.2d ___
Filed November 18, 2022. No. S-21-878.
1. Habeas Corpus: Appeal and Error. On appeal of a habeas corpus peti-
tion, an appellate court reviews the trial court’s factual findings for clear
error and its conclusions of law de novo.
2. Statutes: Appeal and Error. The meaning and interpretation of statutes
are questions of law for which an appellate court has an obligation to
reach an independent conclusion irrespective of the decision made by
the court below.
3. Limitations of Actions: Dismissal and Nonsuit. Neb. Rev. Stat.
§ 25-217 (Cum. Supp. 2020) is self-executing, so that an action is dis-
missed by operation of law, without any action by either the defendant
or the court, as to any defendant who is named in the civil action and
not served with process within the time set forth in the statute.
4. Limitations of Actions: Dismissal and Nonsuit: Jurisdiction. After
dismissal of a civil action by operation of law under Neb. Rev. Stat.
§ 25-217 (Cum. Supp. 2020), there is no longer an action pending and
the district court has no jurisdiction to make any further orders except
to formalize the dismissal.
5. Habeas Corpus: Courts. Habeas corpus proceedings are not like ordi-
nary civil actions, and courts should follow the traditional procedure
illustrated by the habeas corpus statutes rather than make up their own
procedure.
6. Habeas Corpus. The writ of habeas corpus derives from common law
and is a special civil proceeding providing a summary remedy to per-
sons illegally detained.
7. Constitutional Law: Habeas Corpus. The Nebraska Constitution pro-
vides for the remedy of habeas corpus, while the procedure for the writ
is governed by statute.
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8. Habeas Corpus. Habeas corpus proceedings are not adversarial civil
actions and are not in a technical sense a suit between the applicant and
the respondent officer.
9. Habeas Corpus: Rules of the Supreme Court: Pleadings. The plead-
ing rules governing civil actions have no application to habeas corpus
proceedings.
10. Habeas Corpus. The statutory service provisions governing civil actions
have no application in habeas corpus proceedings.
11. Appeal and Error. A proper result will not be reversed merely because
it was reached for the wrong reason.
12. Habeas Corpus. A writ of habeas corpus challenges and tests the
legality of a person’s detention, imprisonment, or custodial deprivation
of liberty.
13. ____. In Nebraska, habeas corpus is quite limited in comparison to the
scope of the writ in federal courts.
14. Criminal Law: Habeas Corpus. Eligibility for a writ of habeas corpus
is governed by the criteria set forth in Neb. Rev. Stat. § 29-2801 (Cum.
Supp. 2020), which explicitly excludes from the scope of habeas cor-
pus persons convicted of some crime or offense for which they stand
committed.
15. Habeas Corpus: Prisoners. Under Nebraska law, in the case of a pris-
oner held pursuant to a judgment of conviction, habeas corpus is avail-
able as a remedy only upon a showing that the judgment, sentence, and
commitment are void.
16. Habeas Corpus: Judgments: Sentences. The writ of habeas corpus
will not lie upon the ground of mere errors and irregularities in the judg-
ment or sentence rendering it not void, but only voidable.
17. Judgments: Collateral Attack. A judgment that is not void, even if
erroneous, cannot be collaterally attacked.
18. Habeas Corpus: Jurisdiction: Sentences. A writ of habeas corpus will
not lie to discharge a person from a sentence of penal servitude where
the court imposing the sentence had jurisdiction of the offense and the
person of the defendant, and the sentence was within the power of the
court to impose.
19. Habeas Corpus. A writ of habeas corpus is not a writ for correction of
errors, and its use will not be permitted for that purpose.
20. Habeas Corpus: Sentences. The regularity of the proceedings lead-
ing up to the sentence in a criminal case cannot be inquired into on an
application for writ of habeas corpus, for that matter is available only
in a direct proceeding.
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Appeal from the District Court for Douglas County: W.
Russell Bowie III, Judge. Affirmed.
Moses Childs, pro se.
Douglas J. Peterson, Attorney General, and James A.
Campbell, Solicitor General, for appellee.
Heavican, C.J., Cassel, Stacy, Funke, Papik, and
Freudenberg, JJ.
Stacy, J.
In this appeal, we consider whether the service and auto-
matic dismissal provisions of Neb. Rev. Stat. § 25-217 (Cum.
Supp. 2020) apply to habeas corpus proceedings. We hold that
§ 25-217 has no application to habeas corpus proceedings,
and consequently, the district court erred when it dismissed
a petition for writ of habeas corpus pursuant to that statute.
However, because our de novo review shows the petition did
not state a cognizable claim for habeas relief, we affirm the
judgment of dismissal, albeit on a different ground.
BACKGROUND
In 2017, the State filed an information against Moses Childs
in the district court for Lancaster County, Nebraska, charg-
ing him with one count of first degree sexual assault. Childs
eventually pled no contest to a reduced charge of attempted
first degree sexual assault and was sentenced to a term of
imprisonment. Childs’ conviction and sentence were affirmed
on direct appeal. 1
On March 24, 2021, Childs filed a petition for writ of habeas
corpus in the district court for Douglas County, Nebraska.
His pro se petition alleged he was being confined in Douglas
1
State v. Childs, No. A-18-1208, 2019 WL 6873068 (Neb. App. Dec. 17,
2019) (selected for posting to court website).
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County pursuant to a conviction and sentence that was void
because (1) he had been denied trial counsel of his choice;
(2) his plea was not entered knowingly, voluntarily, and intel-
ligently; (3) the prosecutor lacked “legal standing” to invoke
the court’s jurisdiction; and (4) his right to remain silent was
violated when the sentencing court required him to participate
in a presentence investigation.
The record on appeal shows no activity in the habeas pro-
ceeding from the date of its filing until September 23, 2021,
when the district court entered an order stating: “Pursuant to
Nebraska Revised Statute 25-217, this action stands dismissed
without prejudice.” Childs timely appealed from the order of
dismissal, and we moved the appeal to our docket to address
an issue of first impression: whether the provisions of § 25-217
apply to habeas corpus proceedings.
ASSIGNMENTS OF ERROR
Childs assigns, restated, that the district court erred in dis-
missing his petition for writ of habeas corpus because (1) the
requirements of § 25-217 do not apply in habeas proceedings
and (2) the allegations of the habeas petition entitled him to
an evidentiary hearing.
The State has cross-appealed, assigning the district court
erred by failing to dismiss Childs’ habeas petition on the
ground its allegations did not entitle him to habeas relief.
STANDARD OF REVIEW
[1] On appeal of a habeas corpus petition, an appellate court
reviews the trial court’s factual findings for clear error and its
conclusions of law de novo. 2
[2] The meaning and interpretation of statutes are questions
of law for which an appellate court has an obligation to reach
2
Buggs v. Frakes, 298 Neb. 432, 904 N.W.2d 664 (2017).
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an independent conclusion irrespective of the decision made by
the court below. 3
ANALYSIS
In their appellate briefing, both Childs and the State take
the position that the service and automatic dismissal provi-
sions of § 25-217 do not apply to habeas corpus proceedings.
We agree.
Section 25-217 addresses the statutory timeline for perfect-
ing service on defendants in civil actions, and it provides in
relevant part:
(1) An action is commenced on the day the complaint
is filed with the court.
(2) Each defendant in the action must be properly served
within one hundred eighty days of the commencement of
the action. . . .
(3) If any defendant is not properly served within the
time specified by subsection (2) of this section then the
action against that defendant is dismissed by operation
of law. The dismissal is without prejudice and becomes
effective on the day after the time for service expires.
[3,4] We have often explained that Ҥ 25-217 is self-
executing, so that an action is dismissed by operation of law,
without any action by either the defendant or the court, as
to any defendant who is named in the [civil] action and not
served with process within the time set forth in the statute.” 4
After dismissal of a civil action by operation of law under
§ 25-217, there is no longer an action pending and the district
3
In re App. No. P-12.32 of Black Hills Neb. Gas, 311 Neb. 813, 976 N.W.2d
152 (2022).
4
E.g., Carrizales v. Creighton St. Joseph, ante p. 296, 304, 979 N.W.2d
81, 89 (2022); Davis v. Choctaw Constr., 280 Neb. 714, 789 N.W.2d 698
(2010).
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court has no jurisdiction to make any further orders except to
formalize the dismissal. 5
§ 25-217 Does Not Apply
to Habeas Corpus
[5] To the extent the district court here concluded that
§ 25-217 applies in habeas corpus proceedings, it erred. We
have cautioned trial courts that habeas corpus proceedings are
not like ordinary civil actions, and courts should “follow the
traditional procedure illustrated by the habeas corpus statutes
rather than make up their own procedure.” 6
[6,7] The writ of habeas corpus derives from common
law, and we have described it as “a special civil proceeding
providing a summary remedy to persons illegally detained.” 7
The Nebraska Constitution provides for the remedy of habeas
corpus, 8 while the procedure for the writ is governed by
statute. 9
The statutory procedure for habeas corpus proceedings is set
out in Neb. Rev. Stat. §§ 29-2801 through 29-2824 (Reissue
2016 & Cum. Supp. 2020). Under those procedures, the first
step is for the petitioner or relator, or someone on his or her
behalf, to “make application” to the court. 10 Accompanying
the application should be “a copy of the commitment or
5
See id.
6
Maria T. v. Jeremy S., 300 Neb. 563, 573, 915 N.W.2d 441, 450 (2018).
7
Id. at 570, 915 N.W.2d at 448. Accord, In re Application of Tail, Tail v.
Olson, 144 Neb. 820, 822, 14 N.W.2d 840, 841 (1944) (“[h]abeas corpus
. . . is a special proceeding, civil in character[,] providing a summary
remedy open to persons illegally detained”).
8
Neb. Const. art. I, § 8 (“[t]he privilege of the writ of habeas corpus shall
not be suspended”).
9
Maria T., supra note 6.
10
§ 29-2801.
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cause of detention of such person” 11 or, if the person claims
to be imprisoned or detained without any legal authority, the
application must “mak[e] the same appear to such judge, by
oath or affirmation.” 12 It has long been the rule that a peti-
tion for writ of habeas corpus should be filed in the county
where the petitioner or relator is confined, and although our
older opinions characterized this as a jurisdictional issue, our
more recent opinions clarify that the issue implicates venue,
not jurisdiction. 13
Once an application for writ of habeas corpus is filed,
the next procedural step requires the court to determine, sua
sponte and based on the allegations of the application, if the
writ should issue. 14 If the application or petition for writ of
habeas corpus sets forth facts which, if true, would entitle
the petitioner to discharge, then the writ is a matter of right
and the petitioner should be produced and a hearing held
thereon to determine the question of fact presented. 15 But if
the application or petition alleges mere conclusions of law, or
if the facts alleged in the application or petition do not show
the petitioner is entitled to the relief of habeas corpus, “then
the writ will be denied for it would be useless to go through
the procedure of granting the writ and having the party
brought before the court merely to be remanded back to the
custody out of which he [or she] seeks to be discharged.” 16
11
Id. See, also, Gallion v. Zinn, 236 Neb. 98, 459 N.W.2d 214 (1990) (hold
ing when petition fails to present statutorily required copy of commitment
and detention order, habeas relief may be denied).
12
§ 29-2801.
13
See, O’Neal v. State, 290 Neb. 943, 863 N.W.2d 162 (2015); Anderson v.
Houston, 274 Neb. 916, 744 N.W.2d 410 (2008).
14
See Maria T., supra note 6.
15
See, id.; Evans v. Frakes, 293 Neb. 253, 876 N.W.2d 626 (2016); In re
Application of Tail, Tail v. Olson, 145 Neb. 268, 16 N.W.2d 161 (1944).
16
In re Application of Tail, Tail v. Olson, supra note 15, 145 Neb. at 272, 16
N.W.2d at 164.
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When a writ of habeas corpus is issued, service is governed
by § 29-2816, which states simply that “[s]uch writ may be
served in any county by any sheriff of the same or of any
other county.”
When a court issues a writ of habeas corpus, it then becomes
“the duty of the officer or person to whom such writ shall
be directed to convey the person or persons so imprisoned
or detained and named in such writ, before the judge . . . on
the day specified in such writ, and to make due return of the
writ.” 17 Once a writ is issued, it must be obeyed, or resistance
thereto made in the regular manner. 18 In every case in which
a writ has been issued, the person to whom it is directed must
sign and file a “return” 19 that plainly and unequivocally states
whether he or she has the petitioner or relator under his or her
“custody or power or under restraint” 20 and, if so, sets forth the
authority for such custody, power, or restraint. 21 The habeas
statutes do not describe by what means, if any, the respondent
may challenge the sufficiency of the application or petition for
writ of habeas corpus, but this court has said that before filing
a response to the writ, the respondent “may challenge the suf-
ficiency of the statements in the application of the relator by
filing a motion to quash or to ‘dissolve’ the writ.” 22 We have
recognized that this procedure is “consistent with traditional
common-law habeas corpus procedure.” 23
[8-10] As the foregoing discussion illustrates, the statu-
tory and traditional common-law procedures governing habeas
17
§ 29-2802. See, also, §§ 29-2816 through 29-2819 (governing contents
and verification of return).
18
See Maria T., supra note 6.
19
See §§ 29-2817 and 29-2818.
20
§ 29-2817.
21
See id. See, also, Maria T., supra note 6.
22
Maria T., supra note 6, 300 Neb. at 572, 915 N.W.2d at 449.
23
Id.
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corpus proceedings in Nebraska have very little in common
with the statutory procedure governing civil actions. 24 Habeas
corpus proceedings are not adversarial civil actions and “are
not in a technical sense a suit between the applicant and the
[respondent] officer.” 25 We have been clear that the pleading
rules governing civil actions have no application to habeas cor-
pus proceedings, 26 and we now similarly hold that the statutory
service provisions governing civil actions have no application
in habeas corpus proceedings. Simply put, under the habeas
corpus procedure, the court issues the writ where appropriate
and there is no requirement that the petitioner must perfect
service on anyone. 27 The district court thus erred as a matter of
law when it applied the service and automatic dismissal provi-
sions of § 25-217 to Childs’ petition for writ of habeas corpus.
Moreover, the erroneous application of § 25-217 resulted in
an unnecessary delay of the court’s duty to sua sponte review
the petition.
[11] But our analysis does not end there, because a proper
result will not be reversed merely because it was reached for
the wrong reason. 28 We find merit in the State’s cross-appeal.
Petition Does Not Support
Habeas Corpus Relief
Although the district court erred in relying on § 25-217 to
dismiss Childs’ habeas petition, our de novo review shows that
24
Accord id. (holding habeas corpus proceedings are not governed by
Nebraska Court Rules of Pleading in Civil Cases).
25
In re Application of Tail, Tail v. Olson, supra note 7, 144 Neb. at 822, 14
N.W.2d at 841.
26
See Maria T., supra note 6.
27
See In re Application of Tail, Tail v. Olson, supra note 7, 144 Neb. at 823,
14 N.W.2d at 842 (“[w]e are unable to find any provision in our [habeas
corpus] statutes for service upon respondent of any other process except
the writ”).
28
See O’Neal, supra note 13.
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dismissal was nevertheless proper on a different ground: Childs
has failed to allege facts which, if true, would entitle him to
habeas relief.
[12-17] A writ of habeas corpus challenges and tests the
legality of a person’s detention, imprisonment, or custodial
deprivation of liberty. 29 In Nebraska, habeas corpus is quite
limited in comparison to the scope of the writ in federal
courts. 30 Eligibility for the writ is governed by the criteria set
forth in § 29-2801, and under that statute, “persons convicted
of some crime or offense for which they stand committed”
are expressly excluded. 31 As such, under Nebraska law, in the
case of a prisoner held pursuant to a judgment of conviction,
habeas corpus is available as a remedy only upon a showing
that the judgment, sentence, and commitment are void. 32 “The
writ will not lie upon the ground of mere errors and irregulari-
ties in the judgment or sentence rendering it not void, but only
voidable.” 33 Stated differently, a judgment that is not void,
even if erroneous, cannot be collaterally attacked. 34
[18-20] Thus, a writ of habeas corpus will not lie to dis-
charge a person from a sentence of penal servitude where the
court imposing the sentence had jurisdiction of the offense and
the person of the defendant, and the sentence was within the
power of the court to impose. 35 A writ of habeas corpus is not
a writ for correction of errors, and its use will not be permitted
for that purpose. 36 “‘[T]he regularity of the proceedings lead-
ing up to the sentence in a criminal case cannot be inquired
29
Tyrrell v. Frakes, 309 Neb. 85, 958 N.W.2d 673 (2021).
30
Id.
31
Sanders v. Frakes, 295 Neb. 374, 888 N.W.2d 514 (2016).
32
Tyrrell, supra note 29.
33
Id., 309 Neb. at 94, 958 N.W.2d at 681.
34
Id.
35
Peterson v. Houston, 284 Neb. 861, 824 N.W.2d 26 (2012).
36
Id.
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into on an application for writ of habeas corpus, for that matter
is available only in a direct proceeding.’” 37
With these principles in mind, we turn to the four grounds
on which Childs alleges he is entitled to habeas relief. First, he
alleged his primary attorney appeared at only a few hearings,
while his secondary attorney appeared at more. Childs char-
acterizes this as denying him counsel of his choice, which he
argues resulted in structural error that supports “reversal of his
conviction.” But such a claim does not entitle him to habeas
relief because, even if true, it would not render the judgment,
sentence, and commitment void.
Second, Childs alleged his plea was not knowingly, volun-
tarily, and intelligently entered because he received ineffec-
tive assistance of counsel. But claims of an invalid plea or
ineffective assistance of counsel do not warrant habeas relief,
because they do not affect the jurisdiction of the trial court or
the authority of the court to impose the sentence given. 38 Thus,
even if true, these allegations would not render the judgment,
sentence, and conviction void.
Third, Childs alleged the prosecutor had no personal knowl-
edge of the factual basis provided to the court during the plea
hearing and thus “had no legal standing upon which to invoke
the [trial] court’s jurisdiction.” But under Nebraska law, it is
the duty of the county attorney, when in possession of
sufficient evidence to warrant the belief that a person is
guilty and can be convicted of a felony or misdemeanor,
to prepare, sign, verify, and file the proper complaint
against such person and to appear in the several courts
of the county and prosecute the appropriate criminal pro-
ceeding on behalf of the state and county. 39
37
Id., 284 Neb. at 867, 824 N.W.2d at 33.
38
See, Gonzalez v. Gage, 290 Neb. 671, 861 N.W.2d 457 (2015); Peterson,
supra note 35; Rehbein v. Clarke, 257 Neb. 406, 598 N.W.2d 39 (1999).
39
Neb. Rev. Stat. § 23-1201 (Cum. Supp. 2020).
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There is nothing improper about a prosecutor’s reciting the
factual basis for the charged crime during a plea hearing.
This claim has no legal merit and does not entitle Childs to
habeas relief.
And fourth, Childs alleged he was compelled to participate
in a presentence investigation “without a knowing and intelli-
gent waiver of his right to remain silent.” This allegation chal-
lenges the regularity of the proceedings leading up to Childs’
sentence and is not a basis for habeas relief. 40
Because none of the allegations in Childs’ petition set forth
facts which, if true, would entitle him to habeas relief, it was
proper to dismiss the petition for writ of habeas corpus. 41
CONCLUSION
Our de novo review demonstrates that the decision of the
district court to dismiss Childs’ petition for writ of habeas cor-
pus was ultimately correct, even though the district court’s rea-
son for ordering dismissal was erroneous. We therefore affirm
the dismissal.
Affirmed.
Miller-Lerman, J., participating on briefs.
40
See Peterson, supra note 35.
41
See Maria T., supra note 6. | 01-04-2023 | 11-18-2022 |
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ECHO GROUP V. TRADESMEN INTERNAT.
Cite as 312 Neb. 729
Echo Group, Inc., appellee and cross-appellant, v.
Tradesmen International, an Ohio corporation,
appellee, and Lund-Ross Constructors, Inc.,
a Nebraska corporation, intervenor-
appellant and cross-appellee.
Echo Group, Inc., appellee and cross-appellant, v.
The Historic Florentine, LLC, a Nebraska limited
liability company, and Midwest Protective
Services, Inc., appellees, and Lund-Ross
Constructors, Inc., a Nebraska corporation,
intervenor-appelllant and cross-appellee.
Echo Group, Inc., appellee and cross-appellant, v.
The Duke of Omaha, LLC, a Georgia limited
liability company, Great Western Bank and
Midwest Protection Services, Inc., appellees,
and Lund-Ross Constructors, Inc.,
a Nebraska corporation, intervenor-
appellant and cross-appellee.
___ N.W.2d ___
Filed October 28, 2022. Nos. S-21-729, S-21-730, S-21-770.
1. Summary Judgment: Appeal and Error. An appellate court affirms a
lower court’s grant of summary judgment if the pleadings and admitted
evidence show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts and that
the moving party is entitled to judgment as a matter of law.
2. ____: ____. In reviewing a summary judgment, an appellate court views
the evidence in the light most favorable to the party against whom the
judgment was granted and gives that party the benefit of all reasonable
inferences deducible from the evidence.
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3. Statutes: Appeal and Error. Statutory interpretation presents a ques-
tion of law which an appellate court reviews independently of the lower
court.
4. Liens: Foreclosure: Equity. An action to foreclose a construction lien
is one grounded in equity.
5. Equity. The maxim “equity follows the law” in its broad sense means
that equity follows the law to the extent of obeying it and conforming to
its general rules and policies whether contained in common law or stat-
ute. This maxim is strictly applicable whenever the rights of the parties
are clearly defined and established by law.
6. ____. Equitable remedies are generally not available where there exists
an adequate remedy at law.
7. Summary Judgment: Proof. The party moving for summary judgment
must make a prima facie case by producing enough evidence to show
that the movant is entitled to judgment if the evidence were uncontro-
verted at trial. If the party moving for summary judgment makes a prima
facie case, the burden shifts to the nonmovant to produce evidence
showing the existence of a material issue of fact that prevents judgment
as a matter of law.
8. Summary Judgment. Conclusions based on guess, speculation, conjec-
ture, or a choice of possibilities do not create material issues of fact for
purposes of summary judgment.
9. Statutes: Appeal and Error. Statutory language is to be given its plain
and ordinary meaning, and an appellate court will not resort to inter-
pretation to ascertain the meaning of statutory words which are plain,
direct, and unambiguous.
10. Principal and Surety: Bonds: Liens. The function of the surety bond
under Neb. Rev. Stat. § 52-142 (Reissue 2021) is to release the property
from the lien and to transfer the claimant’s rights from the property to
the surety bond.
11. Stipulations: Parties. The general rule is that parties are bound by
stipulations voluntarily made.
12. Principal and Surety: Liability. In the absence of a condition extend-
ing his or her liability, a surety cannot be held liable for more than the
penal sum named.
13. Prejudgment Interest: Appeal and Error. Awards of prejudgment
interest are reviewed de novo.
14. Prejudgment Interest. Neb. Rev. Stat. §§ 45-103.02 and 45-104
(Reissue 2021) provide alternate and independent means of recovering
prejudgment interest.
15. ____. Neb. Rev. Stat. § 45-103.02(2) (Reissue 2021) authorizes the
recovery of prejudgment interest on liquidated claims.
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16. ____. When a claim is of the types enumerated in Neb. Rev. Stat.
§ 45-104 (Reissue 2021), then prejudgment interest may be recovered
without regard to whether the claim is liquidated.
17. Appeal and Error. The district court cannot commit error in resolving
an issue never presented and submitted to it for disposition.
18. Prejudgment Interest. Neb. Rev. Stat. § 45-104 (Reissue 2021) applies
to four types of judgments: (1) money due on any instrument in writing;
(2) settlement of the account from the day the balance shall be agreed
upon; (3) money received to the use of another and retained without the
owner’s consent, express or implied, from the receipt thereof; and (4)
money loaned or due and withheld by unreasonable delay of payment.
19. Prejudgment Interest: Liens: Foreclosure. An award of prejudgment
interest in an action to foreclose a construction lien is authorized under
Neb. Rev. Stat. § 45-104 (Reissue 2021).
20. Statutes: Words and Phrases. As a general rule, the word “shall” in
a statute is considered mandatory and is inconsistent with the idea of
discretion.
21. Attorney Fees: Appeal and Error. On appeal, a trial court’s decision
awarding or denying attorney fees will be upheld absent an abuse of
discretion.
22. Attorney Fees. Attorney fees and expenses may be recovered in a civil
action only where provided for by statute or when a recognized and
accepted uniform course of procedure has been to allow recovery of
attorney fees.
23. Statutes: Legislature: Intent. When construing a statute, a court must
determine and give effect to the purpose and intent of the Legislature
as ascertained from the entire language of the statute considered in its
plain, ordinary, and popular sense.
24. Statutes: Intent. In construing a statute, the court must look at the
statutory objective to be accomplished, the problem to be remedied,
or the purpose to be served, and then place on the statute a reasonable
construction which best achieves the purpose of the statute, rather than
a construction defeating the statutory purpose.
25. Appeal and Error. Absent plain error, an appellate court considers only
an appellant’s claimed errors that the appellant specifically assigns in a
separate “assignment of error” section of the brief and correspondingly
argues in the argument section.
26. ____. Plain error is error plainly evident from the record and of such a
nature that to leave it uncorrected would result in damage to the integ-
rity, reputation, or fairness of the judicial process.
Appeals from the District Court for Douglas County: J.
Michael Coffey, Leigh Ann Retelsdorf, and Duane C.
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Dougherty, Judges. Judgment in No. S-21-729 affirmed and
in part reversed, and cause remanded with direction. Judgment
in No. S-21-730 affirmed in part and in part reversed, and
cause remanded with direction. Judgment in No. S-21-770
affirmed in part, and in part reversed.
David S. Houghton and Justin D. Eichmann, of Houghton,
Bradford & Whitted, P.C., L.L.O., for appellant.
Cathy S. Trent-Vilim and Craig F. Martin, of Lamson,
Dugan & Murray, L.L.P., for appellees.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Cassel, J.
I. INTRODUCTION
These three cases consolidated for appeal involve foreclo-
sures of construction liens under the Nebraska Construction
Lien Act (Act). 1 The appeals present three primary issues:
whether equitable considerations make summary judgment
improper, whether prejudgment interest is authorized, and
whether attorney fees are recoverable.
Because there was no dispute that the supplier complied
with the provisions of the Act and equity follows the law, we
affirm the entry of summary judgment in each case.
We conclude that the claims were liquidated, and thus, an
award of prejudgment interest was authorized. Because the
court in two cases erred by not awarding prejudgment inter-
est, we reverse the denial and remand to award such interest in
conformity with this opinion.
Finally, we conclude that under the circumstances, there was
no statutory authorization for an award of attorney fees. Thus,
we reverse in part the judgment in two cases awarding attorney
fees.
1
Neb. Rev. Stat. §§ 52-125 to 52-159 (Reissue 2021).
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II. BACKGROUND
1. Overview
We begin with a broad overview. These appeals arose from
three construction-related projects. A general contractor entered
into agreements with a subcontractor for performance of elec-
trical work, and the subcontractor obtained electrical materials
and equipment from a supplier. When the subcontractor failed
to pay the supplier, the supplier filed construction liens. The
supplier then sued the property owners to foreclose on the
liens. The general contractor posted lien release bonds and
intervened. Ultimately, the district court—through a different
judge in each of the three cases—entered summary judgment
in favor of the supplier. Two judgments overruled requests for
prejudgment interest, one overruled a request for attorney fees,
and one awarded both prejudgment interest and fees. These
appeals followed.
2. Parties and Contracts
With that general understanding, we fill in the details. The
general contractor, Lund-Ross Constructors Co. (Lund-Ross),
was hired for the three projects involved in these appeals. The
projects consisted of renovating common space at a senior liv-
ing center, revamping an old apartment building into new apart-
ments, and constructing a new apartment project, respectively.
Lund-Ross entered into contracts with Signature Electric,
LLC (Signature), doing business as D&J Electric, for the per-
formance of electrical work on the projects. Signature entered
into agreements with Echo Group (Echo) to obtain electrical
materials and equipment.
Generally, the subcontracts between Lund-Ross and
Signature specified that Signature had the responsibility to pay
all amounts owed to any suppliers it engaged. The subcontracts
obligated Signature to furnish satisfactory evidence to Lund-
Ross, “when and if required,” that it did so. To receive monthly
progress payments, Signature had to provide Lund-Ross with a
completed lien waiver for all prior months’ progress payments.
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3. Progress Payments
Signature submitted monthly pay applications to Lund-Ross,
requesting monthly progress payments for work completed
and supplies purchased. Lund-Ross would remit payment to
Signature, less an applicable retainage amount. Once Signature
received payment, it submitted a partial lien waiver to Lund-
Ross, attesting to Signature’s payment of all suppliers up to the
date of the lien waiver.
According to Lund-Ross’ president, the lien waivers were
of “critical importance.” He explained that if Signature did not
provide lien waivers for the previous month attesting to pay-
ment of suppliers, “Lund-Ross would then have known that
there was a problem with Signature’s payment of suppliers and
Lund-Ross could have stopped making payments to Signature
and made other arrangements to pay Signature’s suppliers . . .
directly or take other action to protect itself.”
4. Construction Liens and Lawsuits
In July 2019, Signature abruptly ceased operations.
The next month, and in accordance with the Act, Echo
recorded a construction lien in the office of the Douglas County
register of deeds in each case in the amounts of $11,604.46,
$32,781.03, and $296,407.73, respectively.
Echo presented demands to Lund-Ross for payment with
respect to electrical supplies it furnished to Signature. Having
received no payments, Echo filed lawsuits against the property
owners to foreclose on the construction liens. The complaints
also alleged unjust enrichment. Lund-Ross posted a surety
bond in each case and moved to intervene.
After the court allowed Lund-Ross to intervene, Lund-Ross
filed an answer setting forth numerous affirmative defenses.
Among the affirmative defenses, Lund-Ross identified equi-
table doctrines of waiver, estoppel, laches, and unclean hands.
Lund-Ross stipulated to the dismissal of each property owner.
In case No. S-21-729, Lund-Ross stipulated that any judgment
would be satisfied “by Lund-Ross or its bond.” Similarly, in
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case No. S-21-770, Lund-Ross stipulated that a final judgment
would be satisfied “by Lund[-]Ross and/or its bond.”
Echo subsequently moved for summary judgment. As dis-
cussed in more detail below, the court sustained the motion in
each case.
5. District Court Judgments
The court entered summary judgment in Echo’s favor on the
foreclosure of a construction lien claim in each case. Thus, in
case No. S-21-729, the court entered judgment in the amount
of $11,604.46 against the bond posted by Lund-Ross, together
with costs and postjudgment interest. In case No. S-21-730,
the court entered judgment against the bond in the amount
of “$32,871.03” (transposing the lien amount of $32,781.03),
together with costs, attorney fees, and postjudgment interest.
In case No. S-21-770, the court entered summary judgment
against Lund-Ross in the amount of $296,407.73, plus prejudg-
ment and postjudgment interest, costs, and attorney fees.
The orders further disposed of Echo’s claims for unjust
enrichment. In case No. S-21-729, the court found that claim
should be dismissed with prejudice. In case No. S-21-730, the
court sustained Echo’s motion to dismiss that claim. And in
case No. S-21-770, having determined that summary judgment
was appropriate on the lien foreclosure claim, the court found
it unnecessary to consider Echo’s unjust enrichment claim.
Additional findings by the district court will be set forth as
necessary in the analysis.
Lund-Ross filed a timely appeal in each case. The Nebraska
Court of Appeals sustained Lund-Ross’ motion to consolidate
the appeals, and we subsequently moved them to our docket. 2
III. ASSIGNMENTS OF ERROR
Lund-Ross assigns five errors. In all three cases, it alleges
that the district court erred in determining that no genuine issue
2
See Neb. Rev. Stat. § 24-1106(3) (Cum. Supp. 2020).
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of material fact existed and in granting Echo summary judg-
ment on its claims for construction lien foreclosure.
In two cases—cases Nos. S-21-730 and S-21-770—Lund-
Ross alleges that the court erred in granting judgment in an
amount greater than the surety bond posted by Lund-Ross.
In case No. S-21-770 only, Lund-Ross alleges that the court
erred in (1) entering judgment for the excess amount directly
against Lund-Ross, (2) awarding Echo prejudgment interest on
its claim for construction lien foreclosure, and (3) awarding
Echo attorney fees not actually incurred in pursuit of Echo’s
claim in the action pending before it.
On cross-appeal, Echo assigns that the court erred in cases
Nos. S-21-729 and S-21-730 by denying prejudgment interest.
It further assigns that the court erred in case No. S-21-729 by
denying attorney fees.
IV. STANDARD OF REVIEW
[1,2] An appellate court affirms a lower court’s grant of
summary judgment if the pleadings and admitted evidence
show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts
and that the moving party is entitled to judgment as a matter
of law. 3 In reviewing a summary judgment, an appellate court
views the evidence in the light most favorable to the party
against whom the judgment was granted and gives that
party the benefit of all reasonable inferences deducible from
the evidence. 4
[3] Statutory interpretation presents a question of law which
an appellate court reviews independently of the lower court. 5
These standards are central to our review. We set forth other
applicable standards in the analysis.
3
Elbert v. Young, ante p. 58, 977 N.W.2d 892 (2022).
4
Id.
5
Ag Valley Co-op v. Servinsky Engr., 311 Neb. 665, 974 N.W.2d 324 (2022).
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V. ANALYSIS
1. Summary Judgment
Lund-Ross argues that the district court erred in granting
summary judgment in three ways. In all three appeals, Lund-
Ross claims that the court erred in entering summary judgment
on the construction lien foreclosure claim without “balancing
the equities.” 6 In cases Nos. S-21-730 and S-21-770, Lund-
Ross alleges the court erred by entering summary judgment in
an amount greater than the surety bond it posted to release the
real estate from the construction lien. In case No. S-21-770,
Lund-Ross claims error with respect to the entry of judgment
for the excess amount directly against Lund-Ross.
(a) Balancing of Equities
With regard to summary judgment on the construction lien
foreclosure claims, Lund-Ross does not dispute that Echo
complied with the statutory requirements of the Act. But Lund-
Ross argues that “the grant of such an equitable remedy also
requires the trial court to first balance any equities supported
by the parties’ evidence.” 7
[4] It bases its argument on case law stating that an action
to foreclose a construction lien is one grounded in equity. 8
From this general characterization of the nature of a construc-
tion lien foreclosure proceeding, it reasons that a balancing of
equities—which, it argues, is inherent in an equity action—pre-
cludes granting summary judgment.
No Nebraska case law has addressed balancing of equities
in a lien foreclosure action. Recognizing the same, Lund-Ross
directs our attention to two cases to support its argument.
6
Brief for appellant at 22.
7
Id. at 21.
8
See, e.g., Goes v. Vogler, 304 Neb. 848, 937 N.W.2d 190 (2020); Lincoln
Lumber Co. v. Lancaster, 260 Neb. 585, 618 N.W.2d 676 (2000); Franksen
v. Crossroads Joint Venture, 245 Neb. 863, 515 N.W.2d 794 (1994).
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One case, an unpublished decision of the Iowa Court of
Appeals, 9 involved a trial court’s refusal to foreclose on a
mechanic’s lien based on equitable principles. The trial court
had concluded that the contractor was largely responsible for
creating the dispute due to its confusing and inaccurate billing.
The Court of Appeals reasoned that although the contractor met
the statutory requirements to foreclose on its lien, the appel-
late court had broad discretion in determining an equitable
remedy and could consider the hardship its orders would cause
the defendant.
The other case, a Nebraska case, involved whether to grant
equitable relief in connection with allegations of ultra vires
acts by insurance company officers. 10 There, we stated that
“[i]n balancing equities, [a court] must take into consideration
the good that may be done to those who have been wronged,
against the evil that may befall innocent persons.” 11 After
noting that “if the plaintiff can be readily compensated in dam-
ages,” we stated that “[c]ourts will balance equities and, where
they are equal or predominate against him who seeks relief,
equity will follow that rule.” 12
Neither case persuades us that the possibility of balancing
equities in fashioning relief precludes a court from employ-
ing a summary judgment, at least where there are no factual
disputes. The Nebraska precedent, in particular, differs signifi-
cantly from the case before us. There, the plaintiffs primarily
sought and received injunctive relief requiring that bonds and
money removed from a fraternal benefit corporation and paid
to an insurance company organized by officers of the frater-
nal benefit corporation be returned to that corporation, and
9
Olmstead Construction, Inc. v. Otter Creek Investments, LLC, No. 18-1186,
2019 WL 4678167 (Iowa App. Sept. 25, 2019) (unpublished opinion listed
in table of “Decisions Without Published Opinions” at 940 N.W.2d 44
(2019)).
10
See Folts v. Globe Life Ins. Co., 117 Neb. 723, 223 N.W. 797 (1929).
11
Id. at 745, 223 N.W. at 806.
12
Id.
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precluding the individuals and corporate entities from using
the fraternal benefit corporation’s goodwill, property, or orga-
nization in the business of the insurance company. While an
action for injunction sounds in equity 13 and an action to fore-
close a construction lien is one grounded in equity, 14 the simi-
larity ends there. In Nebraska, construction liens are largely
governed by the Act.
[5,6] Long-established principles require a court in equity
to implement these statutory provisions. The maxim “equity
follows the law” in its broad sense means that equity follows
the law to the extent of obeying it and conforming to its gen-
eral rules and policies whether contained in common law or
statute. 15 This maxim is strictly applicable whenever the rights
of the parties are clearly defined and established by law. 16 And
equitable remedies are generally not available where there
exists an adequate remedy at law. 17 That is the case here. The
Act sets forth a comprehensive statutory structure. By asking
this court to balance the equities with respect to Echo’s fore-
closure requests, Lund-Ross seeks to inject something new into
the Act.
[7] Even if it were appropriate to do so, Lund-Ross did not
meet its burden to show the existence of a material issue of
fact. The party moving for summary judgment must make a
prima facie case by producing enough evidence to show that
13
County of Cedar v. Thelen, 305 Neb. 351, 940 N.W.2d 521 (2020).
14
Goes v. Vogler, supra note 8.
15
Guy Dean’s Lake Shore Marina v. Ramey, 246 Neb. 258, 518 N.W.2d
129 (1994). See, also, Wisner v. Vandelay Investments, 300 Neb. 825, 916
N.W.2d 698 (2018); Fisher v. Heirs & Devisees of T.D. Lovercheck, 291
Neb. 9, 864 N.W.2d 212 (2015); Jeffrey B. v. Amy L., 283 Neb. 940, 814
N.W.2d 737 (2012); Doksansky v. Norwest Bank Neb., 260 Neb. 100, 615
N.W.2d 104 (2000); Henry v. Rockey, 246 Neb. 398, 518 N.W.2d 658
(1994).
16
Guy Dean’s Lake Shore Marina v. Ramey, supra note 15; Wisner v.
Vandelay Investments, supra note 15; Jeffrey B. v. Amy L., supra note 15;
Doksansky v. Norwest Bank Neb., supra note 15.
17
Wisner v. Vandelay Investments, supra note 15.
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the movant is entitled to judgment if the evidence were uncon-
troverted at trial. If the party moving for summary judgment
makes a prima facie case, the burden shifts to the nonmovant
to produce evidence showing the existence of a material issue
of fact that prevents judgment as a matter of law. 18 Echo met
its initial burden, but Lund-Ross failed to meet its respon-
sive burden.
Lund-Ross did not produce evidence to raise a genuine issue
of material fact as to the equitable defenses it raised. There
is no evidence that Echo had an obligation to bring payment
issues to the attention of Lund-Ross or the property owner. Nor
is there evidence that Lund-Ross asked for lien waivers from
any of the suppliers. Although Lund-Ross asserts that Echo
“slept on [its] rights and waited over the course of more than
half [a] year to make [its] claim,” 19 Echo timely filed its liens
and sought foreclosure in accordance with the provisions of
the Act.
[8] At oral argument, Lund-Ross asserted that the equitable
considerations it advanced should be heard at trial. It explained
that a trial would allow a fuller exploration and further devel-
opment of facts. But the time to show a genuine dispute regard-
ing any material fact was at the summary judgment stage. At
that stage, Lund-Ross could produce “depositions, answers to
interrogatories, admissions, stipulations, and affidavits” 20 to
support its equitable defenses. Instead, Lund-Ross essentially
relied on inferences based on speculation. Conclusions based
on guess, speculation, conjecture, or a choice of possibilities
do not create material issues of fact for purposes of sum-
mary judgment. 21
As noted, there is no dispute that Echo complied with the
statutory requirements of the Act with respect to its con-
struction lien foreclosure claims. The district court correctly
18
Ag Valley Co-op v. Servinsky Engr., supra note 5.
19
Brief for appellant at 28.
20
Neb. Rev. Stat. § 25-1332 (Cum. Supp. 2020).
21
Ag Valley Co-op v. Servinsky Engr., supra note 5.
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followed the law and had no need in this instance to “balance
any equities.”
(b) Award Greater Than Surety Bond
Lund-Ross argues that in cases Nos. S-21-730 and S-21-770,
the district court erred by entering judgment in excess of the
surety bond. Lund-Ross contends that the Act defines the rem-
edy for a successful lien claim. So we turn to the Act.
The Act speaks to the procedure to release a lien. Under
§ 52-142(1)(a), a person may release real estate from a lien
by depositing “money in cash, certified check, or other bank
obligation, or a surety bond . . . , in an amount sufficient to pay
the total of the amounts claimed in the liens being released plus
fifteen percent of such total.” Upon such release, “the claim-
ant’s rights are transferred from the real estate to the deposit or
surety bond.” 22 Once the court determines the claim, it “shall
order the clerk of the district court to pay the sums due or ren-
der judgment against the surety company on the bond, as the
case may be.” 23 Lund-Ross homes in on the latter language,
contending that “the limit of any possible recovery by Echo . . .
is a judgment rendered against the surety company on the bond
deposited.” 24 It asserts, without citation to authority, that the
total judgment cannot exceed the bond amount. We disagree.
[9] The plain language of the Act does not contain a limit
on the amount of recovery. Statutory language is to be given
its plain and ordinary meaning, and an appellate court will not
resort to interpretation to ascertain the meaning of statutory
words which are plain, direct, and unambiguous. 25 The Act pro-
vides that a person furnishing materials has a construction lien
“to secure the payment of his or her contract price.” 26 Contract
22
§ 52-142(3).
23
Id.
24
Brief for appellant at 30.
25
In re Guardianship of Jill G., ante p. 108, 977 N.W.2d 913 (2022).
26
§ 52-131(1).
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price is defined as “the amount agreed upon by the contract-
ing parties for performing services and furnishing materials
covered by the contract” as increased or diminished by certain
matters; however, “[i]f no price is agreed upon by the con-
tracting parties, contract price shall mean the reasonable value
of all services or materials covered by the contract.” 27 The
amount of the lien is specified by § 52-136, 28 which provides,
under the circumstances here, that the lien is for the amount
unpaid under Echo’s contract. 29
Provisions within the Act authorize recovery of amounts in
addition to the amount of the lien and, thus, may be in addition
to the amount of the bond. One statute 30 mandates an award to
the prevailing party of reasonable attorney fees and court costs
if a claimant has a claim under a bond procured by an owner
or prime contractor from a surety company in the penal sum
set forth in § 52-141(3). Another makes a person who fails to
furnish information required by § 52-143 liable to the request-
ing party for actual damages or $200 as liquidated damages. 31
A third statute makes a claimant who fails to send a copy of
the recording of a notice of commencement to the contracting
owner liable to the contracting owner for any damages caused
by that failure. 32 A fourth statute provides that if a person is
wrongfully deprived of benefits or if a claimant acts in bad
faith, damages, including the costs of correcting the record and
reasonable attorney, fees may be awarded. 33 Nothing within the
Act limits these additional amounts to 15 percent of the amount
claimed in the lien. 34
27
§ 52-127(2).
28
§ 52-131(4).
29
See § 52-136(2)(a).
30
§ 52-141(6).
31
§ 52-143(3).
32
§ 52-145(6).
33
See § 52-157.
34
See § 52-142(1)(a).
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[10] The language of the Act demonstrates that the function
of the surety bond under § 52-142 is to release the property
from the lien and to transfer the claimant’s rights from the
property to the surety bond. It is simply a matter of substitution
of collateral. 35 The shifting of the lien from the property to the
bond substitute does not create a limit on recovery that would
not otherwise exist. Where recovery of amounts in excess of
the lien amount is permitted, it is not error to enter judgment in
an amount greater than the amount of the surety bond.
(c) Judgment Directly Against Lund-Ross
Lund-Ross further contends that in case No. S-21-770, the
court erred by assessing the judgment in excess of the posted
surety bond—an additional $69,524.86—directly against
Lund-Ross. The district court reasoned that under § 52-142,
it was discretionary to the court whether to render judgment
against the surety company or simply order the clerk of the
district court to pay the bond out to Echo. The court declared
that any remaining amount due on the judgment—which
included prejudgment interest, attorney fees, and costs—was
the sole responsibility and obligation of Lund-Ross. Lund-
Ross argues that any judgment against it—as opposed to
the surety per § 52-142(3)—was error. We disagree for sev-
eral reasons.
First, we reject Lund-Ross’ assertion that judgment could
not be entered against it because “Echo’s pleadings are entirely
devoid of any claims asserted against Lund-Ross.” 36 In case
No. S-21-770, Echo sued the property owner and two corpora-
tions having an interest in the property, seeking to foreclose
on its construction lien. Subsequently, Lund-Ross deposited a
surety bond and moved to intervene. As Lund-Ross recognized
in its motion—and as set forth in the discussion above—upon
release of the construction lien, Echo’s rights were transferred
from the property to the surety bond. The bond to release the
35
See § 52-151(1).
36
Brief for appellant at 30.
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lien identified Lund-Ross as “Principal” and Western Surety
Company as “Surety,” and they bound themselves “jointly
and severally” to Echo. Lund-Ross cites no authority for the
proposition that the liability of the principal on a surety bond
is limited to the penal sum.
[11] Second, Lund-Ross is obligated by its stipulation. The
general rule is that parties are bound by stipulations voluntarily
made. 37 Lund-Ross stipulated that the property owner should
be dismissed as a party and that “to the extent [Echo] obtains
a final judgment, it will be satisfied by Lund[-]Ross and/or
its bond.”
[12] Third, a surety generally cannot be held liable for an
amount greater than the bond. “[I]n the absence of a condition
extending his or her liability, a surety cannot be held liable for
more than the penal sum named.” 38 Although this bond was not
a surety bond meeting the requirements of § 52-141, that stat-
ute conveys the same general rule: “The bond must obligate the
surety company, to the extent of the penal sum of the bond” 39
and “the total liability of the surety may not exceed the penal
sum of the bond.” 40 This means that liability for any amount in
excess of the bond falls to Lund-Ross.
For all these reasons, we find no error by the court in assess-
ing the judgment in excess of the posted surety bond directly
against Lund-Ross.
2. Prejudgment Interest
(a) Standard of Review
[13] Awards of prejudgment interest are reviewed de novo. 41
37
Lincoln Lumber Co. v. Lancaster, supra note 8.
38
11 C.J.S. Bonds § 55 at 43 (2019).
39
§ 52-141(2).
40
§ 52-141(7).
41
McGill Restoration v. Lion Place Condo. Assn., 309 Neb. 202, 959 N.W.2d
251 (2021).
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(b) Additional Facts and Findings
In all three cases, Echo requested prejudgment interest under
Neb. Rev. Stat. § 45-104 (Reissue 2021) only. In case No.
S-21-729, the court did not explicitly rule on Echo’s request
for prejudgment interest. In case No. S-21-730, the court dis-
agreed that Echo’s construction lien was an instrument in writ-
ing envisioned by § 45-104. Thus, it denied Echo’s request for
prejudgment interest under that statute.
In case No. S-21-770, the court found that Echo was entitled
to prejudgment interest under § 45-104. It determined that the
construction lien itself qualified under § 45-104 as “‘money
due on an instrument in writing.’” The court further found that
Echo was entitled to prejudgment interest under the provision
of § 45-104 allowing interest on “‘money loaned or due and
withheld by unreasonable delay of payment.’” Accordingly, the
court determined that Echo was entitled to prejudgment inter-
est of $71,910.72, for the period beginning on the date Echo
recorded the construction lien.
(c) Discussion
Both parties assign error with respect to prejudgment inter-
est. Lund-Ross claims that the court erred by awarding Echo
prejudgment interest in case No. S-21-770. On cross-appeal,
Echo assigns that the court erred by denying it prejudgment
interest in cases Nos. S-21-729 and S-21-730.
[14-16] On appeal, Echo contends that in addition to
§ 45-104, Neb. Rev. Stat. § 45-103.02(2) (Reissue 2021)
also authorized an award of prejudgment interest. Sections
45-103.02 and 45-104 provide alternate and independent means
of recovering prejudgment interest. 42 Section 45-103.02(2)
authorizes the recovery of prejudgment interest on liquidated
claims. 43 When a claim is of the types enumerated in § 45-104,
then prejudgment interest may be recovered without regard to
42
Id.
43
See Weyh v. Gottsch, 303 Neb. 280, 929 N.W.2d 40 (2019).
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whether the claim is liquidated. 44 Although Echo did not iden-
tify § 45-103.02(2) as a basis for prejudgment interest before
the district court, the issue of prejudgment interest “as provided
in [§] 45-104” 45 was clearly raised. We look to both statutes.
(i) § 45-103.02(2)
[17] As noted, the record from the district court proceed-
ings does not reflect that Echo ever mentioned § 45-103.02(2)
as a basis for prejudgment interest. The district court cannot
commit error in resolving an issue never presented and submit-
ted to it for disposition. 46 Thus, in cases Nos. S-21-729 and
S-21-730—where the court found no entitlement to prejudg-
ment interest—we find no error in failing to award interest
under § 45-103.02(2).
As to case No. S-21-770, where the court awarded pre-
judgment interest under § 45-104, we merely observe that
§ 45-103.02(2) supplies another basis for such an award.
Section 45-103.02(2) states that “[e]xcept as provided in sec-
tion 45-103.04, interest as provided in section 45-104 shall
accrue on the unpaid balance of liquidated claims from the date
the cause of action arose until the entry of judgment.”
Here, Echo’s claim was liquidated. For a claim to be liq-
uidated, a dispute must not exist either to the amount due or
to the plaintiff’s right to recover. 47 Lund-Ross admitted each
of Echo’s statements of undisputed fact. Thus, it admitted
the balances that Echo asserted remained unpaid. We note
that in three cases involving the foreclosure of a mechanic’s
lien, terminology predating the Act, 48 our opinion referenced
§ 45-103.02 but disallowed interest because the claim was
44
Id.
45
§ 45-103.02(2).
46
Walsh v. State, 276 Neb. 1034, 759 N.W.2d 100 (2009).
47
See Gerhold Concrete Co. v. St. Paul Fire & Marine Ins., 269 Neb. 692,
695 N.W.2d 665 (2005).
48
See § 52-159 (substituting “construction lien” for “mechanic’s lien”).
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unliquidated. 49 That is not the case here. Thus, it appears that
§ 45-103.02(2) would have provided a perhaps clearer basis for
prejudgment interest.
(ii) § 45-104
[18] We now turn to § 45-104, which the court in case No.
S-21-770 used as the statutory basis for its award of prejudg-
ment interest. Section 45-104 applies to four types of judg-
ments: (1) money due on any instrument in writing; (2) settle-
ment of the account from the day the balance shall be agreed
upon; (3) money received to the use of another and retained
without the owner’s consent, express or implied, from the
receipt thereof; and (4) money loaned or due and withheld by
unreasonable delay of payment. 50
Lund-Ross advances several reasons in support of its belief
that prejudgment interest is unavailable. It argues that the only
relevant instrument in writing would be the material contract
between Echo and Signature, but that no such contract is in
evidence and that Echo did not sue Signature. Lund-Ross also
points to the lack of any instrument in writing between Echo
and the project owners. It further argues that the construction
lien itself does not create the obligation to the claimant; rather,
the lien provides a remedy.
The plain language of the statute provides insight. As set
forth above, interest shall be allowed “on money due on
any instrument in writing.” 51 An “instrument” is “[a]n object,
device, or apparatus designed or used for a particular purpose
or task.” 52 An alternative definition, specific to the legal realm,
49
See, Payless Bldg. Ctr. v. Wilmoth, 254 Neb. 998, 581 N.W.2d 420 (1998);
Blue Tee Corp. v. CDI Contractors, Inc., 247 Neb. 397, 529 N.W.2d 16
(1995); Lange Indus. v. Hallam Grain Co., 244 Neb. 465, 507 N.W.2d 465
(1993).
50
AVG Partners I v. Genesis Health Clubs, 307 Neb. 47, 948 N.W.2d 212
(2020).
51
§ 45-104.
52
See “Instrument,” Oxford English Dictionary Online, https://www.oed.
com/view/Entry/97158 (last visited Oct. 24, 2022).
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is “[a] formal legal document entailing rights and obligations,
such as a contract, deed, legislative act, etc.; any document
formally drawn up so as to have legal effect.” 53 A construction
lien fits within these definitions. That leads to the next ques-
tion: Is money due on the lien? Because the right to recover
money that was due on an underlying contract has essentially
transferred to the lien, the answer is yes.
Further, this court has previously allowed prejudgment inter-
est under § 45-104 in connection with mechanics’ liens. In
Walker v. Collins Construction Co., 54 we cited Comp. Stat.
§ 45-104 (1929) and stated that “where a lien is claimed for an
account for material and labor furnished for the construction
of a building, in the absence of an agreement to the contrary,
interest may be reckoned only from a date six months after
the last item.” 55 We thus allowed prejudgment interest to the
extent that lienors were entitled to liens. In O’Keefe Elevator
v. Second Ave. Properties, 56 we determined that a party who
brought an action to foreclose its mechanic’s lien was entitled
to prejudgment interest under § 45-104 because money was
“‘due and withheld by unreasonable delay of payment.’”
[19] We conclude an award of prejudgment interest in an
action to foreclose a construction lien is authorized under
§ 45-104. At oral argument, counsel for Echo provided no
rationale for interest to begin running before the filing of the
lien. We agree that any prejudgment interest would begin run-
ning on the date of recording the construction lien. That is the
date used by the district court in case No. S-21-770, and we
affirm its award of prejudgment interest.
[20] In connection with Echo’s cross-appeal, we conclude
that the court in cases Nos. S-21-729 and S-21-730 erred by
53
Id.
54
Walker v. Collins Construction Co., 121 Neb. 157, 236 N.W. 334 (1931).
55
Id. at 160, 236 N.W. at 336.
56
O’Keefe Elevator v. Second Ave. Properties, 216 Neb. 170, 175, 343
N.W.2d 54, 57 (1984), disapproved in part on other grounds, Weyh v.
Gottsch, supra note 43.
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denying prejudgment interest. Section 45-104 specifies that
“interest shall be allowed.” As a general rule, the word “shall”
in a statute is considered mandatory and is inconsistent with
the idea of discretion. 57 We therefore reverse the denial of
prejudgment interest and remand cases Nos. S-21-729 and
S-21-730 to the district court with direction to award such
interest in conformity with this opinion.
3. Attorney Fees
(a) Standard of Review
[21] On appeal, a trial court’s decision awarding or denying
attorney fees will be upheld absent an abuse of discretion. 58
We turn to the issues raised by the parties in cases Nos.
S-21-729 and S-21-770.
(b) Case No. S-21-729
[22] In case No. S-21-729, the court overruled Echo’s
request for attorney fees. On cross-appeal, Echo assigns error
to that denial. As a general rule, attorney fees and expenses
may be recovered in a civil action only where provided for
by statute or when a recognized and accepted uniform course
of procedure has been to allow recovery of attorney fees. 59
Echo claims attorney fees were appropriate under two statutes,
one—§ 52-157(3)—contained within the Act, and the other—
Neb. Rev. Stat. § 44-359 (Reissue 2021)—found in the chapter
of the Nebraska Revised Statutes addressing insurance. We
examine each statute.
(i) § 52-157
Echo contends that § 52-157(3) permitted an award of attor-
ney fees. After recalling principles of statutory construction,
we examine the language of the statute.
57
Signal 88 v. Lyconic, 310 Neb. 824, 969 N.W.2d 651 (2022).
58
McGill Restoration v. Lion Place Condo. Assn., supra note 41.
59
North Star Mut. Ins. Co. v. Miller, 311 Neb. 941, 977 N.W.2d 195 (2022).
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[23,24] When construing a statute, a court must determine
and give effect to the purpose and intent of the Legislature
as ascertained from the entire language of the statute consid-
ered in its plain, ordinary, and popular sense. 60 In construing
a statute, the court must look at the statutory objective to be
accomplished, the problem to be remedied, or the purpose to
be served, and then place on the statute a reasonable construc-
tion which best achieves the purpose of the statute, rather than
a construction defeating the statutory purpose. 61
Section 52-157 is titled “Remedies for wrongful conduct.”
Although a section head or title does not constitute any part of
the law, 62 the title fits the statutory language. The first subsec-
tion authorizes damages “[i]f a person is wrongfully deprived
of benefits to which he or she is entitled under [the Act] by
conduct other than that described in section 52-156.” 63 The sec-
ond subsection authorizes damages “[i]f in bad faith a claimant
records a lien, overstates the amount for which he or she is
entitled to a lien, or refuses to execute a release of a lien.” 64
The third and final subsection specifies that damages awarded
under § 52-157 “may include the costs of correcting the record
and reasonable attorney’s fees.” 65
We do not interpret § 52-157 as authorizing attorney fees
in every action involving foreclosure of a construction lien.
Notably, the statute authorizes fees as part of “[d]amages
awarded under this section.” 66 We do not read this language
as authorizing a fee award to a prevailing party for any action
under the Act.
60
Ag Valley Co-op v. Servinsky Engr., supra note 5.
61
Id.
62
Neb. Rev. Stat. § 49-802(8) (Reissue 2021).
63
§ 52-157(1) (emphasis supplied).
64
§ 52-157(2) (emphasis supplied).
65
§ 52-157(3).
66
Id. (emphasis supplied).
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This reading of the statute is consistent with the comments
to a uniform act. Nebraska’s Act is based on the Uniform
Simplification of Land Transfers Act. 67 A comment to the sec-
tion of that uniform act which corresponds to § 52-157 pro-
vides examples of wrongful deprivation which would lead to
liability under the section:
(1) owner contracts under incorrect name so that claim-
ants are misled as to name in which real estate is held
which causes them to record under incorrect name with
resulting failure to secure priority against a third party;
(2) prime contractor furnishes incorrect owner name with
same result; (3) owner or prime contractor furnishes
incorrect description of real estate with resultant mis-
taken recording by claimant; (4) misstatement by prime
contractor as to amount of contract price or payment
thereof which induces claimants not to record lien; (5)
false or bad faith determination of damages from a
prime contractor’s breach which reduces the owner’s lien
liability. 68
The comment demonstrates that wrongful deprivation requires
something more than merely having to foreclose on a construc-
tion lien. And here, Echo has not alleged conduct similar to
that set forth in the comment. Instead, Echo highlights that
there was no genuine dispute as to the amount of its claim or
its right of recovery.
We cannot say that Echo was wrongfully deprived of benefits
under the Act. The Act authorized Echo to obtain a construc-
tion lien, which Echo obtained. The Act authorized foreclosure
of a lien, which Echo pursued. Echo alleged no wrongful con-
duct by Lund-Ross. In a case where a contractor successfully
foreclosed a construction lien, we stated that the contractor
received all of the benefits to which it was entitled under the
67
See Lincoln Lumber Co. v. Lancaster, supra note 8.
68
Unif. Simplification of Land Transfers Act § 5-403, comment 1, 14 U.L.A.
564 (2021).
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Act and, thus, was not entitled to relief under § 52-157. 69 To
the extent a decision by the Nebraska Court of Appeals 70 can
be read as authorization for attorney fees under § 52-157 wher-
ever a party prevails on a construction lien claim and foreclo-
sure, we disapprove it.
Accordingly, we find no error by the court in failing to
award attorney fees under § 52-157 in case No. S-21-729.
Next, we turn to the other statute that Echo contends autho-
rized an award of attorney fees.
(ii) § 44-359
Echo argues that attorney fees were mandated under
§ 44-359. That statute states:
In all cases when the beneficiary or other person
entitled thereto brings an action upon any type of insur-
ance policy, except workers’ compensation insurance, or
upon any certificate issued by a fraternal benefit soci-
ety, against any company, person, or association doing
business in this state, the court, upon rendering judg-
ment against such company, person, or association, shall
allow the plaintiff a reasonable sum as an attorney’s fee
in addition to the amount of his or her recovery, to be
taxed as part of the costs. If such cause is appealed, the
appellate court shall likewise allow a reasonable sum as
an attorney’s fee for the appellate proceedings, except
that if the plaintiff fails to obtain judgment for more
than may have been offered by such company, person, or
association in accordance with section 25-901, then the
plaintiff shall not recover the attorney’s fee provided by
this section. 71
69
See Tilt-Up Concrete v. Star City/Federal, 261 Neb. 64, 621 N.W.2d 502
(2001).
70
See Model Interiors v. 2566 Leavenworth, LLC, 19 Neb. App. 56, 809
N.W.2d 775 (2011).
71
§ 44-359 (emphasis supplied).
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Echo argues that a surety bond is an insurance policy for pur-
poses of § 44-359. We need not decide that issue here. There is
a fatal flaw to Echo’s argument.
The flaw is that Echo did not “bring[] an action upon”
the surety bond. Echo brought an action to foreclose its con-
struction lien. It was not until 2 months later that Lund-Ross
obtained the surety bond to substitute as collateral. And the
surety company was never brought in as a party in these
proceedings.
Echo argues that once it posted the lien release bond, thereby
transferring its claims from the property to the bond, the action
became one on the bond. We disagree. Had Lund-Ross instead
deposited “a sum of money in cash, certified check, or other
bank obligation” 72 to release the real estate from the lien, we
would not term the action as one on a deposit. The shifting of
the lien from the property to the collateral substitute does not
create an entitlement to attorney fees that would not other-
wise exist.
Cases involving bonds where we have allowed attorney fees
under § 44-359 demonstrate the contrast in circumstances.
We allowed attorney fees under a predecessor statute 73 to
§ 44-359 when a plaintiff sued a surety company which was
the surety on a bond. 74 In other words, the plaintiff brought an
action upon the surety bond. Similarly, we allowed fees under
§ 44-359 in a suit against an insurance company for recovery
under a motor vehicle dealer’s bond where the insurance com-
pany was the surety. 75 In a case where a drilling company sued
a subcontractor and the bonding companies for the general
contractor, we determined that attorney fees were authorized
72
§ 52-142(1)(a).
73
See Comp. Stat. § 44-346 (1929).
74
See City of Scottsbluff v. Southern Surety Co., 124 Neb. 260, 246 N.W. 346
(1933).
75
See Adams Bank & Trust v. Empire Fire & Marine Ins. Co., 244 Neb. 262,
506 N.W.2d 52 (1993).
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under § 44-359. 76 We explained, “It is clear in this case that
[the drilling company] did sue the bonding companies of the
principal contractor, and recovered judgment against them.” 77
But that is not the situation before us. We conclude that fees
are not authorized under § 44-359.
As an aside, we note that similar to § 44-359, a statute
within the Act 78 mandates attorney fees for a judicial pro-
ceeding brought on a surety bond. When the requirements of
§ 52-141 are met, no construction lien attaches to the real
estate and a claimant may proceed directly against the surety.
But no one contends that § 52-141 has application here, and we
conclude that it is not implicated.
In case No. S-21-729, we find no error by the court in not
awarding attorney fees.
(c) Case No. S-21-770
(i) Additional Facts and Findings
With respect to attorney fees, an attorney representing Echo
submitted an affidavit stating that a significant portion of the
work performed was applicable in all three cases, particularly
briefing, discovery, and a deposition. The attorney proposed
“accumulat[ing] all time and apply[ing] it to each based on the
pro rata share of the demand.” Echo set forth a table show-
ing the demand in each case and the corresponding pro rata
share of the demand. It showed that in case No. S-21-770,
the demand was $296,407.73 and the pro rata share was 87
percent. In case No. S-21-730, the demand was $32,781.03,
so the pro rata share was 9.6 percent. In case No. S-21-729,
the demand was $11,604.46, making the pro rata share 3.4
percent. According to the affidavit, the total fees incurred for
all three cases against Lund-Ross amounted to $41,607.50;
76
Rieschick Drilling Co. v. American Cas. Co., 208 Neb. 142, 303 N.W.2d
264 (1981).
77
Id. at 154, 303 N.W.2d at 271.
78
§ 52-141(6).
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thus, the pro rata share of fees for case No. S-21-770 totaled
$36,198.53. A document showing all time entries incurred in
the three cases was attached to the affidavit.
The court found Echo’s methodology to be appropriate and
awarded Echo attorney fees pursuant to § 52-157(3). The court
agreed with Echo that § 44-359 provided an additional legal
basis for attorney fees, reasoning that the surety bond qualified
as an insurance policy under § 44-359 and that Echo was a
beneficiary to that surety bond. Although the court stated that
it awarded Echo $36,198.53 in attorney fees, when it specifi-
cally set forth the final judgment, the court awarded attorney
fees of $41,607.50—the total for all three cases.
(ii) Discussion
On appeal, Lund-Ross argues that the court erred in case
No. S-21-770 by awarding fees because (1) it awarded the fees
incurred in all three cases rather than the proportionate share
requested and (2) it awarded fees incurred entirely in separate
matters. Echo does not dispute that the court’s order contained
the errors alleged.
[25,26] Lund-Ross does not allege or argue that the attorney
fee award was not statutorily authorized. Absent plain error,
an appellate court considers only an appellant’s claimed errors
that the appellant specifically assigns in a separate “assign-
ment of error” section of the brief and correspondingly argues
in the argument section. 79 But because we above concluded
that neither § 44-359 nor § 52-157 authorized the award of
attorney fees under the circumstances, allowing the award to
stand would constitute plain error. Plain error is error plainly
evident from the record and of such a nature that to leave it
uncorrected would result in damage to the integrity, reputation,
or fairness of the judicial process. 80 We therefore reverse the
award of attorney fees in case No. S-21-770.
79
In re Estate of Graham, 301 Neb. 594, 919 N.W.2d 714 (2018).
80
North Star Mut. Ins. Co. v. Miller, supra note 59.
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(d) Case No. S-21-730
In case No. S-21-730, the district court awarded attorney
fees of $3,994.32 under § 52-157(3). Although neither party
challenged the award on appeal, we must reverse it. For the
same reasons discussed above, the award under § 52-157(3)
was erroneous and allowing it to stand would be plain error.
Accordingly, we reverse the award of attorney fees in case
No. S-21-730.
VI. CONCLUSION
In all three appeals, we find no abuse of discretion by the
court in entering summary judgment and not granting equitable
relief. In cases Nos. S-21-730 and S-21-770, we find no error
by the court in entering judgment in an amount greater than the
amount of the surety bond. And in case No. S-21-770, we con-
clude that the court did not err in assessing judgment in excess
of the posted surety bond against Lund-Ross.
We conclude that prejudgment interest in an action to fore-
close a construction lien is authorized under § 45-104. Thus, in
cases Nos. S-21-729 and S-21-730, we reverse the denial and
remand with direction to award prejudgment interest in con
formity with this opinion.
Finally, we determine that neither § 44-359 nor § 52-157
authorize attorney fees under the circumstances presented in
these cases. We therefore reverse the award of such fees in
cases Nos. S-21-730 and S-21-770.
Judgment in No. S-21-729 affirmed in part
and in part reversed, and cause
remanded with direction.
Judgment in No. S-21-730 affirmed in part
and in part reversed, and cause
remanded with direction.
Judgment in No. S-21-770 affirmed in part
and in part reversed. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487104/ | In the United States Court of Federal Claims
NEWIMAR, S.A.,
Plaintiff,
v. No. 21-cv-1897
THE UNITED STATES, Filed Under Seal: November 14, 2022
Defendant, Publication: November 17, 2022 1
and
J&J MAINTENANCE, INC.,
Intervenor-Defendant
MEMORANDUM AND ORDER
On May 12, 2022, this Court entered Judgment in favor of Defendants (ECF No. 61) in a
bid protest action brought by Newimar, S.A. (Plaintiff or Newimar). Five months later, on October
12, 2022, Plaintiff filed a Motion for Stay of this Court’s Judgment Pending Appeal (Motion or
Motion to Stay). See ECF No. 67 (Mot.). Specifically, Plaintiff seeks a stay while the United
States Court of Appeals for the Federal Circuit (Federal Circuit) considers Plaintiff’s appeal, filed
on June 22, 2022. Mot. at 30. 2 Plaintiff also urges this Court to enjoin Defendant United States
(Defendant or the Government) and Intervenor-Defendant J&J Maintenance, Inc. (J&J) from
1
This Memorandum and Order was filed under seal in accordance with the Protective Order
entered in this case (ECF No. 12) and was publicly reissued after incorporating all redactions
proposed by the parties. (ECF No. 73.) The sealed and public versions of this Memorandum and
Order are otherwise identical, except for the publication date and this footnote.
2
Citations throughout this Memorandum and Order reference the ECF-assigned page numbers,
which do not always correspond to the pagination within the document.
1
taking further steps to implement or begin performance under the protested contract award pending
Plaintiff’s Appeal. Id.
Plaintiff’s Motion to Stay lacks merit. Accordingly, for the reasons described in this
Memorandum and Order, Plaintiff’s Motion is DENIED.
BACKGROUND
The facts of this dispute are detailed in this Court’s May 12, 2022 Memorandum and Order.
See Newimar S.A. v. United States, 160 Fed. Cl. 97 (2022) (Opinion); ECF No. 61 (Judgment).
For context, the Court briefly summarizes below the procedural history pertinent to the Motion.
The U.S. Department of the Navy (Navy) maintains the infrastructure for U.S. Naval
Station (NAVSTA) Rota along the Bay of Cádiz in Rota, Spain, which includes “a 670-acre
airfield, four active piers, hundreds of facilities, and approximately 373 family housing units.”
Newimar, 160 Fed. Cl. at 107. Plaintiff, the incumbent civilian contractor at NAVSTA Rota for
the last 25 years, filed this post-award bid protest on September 23, 2021 to challenge the Navy’s
contract award to J&J for future base operations support (BOS) services at NAVSTA Rota. Id. at
107. On May 12, 2022, after consideration of the parties’ briefs and after a lengthy and thorough
oral argument, this Court upheld the Navy’s award to J&J, denying Plaintiff’s Motion for
Judgment on the Administrative Record (MJAR), and granting the Government’s and J&J’s Cross-
MJARs. Id. at 142. On June 22, 2022, Plaintiff filed a Notice of Appeal. ECF No. 64. On
September 15, 2022, Plaintiff subsequently filed its opening appellate brief in the Federal Circuit;
Plaintiff, however, did not move the Federal Circuit for an expedited briefing schedule pursuant
to Federal Circuit Rule 27(c). Newimar S.A. v. United States, No. 22-1949, D.I. 16 (Fed. Cir. Sept.
15, 2022); see also Mot. at 7 (stating Plaintiff is not “formally requesting expedited relief” before
the Federal Circuit).
2
Since 2021, Plaintiff has continued to service NAVSTA Rota under a series of bridge
contracts with the Navy. See Declaration of Erin R. Quimby, United States Contracting Officer
(ECF No. 69-1) (Def.’s Aff.), ¶ 3. Plaintiff’s current bridge contract is set to terminate on
December 31, 2022. Id.; Mot. at 8. The Navy declined to further renew Plaintiff’s bridge contract,
and instead intends to proceed with its transition of the awarded contract to J&J, consistent with
this Court’s ruling. Def.’s Aff., ¶ 3; Mot. at 8–9. The contract award incorporates a 45-day phase-
in period for J&J, which the Navy intends to commence on November 16, 2022. Id.; see
Defendant’s Response to Plaintiff’s Motion for a Stay Pending Appeal (ECF No. 69) (Def.’s Resp.)
at 3. Plaintiff filed the present Motion to Stay only after it had received notice on September 30,
2022 of the Navy’s intention to transition the work to J&J and forgo renewal of another bridge
contract with Plaintiff. Def.’s Aff., ¶ 3; see ECF No. 71-3 (Navy letter to Plaintiff, dated
September 30, 2022).
APPLICABLE LEGAL STANDARDS
Plaintiff’s Motion seeks both a stay of this Court’s Judgment and entry of an injunction
pending resolution of its appeal by the Federal Circuit. Mot. at 30. Rule 62(d) of the Rules of the
United States Court of Federal Claims (Rule(s)) states that “[w]hile an appeal is pending from an
interlocutory order or final judgment . . . the court may suspend, modify, restore, or grant an
injunction on terms for bond or other terms that secure the opposing party’s rights.” Rule 62(d).
The imposition of such relief pending appeal is an exercise of judicial discretion that depends upon
the circumstances of the particular action. See ePlus, Inc. v. Lawson Software, Inc., 431 F. App’x
920, 920 (Fed. Cir. 2011) (citing Nken v. Holder, 556 U.S. 418, 433 (2009)) (noting that the
decision to stay a permanent injunction pending appeal “is not a matter of right [b]ut instead an
exercise of judicial discretion”).
3
The relief Plaintiff seeks here “is an ‘extraordinary and drastic remedy,’ which is not
granted lightly.” ACI Techs., Inc. v. United States, 162 Fed. Cl. 49, 43 (2022) (quoting G4S Secure
Integration LLC v. United States, 159 Fed. Cl. 249, 254–55 (2022)); see RLB Contracting, Inc. v.
United States, 120 Fed. Cl. 681, 682 (2015) (“An injunction pending appeal is an extraordinary
remedy and will not be lightly granted.”) (citing Acrow Corp. of Am. v. United States, 97 Fed. Cl.
182, 183 (2011)). As the movant, Plaintiff “bears the burden of showing the circumstances justify
an exercise of the court’s discretion . . . .” Beard v. United States, 451 F. App’x 920, 921 (Fed.
Cir. 2011); see also ACI Techs., 162 Fed. Cl. at 43 (quoting Telos Corp. v. United States, 129 Fed.
Cl. 573, 575 (2016)) (noting that “the party moving for a stay ‘carries the burden of establishing
the propriety of an injunction pending appeal . . . .’”).
While trial courts have discretion to issue stays or other injunctive relief pending appeal,
courts should consider:
(1) whether the movant has made a strong showing that it is likely to succeed on
the merits; (2) whether the movant will be irreparably injured absent an injunction;
(3) whether issuance of the injunction will substantially injure the other interested
parties; and (4) where the public interest lies. 3
ACI Techs., 162 Fed. Cl. at 43 (quoting Telos Corp., 129 Fed. Cl. at 575). Courts acknowledge
that the first two factors are generally of primary importance to a court’s inquiry. See Acrow Corp.
of Am., 424 F. App’x at 948 (noting the first two factors are “the most critical”); see also Standard
Havens Prods., Inc. v. Gencor Indus., Inc., 897 F.2d 511, 512 (Fed. Cir. 1990) (noting courts need
not afford the factors equal weight). Courts, however, “adopt a flexible approach to balancing the
four factors,” as they “do not form a rigid set of rules for determining whether a stay is
appropriate.” JWK Int’l Corp. v. United States, 49 Fed. Cl. 364, 366 (2001); see also ACI Techs.,
3
Concerns over factor 3 (harm to other interested parties) and factor 4 (the public interest) “merge
when the Government is the opposing party.” Nken, 556 U.S. at 435.
4
162 Fed. Cl. at 43 (quoting E.I. DuPont de Nemours & Co. v. Phillips Petroleum Co., 835 F.2d
277, 278 (Fed. Cir. 1987)) (noting that the court must “assess[] [a] movant’s chances for success
on appeal and weigh[] the equities as they affect the parties and the public”) (internal quotations
omitted).
In lieu of demonstrating a strong likelihood of success on the merits under factor 1, the
movant may instead demonstrate a “substantial case” of success on the merits “provided the other
factors militate in movant’s favor.” Standard Havens Prods., 897 F.2d at 513 (citing Hilton v.
Braunskill, 481 U.S. 770, 778 (1987)) (emphasis in original); see also ACI Techs., 162 Fed. Cl. at
43. Thus, a court may still order a stay pending appeal if the moving party demonstrates a
“substantial case” on the merits, and all other factors weigh “decidedly toward the moving party.”
ACI Techs., 162 Fed. Cl. at 44 (quoting G4S Secure Integration, 159 Fed. Cl. at 255); see also
JWK Int’l Corp., 49 Fed. Cl. at 366 (“The stronger the showing of likelihood of success on the
merits, the less heavily the balance of harms need tip in [the movant's] favor. Conversely, if the
harm factors weigh heavily in [the movant's] favor, [the movant] only needs to demonstrate a
substantial case on the merits.”).
Although the “substantial case” standard permits movants to demonstrate a lesser showing
of success on the merits in particular circumstances, it “is no free ride.” ACI Techs., 162 Fed. Cl.
at 44. A “substantial case” on the merits requires more than a “fair” or “better than negligible
chance” of success. Standard Havens Prods., 897 F.2d at 515. The movant must demonstrate that
the question raised “is novel or close” or that the movant has highlighted questions on the merits
“so serious, substantial, difficult and doubtful, as to make them a fair ground for litigation.” ACI
Techs., 162 Fed. Cl. at 44 (internal citations omitted). Indeed, a mere allegation that the
Government or a court erred does not alone satisfy the “substantial case” standard. Id. at 47. “A
5
party seeking a stay must do more than simply claim the trial court got it wrong; it must present a
good faith argument that substantial doubt exists over the trial court's decision.” Obsidian Sols.
Grp., LLC v. United States, No. 20-1602C, 2021 WL 1688892, at *4 (Fed. Cl. Apr. 27, 2021)
DISCUSSION
This Court must deny Plaintiff’s Motion to Stay. As an initial matter, Plaintiff’s delay in
filing its Motion and its decision to forgo expedited briefing before the Federal Circuit provides
sufficient justification to deny Plaintiff’s Motion. Even considering the merits, however,
Plaintiff’s Motion to Stay must be denied, as Plaintiff fails to demonstrate a strong or substantial
case on the merits that would warrant the entry of a stay or injunctive relief pending resolution of
Plaintiff’s appeal before the Federal Circuit.
I. Plaintiff’s Delayed Motion to Stay and Decision to Proceed Before the Federal Circuit
on a Non-Expedited Basis
After close review of both the record and the timing of Plaintiff’s filings, it is evident to
this Court that Plaintiff’s Motion represents a last-minute effort by Plaintiff to recover from
gamesmanship gone awry. It appears that Plaintiff made the strategic decision to delay filing a
motion to stay this Court’s Judgment apparently in the hope, or with the expectation, that the Navy
would further extend Plaintiff’s bridge contract for the duration of the appeal. See Def.’s Aff., ¶ 3
(“Soon after receiving notice of the Navy’s intent to proceed with transition [to J&J], Newimar
filed with this Court a Motion to Stay Performance pending the appeal before the Federal
Circuit.”). In doing so, Plaintiff chose to disregard the reasonably foreseeable financial and
business risks frequently incurred when an incumbent loses a bid to renew a significant contract.
See, e.g., Telos Corp., 129 Fed. Cl. at 578 (recognizing lost profits and adverse consequences to
employees as “the unavoidable results of [a] contract coming to an end”). On September 30, 2022,
Plaintiff learned from the Navy that its gamble had failed, and the latest bridge contract would not
6
be extended past December 31, 2022. See Def.’s Aff., ¶ 3; Mot. at 8. Yet, this outcome was
foreseeable. Indeed, Plaintiff could have predicted this outcome as early as May 12, 2022, when
this Court issued its Opinion and entered Judgment in favor of Defendants. See Newimar, 160
Fed. Cl. at 107–08. It was reasonably foreseeable from a business, strategic, and economic
perspective that the Navy might opt not to renew Plaintiff’s bridge contract after this Court had
upheld the propriety of the award to J&J. See Id. Plaintiff should have anticipated this risk and,
by engaging in prompt motion practice, potentially could have mitigated the financial
consequences of losing its incumbency.
Plaintiff, however, failed to take these precautionary measures. Instead, Plaintiff waited
for five months, until approximately two months before the bridge contract’s termination date, to
file this Motion. See Mot. at 8–9. Plaintiff belatedly alleges that the financial strains it could and
should have foreseen months ago now constitute irreparable harm warranting a stay of this Court’s
Judgment and injunctive relief. See id. at 27–28. Plaintiff cannot have it both ways, and this Court
will not so reward Plaintiff based on such a record. See, e.g., CRAssociates, 103 Fed. Cl. at 27
(noting that “self-inflicted harm . . . [is] not the sort of consideration that ought to give rise to a
stay”). In reviewing the record, this Court identifies two primary timing issues which, taken
together, compel this Court to deny Plaintiff’s Motion.
First, the timing of Plaintiff’s Motion counsels strongly against entering injunctive relief.
The timing of a party’s motion to stay pending appeal is a consideration in deciding whether entry
of a stay or injunctive relief pending appeal is warranted. See, e.g., HVF West, LLC v. United
States, 148 Fed. Cl. 45, 57 (2020) (noting movant’s seven-week delay in filing motion to stay
pending appeal contributed to decision to deny the motion); Lawson Env’t Servs., LLC v. United
States, 128 Fed. Cl. 14, 19 (2016) (holding movant’s two-month delay in filing motion to stay
7
pending appeal undermined its claim of irreparable harm). Plaintiff filed the present Motion to
Stay on October 12, 2022, precisely five months after the Court had issued its Memorandum and
Order and entered Judgment in favor of the Government and J&J. See ECF No. 67; Newimar, 160
Fed. Cl. at 108. Plaintiff’s five-month delay in filing its Motion to Stay far exceeds the seven-
week and two-month intervals considered untimely in HVF West and Lawson Environmental
Services, respectively. 4 HVF West, 148 Fed. Cl. at 57; Lawson Env’t Servs., 128 Fed. Cl. at 19.
Had Plaintiff harbored sincere concerns over the allegedly catastrophic financial consequences
that it could incur resulting from Judgment issued in favor of Defendants, it should have acted
swiftly to file a Motion to Stay at that time. That Plaintiff did not file earlier — and waited for
such a prolonged period to do so — suggests its choice to delay was strategic. It is evident that
Plaintiff intended to prolong its ability to service NAVSTA Rota and only seeks injunctive relief
now because the Navy recently informed Plaintiff that it would not further extend Plaintiff’s latest
bridge contract.
Second, Plaintiff’s portrayal of imminent and irreparable harm absent a stay is further
belied by its failure to pursue an expedited appeal before the Federal Circuit. Federal Circuit Rule
27(c) permits a party to move for accelerated consideration of its appeal by filing a Motion to
Expedite. Fed. Cir. Rule 27(c). The Practice Notes to Federal Circuit Rule 27 indicate that such
a motion “should be filed immediately after docketing . . . [and] is appropriate where the normal
briefing and disposition schedule may adversely affect one of the parties, as in appeals involving
preliminary or permanent injunctions or government contract bid protests.” Fed. Cir. R. 27
Practice Notes (emphasis added). These Practice Notes reflect that a party in Plaintiff’s position
(i.e., a party to a government contract bid protest allegedly harmed by delays inherent in the
4
While not binding, these decisions are instructive.
8
resolution of an appeal) may benefit from expedited briefing. Id. Yet, Plaintiff never filed a
motion to expedite its appeal in the Federal Circuit, and apparently does not plan to do so. Mot.
at 7 (acknowledging Newimar is not “formally requesting expedited relief” before the Federal
Circuit). Plaintiff’s failure to do so further underscores the failed strategic choice that accompanies
Plaintiff’s seemingly sudden allegations of irreparable harm.
Such timing issues, alone, provide ample justification to deny Plaintiff’s Motion.
Nevertheless, for purposes of completeness, this Court also considers Plaintiff’s merits-related
arguments raised by its Motion, all of which fail to warrant entry of a stay or injunctive relief
pending appeal.
II. Plaintiff Fails to Demonstrate a Likelihood of Success on the Merits
Even assuming arguendo that Plaintiff’s tardiness does not necessitate denial of the Motion
to Stay, this Court must still deny Plaintiff’s Motion because it fails to raise any issue or question
so novel or close as to warrant the extraordinary remedy of injunctive relief pending appeal.
Plaintiff insists it has presented, if not a strong case, at least a substantial case on the merits because
its Motion and appeal allegedly present issues of first impression. See Plaintiff’s Reply to
Defendant’s and Intervenor-Defendant’s Oppositions to Motion to Stay (ECF No. 71) (Pl.’s Reply)
at 3. Yet, Plaintiff fails to articulate which of its arguments represents an issue of first impression,
and this Court is aware of none. Indeed, Plaintiff’s Motion merely reiterates the identical concerns
and arguments that Plaintiff raised in its MJAR, all of which this Court previously addressed and
rejected. See generally Newimar, 160 Fed. Cl. at 97. Plaintiff cannot demonstrate a strong or
substantial case on the merits via either reiteration of its previously-asserted MJAR arguments or
via general disagreement with this Court’s reasoning. See Lawson Env’t Servs., 128 Fed. Cl. at 17
(acknowledging that when a movant “seeks to ‘relitigate several issues that the opinion addressed
9
fully and resolved,’” the Court will deny an injunction) (internal citations omitted); Obsidian Sols.
Grp., 2021 WL 1688892, at *4 (“A party seeking a stay must do more than simply claim the trial
court got it wrong; it must present a good faith argument that substantial doubt exists over the trial
court's decision.”).
Plaintiff alleges this case is a close call and offers four arguments in support of its alleged
strong or substantial case on the merits. This Court has closely reviewed the arguments presented
by Plaintiff’s Motion and has additionally reviewed its Memorandum and Order in whole. After
such review, this Court holds Plaintiff fails to demonstrate a strong or substantial case on the
merits, and accordingly that its Motion to Stay must be denied.
A. J&J’s Registration Status with the Spanish Registro Mercantil and Spanish “W”
Tax Number
Plaintiff argues that the Government, and this Court, erred in deeming J&J a responsible
contractor because J&J allegedly failed to (1) register with the Spanish Registro Mercantil or (2)
obtain a proper Spanish “W” tax number during the procurement process. Mot. at 10–19. Plaintiff
asserted the identical arguments, however, in its MJAR, and this Court addressed and ultimately
rejected such arguments. See Newimar, 160 Fed. Cl. at 124–28. Plaintiff’s arguments on the
Registro Mercantil and the Spanish “W” tax number were rejected on two unique bases. Id. First,
Plaintiff waived these arguments by asserting them for the first time in its reply brief. See id. at
124. Second, this Court held that even if such contentions were not waived, Plaintiff’s arguments
would still be unavailing on the merits. Id. at 124 n.13 (citing Qwest Gov’t Servs., Inc. v. United
States, 112 Fed. Cl. 24, 36–37 (2013)). Assuming arguendo that such arguments were not waived,
the Court ultimately concluded compliance with the Spanish Registro Mercantil registration
requirements and the Spanish “W” tax number constituted “contract administration matter[s]
beyond this Court’s bid protest jurisdiction.” Id. at 125.
10
1. Waiver
As noted, this Court held that Plaintiff waived its arguments on J&J’s Registro Mercantil
registration status and the Spanish “W” tax number by failing to raise these arguments until its
reply brief. Id. at 124. Plaintiff marginally addresses the waiver issue in its briefing for the present
Motion to Stay, 5 vaguely pointing to arguments made in Plaintiff’s appellate brief to conclude that
“there is a substantial likelihood that the Federal Circuit overrules the Court’s holdings on waiver
as well as Newimar’s substantive arguments.” Pl.’s Reply at 4. Yet, Plaintiff’s argument is
conclusory and does not explain how its waiver arguments support a strong or substantial case on
the merits here or why the Federal Circuit would likely overrule this Court’s prior waiver
determination. See id. Further, Plaintiff does not distinguish clear Federal Circuit precedent
holding issues initially raised on reply before a trial court are waived. See Stauffer v. Brooks Bros.
Grp., Inc., 758 F.3d 1314, 1322 (Fed. Cir. 2014) (citing Fresenius USA, Inc. v. Baxter Int’l, Inc.,
582 F.3d 1288, 1295–96 (Fed. Cir. 2009)) (appellant waived arguments initially raised in reply
brief before the district court); Novosteel S.A. v. U.S., Bethlehem Steel Corp., 284 F.3d 1261, 1273–
74 (Fed. Cir. 2002) (holding that appellant waived argument raised for the first time in a reply brief
before the district court). This Court properly considered the Federal Circuit’s Novosteel decision
in its May 12, 2022 Memorandum and Order and accordingly deemed Plaintiff’s arguments
procedurally waived. Newimar, 160 Fed. Cl. at 124.
2. Merits
As noted, even if Plaintiff had not waived its arguments concerning Spanish registration
requirements, Plaintiff’s arguments would still fail on the merits. Plaintiff contends this Court
5
Plaintiff only addressed the Court’s waiver holding in its reply in support of its Motion to Stay,
not in its initial Motion. See Pl.’s Reply at 4.
11
failed to adequately consider emails between the Navy and J&J which discuss Spanish registration
requirements. See Mot. at 15–16. In its Memorandum and Order, however, this Court considered
the full Administrative Record and the express terms of the Revised Solicitation and Amendment
0008, which were clear and unambiguous. Newimar, 160 Fed. Cl. at 119–20, 125–27. This Court
accordingly held that the deadline for submission of requisite permits and licenses by the awardee
was “[p]rior to the start of performance,” consistent with the Revised Solicitation and applicable
law. Id. at 125–27 (internal quotations omitted). Far from suggesting an inadequate perusal of the
Administrative Record, the Court’s May 12, 2022 Memorandum and Order explains in detail that
the Government properly excluded consideration of these Spanish registration requirements from
its responsibility assessment; simply put, the clear terms of the Revised Solicitation and
Amendment 0008 did not require bidders to prove satisfaction of the registration requirement at
the time of bid-submission. See id. at 125 (quoting Advanced Am. Constr., Inc. v. United States,
111 Fed. Cl. 205, 223 (2013)) (“Requirements that ‘are not required to be satisfied by the
contractor until after the contract is awarded’ are therefore not considered responsibility
requirements.”).
Additionally, Plaintiff also reiterates concerns over the alleged significance of the Navy’s
consideration of guidance from the U.S. Section of the Permanent Committee on the necessity of
meeting Spanish registration requirements under the Agreement on Defense Cooperation (ADC).
Mot. at 14–15. As explained in this Court’s Opinion, after the Spanish Section of the Permanent
Committee objected that J&J had not yet registered with the Registro Mercantil, the U.S. Section
of the Permanent Committee clarified that registration with the Registro Mercantil was not a
prerequisite to awarding a contract under a solicitation. Newimar, 160 Fed. Cl. at 119 (citing AR
14789–91) (emphasis added). Instead, any awardee under the solicitation would need to have such
12
a license prior to the start of performance. Id. (emphasis added). The Navy appropriately relied
on this clarification, and this Court remains unpersuaded by Plaintiff’s Motion to Stay that its
holding is incorrect. Id.
Finally, Plaintiff contends that this Court ignored important parts of the Administrative
Record and incorrectly “conclude[ed] that the Navy could substitute the U.S. Section’s analysis
under the limited vetting process for its own duty to affirmatively determine compliance” with all
Responsibility criteria. Mot. at 19. As explained in this Court’s Opinion, this Court lacks
jurisdiction to address any alleged non-compliance with the ADC or the specific “allegation that
the Spanish Section [of the Permanent Committee] did not approve J&J as an offeror” due to J&J’s
registration status at that time. Id. at 127–28. Those arguments “depend on interpretation of a
specific provision of [the ADC] rather than anything in the Revised Solicitation.” Id. Because
these arguments “derive[] [their] existence so exclusively and substantially” from the ADC, an
“executive agreement that operates ‘in the framework of the North Atlantic Treaty,’” this Court
lacks jurisdiction to consider these arguments at all. Id. (quoting the ADC, ch. 1, art. I, ¶ 1). This
Court, therefore, exercised judicial restraint in declining to address Plaintiff’s arguments pertaining
to the ADC. Again, the Court is unpersuaded by Plaintiff’s Motion.
This Court reviewed its holding and analysis anew in considering Plaintiff’s Motion. The
Opinion includes a thorough analysis of the Administrative Record and reflects that the Court
correctly rejected, on two separate bases, Plaintiff’s merits argument that J&J was not qualified to
be the awardee due to an alleged failure to meet the Spanish registration requirements. In sum,
Plaintiff’s Motion to Stay rehashes unpersuasive arguments concerning Spanish registration
requirements and does not demonstrate a strong or substantial case on the merits that would
warrant the requested relief.
13
B. Undisclosed Evaluation Criterion
Plaintiff disagrees with the Court’s holding that the Navy did not evaluate offers using an
undisclosed criterion, specifically a criterion concerning the number of previously performed
projects. See Mot. at 20–22. Again, Plaintiff’s Motion expresses discontent with the Court’s ruling
but ultimately offers no new or compelling facts or law that could amount to a strong or substantial
case on the merits. For example, the Revised Solicitation allowed the Navy to evaluate the “depth
and breadth” of offerors’ relevant experience. Newimar, 160 Fed. Cl. at 129. Plaintiff contends
in its Motion that the Court erred in interpreting the term “breadth” to connote numerosity, thereby
finding the Navy properly considered the number of offerors’ past projects. Mot. at 20–21; see
Newimar, 160 Fed. Cl. at 129. Yet, Plaintiff cannot present a strong or substantial case on the
merits simply by expressing disagreement with this Court’s reasoning below; it must instead
explain why the Federal Circuit would also likely disagree with this Court’s holding. See Obsidian
Sols. Grp., 2021 WL 1688892, at *4. It has not done so. Further, as this Court noted, “[a]gencies
have ‘great discretion in determining the scope of an evaluation factor.’” Newimar, 160 Fed. Cl.
at 128 (quoting Maint. Eng’rs v. United States, 50 Fed. Cl. 399, 415 (2001)). For Plaintiff to
succeed on the merits related to this issue, it must demonstrate, inter alia, that the agency used a
“significantly different basis in evaluating the proposals than was disclosed.” Id. (quoting
Harmonia Holdings Grp., LLC v. United States, 153 Fed. Cl. 245, 255 (2021)). Beyond making a
few conclusory statements to this point, Plaintiff’s Motion fails to meet this burden.
This Court also rejected Plaintiff’s argument that the Navy’s contract award involved
undisclosed evaluation criterion because, even if true, Plaintiff suffered no prejudice. Id. at 131-
32. It is well-established that to succeed in a bid protest, a plaintiff must demonstrate that it
suffered prejudice; namely that there was a “substantial chance it would have received the contract
award but for [the Government’s] error.” Banknote Corp. of Am. v. United States, 56 Fed. Cl. 377,
14
380 (2003) (quoting Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed Cir.
1999)) (internal quotations omitted); see also Statistica, Inc. v. Christopher, 102 F.3d 1577, 1581
(Fed. Cir. 1996) (alteration in original) (emphasis in original) (internal quotations omitted)
(quoting C.A.C.I., Inc.-Fed. v. United States, 719 F.2d 1567, 1574–75 (Fed. Cir. 1983)) (“To
establish competitive prejudice, a protester must demonstrate that but for the alleged error, there
was a substantial chance that [it] would receive an award—that it was within the zone of active
consideration.”). Plaintiff’s Motion briefly discusses its concerns with this Court’s lack of
prejudice holding but does not clarify why the holding was incorrect. Mot. at 22. Plaintiff merely
makes the conclusory statement that because the procurement involved “only two bidders that
were weighted equally on all the listed factors, the use of the undisclosed factor was clearly
instrumental in J&J receiving the contract award . . . .” Mot. at 22. Plaintiff’s position, however,
ignores the Administrative Record, which indicates that while the contractors received the same
adjectival ratings across all four evaluation factors, the Government identified several significant
advantages in J&J’s proposal that justified the award. Newimar, 160 Fed. Cl. at 131–32. In
addition, J&J’s proposal offered a lower price, and the Revised Solicitation dictated “[t]he
importance of price [would] increase if the Offerors’ non-price proposals [were] considered
essentially equal in terms of overall quality.” Id. at 132 (citing Tab 50 at AR 10723, 10730–31).
Thus, for the reasons explained in the Court’s Opinion, Plaintiff would have lost the award,
regardless of whether the Government had considered the alleged unstated evaluation criterion. Id.
Accordingly, even if the Federal Circuit were to agree with Plaintiff that the Government
had applied an unstated evaluation criterion, for the reasons stated above and in this Court’s
Memorandum and Order, Plaintiff nevertheless would be unsuccessful on the merits of its
undisclosed criterion argument because it has failed as a matter of law to sufficiently demonstrate
15
prejudice stemming from the use of the criterion. Plaintiff’s argument concerning an unstated
evaluation criterion, therefore, does not raise a strong or substantial case on the merits.
C. Unbalanced Pricing Analysis and Consideration of ELINs
Plaintiff argues that the Court erred in deeming the Navy’s unbalanced pricing analysis
reasonable. Mot. at 22–27. Plaintiff’s Motion, once again, simply rehashes arguments this Court
has already rejected. See Newimar, 160 Fed. Cl. at 139–41. A movant does not present a strong
or substantial case on the merits when it “simply reiterates its objections to the [Government’s]
decision and the Court’s denial of judgment on the administrative record in Plaintiff’s favor.” ACI
Techs., 162 Fed. Cl. at 47. This is particularly true where, as here, the bid protest was a “routine”
challenge to the agency’s evaluation and the issues “before the Court were neither ‘novel [n]or
close.’” See id. (quoting Acrow Corp., 97 Fed. Cl. at 184).
This Court engaged in a thorough review of the Government’s unbalanced pricing analysis.
Newimar, 160 Fed. Cl. at 139–41. In reviewing the Navy’s methodology, this Court appropriately
noted its role was “not to test whether there is a better, faster, or otherwise more correct way to
analyze unbalanced pricing; rather it [was] the Court’s task to determine whether the Navy’s
unbalanced pricing analysis is reasonable and its conclusions rational.” Id. at 139 (quoting IAP
World Servs., Inc. v. United States, 153 Fed. Cl. 564, 567 (2021)). Acknowledging that an
agency’s methodology is “a matter within the sound exercise of the agency’s discretion,” id. at
141 (quoting Logistics Health, Inc. v. United States, 154 Fed. Cl. 51, 85 (2021)), the Court limited
its inquiry to “whether there is any statutory or regulatory provision that precludes [the adopted
methodology].” Id. at 139–140 (quoting Tyler Constr. Grp. v. United States, 570 F.3d 1329, 1333
16
(Fed. Cir. 2009)). 6 Ultimately, Plaintiff failed to identify a single law or regulation prohibiting the
pricing analysis technique the Navy adopted and has still yet to do so. 7 Id. at 140. The Court also
specifically addressed and rejected Plaintiff’s assertion that the terms of the Revised Solicitation,
the FAR, and relevant case law mandated an unbalanced pricing analysis at the exhibit line item
number (ELIN) level. Id. This Court interpreted the definition of “line item” as employed in FAR
§ 2.101 and the Revised Solicitation, confirmed ELINs did not meet the stated definition, and held
accordingly that the Navy’s unbalanced pricing analysis was reasonable and not contrary to law.
Id. Plaintiff’s objections to the Court’s holding, therefore, amount to nothing more than a
difference of opinion on statutory interpretation and do not raise a strong or substantial case on the
merits. See Mot. at 24–25.
6
Plaintiff argues that this Court misapplied Tyler Construction Group v. United States, stating the
standard articulated in the case is limited to a “far more specific determination restricted to IDIQ
contracts for construction procurement.” Mot. at 22–23 (citing 570 F.3d 1329, 1333 (Fed. Cir.
2009)). Plaintiff raised this argument previously in its MJAR to no avail, and it proves equally
unsuccessful here. Indeed, the U.S. Court of Federal Claims has previously applied the Tyler
Construction standard to evaluate an agency’s unbalancing analysis. See, e.g., IAP, 153 Fed. Cl.
at 569. Similarly, this Court did not err in applying the same standard to consider the
Government’s unbalancing analysis in this bid protest. Plaintiff’s Motion does not raise a strong
or substantial case on this basis that would merit a stay or injunctive relief.
7
Plaintiff points to Academy Facilities Management v. United States to argue that the Navy has
previously considered ELINs to constitute “line items” for the purpose of unbalanced pricing
analyses. See Mot. at 26 (citing 87 Fed. Cl. 144, 543–54 (2009)). As an initial matter, “this Court
is not bound by the decisions of other judges on the Court of Federal Claims.” Almanza v. United
States, 136 Fed. Cl. 290, 296 (2018). Further, presenting a single case demonstrating that an
unbalanced pricing analysis may occur at the ELIN level does not establish that every unbalanced
pricing analysis must occur at the ELIN level. Indeed, and as this Court noted, other U.S. Court
of Federal Claims decisions have approved the use of unbalanced pricing methodologies
examining CLIN-level pricing. See Newimar, 160 Fed. Cl. at 140 (citing IAP World Servs., 153
Fed. Cl. at 567–72) (endorsing the Navy's assessment of unbalanced pricing at the CLIN level,
rather than the ELIN level, in a fixed-price procurement). The Navy had discretion to choose how
to perform its unbalanced pricing analysis for this procurement, including the choice to analyze at
the CLIN level, so long as the chosen methodology was reasonable. See Logistics Health, 154
Fed. Cl. at 83–86. Plaintiff’s reliance on Academy Facilities Management is uncompelling.
17
D. Plaintiff’s Successful Prior Protest of the Original Solicitation
Perhaps most unconvincingly, Plaintiff suggests its previous, successful protest of the
Original Solicitation “weighs in favor of the likelihood of Newimar’s success on the merits.” Mot.
at 27. Plaintiff’s prior protest of a solicitation that was later amended has no bearing on Plaintiff’s
likelihood of success on the merits in this appeal. Indeed, Plaintiff’s initial protest of the Original
Solicitation was based on distinct grounds than those considered in this Court’s May 12, 2022
Memorandum and Order concerning the Revised Solicitation. Plaintiff’s Motion does not provide
this Court with any reason to grant the requested relief on this basis.
III. Plaintiff’s Alleged Irreparable Harm in the Absence of Injunctive Relief Does Not
Outweigh Harms to the Government and J&J
As Plaintiff failed to present a strong or substantial case on the merits, Plaintiff’s Motion
could be denied absent consideration of the relative harms to the parties. See HVF West, 148 Fed.
Cl. at 57 (noting that “the first factor—likelihood of success or, at a minimum, substantial case—
is essential,” so harm to the movant is irrelevant if the movant fails to demonstrate a case on the
merits). Nevertheless, even if Plaintiff could demonstrate a strong or substantial case on the merits,
the balance of hardships between Plaintiff, the Government, and J&J still points decidedly against
granting Plaintiff’s Motion.
A. Plaintiff’s Harm
A movant’s “burden of showing irreparable harm in this context is steep.” Obsidian Sols.
Grp., 2021 WL 1688892, at *4. Any injury alleged must be “both certain and great,” and the
movant must convey that the hardship will have an “immediate and substantial impact.” ACI
Techs., 162 Fed. Cl. at 48 (internal quotations and citations omitted). “No federal contractor has
a right to maintain its incumbency in perpetuity,” and the loss of an incumbent contract does not,
on its own, constitute irreparable harm. CRAssociates, 103 Fed. Cl. at 26; see also G4S Secure
18
Integration, 159 Fed. Cl. at 262 (same proposition). The movant, therefore, must allege harms
beyond those “any incumbent would experience upon the loss of a successor contract,” as losing
a contract, even an important contract, is a risk that every incumbent contractor faces.
CRAssociates, 103 Fed. Cl. at 26; see NetCentrics Corp. v. United States, 145 Fed. Cl. 371, 377
(2019) (quoting Navient Sols., LLC v. United States, 141 Fed. Cl. 181, 185 (2018)) (“NetCentrics's
‘financial strain,’ like that of any incumbent contractor that is unsuccessful in a new competition,
‘is the unavoidable result of its [contract] coming to an end.’”).
Courts consider economic loss as evidence of irreparable harm if it “threatens the survival
of a movant’s business.” Obsidian Sols. Grp., 2021 WL 1688892, at *4 (quoting Sierra Mil.
Health Servs., Inc. v. United States, 58 Fed. Cl. 573, 582 (2003)). Yet, the movant must provide
facts or evidence to support its assertions of harm and cannot rely only “on attorney argument to
establish irreparable injury.” Id. (quoting Chromalloy San Diego Corp. v. United States, 145 Fed.
Cl. 708, 744 (2019)).
Plaintiff’s allegations of irreparable harm stem predominately from its dependence on the
NAVSTA Rota contract as its main source of revenue. Plaintiff alleges it derives 90 percent of its
revenue from the services it provides at NAVSTA Rota, and that 122 of Plaintiff’s 172 employees
work exclusively under the bridge contract set to expire on December 31, 2022. Mot. at 27.
Plaintiff argues it will face “catastrophic” harm and “may cease to exist” if “forced to halt work
after the bridge contract without a decision on appeal.” Id. at 27–28. According to Plaintiff, it
could not “financially absorb the costs associated with halting work” or recover any revenue lost
between the bridge contract expiration date and the Federal Circuit’s decision. Id. These risks,
Plaintiff argues, constitute irreparable harm worthy of injunctive relief pending appeal.
19
Plaintiff’s arguments are unavailing. Plaintiff fails to provide any meaningful evidence to
support its contention that it would cease to exist without a stay pending appeal, and, in fact,
evidence supports the contrary. 8 Instead, Plaintiff offers conclusory statements and bald assertions
by its counsel, without further elucidating how the alleged harms are immediate or certain. See
Obsidian Sols. Grp., 2021 WL 1688892, at *4. Further, Plaintiff acknowledges that in addition to
the services it provided under the BOS Contract, it previously engaged in several construction
8
Plaintiff’s Motion mischaracterizes the holding in Swift & Staley Inc. v. United States. 159 Fed.
Cl. 731 (2022). There, the court noted that a movant demonstrated irreparable harm where the
protested contract made up a “significant percentage of [movant’s] revenue,” and the movant
would lose its ability to compete without a stay. Id. at 735–36. Far from declaring that “the loss
of a government contract constitutes irreparable harm . . . particularly when an incumbent
contractor depends on the contract for its survival,” as Plaintiff suggests, the court in Swift & Staley
reinforced the notion that the balance of harm must tilt decidedly in the movant’s favor to warrant
injunctive relief. Mot. at 28; Swift & Staley, 159 Fed. Cl. at 735–36. That is not the case here,
where Plaintiff has provided conclusory and unsupported statements concerning alleged
harm. Plaintiff supports its claim of harm with an affidavit — referenced again only in Plaintiff’s
Reply in support of the Motion to Stay — from its President. See Pl.’s Aff. This affidavit,
however, is almost a year old and does not discuss Plaintiff’s current allegation of harm. Id. at 3
(affidavit executed November 23, 2021). Nor could it. Indeed, the affidavit does not account for
intervening events that may minimize Plaintiff’s claimed harm, including the award of a $5 million
DOD contract, which, Plaintiff acknowledges, “was not in effect at the time” it initially lodged its
protest. Pl.’s Reply at 5. The affidavit’s weight has thus been substantially diluted by the passage
of time. In contrast, the Government and J&J have provided recent declarations specifically
documenting the robust harms they will experience should this Court grant a stay pending appeal.
Plaintiff’s treatment of PDS Consultants, Inc. v. United States is similarly misleading, as Plaintiff
ignores significant differences between the facts in PDS Consultants and the circumstances of this
case. 133 Fed. Cl. 810 (2017). All parties and the court in PDS Consultants agreed that the
movant’s appeal presented a question of first impression and constituted a substantial case on the
merits. Id. at 817. As discussed above, the same cannot be said for Plaintiff’s Motion, which fails
to allege a likelihood of success on appeal and is vigorously contested. Additionally, only the
movant in PDS Consultants alleged any concrete harm that would occur absent a stay pending
appeal: the government chose not to enumerate any harms that would occur under a stay, and the
court considered the opposing party’s alleged harms highly speculative. Id. at 818. The court’s
decision, therefore, did not depend on the percentage of movant’s revenue associated with the
contract under protest; instead, the court determined that the evidence before it concerning balance
of harms favored the movant. Id. Like the court in PDS Consultants, this Court has analyzed the
evidence – as opposed to attorney argument – presented by Plaintiff’s Motion concerning balance
of harms and finds in favor of the Government and J&J.
20
projects with the Navy at NAVSTA Rota. Declaration of Antonio Marcos Rodriguez, Newimar
President (ECF No. 71-1) (Pl.’s Aff.), ¶¶ 5–9. Yet, Plaintiff fails to explain why, should it lose the
BOS contract, Plaintiff could not pursue other similar construction projects in the future. Indeed,
the calamitous tone of Plaintiff’s arguments on harm is further belied by the fact that the U.S.
Department of Defense awarded Plaintiff a five-and-a-half-year custodial services contract worth
over $5 million on June 14, 2022. See Defendant-Intervenor’s Opposition to Plaintiff’s Motion to
Stay (ECF No. 70) (J&J’s Resp.) at 25; see Pl.’s Reply at 5 (acknowledging Plaintiff won this new
contract). This contract not only ensures that Plaintiff will receive revenue over the next five years,
but it also demonstrates that Plaintiff can sign new service contracts going forward.
Accordingly, Plaintiff has not demonstrated sufficient irreparable harm to justify a stay or
injunctive relief pending appeal.
B. The Government’s Harm
Unlike Plaintiff, the Government has alleged substantial harms incurred during Plaintiff’s
bid protest that would continue under a stay. See Def.’s Aff. Injunctive relief pending appeal is
disfavored where it would force the Government to endure additional costs or financial and
operational burdens, such as resorting to other, more expensive contracts than the contract award
under protest. See, e.g., NetCentrics Corp., 145 Fed. Cl. at 377 (denying an injunction which, if
granted, would require the government to pursue six sole-source emergency contracts rather than
the single contract award under protest); Sigmatech, Inc. v. United States, 136 Fed. Cl. 346, 354
(2018) (recognizing that an injunction would exacerbate harm to the government when the bid
protest had already “delayed the [government’s] ability to obtain lower-priced and better-value
services” elsewhere); Akima Intra-Data, LLC v. United States, 120 Fed. Cl. 25, 29 (2015) (denying
21
an injunction that would require the government to “conduct another procurement and incur
unwarranted costs”).
The Government filed a declaration supporting that it has experienced similar harms. See
Def.’s Aff. Since January 2021, the Government and Plaintiff have operated under non-
competitive, single-source bridge contracts that were $100,000 to $120,000 more expensive per
month than J&J’s proposed pricing under the awarded contract. Id. ¶ 6. The bridge contracts’
price premiums resulted in approximately $2.5 million in additional costs that the Government
would not have incurred absent Plaintiff’s protest, and which the Government anticipates will grow
if the Court grants Plaintiff’s Motion. Id. ¶¶ 6–7. In this manner, Plaintiff has financially
benefitted from its bid protest for nearly two years at the expense of the Government. See G4S
Secure Integration, 159 Fed. Cl. at 263–64 (considering whether an incumbent contractor has
benefitted from the delay caused by its protest in balancing the harms experienced by each party).
Additionally, any negotiation process for a third bridge contract would likely introduce added
administrative and financial burdens, as the Government must request special approval for each
sole-source contract and procure funding on a more frequent basis than under the contract awarded
to J&J. Def.’s Aff., ¶ 9.
Furthermore, the Government has demonstrated that under the current bridge contract,
Plaintiff is providing the Navy with a narrower scope of services than outlined in its Revised
Solicitation and award to J&J. Def.’s Resp. at 9–10. The protested contract added several
programs not previously included in the incumbent contract, which the Navy allegedly cannot
accommodate under a bridge contract; these include an infrastructure condition assessment
program, an inventory management program, and a new work order system for family housing
projects. Id. Granting Plaintiff’s Motion would force the Government to procure a third bridge
22
contract and delay implementation of these programs for an additional six to twelve months
pending the appeal. Id. Plaintiff’s Motion alleges that its harm far outweighs that experienced by
either the Government or J&J because granting the “requested stay would merely maintain the
status quo.” Mot. at 28; see Swift & Staley, 159 Fed. Cl. at 735 (granting a stay where the
Government “expressed its willingness to maintain the status quo and has demonstrated that it is
able to effectively continue operations . . . during the pendency of this litigation”). Yet the addition
of these new programs to the Revised Solicitation signaled the Navy’s desire to deviate from the
status quo and add new services to NAVSTA Rota, which it cannot efficiently do under a stay or
bridge contract. 9 These constitute concrete, substantial harms, supported by evidence before this
Court, that are likely to occur if this Court grants Plaintiff’s Motion.
C. J&J’s Harm
Plaintiff alleges that a stay would not inflict substantial harm on J&J because J&J has
“performed no work at the Rota base” to date, and the stay would only delay J&J’s performance
until the Federal Circuit issues its decision. Mot. at 29. However, “delay in performing and
9
Plaintiff argues that the “changes clause” incorporated in its bridge contract with the Navy would
allow the Navy to alter the processes currently in place at NAVSTA Rota to implement newly
desired programs. Pl.’s Reply at 8–9. Plaintiff does not cite to the specific provisions of the bridge
contract to which it is referring, so it is difficult for this Court to assess the validity of this argument.
See id. Nevertheless, the argument mischaracterizes the Government’s position. The Government
does not allege that it cannot contractually implement these changes under a bridge contract.
Def.’s Resp. at 10. Instead, the Government merely contends that “due to the significant effort
involved in setting up these programs, the Navy cannot effectively add these programs to a short-
term bridge contract.” Id. In other words, it would be inefficient for the Government to initiate
this process under a bridge contract of limited duration, particularly when the Government already
selected an offeror whose proposal offered the Government better value and to whom the
Government would later have to transition these processes. The Government and the public have
an interest in allowing the Government to “use the more efficient and less expensive contract while
the matter is before the court of appeals.” NetCentrics Corp., 145 Fed. Cl. at 378. With respect
to these new programs, the Government has demonstrated that its contract with J&J offers the
“more efficient and less expensive” alternative. Def.’s Aff., ¶¶ 5–6.
23
profiting from” an awarded contract “weighs against injunctive relief.” G4S Secure Integration,
159 Fed. Cl. at 263 (citing Telos, 129 Fed. Cl. at 579 and CRAssociates, 103 Fed. Cl. at 28).
Plaintiff’s stance also ignores the considerable administrative burden that J&J has already endured
in preparing to assume the NAVSTA Rota services contract. See J&J’s Resp. at 37–40;
Declaration of , Director of International Operations for J&J (ECF
No. 70-2) (J&J’s Aff.). J&J has already hired key personnel for the NAVSTA Rota contract,
J&J’s
Resp. at 37–40; J&J’s Aff., ¶ 9; see Akima Intra-Data, 120 Fed. Cl. at 29 (recognizing harm where
the awardee “has already begun hiring key personnel and incurred recruiting, compensation,
training, and travel costs”). J&J
reasonably contends that these employees “will be caught in limbo” if this Court grants a stay,
with no work to do in Spain . J&J’s Resp. at 39; see J&J’s Aff.,
¶ 9. Not only would a stay place a heavy toll on J&J, but it also would likely create administrative
difficulties for J&J, which would need to determine where to send its employees and how to pay
them. J&J’s Resp. at 39; see J&J’s Aff., ¶ 9. J&J’s demonstrated harm, therefore, weighs against
issuing a stay pending appeal or injunctive relief.
IV. Granting Plaintiff’s Motion Would Subvert the Public Interest
Contrary to Plaintiff’s contentions, public interest counsels against granting Plaintiff’s
Motion. Plaintiff alleges that public interest favors injunctive relief in this instance, in part, due to
Plaintiff’s consistently favorable ratings as the incumbent contractor over the past 25 years. Mot.
at 29. Plaintiff also suggests that public interest would disfavor the “wasted effort,” which, it
contends, would occur if Plaintiff ultimately won its appeal after the Government had transitioned
to another contractor. Id. at 29–30. These arguments are unpersuasive, as they imply that J&J did
24
not represent the “best value” offeror or that the award to J&J was somehow unlawful or improper.
This Court already held the Navy’s contract award to J&J proper in its May 12, 2022 Memorandum
and Order, and Plaintiff’s Motion has failed to raise any new issues or questions on the merits that
meaningfully challenge this Court’s ruling. See Newimar, 160 Fed. Cl. at 121. The Navy
concluded that J&J’s proposal represented a better value than Plaintiff’s proposal, and there is “a
substantial public interest in allowing the government to proceed with contracts awarded . . . to the
contractor offering the best value.” JWK Int’l Corp., 49 Fed. Cl. at 370.
Further, the FAR promotes the use of “full and open competition” in government
procurements, which cannot occur if the Government continues granting Plaintiff sole-source, non-
competitive bridge contracts. See FAR, Part 6; JWK Int’l Corp., 49 Fed. Cl. at 370. As the
Government is the opposing party in this matter, the Government’s harms factor into the Court’s
assessment of public interest. Nken, 556 U.S. at 435 (“The third and fourth factors, harm to the
opposing party and the public interest, merge when the Government is the opposing party.”).
Plaintiff’s bridge contracts have already cost the Government an additional $2.5 million and cannot
accommodate the new services the Navy sought in its Revised Solicitation and award to J&J.
Def.’s Aff., ¶ 6. The public has an interest in permitting the Government to operate under the most
efficient and cost-effective contract that satisfies its services needs during the appellate process.
See NetCentrics Corp., 145 Fed. Cl. at 378 (“[T]he public interest would be served by allowing
the government to use the more efficient and less expensive contract while the matter is before the
court of appeals.”). Furthermore, Plaintiff is the only party that would benefit from a stay. See
JWK Int’l Corp., 49 Fed. Cl. at 370 (expressing concern when “the only party to benefit” from
granting the requested injunctive relief and further delaying contract performance “would likely
25
be the incumbent contractor”). Ultimately, the public interest does not favor granting Plaintiff a
stay or injunctive relief.
CONCLUSION
For the reasons described above, Plaintiff’s Motion fails to establish that a stay or
injunctive relief pending appeal is warranted. Accordingly, this Court DENIES Plaintiff’s Motion
for Stay of Judgment Pending Appeal (ECF No. 67).
The parties are directed to CONFER and FILE a Notice within three days of this
Memorandum and Order, attaching a proposed public version of this Sealed Memorandum and
Order, with any competition-sensitive or otherwise protected information redacted.
IT IS SO ORDERED.
Eleni M. Roumel
ELENI M. ROUMEL
Judge
Dated: November 14, 2022
Washington, D.C.
26 | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487107/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:05 AM CST
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
STATE V. TRAIL
Cite as 312 Neb. 843
State of Nebraska, appellee, v.
Aubrey C. Trail, appellant.
___ N.W.2d ___
Filed November 10, 2022. No. S-21-557.
1. Pleadings: Parties: Judgments: Appeal and Error. A denial of a
motion to sever will not be reversed unless clear prejudice and an
abuse of discretion are shown, and an appellate court will find such an
abuse only where the denial caused the defendant substantial prejudice
amounting to a miscarriage of justice.
2. Trial: Witnesses. It is for the trial court to determine the extent to which
a sequestration order will be applied in a given case.
3. Motions for Mistrial: Appeal and Error. An appellate court will not
disturb a trial court’s decision whether to grant a motion for mistrial
unless the court has abused its discretion.
4. Criminal Law: Motions for New Trial: Appeal and Error. In a crimi-
nal case, a motion for new trial is addressed to the discretion of the trial
court, and unless an abuse of discretion is shown, the trial court’s deter-
mination will not be disturbed.
5. Constitutional Law: Statutes: Appeal and Error. The constitutionality
of a statute presents a question of law, which an appellate court indepen-
dently reviews.
6. Sentences: Death Penalty: Aggravating and Mitigating Circum
stances: Appeal and Error. In reviewing a sentence of death, the
Nebraska Supreme Court conducts a de novo review of the record to
determine whether the aggravating and mitigating circumstances support
the imposition of the death penalty.
7. Constitutional Law: Criminal Law: Jury Trials. The Sixth Amendment
secures to criminal defendants the right to be tried by an impartial jury
drawn from sources reflecting a fair cross-section of the community.
8. Constitutional Law: Juror Qualifications. The fair-cross-section
venire requirement is not explicit in the text of the Sixth Amendment,
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Cite as 312 Neb. 843
but is derived from the traditional understanding of how an impartial
jury is assembled.
9. ____: ____. The representativeness constitutionally required at the
venire stage can be disrupted at the jury-panel stage to serve a State’s
legitimate interest.
10. Death Penalty: Juror Qualifications. An adequate voir dire where
jurors are directly involved in sentencing in a capital case entails the
opportunity to inquire into whether the views on the death penalty
would disqualify prospective jurors from sitting.
11. Juror Qualifications. Groups defined solely in terms of shared attitudes
that would prevent or substantially impair members of the group from
performing one of their duties as jurors are not distinctive groups for
fair-cross-section purposes.
12. Constitutional Law: Juror Qualifications: Proof. In order to establish
a prima facie violation of the fair-cross-section requirement under the
Sixth Amendment, a defendant must show (1) that the group alleged
to be excluded is a “distinctive” group in the community, (2) that the
representation of this group in venires from which juries are selected is
not fair and reasonable in relation to the number of such persons in the
community, and (3) that this underrepresentation is due to systematic
exclusion of the group in the jury selection process.
13. Juries. An impartial jury is nothing more than jurors who will conscien-
tiously apply the law and find the facts.
14. Death Penalty: Juror Qualifications. Beliefs with respect to the death
penalty are within the individual’s control. Death qualification does not
create an appearance of unfairness, as it only results in the removal for
cause of those jurors who are unwilling to temporarily set aside their
own beliefs in deference to the rule of law.
15. Death Penalty: Juries: Proof. The State has a legitimate interest in
avoiding the burden of presenting the same evidence to different juries
for the guilt phase and the aggravation phase of trial.
16. Constitutional Law: Death Penalty: Juries. The State does not violate
the Sixth Amendment right to an impartial jury by death qualifying the
jury before a trial wherein it has alleged an aggravator that, if found by
the jury, will make the defendant eligible for the death penalty.
17. Equal Protection: Statutes. When a classification created by state
action does not jeopardize the exercise of a fundamental right or catego-
rize because of an inherently suspect characteristic, the Equal Protection
Clause requires only that the classification rationally further a legitimate
state interest.
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312 Nebraska Reports
STATE V. TRAIL
Cite as 312 Neb. 843
18. Constitutional Law: Death Penalty. The Eighth Amendment and arti-
cle I, §§ 9 and 15, of the Nebraska Constitution are not violated by death
qualification in a capital case.
19. Constitutional Law: Trial: Joinder. There is no constitutional right to
a separate trial.
20. Trial: Joinder: Appeal and Error. Whether offenses were properly
joined involves a two-stage analysis: (1) whether the offenses were suf-
ficiently related to be joinable and (2) whether the joinder was prejudi-
cial to the defendant.
21. Trial: Joinder: Proof: Appeal and Error. A defendant appealing the
denial of a motion to sever has the burden to show compelling, specific,
and actual prejudice.
22. Trial: Joinder. Severe prejudice occurs when a defendant is deprived
of an appreciable chance for an acquittal, a chance that the defendant
would have had in a severed trial.
23. ____: ____. Prejudice from joinder cannot be shown if evidence of
one charge would have been admissible in a separate trial of another
charge.
24. Conspiracy: Hearsay. The coconspirator exception to the hearsay rule
is applicable regardless of whether a conspiracy has been charged in the
information or not.
25. ____: ____. Under the coconspirator exception to the hearsay rule, the
declarant conspirator who partners with others in the commission of a
crime is considered the agent of his or her fellow conspirators, and the
commonality of interests gives some assurance that the statements are
reliable.
26. Conspiracy: Hearsay: Evidence. Whether or not a conspiracy has
been charged in the information, before the trier of fact may consider
testimony under the coconspirator exception to the hearsay rule, a prima
facie case establishing the existence of the conspiracy must be shown by
independent evidence, to prevent the danger of hearsay evidence being
lifted by its own bootstraps.
27. Trial: Witnesses. The exclusion or sequestration of a witness is within
the discretion of the trial court.
28. Trial: Witnesses: Appeal and Error. The denial of a sequestration
motion will not be overturned absent evidence of prejudice to the
defendant.
29. Criminal Law: Motions for Mistrial. A mistrial is properly granted in
a criminal case where an event occurs during the course of trial which
is of such a nature that its damaging effect cannot be removed by proper
admonition or instruction to the jury and thus prevents a fair trial.
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312 Nebraska Reports
STATE V. TRAIL
Cite as 312 Neb. 843
30. Motions for Mistrial: Proof: Appeal and Error. To prove error predi-
cated on the failure to grant a mistrial, the defendant must prove the
alleged error actually prejudiced him or her, rather than creating only
the possibility of prejudice.
31. Jurors: Jury Instructions: Presumptions. Absent evidence to the con-
trary, the legal system presumes that jurors, to the extent they are able,
will comply with curative instructions and judicial admonitions.
32. Motions for New Trial: Statutes. A motion for a new trial is a statutory
remedy and can be granted by a court of law only upon the grounds, or
some of them, provided for by the statutes.
33. Motions for New Trial: Proof. The asserted ground for a new trial must
affect adversely the substantial rights of the defendant, and it must be
shown that the defendant was prejudiced thereby.
34. Courts: Motions for Mistrial: Motions for New Trial: Appeal and
Error. A trial court is vested with considerable discretion in passing on
motions for mistrial and for a new trial, and an appellate court will not
disturb a trial court’s decision whether to grant a motion for mistrial or
a motion for new trial unless the court has abused its discretion.
35. Appeal and Error. It is an abuse of discretion to make an error of law
or clear errors of factual determination.
36. Judges: Witnesses: Appeal and Error. The trial judge is better situated
than a reviewing court to pass on questions of witness credibility and the
surrounding circumstances and atmosphere of the trial.
37. Motions for Mistrial. As a general matter, a defendant is not permitted
to profit from the defendant’s own bad conduct by disrupting courtroom
proceedings and then urging disruption as a ground for mistrial.
38. Criminal Law: Motions for Mistrial. Disruptive acts of the defendant
are not irremediable simply because they reflect some attribute consist
ent with the charged crime.
39. Constitutional Law: Due Process: Criminal Law: Jury Trials: Proof.
The Sixth Amendment right to a speedy and public trial by an impartial
jury, in conjunction with the Due Process Clause, requires that each ele-
ment of a crime be proved to a jury beyond a reasonable doubt.
40. Constitutional Law: Statutes: Death Penalty: Aggravating and
Mitigating Circumstances: Jury Trials. Under a statutory scheme
in which the death penalty cannot not be imposed unless at least one
aggravating factor is found to exist beyond a reasonable doubt, the
Sixth Amendment requires the factual determination of the aggravating
factor be entrusted to the jury.
41. Constitutional Law: Death Penalty: Aggravating and Mitigating
Circumstances: Jury Trials. The Sixth Amendment requires only the
right to a jury determination of the death-eligibility finding of one or
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STATE V. TRAIL
Cite as 312 Neb. 843
more aggravating circumstances and it does not apply to the selec-
tion decision.
42. ____: ____: ____: ____. In a capital sentencing proceeding, just as in
an ordinary sentencing proceeding, a jury is not constitutionally required
to weigh the aggravating and mitigating circumstances or to make the
ultimate sentencing decision within the relevant sentencing range.
43. ____: ____: ____: ____. Nebraska’s sentencing scheme does not vio-
late the Sixth Amendment right to a jury trial or article I, § 6, of the
Nebraska Constitution, by leaving to the three-judge panel the ultimate
life-or-death decision upon making the selection decisions of whether
the aggravating circumstances justify the death penalty and whether
sufficient mitigating circumstances exist that approach or exceed the
weight given to the aggravating circumstances.
44. Constitutional Law: Sentences. The Cruel and Unusual Punishment
Clause prohibits (1) barbaric punishments under all circumstances and
(2) punishments that are not graduated and proportioned to the offense.
45. Constitutional Law: Statutes: Death Penalty: Aggravating and
Mitigating Circumstances. Nebraska’s statutory scheme, delegating
to the three-judge panel determinations of whether the aggravating
circumstances justify the death penalty and whether sufficient miti-
gating circumstances exist that approach or exceed the weight given
to the aggravating circumstances, does not violate the 8th and 14th
Amendments to the U.S. Constitution or article I, § 9, of the Nebraska
Constitution.
46. Sentences: Death Penalty: Appeal and Error. Proportionality review
requires the Supreme Court to compare the aggravating and mitigating
circumstances with those present in other cases in which a district court
imposed the death penalty.
47. Death Penalty: Aggravating and Mitigating Circumstances. The bal-
ancing of aggravating circumstances against mitigating circumstances is
not merely a matter of number counting, but, rather, requires a careful
weighing and examination of the various factors.
48. ____: ____. The death penalty can be imposed when only one aggravat-
ing circumstance is present.
Appeal from the District Court for Saline County: Vicky L.
Johnson, Judge. Affirmed.
Benjamin H. Murray, of Murray Law, P.C., L.L.O., for
appellant.
Douglas J. Peterson, Attorney General, and James D. Smith,
Senior Assistant Attorney General, for appellee.
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Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
STATE V. TRAIL
Cite as 312 Neb. 843
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Freudenberg, J.
I. INTRODUCTION
The defendant was convicted by a jury of murder in the
first degree and criminal conspiracy to commit first degree
murder. He was also convicted, pursuant to a plea, of improper
disposal of human skeletal remains. A three-judge panel sen-
tenced the defendant to death. The defendant asserts on appeal
that the three-judge panel erred in determining the sentence
of death was not excessive or disproportionate to the penalty
imposed in similar cases. Alternatively, he argues Nebraska’s
death penalty scheme is unconstitutional because it allows
a panel of judges rather than a jury to make findings of
whether the aggravating circumstances justify the death pen-
alty and whether sufficient mitigating circumstances exist
which approach or exceed the weight given to the aggravating
circumstances. The defendant also challenges the constitution-
ality of death qualifying the potential jurors, arguing that it
creates a conviction-prone jury. Finally, the defendant chal-
lenges the denial of his pretrial motion to sever the conspiracy
and murder charges, the court’s release of the victim’s mother
from sequestration after she testified, the denial of his motion
for a mistrial after a verbal outburst and act of self-harm in
front of the jury, and the denial of a motion for a new trial
after evidence was submitted allegedly demonstrating the self-
harm would not have occurred but for the alleged misconduct
of jail staff. We affirm.
II. BACKGROUND
The State’s amended information charged Aubrey C. Trail
with one count of murder in the first degree, in violation of
Neb. Rev. Stat. § 28-303(1)(a) (Cum. Supp. 2020); one count
of improper disposal of human skeletal remains, in violation
of Neb. Rev. Stat. § 28-1301(2)(b) (Reissue 2016); and one
count of criminal conspiracy to commit first degree murder, in
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312 Nebraska Reports
STATE V. TRAIL
Cite as 312 Neb. 843
violation of Neb. Rev. Stat. § 28-202 (Cum. Supp. 2020). The
victim was Sydney Loofe (Sydney), who was 24 years old at
the time of her death on or about November 15, 2017.
The operative information gave notice that the State intended
to adduce evidence of the aggravating circumstances (1) that
the murder manifested exceptional depravity by ordinary stan-
dards of morality and intelligence and (2) that Trail has a
substantial prior history of serious assaultive or terrorizing
criminal activity. The State later removed the notice of second
aggravator.
As part of his trial strategy, Trail pled no contest to the
improper disposal of human skeletal remains. His plea was
accepted prior to the beginning of the jury trial on the remain-
ing two counts. The theory of the defense was that Trail was
involved in a consensual sexual relationship with a group of
women. This group always included Bailey Boswell, with
whom Trail lived. The group also at various points included
Ashley Hills, Anastasia Golyakova, and Kaitlyn Brandle. The
defense argued that because Hills and Golyakova had recently
left the group, Trail was hoping Sydney would become a new
member. According to the defense, Sydney was interested in
joining the group and was accidentally killed while the recipi-
ent of consensual erotic asphyxiation. Trail then panicked and
dismembered and disposed of Sydney’s remains.
1. Jury Selection
Before trial, defense counsel moved to “prevent death quali-
fication of the jury.” In the motion, defense counsel objected
to any mention—in the jury questionnaires, during jury selec-
tion, or during the trial of guilt or innocence—of the possible
sentences Trail might receive. Defense counsel asserted that
informing the jury of the possible penalty of death is unneces-
sary and results in excluding those jurors who cannot perform
their duties because of their beliefs on the death penalty.
According to defense counsel, this process results in those
charged with capital offenses being unjustifiably subjected to
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312 Nebraska Reports
STATE V. TRAIL
Cite as 312 Neb. 843
conviction-prone juries, which violates equal protection under
the 14th Amendment to the U.S. Constitution and article 1,
§ 3, of the Nebraska Constitution; the right under the 6th
Amendment to the U.S. Constitution to a fair and impartial
cross-section of jurors; and the right to heightened reliability
in capital cases as protected by the 8th Amendment to the
U.S. Constitution and article I, §§ 9 and 15, of the Nebraska
Constitution.
As is relevant to this appeal, defense counsel asserted that
“empirical research has demonstrated that the systematic
exclusion of jurors who have a moral objection to the death
penalty results in capital juries that tend to be . . . more
conviction-prone” and that these views are not representative
of a fair cross-section of the community. Further, asking jurors
about their views on the death penalty magnifies the effect of
conviction-prone beliefs. While defense counsel acknowledged
that the U.S. Supreme Court, in Lockhart v. McCree, 1 rejected
a claim that the process of death qualification violates the fair-
cross-section requirement of the Sixth Amendment and the
right to an impartial jury, defense counsel cited in the written
motion to various articles describing additional studies in the
30-plus years since McCree, indicating the process of death
qualification creates conviction-prone juries. No testimony or
other evidence was adduced in support of the motion.
Defense counsel stated that the justification for death quali-
fication presupposes a statutory scheme in which a single jury
determines both the guilt and the penalty. Defense counsel
argued that because in Nebraska, the jury does not deter-
mine the sentence in the penalty phase, informing the jury
of the possible sentence of death serves no legitimate pur-
pose. Accordingly, a potentially conviction-prone jury created
by death qualification cannot pass the heightened scrutiny
allegedly applicable to this conviction-prone classification
of jurors.
1
Lockhart v. McCree, 476 U.S. 162, 106 S. Ct. 1758, 90 L. Ed. 2d 137
(1986).
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The court overruled the motion and proceeded with voir
dire. During voir dire, defense counsel renewed the objection
to “the death qualification of each individual juror during jury
selection.” The renewed objection was overruled.
Juror questionnaires and the judge’s statement from the
bench during voir dire informed the potential jurors that
the charges Trail faced could result in the death penalty. The
judge explained that the sentence itself would be determined
by a panel of judges, but that if Trail were found guilty of first
degree murder, the jurors would be asked to listen to some
more evidence and determine if the State had proved addi-
tional elements, after which their duty would be done and the
matter would go to the panel of judges for sentencing.
During the jury selection process, jurors Nos. 104 and 126
stated in chambers that their views against the death penalty
would impair their ability to be fair and impartial. Both jurors
were struck for cause on the State’s motion. Defense counsel
did not object to them being excused.
Jurors Nos. 23, 60, 78, 245, 261, and 275 were struck for
cause on defense counsel’s motion because they indicated their
belief in Trail’s guilt would interfere with their ability to be
fair and impartial.
Jurors Nos. 108, 113, and 262 indicated they did not believe
in the death penalty but could perform their factfinding duties
in a fair and impartial manner. Jurors Nos. 113 and 262 were
subject to peremptory challenges, but juror No. 108 was not.
2. Motion to Sever Murder and
Conspiracy Charges
Defense counsel moved pursuant to Neb. Rev. Stat.
§ 29-2002 (Reissue 2016) to sever the trial on the murder
charge from the other charges. As relevant to this appeal,
defense counsel asserted joinder would prejudice Trail because
evidence admissible in support of the conspiracy charge would
not be admissible in support of the murder charge, if those
two charges were tried separately. Defense counsel explained
there would be no evidence proving the conspiracy that would
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be truly independent of the murder charge. Defense counsel
believed that, because of this, there could be no prima facie
case through independent evidence establishing the existence
of the underlying conspiracy, which is necessary to admit
testimony under the coconspirator exception to the hearsay
rule. The defense argued the State was trying to introduce
hearsay evidence to establish a conspiracy, with its more flex-
ible hearsay rules, and then use that conspiracy to permit the
introduction of otherwise inadmissible hearsay testimony into
evidence to support the murder charge.
The State responded it intended to establish, without “imper-
missible hearsay,” a prima facie case of conspiracy, before
attempting to introduce evidence under the coconspirator
exception to the hearsay rule. The evidence to establish the
conspiracy, explained the State, would primarily consist of
the testimony of Hills, Golyakova, and Brandle, all of whom
Trail had tried to convince to participate in a murder. The State
asserted their testimony would be admissible as evidence of
premeditation on the murder charge and would be introduced
into evidence even if the trial of the conspiracy count were not
joined with the murder count.
The court overruled the motion to sever. However, it warned
the State that “it needs to structure its case to avoid the boot-
strapping problems and that I will be keeping an eye on the
case as it proceeds.”
3. Sequestration and Release
of Sydney’s Mother
Before trial commenced, the court granted defense coun-
sel’s motion to sequester witnesses. Sydney’s mother was the
first witness to testify at trial. After being cross-examined
by defense counsel, the State asked that Sydney’s mother be
released from her subpoena. The State said it would waive
sequestration and would be willing to allow the defense to
call Sydney’s mother out of turn if it wished, so that Sydney’s
mother could be present to watch the remainder of the trial.
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Defense counsel objected. Following a discussion in cham-
bers that was not on record, the court pronounced that it was
releasing Sydney’s mother from sequestration but would allow
the defense to reopen its cross-examination if it wished to do
so. Sydney’s mother was not recalled to testify by either party
after being released from sequestration.
4. Evidence Adduced at Trial
At trial, evidence was adduced that Trail and Boswell moved
into a basement apartment in Wilber, Nebraska, in June 2017.
They had been in a romantic relationship since the summer of
2016. To make money, they sold stolen goods, including sales
at a local antiques market.
(a) Sydney’s Contact With Trail and
Boswell in November 2017
In November 2017, Boswell posed as “Audrey” on an online
dating application (dating app). Boswell began messaging with
Sydney on November 11 and learned that her family lived
hours away from where Sydney lived in Lincoln, Nebraska.
She also learned that Sydney worked as a store clerk at a
Lincoln hardware store. Sydney and Boswell arranged a first
date on November 14. Text messages between them are con-
sistent with arranging a first date. Neither Trail nor any other
third party is mentioned in the text messages.
Sydney initially delayed giving Boswell her address, but
upon further request on the evening of November 13, 2017,
provided it. Within 1 minute of obtaining the address, Boswell
conducted an internet search for its location. Within 5 minutes
of obtaining that information, Boswell made a reservation at a
hotel nearby.
Trail and Boswell checked into that hotel before the first
date. After a couple of hours on their first date, Boswell
returned Sydney home. Sydney did not go to the hotel. Boswell
joined Trail at the hotel, where they again spent the night.
Sydney had accepted a second date with Boswell to occur
on November 15, 2017. On the morning of November 15,
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Trail and Boswell left the hotel and went to a hardware store
where they purchased dropcloths, a hacksaw, blades, and
tin snips.
Cell phone location information indicated that around the
time Sydney would have left for work, Trail and Boswell
drove to the vicinity of Sydney’s apartment. Trail and Boswell
then took the same route Sydney took to work.
Shortly after Sydney started her shift, Trail entered Sydney’s
workplace alone. Video footage showed that as Sydney walked
toward her station at the “guard shack,” she crossed paths with
Trail, who was walking into the store. Trail did not interact
with Sydney, and she did not appear to recognize Trail. As
Sydney walked away, Trail turned around twice to watch her.
Trail then called Boswell. Trail proceeded into the hardware
store where he purchased a chemical drain cleaner and a
long cord.
Cell phone location information showed that Trail and
Boswell went back to their Wilber apartment while Sydney
was at work. While in Wilber, Boswell made two trips to local
stores. On the first trip, she purchased bleach and large trash
bags. Later, she purchased duct tape and roasting pans.
Throughout the day, Boswell texted Sydney to ask how
her day was going and communicate that she was looking
forward to their date. Sydney left work at the end of her shift
on November 15, 2017. Boswell left the Wilber apartment
around 6 p.m. and picked Sydney up at her apartment around
6:54 p.m.
Trail was at the Wilber apartment. Boswell called Trail
at 7:11 p.m. Cell phone location information indicated that
Sydney arrived at Trail and Boswell’s apartment at approxi-
mately 8 p.m. on November 15, 2017, and that both Trail and
Boswell were present at the apartment at that time. The cell
tower lost all signal from Sydney’s phone at 8:40 p.m.
A resident of the apartment building where Trail and Boswell
lived smelled bleach late that night. The smell of bleach was
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so strong that the following day, another resident of the build-
ing became ill from it.
Sydney did not report to work the next day. She was never
seen alive again.
(b) Disposal of Sydney’s Body
and Cause of Death
Cell phone location information indicated that Trail and
Boswell left their apartment the afternoon of November 16,
2017, and traveled to an area in Clay County. On December
4 and 5, after tracing Trail’s and Boswell’s cell phone loca-
tion information, most portions of Sydney’s body were found
in a ditch in the area Trail and Boswell had traveled to on
November 16. The remainder of Sydney’s body, including most
of her internal organs, was never found. Law enforcement also
found duct tape, tarps, a sauna suit with the crotch missing,
gloves, and various items of clothing in the vicinity.
Sydney’s body had been segmented into 14 parts and
placed into garbage bags. An autopsy revealed the manner of
death to be homicidal violence that included an element of
strangulation. The hyoid bone in the neck had been crushed,
there was a scleral hemorrhage in one of her eyes, and there
was petechiae, or “little hemorrhages,” throughout the face,
including in the eyelids and under the eyelids. Scleral hemor-
rhages and petechiae are due to an occlusion of blood flow
and consistent with either manual or ligature strangulation.
When asked whether these signs are “very common in stran-
gulation cases,” the expert responded, “Yes. Manual strangu-
lation, yes.”
Expert testimony introduced by the State reflected that stran-
gulation due to erotic asphyxiation is rare and that a fracture
of the hyoid bone, which resides deep in the neck tissue, is
very uncommon during erotic asphyxiation. Sydney’s body
also showed indications that around the time of death, she
experienced blunt force trauma. This included bruises on the
back of the head and down the middle of her back and a deep
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bruise into the muscle of her inner thigh. Around the time of
her death, Sydney also suffered a torn earlobe around a pierc-
ing site. Abraded contusions around Sydney’s wrists revealed
evidence of restraints.
The autopsy was complicated by the absence of most of the
organs of Sydney’s torso and abdomen, as well as the absence
of other body parts, such as the upper part of the trachea, wind-
pipe, larynx, and veins and arteries of the neck. These appeared
to have been removed post mortem by use of a sharp blade.
The pathologist did not believe the mutilation of Sydney’s
body was due to animal predation.
In an interview with law enforcement after he was appre-
hended, Trail spoke of draining Sydney’s blood from her body
and being “very thirsty that day.” Numerous superficial post
mortem shallow cuts were found on Sydney’s body. These
included cuts underlining and framing a tattoo on Sydney’s arm
reading, “Everything will be wonderful someday.”
(c) Hills’, Golyakova’s, and Brandle’s
Relationships With Trail and Boswell
From July to November 2017
Before they were called individually to testify, defense
counsel objected at trial to the introduction of the deposition
testimonies of Hills, Golyakova, and Brandle on the grounds
that the State had failed to establish a prima facie case of a
conspiracy through independent evidence. The State responded
that evidence had already been adduced of overt acts of the
conspiracy, such as online dating recruitment, the purchases
at the hardware store the day before the murder, staying at
the hotel, driving by Sydney’s apartment and observing her at
work, and the cell phone evidence linking Trail and Boswell
to Sydney’s murder. The State explained that Sydney’s murder
was part of an overarching conspiracy beginning in July 2017
to kill someone, and to continue killing.
The court ruled that the State had not yet established a prima
facie case for a conspiracy through independent evidence.
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After that ruling, the State introduced, without objection, phys-
ical evidence that Golyakova and Brandle had been inside the
Wilber apartment. The State also introduced the testimony of
law enforcement that its investigation had linked Golyakova
to several stays with Trail and Boswell at a hotel in Falls City,
Nebraska, between July and October 2017. The State then
adduced Hills’ testimony.
(i) Hills’ Testimony and Prima
Facie Case of Conspiracy
Without objection, Hills testified that she met Boswell
through an online dating app in July 2017 and that she met
Trail through Boswell. Boswell used an alias.
Trail told Hills that he could help her get revenge on
an abusive stepfather. He invited Hills to become 1 of 12
other women he claimed were associated with him, whom he
referred to intermittently as “his girls” and “witches.” Trail
showed Hills nude photographs of the alleged witches, but she
never met any of them. Boswell was the “queen witch.” Trail
claimed to be a vampire.
In August 2017, Hills was introduced to Golyakova as a per-
son who Trail said might become “one of us” as a “watcher.”
Trail told Hills that she could leave his “coven” at any point
until she took her first “soul,” which she understood meant to
kill someone and “take their last breath.”
Hills believed Trail. She continued to associate with Trail
and Boswell. She was sexually involved with both. Their
sexual activities involved erotic asphyxiation. Hills had to fol-
low various rules that Trail set for her behavior, such as having
to check in every 3 hours while away from the Wilber apart-
ment, remaining unclothed while in the apartment, and having
to ask permission to do anything, even to use the restroom or
get a drink of water. If she did not follow these rules or oth-
erwise misbehaved, she was physically punished by being hit,
whipped, or choked. Trail paid her an allowance. Hills also
assisted in selling antiques.
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Hills described a process she observed a few times where
Boswell would start talking to a woman she met through a
dating app and then hand off the communication with that
woman to Trail. If the woman wanted to talk on the phone,
Trail would give the phone to Boswell after giving her a sum-
mary of prior text communications.
Hills stated that in August 2017, while at a grocery store,
Boswell briefly met with a woman she had been communicat-
ing with in that manner. Boswell directed the woman to go
speak with Trail. Trail and the woman spoke for a while before
Trail, Boswell, and Hills left the store. Hills testified that Trail
asked her afterward if she wanted that woman to be her “first
kill.” While Hills responded in the affirmative, she was told a
couple of weeks later that the woman had traveled to California
to visit family. Trail told Hills they “would either save her for
another time or find someone else.”
Trail, Boswell, Hills, and Golyakova went on a vacation
together that August. Shortly thereafter, Trail stated that he
wanted to kill Golyakova. Trail explained Golyakova was too
nice and “didn’t have the evil in her.” A plan was discussed to
do so, but never executed. Trail threatened Hills that he would
kill her family if she ever disclosed his plans.
Hills stated that Trail often spoke of torturing and killing
someone and said that causing pain to someone would make
the killer more powerful. Trail was aroused by the idea of
watching her and Boswell torture someone. He told Hills he
wanted the idea of torturing someone to be arousing for her
and Boswell too. Trail asked Hills to think about ways she
would torture her victim.
In September 2017, Hills told Boswell she wanted out.
Among other reasons, she did not want to kill Golyakova. Hills
moved to another town and had only sporadic contact with
Trail and Boswell thereafter.
During a break in Hills’ testimony, the court found in cham-
bers that the State had provided sufficient evidence to prove a
prima facie case of conspiracy and that “it may now get into
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the statements of . . . Boswell.” Defense counsel asked if “when
we start getting into the hearsay,” it could have a continuing
objection after making the first objection. The court granted the
continuing hearsay objection, which defense counsel explained
would be for any statements attributable to Boswell.
Hills resumed her testimony. She stated that Trail once
showed her Boswell’s “killing bag.” He had pulled out a ham-
mer, some pliers, and a sauna suit from the bag and showed
them to her. Trail told Hills she would get her own killing bag
“when it was time.” Trail said the sauna suit was so that they
would not get blood on themselves.
(ii) Golyakova
Golyakova testified at trial that in the late summer of 2017,
she met Boswell through a dating app. Boswell initially used
an alias. She was later introduced to Trail by Boswell, who
explained they were in an “open relationship.” She even
tually entered into a relationship with Trail and Boswell that
was somewhat similar to Hills’, but Boswell was in charge of
punishing her. Also, erotic asphyxiation was apparently not
involved. Golyakova soon told them she was not comfortable
with some of the rules, after which she no longer had to fol-
low them. Golyakova did household chores and assisted in the
antiques enterprise. Golyakova testified that she liked the idea
of someone taking care of her.
Trail spoke to Golyakova about having a coven and spe-
cial powers, but she did not believe him. Golyakova testi-
fied that Trail and Boswell eventually started talking to her
about whether she would be willing to torture and kill some-
one. They told her they wanted to make videos of people
being tortured, which they could sell. Trail and Boswell told
Golyakova that they could make $1 million, split it, and go
their separate ways. They sometimes also discussed murder-
ing someone in a certain manner, “like for sacrifices or some-
thing.” Trail and Boswell assured Golyakova that their victim
would be someone who had done bad things. Golyakova said
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she was not comfortable hurting anyone, and she left the
group in October.
(iii) Brandle
Brandle testified at trial that she met Boswell through a
dating app in October 2017. Boswell used an alias. Brandle
entered into a relationship with Boswell similar to the others,
except she was more focused on having a romantic relation-
ship with Boswell and did not want anything from Trail. She
understood that she was entering into a dominant-submissive
relationship and that Trail was part of a “package deal,” but
testified that there was no mention of choking. She had not
been in a dominant-submissive relationship before, but she
wanted to be with Boswell and decided to “give it a shot.” She
did not get directly involved in their antiques enterprise.
Brandle said there was some discussion of witches. Trail
told her that she was Boswell’s “familiar” and that they had
known each other in past lives. Trail also mentioned having
a coven of witches that she would meet someday. Trail told
Brandle she could ask for one wish, but she “would have to
pay the price.” Brandle explained that she was skeptical and
did not pursue that line of discussion. She was never told what
the “price” would be.
On November 13, 2017, Boswell complained about another
woman she claimed was stalking her and asked Brandle if
she would ever “kill for her.” During intercourse, while Trail
watched, Boswell asked Brandle if there was anyone she
“wanted to kill.” Boswell also asked Brandle to describe ways
someone could torture someone else. When the intercourse
became uncomfortable and Brandle wanted to stop, Trail told
her that it would stop if Brandle told Boswell what she wanted
to hear. Brandle testified that she tried to describe “torture
techniques” from the “Renaissance era” that she recalled learn-
ing about in school.
Brandle suffered an asthma attack and went back to her
home in Omaha, Nebraska. On the morning of November
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15, 2017, while Boswell was in the hardware store, Boswell
texted Brandle that she would be busy for the next couple
of days.
Brandle testified that she did not see Trail or Boswell again
until the afternoon of November 17, 2017. Brandle described
that on November 17, Trail and Boswell seemed quieter and
more tense than usual. Trail and Boswell picked Brandle up,
and they went to a hotel casino. Boswell showed Brandle a pic-
ture of a young woman whom she identified as her stalker and
asked Brandle to participate in her murder. Brandle initially
declined, but she accepted the proposition after Trail made
various threatening statements.
After participating in arrangements to leave Boswell’s car in
a store parking lot and taking a cab back to the hotel with the
idea that they would be using Brandle’s car for the supposed
murder they were planning, Trail told Brandle she did not
have to worry about participating anymore, because she had
already proved her loyalty. Trail and Boswell then convinced
Brandle to drive them across Nebraska for a supposed drug
deal. Brandle testified that Trail and Boswell continued to seem
tense and appeared to have quiet arguments.
Brandle testified that eventually either Trail or Boswell
suggested they were going to find someone to torture and
kill, as a way to make money. On November 21, 2017, during
intercourse at a hotel room, Boswell again asked Brandle to
talk about how people could be tortured. Brandle talked about
the same historical torture methods she had the previous time.
Boswell talked about dismembering people.
On November 22, 2017, Trail and Boswell had Brandle
drive them to Kearney, Nebraska. Trail and Boswell explained
they intended to find, as a victim, an exchange student who
was still around during the Thanksgiving holiday. Their
thinking, Brandle explained, was that such a victim would
be unlikely to be immediately missed. The idea was that
Boswell and Brandle would torture and murder the victim
while Trail watched. Brandle stated she tried to stay calm and
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cooperative because she believed that her family would be
hurt if she did not.
When a law enforcement officer left a voicemail on Brandle’s
phone and Trail was informed of that fact, they all left Kearney
without any further action toward attempting to identify a
potential murder victim. At that point, Trail and Boswell told
Brandle that a young woman was missing and that Boswell
was being falsely blamed because she was the last person seen
with the woman. Boswell cried and insisted she did not hurt
the missing woman.
Trail and Boswell eventually dropped Brandle off at a hotel
close to her home after Brandle learned from law enforce-
ment that her mother had filed a missing person report on
her. Brandle’s mother also informed her that her father was
gravely ill. Brandle told Trail and Boswell she wanted to
return home.
(d) Trail’s Testimony
Trail testified in his own defense. He stated at the outset
that he did not contest 85 percent of the prosecution’s case.
Trail said that in Trail and Boswell’s apartment, he and the
women he was involved with could talk about anything, “from
the mildest to the wildest” and “what you were is what you
were.” He and Boswell were not going to tell anyone they were
“wrong about anything.” He acknowledged “there was a lot of
talk in our house about killing people, torturing people.” Trail
claimed these were just fantasies.
Trail admitted that much, albeit not all, of his inspiration
in his discussions of these fantasies came from a book of fic-
tion about witchcraft where the characters torture people for
power. He did not believe this was true but thought the women
were interested in the discussions. Other discussions about
reincarnation and “spiritual” witches and vampires reflected
his personal beliefs.
Trail claimed that he met Sydney in the spring of 2017
while she was working at the hardware store and that
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Boswell met her about a week later. Trail described that
Sydney and Boswell developed a romantic relationship and
that Sydney was paid for participation in Trail’s illegal mon-
eymaking schemes. Sydney ended her arrangement with Trail
in September 2017.
Trail testified that in November 2017, Boswell asked Trail if
she could reach out to Sydney through the dating app she was
on. Sydney was upset when Boswell picked her up for their
first date and Sydney realized who her date was. But Boswell
convinced Sydney to consider “coming back and being with
us,” and they arranged a second date. Trail described the items
purchased on November 15 as intended for the repair and
cleaning of antiques.
According to Trail, Sydney went to the Wilber apartment on
the evening of November 15, 2017, to discuss the possibility
of rejoining the group. During that conversation, Trail asked
Sydney to either answer or turn off her phone. Sydney turned
off the phone.
Trail testified that Sydney eventually agreed to experiment
that night with erotic asphyxiation wherein Trail would hold
a cord connected to a ligature while Sydney and Boswell
engaged in sexual intercourse. And during these activities,
Sydney appeared to have a seizure, stopped breathing, and
died. Trail said he did not intend to kill Sydney. He explained
that doing so would be “counter-productive,” because he used
people for sex and to make money.
Trail testified he did not call an ambulance because he had
an extensive criminal history and had illegal drugs and stolen
goods in the apartment. He dismembered Sydney’s body as a
means of fitting it into a trunk to remove it from their apart-
ment without being noticed. He denied removing Sydney’s
internal organs. He dumped the trash bags containing Sydney’s
body in the location where they were eventually discovered by
law enforcement.
Trail described fleeing with Brandle’s assistance, claim-
ing that looking for an exchange student as a potential victim
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was simply part of a fantasy they never intended to act upon.
Likewise, he claimed the prior discussion with Hills about
killing the woman he met at a store was just a fantasy. In fact,
Trail claimed he told Hills the woman had moved to California
“[b]ecause the crazy bitch wanted to kill her.” He said he was
afraid she would actually do it and wanted to prevent that
from happening.
5. Courtroom Disruption
The trial lasted approximately 3 weeks. On the third day
of trial, around 10:30 a.m., after a witness was sworn in but
before she testified, Trail, seated at the counsel table, yelled,
“[Boswell] is innocent, and I curse you all.”
Immediately thereafter, Trail made a couple of slashing ges-
tures at his neck. Some blood was visible. Trail had secreted
a razor blade into the courtroom and had used it to inflict
wounds to his neck. The jury was immediately cleared from
the courtroom, and law enforcement and medical personnel
took over.
The judge told counsel that trial would be reconvened after
the jury was instructed to “disregard the outburst.” Defense
counsel moved for a mistrial, arguing the jury would be preju-
diced against Trail in determining the aggravator of having
a history of serious assaultive or terrorizing criminal activ-
ity. The court stated it would determine whether a mistrial
was warranted after individually interviewing the members of
the jury.
The court instructed the jury “to disregard the outburst that
you heard this morning and to not consider it in your delibera-
tions at the end of the trial.” Thereafter, each juror was indi-
vidually questioned by the trial judge in chambers with counsel
present. The court generally asked each juror if the juror had
heard the curative instruction and believed he or she could
remain fair and impartial and follow that instruction. Several
jurors were asked if the events of the day affected their ability
to remain a fair and impartial juror.
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Each juror assured the court that he or she could remain
fair and impartial. The court directed each juror to bring it
to the court’s attention if the juror later came to the conclu-
sion that the juror could no longer be fair and impartial. None
ever did.
The court overruled the motion for mistrial.
6. Motion for New Trial
The jury found Trail guilty of first degree murder and of
conspiracy to commit first degree murder. After the verdict,
defense counsel moved for a new trial on the grounds that
Trail was prevented from having a fair trial due to the court’s
rulings on several issues. However, Trail has only appealed
the denial of his motion as related to defense counsel’s
motion for mistrial following Trail’s verbal outburst and act
of self-harm.
With respect to Trail’s disruption in front of the jury, defense
counsel argued that, but for a lack of security measures, the
incident could have been prevented. This negligence, argued
defense counsel, “contributed to the severity of the event
and elevated it to the level that required a mistrial.” Defense
counsel also argued that the act of violence prejudiced the jury
against Trail inasmuch as it was contrary to the argument that
Trail was incapable of violence.
While the court’s ruling was pending, the State moved to
adduce additional evidence that it argued would show Trail’s
actions were calculated to disrupt the trial. The State asked
that the evidence be under seal, as it involved law enforcement
intelligence, courtroom security, and officer safety. Defense
counsel responded that he did not object and was tentatively
planning on offering the same or similar evidence as newly
discovered evidence in support of the motion for new trial. At a
later date, several exhibits were marked, offered, and received
under seal.
The court ultimately denied the motion for new trial, observ-
ing that Trail had not produced any evidence that the act of
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self-harm prejudiced him. The court found that the self-harm
was “a calculating gesture resulting in superficial cuts.”
7. Constitutionality of Panel Findings of
Sufficiency and Relative Weight of
Aggravating Circumstances
After the verdict, defense counsel waived Trail’s right to
a jury for the aggravation sentencing phase. Defense counsel
then moved to declare Nebraska’s death penalty statutes uncon-
stitutional, in violation of the Sixth and Eighth Amendments to
the U.S. Constitution and articles 1 through 6 of the Nebraska
Constitution. Defense counsel asserted that the sentencing pan-
el’s factual findings regarding the relative weight of the aggra-
vating and mitigating circumstances are facts increasing the
penalty for a crime beyond the prescribed statutory maximum
and must, therefore, be submitted to a jury. Defense counsel
also argued that Nebraska is an “outlier” by permitting the
determination of the death penalty to be made by a judicial
panel, rather than a jury, and that the “noticeable trend away
from judicial death sentencing” is strong evidence that soci-
ety does not regard such a procedure to be proper or humane.
Finally, according to defense counsel, a determination by a jury
of the relative weight of the aggravators and mitigators is nec-
essary to satisfy the Eighth Amendment’s heightened reliability
standards for capital punishment because the consensus of 12
jurors is less arbitrary and better expresses the conscience of
the community on the ultimate question of life or death. The
trial court treated the motion as a motion to quash and ulti-
mately found that it lacked merit and denied it.
8. Sentencing
Pursuant to Neb. Rev. Stat. § 29-2521(2) (Cum. Supp. 2020),
a sentencing hearing before a three-judge panel was held. The
panel found the State had proved beyond a reasonable doubt
the aggravating factor that the murder manifested exceptional
depravity by ordinary standards of morality and intelligence.
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This was supported by the fact that Sydney’s murder reflected
cold, calculated planning beyond the mere premeditation nec-
essary to support a conviction of first degree murder.
The panel also found to be present four out of the five factors
for a finding of exceptional depravity: (1) apparent relishing of
the murder by the killer, (2) infliction of gratuitous violence on
the victim, (3) needless mutilation of the victim, (4) senseless-
ness of the crime, or (5) helplessness of the victim. 2 The panel
explained that the mutilation of Sydney’s body made it impos-
sible to determine if Trail had inflicted upon Sydney gratuitous
violence beyond that necessary to inflict death, but all of the
other four factors were present. First, Trail’s actions before and
after the murder demonstrated he relished the act, having no
regard for Sydney’s life beyond his own pleasure. Second, the
needless mutilation of Sydney’s body demonstrated that Trail
had a mental state “senselessly bereft of any regard for human
life.” Third, noting that Sydney posed no threat to Trail and
Boswell, had no idea she was being led to an encounter with a
“man twice her size,” and was unable to defend herself or seek
help at the time of the murder, the panel found that Sydney
was a helpless victim. For similar reasons, the panel found that
her murder was completely unnecessary and senseless. Further,
the panel found that Trail had the capacity to appreciate the
wrongfulness of his conduct and to conform his conduct to
the requirements of the law.
The panel found no statutory mitigating factor or circum-
stances existed. The only statutory mitigating factor alleged by
Trail was that the “victim was a participant in the defendant’s
conduct or consented to the act,” as set forth in Neb. Rev. Stat.
§ 29-2523(2)(f) (Cum. Supp. 2020). The panel found this miti-
gating circumstance did not exist.
As a nonstatutory mitigating circumstance, the panel rec-
ognized Trail’s bad childhood and disadvantaged upbringing.
His parents left him when he was 2 years old, after which
2
State v. Palmer, 224 Neb. 282, 399 N.W.2d 706 (1986).
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time he lived for several years with grandparents who “had a
poor attitude toward the law.” When his mother later married,
Trail was adopted by his stepfather, who was abusive. Trail
spent his teenage years in troubled environments, including
a juvenile detention facility. He was incarcerated for the first
time at age 17 and has spent most of his life incarcerated or
on parole.
In weighing the aggravating circumstance against the exist-
ing nonstatutory mitigating factor, the panel found that—given
the degree of cold, calculated planning; the relishing of the
murder; and the mutilation of the victim, all demonstrating an
“extreme depravity in the mind of . . . Trail”—the aggravating
circumstance was entitled to great weight. The panel found
the weight of the nonstatutory mitigating circumstance of
Trail’s bad childhood and disadvantaged upbringing “does not
approach or exceed the weight of the overwhelming evidence
supporting the aggravating circumstance of exceptional deprav-
ity found in this case.”
Finally, the panel found in its review under Neb. Rev. Stat.
§ 29-2522(3) (Cum. Supp. 2020) that the sentence of death
would not be excessive or disproportionate to the penalty
imposed in similar cases, considering both the crime and the
defendant. It noted cases such as State v. Torres, 3 State v.
Joubert, 4 State v. Moore, 5 and State v. Williams. 6
For his conviction of first degree murder, the panel sen-
tenced Trail to death. The presiding judge sentenced Trail
to 2 years’ incarceration for the improper disposal of human
skeletal remains and to 50 years’ incarceration for conspiracy
to commit first degree murder, both to run consecutively
to the murder conviction. Trail, represented by trial coun-
sel, appeals.
3
State v. Torres, 283 Neb. 142, 812 N.W.2d 213 (2012).
4
State v. Joubert, 224 Neb. 411, 399 N.W.2d 237 (1986).
5
State v. Moore, 210 Neb. 457, 316 N.W.2d 33 (1982).
6
State v. Williams, 205 Neb. 56, 287 N.W.2d 18 (1979).
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III. ASSIGNMENTS OF ERROR
Trail assigns that the district court erred in (1) “death
qualifying” the jury; (2) denying his pretrial motion to sever;
(3) allowing an identified witness to remain in the courtroom
during trial, in violation of the court’s own sequestration
order; (4) denying his motion for mistrial; and (5) denying his
motion for new trial. He also assigns that the sentencing panel
erred when balancing the aggravating circumstances against
the mitigating circumstances and by concluding that his case
merits death when compared to similar cases. He asserts that
Nebraska’s death penalty statutory scheme violates the Sixth
and Eighth Amendments to the U.S. Constitution and articles
1 through 6 and 1 through 9 of the Nebraska Constitution,
because it permits judges, not juries, to make the factual find-
ings necessary to impose death sentences.
IV. STANDARD OF REVIEW
[1] A denial of a motion to sever will not be reversed unless
clear prejudice and an abuse of discretion are shown, and an
appellate court will find such an abuse only where the denial
caused the defendant substantial prejudice amounting to a mis-
carriage of justice. 7
[2] It is for the trial court to determine the extent to which a
sequestration order will be applied in a given case. 8
[3] An appellate court will not disturb a trial court’s deci-
sion whether to grant a motion for mistrial unless the court has
abused its discretion. 9
[4] In a criminal case, a motion for new trial is addressed
to the discretion of the trial court, and unless an abuse of
discretion is shown, the trial court’s determination will not be
disturbed. 10
7
State v. Henry, 292 Neb. 834, 875 N.W.2d 374 (2016).
8
State v. Swillie, 218 Neb. 551, 357 N.W.2d 212 (1984).
9
State v. Figures, 308 Neb. 801, 957 N.W.2d 161 (2021).
10
State v. Hairston, 298 Neb. 251, 904 N.W.2d 1 (2017).
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[5] The constitutionality of a statute presents a question of
law, which an appellate court independently reviews. 11
[6] In reviewing a sentence of death, the Nebraska Supreme
Court conducts a de novo review of the record to determine
whether the aggravating and mitigating circumstances support
the imposition of the death penalty. 12
V. ANALYSIS
On direct appeal, Trail challenges the denial of his pretrial
motions to prevent death qualification of the jury and to sever
the conspiracy and murder charges. He argues that the district
court erred during trial by releasing the victim’s mother from
sequestration after she testified and by denying his motion
for a mistrial based on his verbal outburst and self-harm. He
asserts that, after trial, the court erred in denying his motion
for a new trial based on that same incident. Finally, Trail
asserts the Nebraska death penalty statutes under which he
was sentenced are unconstitutional. Alternatively, he asserts
the three-judge panel erred in determining the sentence of
death was not excessive or disproportionate to the penalty
imposed in similar cases. We address each of these arguments
in turn.
1. Death Qualification
Trail argues the district court abused its discretion in inform-
ing the venire the death penalty was a potential sentence,
which led to questioning potential jurors about their ability to
remain fair and impartial despite their views on the death pen-
alty, which led to removing jurors for cause when they could
not remain fair and impartial. In other words, he challenges the
death qualification of the jury.
Trail asserts the exclusion of prospective jurors who were
opposed to capital punishment subjected him to a trial before
11
State v. Jenkins, 303 Neb. 676, 931 N.W.2d 851 (2019).
12
State v. Schroeder, 305 Neb. 527, 941 N.W.2d 445 (2020).
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a more “conviction-prone” 13 jury than he would have had
without death qualification. He does not necessarily take issue
with the premise that views on capital punishment can interfere
with certain potential jurors’ ability to perform their duties, but
claims death qualification is unnecessary in Nebraska because
jurors do not impose the sentence. He claims the jury can
remain unbiased without death qualification because “it is pos-
sible to keep the issue of the death penalty out of the jurors’
minds all together.” 14
While Trail acknowledges Neb. Rev. Stat. § 29-2006(3)
(Cum. Supp. 2020) states that having opinions “such as to pre-
clude [a juror] from finding the accused guilty of an offense
punishable with death” is good cause to challenge the juror,
he describes this as a “relic from a time period in Nebraska
history during which it was widely known that the penalty for
murder was a mandatory death sentence.” 15 Trail asserts unnec-
essary death qualification violates the heightened reliability
standard applicable to capital cases under the 8th Amendment
to the U.S. Constitution and article I, §§ 9 and 15, of the
Nebraska Constitution; equal protection principles embodied in
the 14th Amendment to the U.S. Constitution and article I, § 3,
of the Nebraska Constitution; and the 6th Amendment right to
a jury trial.
(a) Sixth Amendment
The Sixth Amendment provides in pertinent part: “In all
criminal prosecutions, the accused shall enjoy the right to a
speedy and public trial, by an impartial jury of the State and
district wherein the crime shall have been committed . . . .”
The 6th Amendment is applicable to the States through the
14th Amendment.
13
Brief for appellant at 20.
14
Id. at 16.
15
Id. at 17-18.
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[7-9] The Sixth Amendment secures to criminal defendants
the right to be tried by an impartial jury drawn from sources
reflecting a fair cross-section of the community. 16 The fair-cross-
section venire requirement is not explicit in the text of the Sixth
Amendment, but is derived from the traditional understanding
of how an “impartial jury” is assembled. 17 The Constitution
presupposes that a jury selected from a fair cross-section of the
community is impartial. 18 The “‘representativeness’” constitu-
tionally required at the venire stage can be disrupted at the jury-
panel stage to serve a State’s “‘legitimate interest.’” 19
The U.S. Supreme Court has produced a body of case law
under the Sixth Amendment holding the State has a legitimate
interest in death qualifying juries that are directly involved in
capital sentencing. It has not addressed death qualification out-
side of that context.
The Court has expressly declined to conclude, as a matter of
judicial notice or on the records presented to it, that, in the con-
viction phase of trial, the exclusion of jurors opposed to capital
punishment results in an unrepresentative jury on the issue of
guilt or substantially increases the risk of conviction. 20 Even
assuming without deciding death qualification “‘slants’” 21 the
jury in favor of conviction, the Court has repeatedly held it
serves a proper purpose to exclude jurors whose views on capi-
tal punishment interfere with their ability to obey their oath
during the sentencing phase of trial. 22
16
Berghuis v. Smith, 559 U.S. 314, 130 S. Ct. 1382, 176 L. Ed. 2d 249
(2010).
17
Holland v. Illinois, 493 U.S. 474, 110 S. Ct. 803, 107 L. Ed. 2d 905
(1990).
18
Lockhart v. McCree, supra note 1.
19
Holland v. Illinois, supra note 17, 493 U.S. at 483.
20
Witherspoon v. Illinois, 391 U.S. 510, 88 S. Ct. 1770, 20 L. Ed. 2d 776
(1968).
21
Lockhart v. McCree, supra note 1, 476 U.S. at 179.
22
See Lockhart v. McCree, supra note 1.
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The Court has explained there must be a balance between
the interests of the defendant and of the State in a capital case.
While a criminal defendant has the right to an impartial jury
drawn from a venire that has not been “tilted” 23 in favor of
capital punishment by selective prosecutorial challenges for
cause, the State has a strong interest in having jurors who are
able to apply capital punishment within the framework state
law prescribes. To balance these interests, a juror who is sub-
stantially impaired in the ability to impose the death penalty
can be excused by the State for cause while a juror who is not
thereby substantially impaired cannot be excused for cause. 24
Similarly, a juror who is substantially impaired in the ability to
choose life imprisonment can be excused by the defendant for
cause, while a juror who is in favor of the death penalty but
who is not thereby substantially impaired cannot be excused
for cause. 25
[10] In order to meaningfully effectuate these constitutional
protections, there must be an adequate voir dire. 26 The U.S.
Supreme Court has held that in a capital case where the jury
is directly involved in sentencing, this entails the opportunity
to inquire into whether views on the death penalty would dis-
qualify prospective jurors from sitting. 27 General questions
as to prospective jurors’ ability to remain fair and impartial
and to follow the law are inadequate substitutes for more spe-
cific questions, when requested, as to whether the jurors are
“unalterably in favor of, or opposed to, the death penalty in
every case.” 28
23
Uttecht v. Brown, 551 U.S. 1, 9, 127 S. Ct. 2218, 167 L. Ed. 2d 1014
(2007).
24
Id.
25
See, Morgan v. Illinois, 504 U.S. 719, 112 S. Ct. 2222, 119 L. Ed. 2d 492
(1992); Ross v. Oklahoma, 487 U.S. 81, 108 S. Ct. 2273, 101 L. Ed. 2d 80
(1988).
26
See id. See, also, Lockhart v. McCree, supra note 1.
27
See Morgan v. Illinois, supra note 25.
28
Id., 504 U.S. at 735.
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In Lockhart v. McCree, 29 the Supreme Court held that even
though death qualification is more directly pertinent to the
penalty phase, it did not violate the Sixth Amendment to death
qualify a jury before the guilt phase of a capital trial. The
Court said in Witherspoon v. Illinois 30 that the State “crossed
the line of neutrality” by systematically excluding for cause
members of the venire who had general scruples against capital
punishment but who could nevertheless obey their oaths 31 and
said that culling all jurors “who harbor doubts about the wis-
dom of capital punishment,” but who were nevertheless capa-
ble of obeying their oath, produces a jury that does not “speak
for the community” and is “uncommonly willing to condemn
a man to die.” 32 The Court in McCree pointed out its state-
ments in Witherspoon were in the context of a system where
the jury had considerable discretion at sentencing. Regardless,
McCree explained a narrower elimination for cause of jurors
who are unable to apply the law to the facts because of their
beliefs on capital punishment does not similarly cross the line
of neutrality. 33
[11,12] Even assuming for purposes of its opinion that death-
qualified juries are “somewhat more ‘conviction-prone,’” 34 the
Court in McCree explained that “groups defined solely in terms
of shared attitudes that would prevent or substantially impair
members of the group from performing one of their duties as
jurors . . . are not ‘distinctive groups’ for fair-cross-section
29
Lockhart v. McCree, supra note 1.
30
Witherspoon v. Illinois, supra note 20.
31
Id., 391 U.S. at 520. See Adams v. Texas, 448 U.S. 38, 100 S. Ct. 2521, 65
L. Ed. 2d 581 (1980). See, also, Gray v. Mississippi, 481 U.S. 648, 107 S.
Ct. 2045, 95 L. Ed. 2d 622 (1987); Wainwright v. Witt, 469 U.S. 412, 105
S. Ct. 844, 83 L. Ed. 2d 841 (1985).
32
Id., 391 U.S. at 520, 521. See, also, Adams v. Texas, supra note 31; Gray
v. Mississippi, supra note 31; Wainwright v. Witt, supra note 31.
33
Lockhart v. McCree, supra note 1.
34
Id., 476 U.S. at 173.
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purposes.” 35 In order to establish a prima facie violation of the
fair-cross-section requirement under the Sixth Amendment, a
defendant must show (1) that the group alleged to be excluded
is a “distinctive” group in the community, (2) that the represen-
tation of this group in venires from which juries are selected
is not fair and reasonable in relation to the number of such
persons in the community, and (3) that this underrepresentation
is due to systematic exclusion of the group in the jury selec-
tion process. 36
[13,14] The Court reiterated an impartial jury is “nothing
more than jurors who will conscientiously apply the law and
find the facts.” 37 “[I]t is simply not possible to define jury
impartiality, for constitutional purposes, by reference to some
hypothetical mix of individual viewpoints.” 38 Also, the Court
noted the same allegedly conviction-prone individuals could
end up on the defendant’s jury through “‘luck of the draw.’”
It did not “understand the logic of the argument that a given
jury is unconstitutionally partial when it results from a state-
ordained process, yet impartial when exactly the same jury
results from mere chance.” 39 Beliefs with respect to the death
penalty, said the Court, are within the individual’s control.
Death qualification does not create an appearance of unfair-
ness, as it only results in the removal for cause of those jurors
who are unwilling “to temporarily set aside their own beliefs in
deference to the rule of law.” 40
Death qualification before the guilt phase, said the Court,
serves a legitimate state interest in obtaining a single jury
35
Id., 476 U.S. at 174.
36
Duren v. Missouri, 439 U.S. 357, 99 S. Ct. 664, 58 L. Ed. 2d 579 (1979).
37
Lockhart v. McCree, supra note 1, 476 U.S. at 178 (internal quotation
marks omitted).
38
Id., 476 U.S. at 183.
39
Id., 476 U.S. at 178.
40
Id.
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that can properly and impartially apply the law to the facts
of the case at both the guilt and sentencing phases of a
capital trial. 41 Given that much of the same evidence would
be presented at both phases of the capital trial, it served
the interests both of the prosecution and of the defense to
avoid the burden of having to present the evidence and tes-
timony twice. 42 This is balanced against the fact that there is
less concern during the conviction stage of the effect of an
imbalanced jury. The Court explained, “[J]ury discretion is
more channeled” in its more traditional role of finding the
facts and determining the guilt or innocence of a criminal
defendant. 43
In Buchanan v. Kentucky, 44 the Court extended its rationale
from McCree to hold that the constitutional rights of a non-
capital defendant were not violated by death qualification of
the jury before the guilt phase of a joint trial with a capital
codefendant. The Court said the state has a significant interest
in having a joint trial of defendants when the crimes charged
arise out of one chain of events. The joint trial may benefit
the noncapital defendant as well. 45 In joint trials, the “jury
obtains a more complete view of all the acts underlying the
charges than would be possible in separate trials” and “may
be able to arrive more reliably at its conclusions regarding
the guilt or innocence of a particular defendant and to assign
fairly the respective responsibilities of each defendant in the
sentencing.” 46 Furthermore, the State has a genuine interest in
avoiding the burden of presenting the same evidence to different
41
See Lockhart v. McCree, supra note 1.
42
See id.
43
Id., 476 U.S. at 183.
44
Buchanan v. Kentucky, 483 U.S. 402, 107 S. Ct. 2906, 97 L. Ed. 2d 336
(1987).
45
See id.
46
Id., 483 U.S. at 418.
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juries for different defendants charged with crimes arising from
the same events. 47
The Court said in Buchanan that these interests in a joint
trial, combined with the interest discussed in McCree in
having the same jury for the guilt and penalty phases of a
capital defendant’s trial, “argue[] strongly in favor of permit-
ting ‘death qualification’ of the jury.” 48 It also reiterated that
any concern about the possible effect of an allegedly imbal-
anced jury was not present because of the limited nature of
the jury’s discretion in the trial, which was generally more
“channeled than at a capital-sentencing proceeding.” 49 At sen-
tencing, under the statutory scheme at issue in Buchanan, the
jury’s sentence was limited to specific statutory sentences and
subject to review by the judge. In light of the presupposition in
Buchanan that jury members selected from a fair cross-section
of the community are impartial so long as they can properly
carry out their duties, as well as the State’s significant interests
in the joint trial, the Court held there was no violation of the
noncapital defendant’s 6th and 14th Amendments right to an
impartial jury.
Trail correctly points out that a panel of judges, rather than
the jury, decides the defendant’s punishment in capital cases
in Nebraska. 50 This has long been true. Accordingly, we have
acknowledged the death-qualification case law of the U.S.
Supreme Court is factually distinguishable; the juries in those
cases ultimately determined the sentence. 51 Nonetheless, we
have not been persuaded that this factual distinction is deter-
minative of Sixth Amendment challenges in capital cases in
Nebraska where juries have decided if any of the alleged
47
Id.
48
Id., 483 U.S. at 419-20.
49
Id., 483 U.S. at 420.
50
See 1973 Neb. Laws, L.B. 268.
51
See, State v. Bird Head, 225 Neb. 822, 408 N.W.2d 309 (1987); State v.
Burchett, 224 Neb. 444, 399 N.W.2d 258 (1986).
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aggravating circumstances were proved beyond a reasonable
doubt. 52 In this context, we have specifically rejected the
argument that it is unconstitutional to death qualify juries in
capital cases in Nebraska because those juries do not ultimately
decide if the sentence shall be life or death. 53 Instead, we have
repeatedly held under the Sixth Amendment that it is permis-
sible to determine during voir dire whether jurors’ views on
capital punishment would prevent or substantially impair their
ability to impartially apply the law to the evidence—and to
exclude them for that reason. 54
Our case law on death qualification has not explicitly
addressed the argument raised by Trail in this appeal that the
State lacks a legitimate interest in death qualifying the venire
because it can ensure jurors’ beliefs will not interfere with
their duties by never telling them they are sitting in a capital
case. This novel argument does not cause us to question our
prior holdings.
We cannot, as Trail implicitly suggests, presume potential
jurors come to the jury pool ignorant of the law. To the con-
trary, jurors, as citizens of this state, are presumably aware the
law provides for the death penalty as a possible punishment
for murder under certain circumstances. And the circumstances
making the death penalty a legal possibility are likely to
become apparent during the course of the State’s presentation
of the evidence at trial. While the jurors will not know with
certainty whether the State has in fact alleged an aggravator in
any given case, they will not have the level of ignorance Trail
believes possible.
52
See id. See, also, State v. Nesbitt, 264 Neb. 612, 650 N.W.2d 766 (2002);
State v. Bradley, 236 Neb. 371, 461 N.W.2d 524 (1990); State v. Hankins,
232 Neb. 608, 441 N.W.2d 854 (1989); State v. El-Tabech, 225 Neb. 395,
405 N.W.2d 585 (1987); State v. Peery, 223 Neb. 556, 391 N.W.2d 566
(1986); State v. Rust, 223 Neb. 150, 388 N.W.2d 483 (1986); State v.
Reeves, 216 Neb. 206, 344 N.W.2d 433 (1984); State v. Williams, supra
note 6.
53
Id.
54
See id.
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[15] Even if the jurors could be sufficiently ignorant of the
capital implications of a conviction at the guilt phase of trial,
once they are asked to determine if the State has proved an
aggravating circumstance beyond a reasonable doubt, any juror
knowledgeable of the law will understand it is a capital case.
And just as the U.S. Supreme Court has described the State’s
interest in having the same jury for the guilt and sentencing
phases and jointly trying a capital defendant and a noncapital
defendant in charges arising out of the same events, the State
has an interest in having the same jury determine both the
defendant’s guilt or innocence and the alleged aggravating
circumstances that, if found, will permit a three-judge panel
to impose the death penalty. The State has a legitimate inter-
est in avoiding the burden of presenting the same evidence to
different juries for the guilt phase and the aggravation phase
of trial. Thus, the State has an interest in determining at voir
dire whether any jurors will be unable to perform their duties
at the aggravation phase of the trial. In other words, the State
has a legitimate interest in death qualifying juries in capital
cases in Nebraska.
There is a presupposition that a jury selected from a fair
cross-section of the community is impartial despite a mix of
viewpoints. Groups defined by belief systems that substan-
tially impair persons from performing their duties as jurors are
not distinctive groups for fair-cross-section purposes. Even if
we assume the result of death qualification is a slightly more
conviction-prone jury, the State has a legitimate interest in
eliminating from the venire those jurors who cannot carry out
their duties because of their views. When the death penalty
cannot be imposed before the jury decides if an aggravating
circumstance exists, then the State has a reason to question
whether views on the death penalty will interfere with that
task, and to question the venire accordingly. Moreover, jurors’
discretion is much more channeled during the guilt and aggra-
vation stages of trial than at the ultimate sentencing hearing by
the three-judge panel.
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[16] We hold that the State does not violate the Sixth
Amendment right to an impartial jury by death qualifying the
jury before a trial wherein it has alleged an aggravator that,
if found by the jury, will make the defendant eligible for the
death penalty. Although Trail ultimately waived his right to a
jury determination of the alleged aggravator, he did so only
after the verdict and after the district court rejected his chal-
lenges to death qualification.
(b) Equal Protection
[17] We also disagree with Trail’s argument that death qual-
ification in Nebraska violates equal protection. The Nebraska
Constitution and the U.S. Constitution have identical require-
ments for equal protection challenges. 55 The Equal Protection
Clause of the 14th Amendment, § 1, mandates that no state
shall “deny to any person within its jurisdiction the equal
protection of the laws.” This clause does not forbid classifi-
cations; it simply keeps governmental decisionmakers from
treating differently persons who are in all relevant aspects
alike. 56 When a classification created by state action does not
jeopardize the exercise of a fundamental right or categorize
because of an inherently suspect characteristic, the Equal
Protection Clause requires only that the classification ratio-
nally further a legitimate state interest. 57 In equal protection
challenges, the burden is on a defendant to “‘prove the exis-
tence of purposeful discrimination.’” 58
Trail asserts death qualification creates a classification
between capital defendants and noncapital defendants when
it subjects capital defendants to allegedly conviction-prone
55
Citizens for Eq. Ed. v. Lyons-Decatur Sch. Dist., 274 Neb. 278, 739
N.W.2d 742 (2007).
56
Sherman T. v. Karyn N., 286 Neb. 468, 837 N.W.2d 746 (2013).
57
Citizens for Eq. Ed. v. Lyons-Decatur Sch. Dist., supra note 55.
58
Batson v. Kentucky, 476 U.S. 79, 93, 106 S. Ct. 1712, 90 L. Ed. 2d 69
(1986).
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juries that noncapital defendants do not have. He asserts that
because jurors can be kept in ignorance of the capital implica-
tions of their factfinding, such classification does not ratio-
nally further a legitimate state interest. Trail has not proved
purposeful discrimination.
We have already rejected Trail’s argument that the jury
can effectively be suspended in ignorance of the possibility
of the death penalty. And we note that in McCree, the U.S.
Supreme Court implicitly disagreed with the idea that the
death qualification of a jury is subject to heightened scrutiny. 59
The Court explicitly distinguished the exclusion of jurors who
have decided that their personal views would not allow them
to impose the death penalty from prior cases finding unconsti-
tutional the wholesale exclusion of individuals of a particular
skin color, ethnic heritage, or gender.
As discussed, the State is entitled to a jury that is capable
of performing its duties. Excluding prospective jurors based
on voluntary belief systems that render them unable to per-
form their duties does not create an appearance of unfairness.
For purposes of inquiry into views on capital punishment,
capital cases and noncapital cases are different. Views on
capital punishment are relevant to the ability of jurors to obey
their oaths in capital cases. We find no merit to Trail’s argu-
ment that death qualification of the jury violated his rights to
equal protection.
(c) Heightened Reliability Under Eighth Amendment
to U.S. Constitution and Article I, §§ 9 and 15,
of Nebraska Constitution
Trail makes one conclusory statement that death qualifica-
tion violates the heightened reliability required by the Eighth
Amendment to the U.S. Constitution and article I, §§ 9 and
15, of the Nebraska Constitution. Conclusory assertions unsup-
ported by coherent analytical argument fail to satisfy the
59
See Lockhart v. McCree, supra note 1.
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requirement of arguing an assigned error to obtain consider-
ation by an appellate court. 60
[18] In the absence of analytical support, we hold the
Eighth Amendment and article I, §§ 9 and 15, of the Nebraska
Constitution are not violated by death qualification in a
capital case. We note the U.S. Supreme Court’s opinion in
Witherspoon, which, as discussed, set constitutional limits on
excusing jurors for cause because of their beliefs on capital
punishment, was based in the Sixth Amendment and nowhere
implied the Eighth Amendment is implicated. 61 The Eighth
Amendment states: “Excessive bail shall not be required,
nor excessive fines imposed, nor cruel and unusual punish-
ments inflicted.” The 14th Amendment applies those restric-
tions to the States. 62 Under article I, § 9, of the Nebraska
Constitution:
All persons shall be bailable by sufficient sureties,
except for treason, sexual offenses involving penetration
by force or against the will of the victim, and murder,
where the proof is evident or the presumption great.
Excessive bail shall not be required, nor excessive fines
imposed, nor cruel and unusual punishment inflicted.
Article I, § 15, states all penalties shall be proportioned to
the nature of the offense. Under the Eighth Amendment, “the
qualitative difference of death from all other punishments
requires a correspondingly greater degree of scrutiny of the
capital sentencing determination.” 63 None of these provisions
are violated by the process of death qualifying the jury so that
the members of the venire are capable of performing their
duties despite their personal views on capital punishment.
60
See State v. Chase, 310 Neb. 160, 964 N.W.2d 254 (2021).
61
See Witherspoon v. Illinois, supra note 20.
62
Hall v. Florida, 572 U.S. 701, 134 S. Ct. 1986, 188 L. Ed. 2d 1007 (2014).
63
Calwell v. Mississippi, 472 U.S. 320, 329, 105 S. Ct. 2633, 86 L. Ed. 2d
231 (1985) (internal quotation marks omitted).
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(d) § 29-2006(3) Applicable Only
to Capital Indictments
In the course of arguing the district court erred in death
qualifying the jury, Trail asserts that § 29-2006(3) is inappli-
cable because, on the information alone, he was not eligible for
the death penalty. Section 29-2006(3) states:
The following shall be good causes for challenge to
any person called as a juror or alternate juror, on the trial
of any indictment: . . . (3) in indictments for an offense
the punishment whereof is capital, that his opinions are
such as to preclude him from finding the accused guilty
of an offense punishable with death . . . .
According to Trail, this is not a trial, described by § 29-2006(3),
“in indictments for an offense the punishment whereof is capi-
tal” because the death penalty was only a sentencing option
upon the State’s noticing and proving, after the merits phase,
additional facts at an aggravation hearing.
But Trail does not appeal the district court’s excusal of any
potential juror for cause under § 29-2006(3), and the State’s
interest in and constitutionality of death qualification does not
depend upon a statutory provision. Therefore, we need not
address Trail’s unique view that he was not charged with “an
offense the punishment whereof is capital” for purposes of
§ 29-2006(3) because the matters making him death eligible
were determined after the merits phase of the trial. Regardless
of whether that was the case, Trail was given timely notice
in the information that the State was planning on proving an
aggravating circumstance and the district court did not err in
death qualifying the jury for Trail’s trial.
2. Motion to Sever Murder
and Conspiracy Charges
Having found no merit to Trail’s challenges to death qualifi-
cation of the jury, we turn to his assignment that the court erred
by refusing to sever the trials on the charges for first degree
murder and conspiracy to commit first degree murder.
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[19,20] There is no constitutional right to a separate trial. 64
Instead, the joinder or separation of charges for trial is gov-
erned by § 29-2002, which states, in relevant part:
(1) Two or more offenses may be charged in the same
indictment, information, or complaint in a separate count
for each offense if the offenses charged, whether felonies
or misdemeanors, or both, are of the same or similar
character or are based on the same act or transaction or
on two or more acts or transactions connected together or
constituting parts of a common scheme or plan.
....
(3) If it appears that a defendant or the state would
be prejudiced by a joinder of offenses in an indictment,
information, or complaint . . . the court may order an
election for separate trials of counts, indictments, infor-
mations, or complaints, grant a severance of defendants,
or provide whatever other relief justice requires.
In summary, whether offenses were properly joined involves a
two-stage analysis: (1) whether the offenses were sufficiently
related to be joinable and (2) whether the joinder was prejudi-
cial to the defendant. 65 There is a strong presumption against
severing properly joined counts. 66
[21-23] Trail does not contest that the offenses were suf-
ficiently related to be joinable, but, rather, he asserts the join-
der was prejudicial. A denial of a motion to sever will not be
reversed unless clear prejudice and an abuse of discretion are
shown, and an appellate court will find such an abuse only
where the denial caused the defendant substantial prejudice
amounting to a miscarriage of justice. 67 A defendant appealing
the denial of a motion to sever has the burden to show compel-
ling, specific, and actual prejudice. 68 Severe prejudice occurs
64
State v. Benson, 305 Neb. 949, 943 N.W.2d 426 (2020).
65
Id.
66
Id.
67
State v. Henry, supra note 7.
68
State v. Benson, supra note 64.
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when a defendant is deprived of an appreciable chance for an
acquittal, a chance that the defendant would have had in a sev-
ered trial. 69 Prejudice from joinder cannot be shown if evidence
of one charge would have been admissible in a separate trial of
another charge. 70
Trail argues he was prejudiced by the joinder because “it
is likely that all the evidence that might have been admissible
in a trial of either [the murder count or the conspiracy count]
tried separately would not have been admissible if Count
I, Murder in the First Degree were tried separately.” 71 Trail
does not point out which specific statements were entered
into evidence by virtue of the joinder, which would have been
inadmissible otherwise. Rather, he generally asserts the State
was allowed to introduce hearsay evidence to establish a con-
spiracy, lifting the conspiracy “‘by its own bootstraps,’” 72 then
utilizing that conspiracy evidence to get a conviction on the
murder charge.
Such arguments fall far short of showing compelling, spe-
cific, and actual prejudice. Most fundamentally, however, there
is no merit to Trail’s assumption that different hearsay rules
apply to proof of a conspiracy in a trial on a conspiracy charge
versus proof of a conspiracy in a trial on a murder charge.
[24-26] In State v. Hudson, 73 we specifically held that
the coconspirator exception to the hearsay rule is applicable
regardless of whether a conspiracy has been charged in the
information. Under Neb. Rev. Stat. § 27-801(4)(b)(v) (Reissue
2016), a statement is not hearsay if it is “a statement by a
coconspirator of a party during the course and in furtherance
of the conspiracy.” Under the coconspirator exception to the
hearsay rule, the declarant conspirator who partners with oth-
ers in the commission of a crime is considered the agent of
69
Id.
70
Id.
71
Brief for appellant at 23.
72
Id.
73
State v. Hudson, 279 Neb. 6, 775 N.W.2d 429 (2009).
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his or her fellow conspirators, and the commonality of inter-
ests gives some assurance that the statements are reliable. 74
Whether or not a conspiracy has been charged in the informa-
tion, before the trier of fact may consider testimony under the
coconspirator exception to the hearsay rule, a prima facie case
establishing the existence of the conspiracy must be shown by
independent evidence, to prevent the danger of hearsay evi-
dence being lifted by its own bootstraps. 75
Our review of the record demonstrates the district court
was aware of Trail’s concerns and insisted the State establish
by independent evidence a prima facie case of the conspiracy
before it admitted Boswell’s out-of-court statements. We find
no merit to this assignment of error.
3. Sequestration
Trail next argues the district court erred in allowing
Sydney’s mother to remain in the courtroom “in violation
of its own sequestration order.” 76 Trail elaborates that under
Neb. Rev. Stat. § 27-615 (Reissue 2016), he had a right to
have the witnesses excluded so that they could not hear the
testimony of other witnesses. Trail does not explain how he
was prejudiced by the district court’s ruling other than gen-
erally noting Sydney’s mother “remained in the front of the
courtroom for the majority of the balance of the trial within
sight of the jury and was able to hear the testimony of all the
other witnesses.” 77
[27,28] Section 27-615 provides, with certain exceptions
not here applicable that “[a]t the request of a party the
judge shall order witnesses excluded so that they cannot hear
the testimony of other witnesses . . . .” However, we have
long held that the exclusion or sequestration of a witness is
74
State v. Britt, 293 Neb. 381, 881 N.W.2d 818 (2016).
75
See State v. Estrada Comacho, 309 Neb. 494, 960 N.W.2d 739 (2021).
76
Brief for appellant at 25.
77
Id. at 26.
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within the discretion of the trial court. 78 It is for the trial
court to determine the extent to which a sequestration order
will be applied in a given case. 79 Sequestration is based on
the belief that not hearing other witnesses’ testimony tends to
better elicit the truth and promote the ends of justice, but this
reasoning generally applies only to unexamined witnesses. 80
Thus, generally speaking, a request for sequestration of wit-
nesses is a request that they be excluded from the court-
room until called to testify. 81 The denial of a sequestration
motion will not be overturned absent evidence of prejudice to
the defendant. 82
The district court did not abuse its discretion in allow-
ing Sydney’s mother to remain in the courtroom after she
testified and after the court released her from sequestration.
Furthermore, Trail has failed to demonstrate he was prejudiced
by her presence. While the defense was given the opportunity
to recall Sydney’s mother in order to reopen cross-examination,
it did not elect to do so. The fact that the mother of a mur-
der victim was present in the courtroom in view of the jury
during trial does not in itself demonstrate prejudice to the
defendant.
4. Courtroom Disruption
Trail argues that his outburst at trial—“curse you all” and
cutting his neck with a razor blade—was of such a nature that
its damaging effect could not be removed by admonition or
instruction and that the court should have granted his motion
for a mistrial. Even if an admonition or instruction could
have otherwise removed the prejudice, according to Trail,
the court’s procedure of first ordering the jurors to disregard
78
State ex rel. NSBA v. Miller, 258 Neb. 181, 602 N.W.2d 486 (1999).
79
State v. Swillie, supra note 8.
80
See State ex rel. NSBA v. Miller, supra note 78.
81
State v. Hess, 225 Neb. 91, 402 N.W.2d 866 (1987).
82
State ex rel. NSBA v. Miller, supra note 78.
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the outburst and then asking them if they could follow the
court’s instruction was insufficient because it put the jurors in
a difficult position of stating they could not follow the court’s
order. Similarly, Trail argues his motion for a new trial should
have been granted because of his disruption. Trail suggests
the additional evidence submitted in support of the motion for
new trial, entered under seal, showed the self-harm was due to
“misconduct of agents of the prosecuting attorney,” 83 because
it would not have occurred had jail staff implemented extra
security measures warranted by specific knowledge. We hold
the district court did not err in denying Trail’s motions for a
mistrial and for a new trial.
[29-31] A mistrial is properly granted in a criminal case
where an event occurs during the course of trial which is of
such a nature that its damaging effect cannot be removed by
proper admonition or instruction to the jury and thus pre-
vents a fair trial. 84 A defendant faces a higher threshold than
merely showing a possibility of prejudice when attempting to
prove error predicated on the failure to grant a mistrial. 85 The
defendant must prove that the alleged error actually prejudiced
him or her, rather than creating only the possibility of preju-
dice. 86 Absent evidence to the contrary, the legal system pre-
sumes that jurors, to the extent they are able, will comply with
curative instructions and judicial admonitions. 87
[32,33] A motion for a new trial is a statutory remedy and
can be granted by a court of law only upon the grounds, or
83
Brief for appellant at 36.
84
State v. Figures, supra note 9.
85
State v. Grant, 293 Neb. 163, 876 N.W.2d 639 (2016).
86
State v. Briggs, 303 Neb. 352, 929 N.W.2d 65 (2019).
87
See, David F. Herr & Roger S. Haydock, Motion Practice § 21.04 (8th ed.
2021) (discussing curative instructions); David Paul Nicoli, Federal Rules
of Criminal Procedure 23(b) and 24(c): A Proposal to Reduce Mistrials
Due to Incapacitated Jurors, 31 Am. U.L. Rev. 651 (1982). See, also, U.S.
v. Dunlap, 28 F.3d 823 (8th Cir. 1994).
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some of them, provided for by the statutes. 88 The grounds on
which a trial court may order a new trial after a criminal convic-
tion has been entered are specified in Neb. Rev. Stat. § 29-2101
(Reissue 2016). The asserted ground for a new trial must affect
adversely the substantial rights of the defendant, and it must be
shown that the defendant was prejudiced thereby. 89
[34-36] A trial court is vested with considerable discre-
tion in passing on motions for mistrial and new trial, 90 and an
appellate court will not disturb a trial court’s decision whether
to grant a motion for mistrial or a motion for new trial unless
the court has abused its discretion. 91 It is an abuse of discre-
tion to make an error of law or clear errors of factual deter-
mination. 92 Our deference to the trial court stems in part from
the recognition that the trial judge is better situated than a
reviewing court to pass on questions of witness credibility and
the surrounding circumstances and atmosphere of the trial. 93
The trial judge has a special perspective on the relationship
between the evidence and the verdict which cannot be recre-
ated by a reviewing court from the printed record. 94 The trial
court is likewise in a better position to make credibility deter-
minations of jurors’ statements concerning whether they were
influenced by extraneous information. 95
88
See Greenberg v. Fireman’s Fund Ins. Co., 150 Neb. 695, 35 N.W.2d 772
(1949). See, also, State v. Bartel, 308 Neb. 169, 953 N.W.2d 224 (2021).
89
State v. Tainter, 218 Neb. 855, 359 N.W.2d 795 (1984).
90
See State v. Swindle, 300 Neb. 734, 915 N.W.2d 795 (2018). See, also,
State v. Madren, 308 Neb. 443, 954 N.W.2d 881 (2021); State v. Grant,
supra note 85.
91
See, State v. Figures, supra note 9; State v. Bartel, supra note 88.
92
See, U.S. v. McDaniel, 398 F.3d 540 (6th Cir. 2005); U.S. v. Petrie, 302
F.3d 1280 (11th Cir. 2002).
93
Holmes v. Crossroads Joint Venture, 262 Neb. 98, 629 N.W.2d 511 (2001).
94
See id.
95
See Scherz v. Platte Valley Public Power and Irrigation District, 151 Neb.
415, 37 N.W.2d 721 (1949). See, also, State v. Jenkins, supra note 11.
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[37] The district court, after considering all the evidence
submitted by the parties at the hearing on the motion for new
trial, found Trail’s act of self-harm was “a calculating gesture,”
and we will not disturb this finding on appeal. As a general
matter, a defendant is not permitted to profit from the defend
ant’s own bad conduct by disrupting courtroom proceedings
and then urging disruption as a ground for mistrial. 96 “To hold
otherwise would provide a criminal defendant with a conve-
nient device for provoking a mistrial whenever he chose to
do so, either inside or outside the courtroom.” 97 As the U.S.
Supreme Court has explained in the context of the right to be
present at trial, an accused cannot be permitted through dis-
ruptive conduct to indefinitely avoid being tried. 98 “It would
degrade our country and our judicial system to permit our
courts to be bullied, insulted, and humiliated and their orderly
progress thwarted and obstructed by defendants brought before
them charged with crimes.” 99
In accordance with these principles, in State v. Grant, 100
we held the trial court did not err in denying the defendant’s
96
See, United States v. Bentvena, 319 F.2d 916 (2d Cir. 1963); Hayes v.
State, 340 So. 2d 1142 (Ala. Crim. App. 1976); People v. Dunn, 141 Cal.
Rptr. 3d 193, 205 Cal. App. 4th 1086 (2012); Hammond v. United States,
345 A.2d 140 (D.C. 1975); State v. Ganal, 81 Haw. 358, 917 P.2d 370
(1996); State v. Doyle, 335 So. 3d 393 (La. App. 2021); State v. Eaton,
563 S.W.3d 841 (Mo. App. 2018); State v. Grant, supra note 85; People
v. Mabre, 166 A.D.2d 339, 561 N.Y.S.2d 10 (1990); State v. Joiner, 237
N.C. App. 513, 767 S.E.2d 557 (2014); State v. Linkous, 177 W. Va. 621,
355 S.E.2d 410 (1987). See, also, generally, Annot., 89 A.L.R.3d 960
(1979 & Supp. 2022). But see, e.g., People v. Blunt, 273 A.D.2d 146, 709
N.Y.S.2d 560 (2000) (defendant’s orations containing inadmissible and
highly prejudicial factual assertions were too extensive and damaging to
be dealt with through curative instructions and jury inquiries).
97
Hammond v. United States, supra note 96, 345 A.2d at 141.
98
Illinois v. Allen, 397 U.S. 337, 90 S. Ct. 1057, 25 L. Ed. 2d 353 (1970).
99
Id., 397 U.S. at 346.
100
State v. Grant, supra note 85.
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motion for a mistrial based on his conduct during trial of sud-
denly standing up and punching his counsel in the head, after
which a scuffle with law enforcement ensued to restrain him.
The defendant was subsequently found guilty of first degree
murder and use of a deadly weapon to commit a felony. The
court admonished the jury members and asked them to notify
the court if they could no longer be fair and impartial. None
did. While it appeared the altercation upset at least one mem-
ber of the jury, we pointed out the reactions at issue would
not have occurred without the defendant’s own outburst. 101
We would not “permit a defendant to benefit from his or her
own bad behavior during trial.” 102 We also found that because
the jury members were admonished and indicated they could
remain fair and impartial, the defendant had failed to demon-
strate prejudice. We reached a similar conclusion for similar
reasons in State v. Blackwell, 103 affirming the court’s denial of
a motion for new trial based on the defendant’s yelling at wit-
nesses during their testimony.
When the trial court has endeavored to promptly ameliorate
any prejudicial effect, even frequent offensive and violent out-
bursts by defendants will not ordinarily require a mistrial or a
new trial. 104 In United States v. Bentvena, 105 a series of “dra-
matic disturbances” by several defendants did not warrant a
mistrial when the prosecution had done nothing to provoke the
incidents and the judge did all in his power to minimize their
effect. To hold otherwise, explained the court, “would produce
little less than anarchy.” 106
[38] Neither are disruptive acts of the defendant irremedi-
able simply because they reflect some attribute consistent
101
See id.
102
Id. at 194, 876 N.W.2d at 664.
103
State v. Blackwell, 184 Neb. 121, 165 N.W.2d 730 (1969).
104
See, e.g., United States v. Bentvena, supra note 96.
105
Id. at 930.
106
Id. at 931.
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with the charged crime. For example, in People v. White, 107
a defendant on trial for escape was not entitled to a mistrial
after the jury saw him flee the courtroom when the State’s
last witness took the stand. The court found the defendant’s
“‘contumacious’” behavior should not entitle him to a mistrial
absent “irremedial prejudice.” 108 And it found that the trial
court’s actions in promptly escorting the jury members from
the courtroom and admonishing them to keep an open mind
adequately minimized the likelihood of prejudice. 109
As with these other defendants, we will not permit Trail
to benefit from his own bad behavior during trial. The court
described that, after yelling, “[Boswell] is innocent, and I curse
you all,” Trail made some slashing gestures at his neck and
some blood was visible. While dramatic, the incident was not
of such a nature to create irremediable prejudice.
We find no merit to Trail’s assertion that the violent dis-
ruption was irremediably prejudicial because he could not
thereafter argue to the jury he was incapable of violence and,
thus, innocent. The same could be said of any violent outburst
during the trial on charges of any violent crime. Moreover, it is
apparent it was never defense counsel’s strategy to argue Trail
was nonviolent, arguing instead that Trail had unintentionally
killed Sydney while engaged in sadomasochistic consensual
asphyxiation. Similarly, Trail’s statement about cursing “you
all” was not irremediably prejudicial because Sydney’s murder
was allegedly connected to witchcraft. And even assuming
Trail’s outburst was construed by jurors as a call to the super-
natural rather than a more mundane expression of outrage,
such beliefs were cumulative of Trail’s own testimony that he
believed in spiritual witches.
The trial court endeavored to promptly ameliorate any preju-
dicial effect by clearing the jury from the courtroom and
107
People v. White, 199 A.D.2d 558, 606 N.Y.S.2d 49 (1993).
108
Id. at 559, 606 N.Y.S.2d at 50.
109
See id.
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instructing it “to disregard the outburst that you heard this
morning and to not consider it in your deliberations at the end
of the trial.” After interviewing each of the jurors individually,
the district court found they were able to follow the cura-
tive instruction to disregard the outburst and remain fair and
impartial in their deliberations. We disagree with Trail’s asser-
tion that the court’s procedure of giving the curative instruc-
tion before individually interviewing the jurors pressured the
jurors into falsely proclaiming they could follow the court’s
instruction. We will not second-guess the court’s evaluation of
the credibility of the jurors’ assurances that they could remain
fair and impartial. The disruption was not so damaging that
a reasonable juror would be incapable of following curative
instructions or of knowing his or her own capacity to remain
impartial. The court did not err in finding that Trail did not suf-
fer actual prejudice.
Trail’s arguments pertaining to jail staff’s negligence are
irrelevant to our analysis, and we therefore do not determine
the extent of such negligence, if any. Whatever security meas
ures jail staff could have taken to prevent Trail from secret-
ing the razor blade into the courtroom, Trail’s responsibility
for intentionally disrupting the trial would remain the same.
Whether or not jail staff should have done more to prevent it,
Trail should not benefit from this “calculating gesture.”
The district court did not abuse its discretion in denying
Trail’s motions for a mistrial and a new trial. We turn to Trail’s
assignments of error relating to sentencing.
5. Constitutionality of Findings of Whether
Aggravating Circumstances Justify Death
Penalty and Relative Weight of
Aggravating and Mitigating Circumstances
Being Made by Judges Rather Than Jury
Trail assigns the district court erred in sentencing him to
death because Nebraska’s death penalty scheme is unconsti-
tutional. He argues that because a panel of judges rather than
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a jury makes findings of whether the aggravating circum-
stances justify the death penalty and whether sufficient miti-
gating circumstances exist that approach or exceed the weight
given to the aggravating circumstances, Nebraska’s death
penalty scheme violates article I, §§ 6 and 9, of the Nebraska
Constitution and the 6th and 8th Amendments to the U.S.
Constitution, made applicable to the states through the 14th
Amendment. We disagree.
Under Nebraska’s capital sentencing scheme, a jury, if not
waived, 110 only determines the existence of aggravating circum-
stances. 111 A jury’s participation in the death penalty sentenc-
ing phase, if not waived, 112 ceases after the determination of
aggravating circumstances. 113 A three-judge panel determines
the existence of mitigating circumstances, weighs aggravating
and mitigating circumstances, and determines the sentence. 114
Section 29-2522 provides the guidelines for the three-judge
panel’s sentencing determination:
The panel of judges for the sentencing determination
proceeding shall either unanimously fix the sentence at
death or, if the sentence of death was not unanimously
agreed upon by the panel, fix the sentence at life impris-
onment. Such sentence determination shall be based upon
the following considerations:
(1) Whether the aggravating circumstances as deter-
mined to exist justify imposition of a sentence of death;
(2) Whether sufficient mitigating circumstances exist
which approach or exceed the weight given to the aggra-
vating circumstances; or
110
See Neb. Rev. Stat. § 29-2520(3) (Cum. Supp. 2020).
111
See § 29-2520(4)(g).
112
See § 29-2520(3).
113
See § 29-2520(4)(g).
114
§ 29-2521.
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(3) Whether the sentence of death is excessive or dis-
proportionate to the penalty imposed in similar cases,
considering both the crime and the defendant.
In each case, the determination of the panel of judges
shall be in writing and refer to the aggravating and
mitigating circumstances weighed in the determination of
the panel.
(a) Sixth Amendment
[39] The Sixth Amendment right to a speedy and public
trial by an impartial jury, in conjunction with the Due Process
Clause, requires that each element of a crime be proved to
a jury beyond a reasonable doubt. 115 Article I, § 6, of the
Nebraska Constitution provides: “The right of trial by jury
shall remain inviolate . . . .”
In Apprendi v. New Jersey 116 and Ring v. Arizona, 117 the
U.S. Supreme Court held that under the Sixth Amendment, a
defendant has a right to have any “fact on which the legislature
conditions an increase in their maximum punishment” deter-
mined by a jury, even if the State characterizes that factual
finding as a sentencing factor rather than an element. 118 “[T]he
relevant inquiry is one not of form, but of effect.” 119
[40] The Court in Ring elaborated that under a statutory
scheme in which the death penalty cannot be imposed unless
at least one aggravating factor is found to exist beyond a
reasonable doubt, the Sixth Amendment requires the factual
determination of the aggravating factor be entrusted to the
jury. “[I]f the legislature defines some core crime and then
provides for increasing the punishment of that crime upon a
115
Hurst v. Florida, 577 U.S. 92, 136 S. Ct. 616, 193 L. Ed. 2d 504 (2016).
116
Apprendi v. New Jersey, 530 U.S. 466, 120 S. Ct. 2348, 147 L. Ed. 2d 435
(2000).
117
Ring v. Arizona, 536 U.S. 584, 122 S. Ct. 2428, 153 L. Ed. 2d 556 (2002).
118
Id., 536 U.S. at 589.
119
Apprendi v. New Jersey, supra note 116, 530 U.S. at 494.
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finding of some aggravating fact[,] . . . the core crime and the
aggravating fact together constitute an aggravated crime.” 120
The Court found that “enumerated aggravating factors [of
state laws] operate as the functional equivalent of an element
of a greater offense.” 121
The Court in Ring expressly observed, however, it was not
addressing whether the Sixth Amendment forbade determi-
nations by judges, rather than juries, of mitigating circum-
stances, the relative weight of aggravating and mitigating
circumstances, or the ultimate sentencing decision. In fact, the
Court in Ring reiterated the distinction between facts of mitiga-
tion versus aggravation, as well as its prior pronouncement in
Proffitt v. Florida 122 that “‘[i]t has never [been] suggested that
jury sentencing is constitutionally required.’” 123
In several cases, we have rejected the argument that
because the right to a jury determination is limited to guilt or
innocence of the crimes charged and the determination of the
aggravating circumstances, Nebraska’s sentencing scheme is
unconstitutional under the 6th and 14th Amendments to the
U.S. Constitution and article I, §§ 3 and 6, of the Nebraska
Constitution. 124 In State v. Gales (Gales I), 125 we explained
that Apprendi and Ring do not stand for the proposition that
a jury, rather than a judge or judges, must make the sentenc-
ing determinations listed under § 29-2522. Rather, Apprendi
and Ring affected only the narrow issue of whether there is
120
Ring v. Arizona, supra note 117, 536 U.S. at 605 (internal quotation marks
omitted).
121
Id., 536 U.S. at 609 (internal quotation marks omitted).
122
See Proffitt v. Florida, 428 U.S. 242, 96 S. Ct. 2960, 49 L. Ed. 2d 913
(1976).
123
Ring v. Arizona, supra note 117, 536 U.S. at 597-98 n.4.
124
See, State v. Jenkins, supra note 11; State v. Lotter, 301 Neb. 125, 917
N.W.2d 850 (2018); State v. Hessler, 274 Neb. 478, 741 N.W.2d 406
(2007); State v. Gales, 269 Neb. 443, 694 N.W.2d 124 (2005).
125
State v. Gales, 265 Neb. 598, 658 N.W.2d 604 (2003).
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a Sixth Amendment right to have a jury determine the exis-
tence of any aggravating circumstance upon which a capital
sentence is based.
[41] We noted in Gales I that the U.S. Supreme Court, in
Tuilaepa v. California, 126 had described statutory schemes
similar to the one in Nebraska as being composed of an
“‘eligibility decision,’” in which there must be a determina-
tion of the existence of one or more prescribed aggravating
circumstances before a defendant is eligible for a sentence
of death and a “‘selection decision,’” in which the sentence
determines whether a defendant who is thereby death eligible
should in fact receive the death penalty, based upon an indi-
vidualized determination of the character of the individual
and the circumstances of the crime. 127 The “eligibility deci-
sion” stemmed from a series of U.S. Supreme Court deci-
sions holding that in order to render a defendant eligible for
the death penalty, the trier of fact must convict the defendant
of murder and also find one “‘aggravating circumstance’ (or
its equivalent) at either the guilt or penalty phase.” 128 We
pointed out that the U.S. Supreme Court, in both Proffitt 129
and Spaziano v. Florida, 130 had rejected arguments that the
selection decision, as opposed to the eligibility decision, must
be made by a jury, and the Court in Ring appeared to continue
126
Tuilaepa v. California, 512 U.S. 967, 114 S. Ct. 2630, 129 L. Ed. 2d 750
(1994).
127
Gales I, supra note 125, 265 Neb. at 609, 658 N.W.2d at 614, quoting
Tuilaepa v. California, supra note 126.
128
Tuilaepa v. California, supra note 126, 512 U.S. at 971-72. See, Lowenfield
v. Phelps, 484 U.S. 231, 108 S. Ct. 546, 98 L. Ed. 2d 568 (1988); Zant v.
Stephens, 462 U.S. 862, 103 S. Ct. 2733, 77 L. Ed. 2d 235 (1983); Coker
v. Georgia, 433 U.S. 584, 97 S. Ct. 2861, 53 L. Ed. 2d 982 (1977). See,
also, Jones v. United States, 527 U.S. 373, 119 S. Ct. 2090, 144 L. Ed. 2d
370 (1999).
129
See Proffitt v. Florida, supra note 122.
130
Spaziano v. Florida, 468 U.S. 447, 104 S. Ct. 3154, 82 L. Ed. 2d 340
(1984), overruled, Hurst v. Florida, supra note 115.
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to approve of the distinction between eligibility and selection
decisions for purposes of the Sixth Amendment. 131 We accord-
ingly held that the Sixth Amendment requires only the right to
a jury determination of the death-eligibility finding of one or
more aggravating circumstances and it does not apply to the
selection decision.
Relying on the 2016 U.S. Supreme Court decision in Hurst
v. Florida, 132 Trail asserts that Gales I and its progeny are no
longer good law. We disagree.
In Hurst, the Court held that a “hybrid” 133 sentencing
scheme, in which the jury made a merely “advisory” 134 recom-
mendation of life or death and did not make a binding finding
as to the existence of any aggravating circumstance, violated
the Sixth Amendment. The sentencing scheme required the
jury to render an advisory verdict of life or death while
the sentencing judge then exercised independent judgment
to determine the existence of aggravating and mitigating fac-
tors and made an independent judgment, after weighing the
aggravating and mitigating factors, about whether the sen-
tence should be life or death. The sentencing statute specified
that a defendant was not death eligible until the court (not
a jury) made independent findings that the person shall be
punished by death—which included finding that sufficient
aggravating circumstances existed and that there were insuf-
ficient mitigating circumstances to outweigh the aggravating
circumstances. 135
The Supreme Court in Hurst rejected the State’s argument
that the scheme was constitutional because a jury implicitly
found at least one aggravating circumstance when it recom-
mended the death penalty. The Court explained, “The State
131
Gales I, supra note 125.
132
Hurst v. Florida, supra note 115.
133
Id., 577 U.S. at 95 (internal quotation marks omitted).
134
Id. (internal quotation marks omitted).
135
See id.
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fails to appreciate the central and singular role the judge
plays” 136 under the law wherein “[t]he trial court alone must” 137
make the “critical findings necessary to impose the death
penalty” 138 without which the defendant’s maximum authorized
punishment would be life imprisonment.
We recently addressed Hurst in State v. Jenkins. 139 We
held on direct appeal from the defendant’s conviction and
sentence to the death penalty that Hurst did not require us
to reexamine our prior conclusion that the Sixth Amendment
does not require the jury to determine mitigating circum-
stance, perform the balancing function, or conduct the pro-
portionality review.
Similarly, in State v. Lotter, 140 we held, for purposes of the
statute of limitations for a postconviction action, that Hurst
did not announce a new rule of law. We explained Hurst was
merely an application of Ring to the sentencing scheme under
which the judge alone found the existence of any aggravating
circumstance that made the defendant death eligible.
We explained in Lotter that isolated references in Hurst
to the sentencing scheme’s requirement that the court find
there were insufficient mitigating circumstances to outweigh
the aggravating circumstances did not mean that the Supreme
Court had held the jury rather than a judge must find that
the aggravating circumstances outweigh the mitigating ones.
Rather, we sided with the opinion of most federal and state
courts, which agree Hurst does not stand for the proposition
that a jury must find beyond a reasonable doubt that the aggra-
vating factors outweigh the mitigating circumstances. 141
136
Id., 577 U.S. at 99.
137
Id., 577 U.S. at 100.
138
Id., 577 U.S. at 98.
139
State v. Jenkins, supra note 11.
140
State v. Lotter, supra note 124.
141
Id.
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[42] After Jenkins and Lotter, the U.S. Supreme Court, in
McKinney v. Arizona, 142 implicitly confirmed the validity of
our analysis and the majority view. The Court held that on
remand for a reweighing of the aggravating and mitigating
circumstances (after federal habeas corpus review found the
trial court had erred by refusing to consider the mitigating
circumstance of the defendant’s post-traumatic stress disor-
der), a judge, rather than a jury, could conduct the reweigh-
ing. The Supreme Court specifically rejected the defendant’s
argument that its holding in Hurst required a jury to reweigh
aggravating and mitigating circumstances. The Court reiter-
ated, “[I]n a capital sentencing proceeding just as in an ordi-
nary sentencing proceeding, a jury (as opposed to a judge)
is not constitutionally required to weigh the aggravating and
mitigating circumstances or to make the ultimate sentencing
decision within the relevant sentencing range.” 143 The Court
explained that Ring and Hurst stand only for the proposi-
tion that a jury must find an aggravating circumstance that
makes the defendant death eligible. “In short,” said the Court,
“Ring and Hurst did not require jury weighing of aggravat-
ing and mitigating circumstances” 144 and “‘States that leave
the ultimate life-or-death decision to the judge may continue
to do so.’” 145
[43] By leaving to the three-judge panel the ultimate life-
or-death decision upon making the selection decisions of
whether the aggravating circumstances justify the death pen-
alty and whether sufficient mitigating circumstances exist that
approach or exceed the weight given to the aggravating cir-
cumstances, Nebraska’s sentencing scheme does not violate
142
McKinney v. Arizona, ___ U.S. ___, 140 S. Ct. 702, 206 L. Ed. 2d 69
(2020).
143
Id., 140 S. Ct. at 707.
144
Id., 140 S. Ct. at 708.
145
Id., 140 S. Ct. at 708, quoting Ring v. Arizona, supra note 117 (Scalia, J.,
concurring; Thomas, J., joins).
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the Sixth Amendment right to a jury trial or article I, § 6, of
the Nebraska Constitution.
(b) Eighth Amendment
Taking a more novel tack, Trail asserts Nebraska’s delega-
tion of the selection criteria and ultimate life-or-death deci-
sion to the three-judge panel violates the Eighth Amendment
to the U.S. Constitution and article I, § 9, of the Nebraska
Constitution. He asserts that allowing judge-determined death
sentences has fallen outside society’s evolving standards of
decency and that jurors, rather than judges, can more reliably
express society’s consensus of whether a sentence of death is
the adequate response to the defendant’s crimes. It does not
appear we have ever addressed this specific argument. We con-
clude it lacks merit.
[44] The Cruel and Unusual Punishment Clause prohibits
(1) “barbaric punishments under all circumstances” and (2)
punishments that are not “‘graduated and proportioned to
[the] offense.’” 146 Most cases involve disproportionality. 147
On disproportionality, there is a body of case law applying
categorical rules under the Eighth Amendment in light of
either the “nature of the offense” or the “characteristics of the
offender.” 148 In adopting such rules, the U.S. Supreme Court
has considered, first, “‘objective indicia of society’s standards’
. . . to determine whether there is a national consensus against
the sentencing practice at issue.” 149 It then has exercised its
own independent judgment, guided by “‘the standards elabo-
rated by controlling precedents and by the Court’s own under-
standing and interpretation of the Eighth Amendment’s text,
history, meaning, and purpose.’” 150
146
Graham v. Florida, 560 U.S. 48, 59, 130 S. Ct. 2011, 176 L. Ed. 2d 825
(2010).
147
See id.
148
Id., 560 U.S. at 60.
149
Id., 560 U.S. at 61.
150
Id.
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The U.S. Supreme Court has recognized that the Eighth
Amendment reaffirms the duty of the government to respect the
dignity of all persons “‘[b]y protecting even those convicted
of heinous crimes . . . .’” 151 “To enforce the Constitution’s
protection of human dignity, this Court looks to the ‘evolv-
ing standards of decency that mark the progress of a maturing
society.’” 152 This is necessary because the standard of extreme
cruelty is not merely descriptive, but necessarily embodies a
moral judgment, and what is considered cruel and unusual pun-
ishment must change as the basic mores of society change. 153
The U.S. Supreme Court has also said, “The fundamental
respect for humanity underlying the Eighth Amendment’s
prohibition against cruel and unusual punishment gives rise
to a special need for reliability in the determination that
death is the appropriate punishment in any capital case.” 154
In order to ensure that reliability, “the sentencing process
must permit consideration of the ‘character and record of the
individual offender and the circumstances of the particular
offense.’” 155
None of these Eighth Amendment principles are pertinent
to whether a jury, as opposed to a judge, weighs the aggra-
vating against the mitigating circumstances and makes the
ultimate determination if death is the appropriate punishment.
In fact, the U.S. Supreme Court has recognized as much. In
Clemons v. Mississippi, 156 in addition to addressing the Sixth
151
Hall v. Florida, supra note 62, 572 U.S. at 708, quoting Roper v. Simmons,
543 U.S. 551, 125 S. Ct. 1183, 161 L. Ed. 2d 1 (2005).
152
Id., quoting Trop v. Dulles, 356 U.S. 86, 78 S. Ct. 590, 1 L. Ed. 2d. 630
(1958).
153
State v. Boche, 294 Neb. 912, 885 N.W.2d 523 (2016).
154
Johnson v. Mississippi, 486 U.S. 578, 584, 108 S. Ct. 1981, 100 L. Ed. 2d
575 (1988) (internal quotation marks omitted).
155
See Lockett v. Ohio, 438 U.S. 586, 601, 98 S. Ct. 2954, 57 L. Ed. 2d 973
(1978).
156
Clemons v. Mississippi, 494 U.S. 738, 110 S. Ct. 1441, 108 L. Ed. 2d 725
(1990).
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Amendment, the U.S. Supreme Court held it does not violate
the Eighth Amendment for an appellate court, rather than
remand for a jury reweighing, to uphold a death sentence
by itself reweighing on appeal the aggravating and mitigat-
ing evidence. One aggravating circumstance found below
had been held on appeal to be unconstitutionally vague, but
the other aggravating circumstance was held to be valid. 157
The Court explained, “The primary concern in the Eighth
Amendment context has been that the sentencing decision be
based on the facts and circumstances of the defendant, his
background, and his crime.” 158 “[S]tate appellate courts can
and do give each defendant an individualized and reliable
sentencing determination based on the defendant’s circum-
stances, his background, and the crime.” 159 This holding in
Clemons was reaffirmed after Hurst 160 by the Court’s opinion
in McKinney. 161
In arguing that the Eighth Amendment is relevant to pro-
cedures such as whether a panel of judges rather than a jury
makes the final selection determinations necessary to impose
the death penalty, Trail relies on Hall v. Florida. 162 In Hall,
the U.S. Supreme Court held that a statutory scheme making
an intellectual quotient score final and conclusive on whether
a defendant was intellectually disabled, without allowing con-
sideration of additional evidence of intellectual disability,
violated the Eighth Amendment when the scientific com-
munity and the national consensus recognized the specified
score to be at the lower end of the inherent margin of error
for a range demonstrating intellectual disability. Applying
157
See id.
158
Id., 494 U.S. at 748.
159
Id., 494 U.S. at 749.
160
Hurst v. Florida, supra note 115.
161
McKinney v. Arizona, supra note 142.
162
Hall v. Florida, supra note 62.
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its prior holding in Atkins v. Virginia 163 that the 8th and 14th
Amendments to the U.S. Constitution forbid the execution of
persons with intellectual disability, the Court held the rigid
statutory rule respecting intellectual quotient scores “creates
an unacceptable risk that persons with intellectual disability
will be executed, and thus is unconstitutional.” 164
Hall is not apposite to the case at bar. Having a three-judge
panel weigh aggravators against mitigators and determine the
ultimate sentence does not create an unacceptable risk that
persons will be executed without the constitutionally required
consideration of character and record of the individual offender
and the circumstances of the particular offense.
[45] In State v. Mata, 165 we rejected the defendant’s argu-
ment that a system wherein a three-judge panel weighs the
aggravating and mitigating circumstances without guidance
from the jury is arbitrary and capricious under the 8th and
14th Amendments. In State v. Hessler, 166 we rejected the
defendant’s argument under the Eighth Amendment that a
sentencing panel is not in as good of a position as the
jury to assign a weight to the aggravating circumstances,
to weigh aggravating circumstances against mitigating cir-
cumstances, or to determine the sentence. While Trail’s 8th
Amendment arguments are somewhat different from those
addressed in Mata and Hessler, he presents no reason to
depart from our holdings in those cases that Nebraska’s
statutory scheme, delegating to the three-judge panel deter-
minations of whether the aggravating circumstances justify
the death penalty and whether sufficient mitigating circum-
stances exist that approach or exceed the weight given to the
163
Atkins v. Virginia, 536 U.S. 304, 122 S. Ct. 2242, 153 L. Ed. 2d 335
(2002).
164
Hall v. Florida, supra note 62, 572 U.S. at 704.
165
State v. Mata, 275 Neb. 1, 745 N.W.2d 229 (2008).
166
State v. Hessler, supra note 124.
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aggravating circumstances, does not violate the 8th and 14th
Amendments to the U.S. Constitution or article I, § 9, of the
Nebraska Constitution.
6. Proportionality Review
[46] Lastly, Trail argues that because his crimes involved
only one victim and one aggravator, the sentence of death
in this case is excessive or disproportionate to the penalty
imposed in similar cases. Under Neb. Rev. Stat. § 29-2521.03
(Cum. Supp. 2020), we are required upon appeal to determine
the propriety of a death sentence by conducting a proportional-
ity review. Proportionality review requires us to compare the
aggravating and mitigating circumstances with those present
in other cases in which a district court imposed the death pen-
alty. 167 This is to ensure that the sentence imposed in the case
under review is no greater than those imposed in other cases
with the same or similar circumstances. 168
[47] We disagree with Trail’s premise that the number of
victims or the number of aggravating circumstances is determi-
native. We have emphasized that the balancing of aggravating
circumstances against mitigating circumstances is not merely
a matter of number counting, but, rather, requires a careful
weighing and examination of the various factors. 169 It would
be virtually impossible to find two murder cases which are the
same in all respects. 170 Instead, the question is simply whether
the cases being compared are sufficiently similar, considering
both the crime and the defendant, to provide the court with
a useful frame of reference for evaluating the sentence in
this case. 171
167
State v. Mata, supra note 165.
168
See id.
169
State v. Dunster, 262 Neb. 329, 631 N.W.2d 879 (2001).
170
State v. Schroeder, supra note 12.
171
Id.
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[48] Accordingly, we have held that the death penalty can
be imposed when only one aggravating circumstance is pres-
ent. 172 Where the record reveals that the sentence of death was
the result of reasoned judgment and the careful weighing and
examination of the various circumstances and factors in light
of the totality of the circumstances present, one aggravating
circumstance may be sufficient under our statutory system for
the sentencing court to conclude that imposition of the death
penalty is appropriate. 173
In our de novo review, we conclude that the requirements of
Neb. Rev. Stat. §§ 29-2519 to 29-2546 (Cum. Supp. 2020) have
been met. Trail does not contest that the State proved beyond
a reasonable doubt the aggravating circumstance of excep-
tional depravity to justify the imposition of the death penalty.
As the sentencing panel described, the murder reflected cold,
calculated planning to find and kill a helpless victim to sat-
isfy Trail’s curiosity and sexual proclivities. The carvings on
Sydney’s body and other acts of strategic mutilation demon-
strated he relished the murder and had “no regard for the life
of Sydney . . . beyond his own personal pleasure.” We find the
aggravating circumstance of exceptional depravity is sufficient
under the totality of the circumstances present to justify the
death penalty for Trail.
Trail does not assert on appeal any mitigating circumstance.
We agree with the sentencing panel that the nonstatutory miti-
gating circumstance of Trail’s upbringing does not approach
or exceed the aggravating circumstance.
We have reviewed our relevant decisions on direct appeal
from other cases in which the death penalty was imposed
and do not find the imposition of the death penalty is a
greater penalty than the sentences imposed in other cases
with similar circumstances. For example, in State v. Joubert,
we affirmed the death penalty when, among other things,
172
See, id.; State v. Dunster, supra note 169.
173
State v. Dunster, supra note 169.
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the defendant had “coldly planned” 174 “[the] murders far in
advance . . . to satisfy his intellectual or sexual curiosity or
urges.” 175 Further, the murders in Joubert were “‘totally and
senselessly bereft of any regard for human life.’” 176 In Mata,
in affirming the death penalty, we found it “sufficient to say
that [the victim’s] skull had been fractured by multiple blows
of blunt force trauma at or near the time of death and that
[the defendant] had dismembered [the victim’s] body and
disposed of it in pieces.” 177 “[The defendant] had relished
killing [the victim] with gratuitous violence and unnecessary
mutilation.” 178
Our proportionality review, required by § 29-2521.03, is
designed to ensure that no sentence imposed shall be greater
than those imposed in other cases with the same or similar
circumstances and that the review should include only those
cases in which the death penalty was imposed. 179 Like the
defendant in Joubert, Trail coldly planned Sydney’s murder
to satisfy sexual urges. Like the actions of the defendant in
Joubert and the defendant in Mata, Trail’s mutilation and dis-
memberment of Sydney’s body showed he relished the killing
and was bereft of any regard for human life. The crime com-
mitted against Sydney was utterly senseless and cruel. The
sentence of death in this case is not excessive or dispropor-
tionate to the penalty imposed in similar cases. We uphold the
sentencing panel’s imposition of the death sentence.
VI. CONCLUSION
For the foregoing reasons, we find no merit to Trail’s
assignments of error challenging the denial of his pretrial
174
State v. Joubert, supra note 4, 224 Neb. at 432, 399 N.W.2d at 251.
175
Id. at 430, 399 N.W.2d at 250.
176
Id.
177
State v. Mata, supra note 165, 275 Neb. at 30, 745 N.W.2d at 255.
178
Id.
179
See State v. Joubert, supra note 4.
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motions to prevent death qualification of the jury and to
sever the conspiracy and murder charges, the district court’s
orders during trial releasing Sydney’s mother from sequestra-
tion after she testified and denying his motion for a mistrial
based on his outburst involving self-harm, and the district
court’s denial of his motion for a new trial. Further, we
reaffirm the constitutionality of the Nebraska death penalty
statutes and find Trail’s sentence of death was not excessive
or disproportionate.
Affirmed. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487109/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
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IN RE INTEREST OF JORDON B.
Cite as 312 Neb. 827
In re Interest of Jordon B., a child
under 18 years of age.
State of Nebraska and Nebraska Department of
Health and Human Services, appellees, v. Allen B.
and Leah B., appellees, Christina Boydston,
guardian ad litem for Jordon B., appellee
and cross-appellant, Jason D. on behalf
of J.D. and L.D., intervenor-appellee,
and Andrew Todd and Alicia Todd,
appellants and cross-appellees.
___ N.W.2d ___
Filed November 4, 2022. No. S-22-019.
1. Juvenile Courts: Appeal and Error. An appellate court reviews juve-
nile cases de novo on the record and reaches a conclusion independently
of the juvenile court’s findings.
2. Judgments: Jurisdiction. A jurisdictional question that does not involve
a factual dispute is a question of law.
3. Interventions. Whether a party has the right to intervene is a question
of law.
4. Judgments: Appeal and Error. When reviewing questions of law, an
appellate court resolves the questions independently of the conclusions
reached by the trial court.
5. Statutes: Appeal and Error. Statutory interpretation is a question of
law, which an appellate court resolves independently of the trial court.
6. Juvenile Courts: Jurisdiction: Appeal and Error. In a juvenile case,
as in any other appeal, before reaching the legal issues presented for
review, it is the duty of an appellate court to determine whether it has
jurisdiction over the matter before it.
7. Standing: Jurisdiction. Standing relates to a court’s power, that is,
jurisdiction, to address issues presented and serves to identify those
disputes which are appropriately resolved through the judicial process.
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8. Juvenile Courts: Standing: Appeal and Error. The right of appeal
in a juvenile case in Nebraska is purely statutory, and Neb. Rev. Stat.
§ 43-2,106.01 (Reissue 2016) controls who has the right to appeal from
a juvenile court’s placement order.
9. Juvenile Courts: Parent and Child. Foster parents who were never
awarded custody are not “custodians” or “guardians” for purposes of
Neb. Rev. Stat. § 43-2,106.01(2)(c) (Reissue 2016).
10. Parent and Child: Standing: Appeal and Error. Foster parents do not
have a legal or equitable right, title, or interest in the subject matter of
the controversy that gives them standing to appeal from an order chang-
ing a child’s placement.
11. Parent and Child: Statutes: Interventions. Although foster parents
have a statutory right to participate in review hearings, their ability to
participate is less than that of a party, and foster parents are not entitled
to intervene as a matter of right.
12. Juvenile Courts: Jurisdiction: Statutes: Parent and Child:
Interventions: Equity. A juvenile court, as a statutorily created court
of limited jurisdiction, has only the authority which the statutes confer
on it, and therefore, a juvenile court cannot allow foster parents to equi-
tably intervene independently of the statutes.
13. Juvenile Courts: Appeal and Error. The fact that a person has two
different relationships to a child does not confer that person with a
right to appeal when neither is a relationship listed in Neb. Rev. Stat.
§ 43-2,106.01(2) (Reissue 2016).
14. Jurisdiction: Interventions: Standing: Final Orders: Appeal and
Error. An appellate court exercises jurisdiction over an appeal from an
order denying intervention even if the appellant would not have standing
to appeal from the court’s final order or judgment on the merits.
15. Statutes: Appeal and Error. Statutory language is to be given its plain
and ordinary meaning, and an appellate court will not resort to inter-
pretation to ascertain the meaning of statutory words which are plain,
direct, and unambiguous.
16. Minors: Words and Phrases. “Sibling,” under the Foster Care Review
Act generally and under Neb. Rev. Stat. § 43-1311.02(9) (Cum. Supp.
2020) specifically, means a person with whom one shares a common
parent or parents.
17. Appeal and Error. An issue not presented to or decided by the trial
court is not appropriate for consideration on appeal.
Appeal from the County Court for Dodge County: Kenneth
J. Vampola, Judge. Affirmed.
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Linsey A. Camplin and Sam Baue, of McHenry, Haszard,
Roth, Hupp, Burkholder, Blomenberg & Camplin, P.C., L.L.O.,
for appellants.
Leslie E. Remus and Trevor J. Rogers, Senior Certified
Law Student, for appellee Nebraska Department of Health and
Human Services.
Brianna L. McLarty, Deputy Dodge County Attorney, for
appellee State of Nebraska.
Timothy E. Sopinski, of Sopinski Law Office, for appellee
Allen B.
Adam R. Tripp, of Tripp Law Office, for appellee Leah B.
Pamela Lynn Hopkins, of Hopkins Law Office, L.L.C., for
guardian ad litem.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Miller-Lerman, J.
NATURE OF CASE
Andrew Todd and Alicia Todd appeal the order of the juve-
nile court for Dodge County which granted a change of place-
ment for Jordon B. They claim that they have certain rights as
foster parents, and they claim error in, inter alia, the juvenile
court’s determination that Andrew did not have standing to
intervene as an adult sibling of Jordon. In addition, Christina
Boydston, Jordon’s guardian ad litem, cross-appeals and claims
that the juvenile court erred when it found that Andrew was a
“sibling” of Jordon and when it failed to appoint counsel to
represent her or new counsel to represent Jordon after Andrew
challenged the credibility and veracity of her guardian ad
litem report.
We determine that as foster parents, the Todds do not have
standing to appeal the juvenile court’s placement order or the
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right to intervene as parties. We further determine that Andrew
is not a “sibling” to Jordon, and for that reason, the juvenile
court did not err when it denied Andrew’s petition to intervene.
We further determine that the record does not show the guard-
ian ad litem requested appointment of counsel for herself or
new counsel for Jordon and that therefore, the juvenile court
did not err when it failed to make such appointments. We
therefore affirm the juvenile court’s order.
STATEMENT OF FACTS
Jordon was born in September 2020, and his biological
parents were Leah B. and Allen B. The Nebraska Department
of Health and Human Services (DHHS) removed Jordon from
Leah and Allen’s home on September 25. The juvenile court
for Dodge County granted temporary custody of Jordon to
DHHS based on concerns that Leah and Allen were not able to
care for him and provide an accurate feeding schedule. Such
concerns were based in part on the fact that two older sons of
Leah and Allen had been removed from their custody for simi-
lar reasons. The court appointed Boydston as Jordon’s guardian
ad litem.
Jordon was initially placed with Jason D. and Lesley D.
Jason is Leah’s father, and Lesley is Leah’s stepmother by
virtue of her marriage to Jason. Jason and Lesley had adopted
Jordon’s two older brothers after Leah’s and Allen’s parental
rights to the two were terminated.
After Jason and Lesley advised DHHS that they could not
provide permanency or long-term care to Jordon, DHHS placed
Jordon with the Todds. Andrew is Lesley’s adult biological
son. Andrew is not biologically related to Leah, but he is her
stepbrother by virtue of his mother Lesley’s marriage to Leah’s
father, Jason. Andrew is also a sibling to Jordon’s two older
brothers by virtue of Lesley’s adoption of the two boys.
In an order filed December 9, 2020, the court adjudicated
Jordon to be a child within the meaning of Neb. Rev. Stat.
§ 43-247(3)(a) (Reissue 2016). The court later approved a case
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plan with a primary permanency plan of reunification, but the
court determined that custody should remain with DHHS and
that Jordon should remain in out-of-home placement.
On July 14, 2021, Leah filed a motion for change of
placement in which she requested that Jordon’s placement
be changed to the residence of Rita Pospishil, who is Allen’s
cousin. On the same day, Jason, as biological grandfather and
adoptive father, filed a complaint on behalf of Jordon’s two
older brothers requesting that they be allowed to intervene
in this case to seek a joint-sibling placement of Jordon with
them in Jason and Lesley’s home. The court allowed Jason to
intervene on behalf of the brothers, and it set a hearing on the
request for joint-sibling placement and on Leah’s motion to
change placement to Pospishil. The court ordered submission
of reports prior to the hearing, including, inter alia, a home
study with regard to Pospishil and a guardian ad litem report.
The hearing was set for September 16.
On September 9, 2021, the Todds filed a motion to intervene
in the case. They sought to intervene as Jordon’s foster par-
ents, and they alleged that Jordon had been placed with them
for most of his life and that it was in Jordon’s best interests
to continue placement with them. Andrew also alleged that he
was a relative of Jordon. He alleged that he was a stepuncle
to Jordon based on his stepsibling relationship with Leah and
that he was also a stepbrother to Jordon based on his mother
Lesley’s adoption of Jordon’s two older brothers. Andrew
alleged that he was a sibling of Jordon under the Foster Care
Review Act (the Act) and that as a sibling he had an interest
in the case.
After the hearing, the juvenile court filed an order on
October 27, 2021, in which it ruled on pending motions. The
court first addressed the Todds’ motion to intervene. The
court determined that the Todds did not have standing to
intervene on the basis that they were Jordon’s foster parents.
The court cited In re Interest of Enyce J. & Eternity M., 291
Neb. 965, 870 N.W.2d 413 (2015), for the proposition that
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although foster parents have a statutory right to participate
in review hearings, their ability to participate was less than
that of a party, and that foster parents do not have an interest
that entitles them to intervene in a juvenile case as a matter
of right.
The court then turned to Andrew’s request to intervene
on the basis that he was a sibling of Jordon. The court
defined the issue as being “whether Andrew . . . has stand-
ing to intervene as an adult stepbrother to Jordon pursuant to
Neb. Rev. Stat. [§] 43-1311.02.” The court cited Neb. Rev.
Stat. § 43-1311.02(1)(a) (Cum. Supp. 2020), which provides
as follows:
Reasonable efforts shall be made to place a child and
the child’s siblings in the same foster care placement or
adoptive placement, unless such placement is contrary
to the safety or well-being of any of the siblings. This
requirement applies even if the custody orders of the sib-
lings are made at separate times and even if the children
have no preexisting relationship.
The court cited In re Interest of Nizigiyimana R., 295
Neb. 324, 889 N.W.2d 362 (2016), in which we held that the
duty to make reasonable efforts to implement a joint-sibling
placement existed even if a court had terminated a parent’s
relationship with each child and even if the siblings had not
previously lived together and that the duty extended to joint-
sibling placements with unadjudicated siblings. The court
also referenced § 43-1311.02(9), which generally provides
that a sibling of a juvenile has a right to intervene for limited
purposes. The court noted that § 43-1311.02(1)(a) referred
specifically to situations in which the “children” have no pre
existing relationship. The court read this reference to mean
that § 43-1311.02 applied only to siblings who were children,
and it noted that the statute made no reference to adult sib-
lings. The court therefore concluded that “the limited right
to seek ‘joint-sibling placement, sibling visitation, or ongo-
ing interaction with their sibling’ in subsection (9) belongs
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to minor siblings only.” The court therefore denied Andrew’s
motion to intervene as a sibling of Jordon.
In its October 27, 2021, order, the court next addressed
Leah’s motion to change Jordon’s placement to Pospishil and
the older brothers’ request for placement with them in Jason
and Lesley’s home. The court noted that DHHS had complied
with § 43-1311.02(1)(a) when it initially placed Jordon in
Jason and Lesley’s home. The court, however, further noted
the testimony of a DHHS caseworker that Jordon’s placement
had been changed because Jason and Lesley were “incapable
or unwilling to provide care for Jordon” and that therefore, “it
was not in Jordon’s best interest to put him in a home . . . that
was unable to provide for his basic needs due to the reported
issues of the other children in the home.” The caseworker fur-
ther testified that Jason and Lesley had not subsequently asked
that DHHS place Jordon back in their home and that the case-
worker did not become aware they were interested in taking
placement until the motion in this case was filed.
The court found that the primary permanency plan in this
case was reunification of Jordon with Leah and Allen and that
Leah and Allen were making progress toward reunification.
The court noted that the caseworker had testified that it was
in Jordon’s best interests to be in a placement that was more
conducive to the plan of reunification and that the caseworker
opined that Pospishil’s relationship with Leah and Allen was
conducive to that goal although Jason and Lesley’s relation-
ship was less conducive and could negatively affect the goal
of reunification.
The court stated that another witness who had supervised
Leah and Allen’s visitations with Jordon agreed that they were
making good progress and that it was in Jordon’s best interests
to be in a placement with Pospishil, who would be conducive
to the goal of reunification. The court further noted that the
home study showed that Pospishil had a good relationship
with Leah and Allen and that placement with her was recom-
mended. Based on this evidence, the court found that it was
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in Jordon’s best interests to grant Leah’s motion for change
of placement to Pospishil, and it ordered DHHS to prepare a
transition plan to effectuate the change. The court overruled
motions to reconsider that were subsequently filed by the
Todds and by Jason on behalf of Jordon’s older brothers.
The Todds appeal the juvenile court’s order, and Boydston
cross-appeals.
ASSIGNMENTS OF ERROR
The Todds claim that the juvenile court erred when it deter-
mined that they did not have the right to intervene as foster
parents and that Andrew did not have the right to intervene
because he was an adult sibling and not a child sibling. They
also claim that the court erred when it (1) granted Leah’s
motion to change placement to Pospishil, (2) denied the older
brothers’ motion for placement with them, and (3) overruled
the motions to reconsider.
Boydston claims on cross-appeal that the juvenile court
erred when it found that Andrew was a “sibling” of Jordon
when Andrew and Jordon do not have a common parent.
Boydston also claims the court erred when it failed to appoint
counsel to represent her or to appoint new counsel to represent
Jordon after Andrew challenged the credibility and veracity of
her guardian ad litem report.
STANDARDS OF REVIEW
[1] An appellate court reviews juvenile cases de novo on the
record and reaches a conclusion independently of the juvenile
court’s findings. In re Interest of Enyce J. & Eternity M., 291
Neb. 965, 870 N.W.2d 413 (2015).
[2-4] A jurisdictional question that does not involve a factual
dispute is a question of law. Id. Whether a party has the right
to intervene is a question of law. Id. When reviewing questions
of law, an appellate court resolves the questions independently
of the conclusions reached by the trial court. Id.
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[5] Statutory interpretation is a question of law, which an
appellate court resolves independently of the trial court. In re
Guardianship of Jill G., ante p. 108, 977 N.W.2d 913 (2022).
ANALYSIS
Standing.
[6,7] In a juvenile case, as in any other appeal, before reach-
ing the legal issues presented for review, it is the duty of an
appellate court to determine whether it has jurisdiction over the
matter before it. In re Interest of Mekhi S. et al., 309 Neb. 529,
960 N.W.2d 732 (2021). Standing relates to a court’s power,
that is, jurisdiction, to address issues presented and serves
to identify those disputes which are appropriately resolved
through the judicial process. In re Interest of Meridian H., 281
Neb. 465, 798 N.W.2d 96 (2011).
In its brief of appellee, the State argues, firstly, that the
Todds do not have standing to appeal the juvenile court’s
placement order as foster parents and, secondly, that even if he
is a sibling to Jordon, Andrew also would not have standing
as a sibling to appeal the juvenile court’s placement order. No
objection is made to the standing of Boydston, the guardian ad
litem. In support of its position that the Todds lack standing,
the State cites Neb. Rev. Stat. § 43-2,106.01 (Reissue 2016),
which provides as follows:
(1) Any final order or judgment entered by a juvenile
court may be appealed to the Court of Appeals in the
same manner as an appeal from district court to the Court
of Appeals. The appellate court shall conduct its review
in an expedited manner and shall render the judgment and
write its opinion, if any, as speedily as possible.
(2) An appeal may be taken by:
(a) The juvenile;
(b) The guardian ad litem;
(c) The juvenile’s parent, custodian, or guardian. For
purposes of this subdivision, custodian or guardian shall
include, but not be limited to, [DHHS], an association, or
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an individual to whose care the juvenile has been awarded
pursuant to the Nebraska Juvenile Code; or
(d) The county attorney or petitioner . . . .
Under § 43-2,106.01(2)(b), the guardian ad litem may appeal
a final order or judgment entered by a juvenile court. Therefore,
Boydston has standing to appeal the juvenile court’s order, and
we may consider the issues she raises in her cross-appeal. In
contrast, we must proceed to consider whether, and to what
extent, the Todds have standing as foster parents and then con-
sider Andrew’s standing as a purported sibling of Jordon.
Foster Parents Do Not Have Standing to
Appeal Under § 43-2,106.01 and Do
Not Have a Right to Intervene
in Juvenile Proceedings.
[8-10] We have stated that in assessing standing, the right of
appeal in a juvenile case in Nebraska is purely statutory, and
that § 43-2,106.01 controls who has the right to appeal from
a juvenile court’s placement order. In re Interest of Joseph C.,
299 Neb. 848, 910 N.W.2d 773 (2018). As set forth above,
§ 43-2,106.01(2) does not include “foster parent” in the list
of persons who may take an appeal. We have held that foster
parents who were never awarded custody are not “custodians”
or “guardians” for purposes of § 43-2,106.01(2)(c). See In re
Interest of Jackson E., 293 Neb. 84, 875 N.W.2d 863 (2016).
Furthermore, in In re Interest of Enyce J. & Eternity M., 291
Neb. 965, 974, 870 N.W.2d 413, 420 (2015), we determined
that foster parents “do not have a legal or equitable right,
title, or interest in the subject matter of the controversy that
gives them standing to appeal from the order changing [a
child’s] placement.”
[11,12] In In re Interest of Enyce J. & Eternity M., supra, we
also stated that although foster parents did not have standing
to appeal the order changing placement, we nevertheless had
jurisdiction to consider the order dismissing the foster parents’
complaint to intervene. We determined that although foster
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parents have a statutory right to participate in review hearings,
their ability to participate was less than that of a party, and we
held that foster parents are not entitled to intervene as a mat-
ter of right. Id. We further determined that a juvenile court, as
a statutorily created court of limited jurisdiction, has only the
authority which the statutes confer on it and that therefore, a
juvenile court could not allow foster parents to equitably inter-
vene independently of the statutes. Id.
We conclude that under this authority, the Todds’ status as
foster parents did not authorize them either to intervene or to
appeal the placement order. In their brief, the Todds recognize
this precedent, but they argue that the present case is different
because they assert that Andrew is both a foster parent and a
sibling. We next consider the effect of Andrew’s alleged status
as a sibling with regard to intervention and appeal.
Although Siblings Do Not Have Standing to Appeal
Under § 43-2,106.01, They Have a Limited Right
to Intervene Under § 43-1311.02(9).
[13] As noted above, the State argues that even if Andrew
is a sibling of Jordon, a sibling does not have standing under
§ 43-2,106.01 to appeal a placement order. As set forth above,
§ 43-2,106.01(2) does not include “sibling” in the list of per-
sons who may take an appeal. We therefore agree with the State
that even if Andrew is a sibling of Jordon, Andrew qua sibling
is not among those listed in § 43-2,106.01 as persons who may
appeal a juvenile court order. We further reject the Todds’ argu-
ment that Andrew may appeal because he is both a foster par-
ent and a sibling. The fact that a person has two different rela-
tionships to a child does not confer that person with a right to
appeal when neither is a relationship listed in § 43-2,106.01(2).
We conclude that the Todds, and Andrew specifically, do not
have standing under § 43-2,106.01 to appeal the placement
order whether as foster parents, a sibling, or both.
[14] However, as stated above, in In re Interest of Enyce J.
& Eternity M., supra, we stated that although foster parents
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did not have standing to appeal the order changing placement,
we had jurisdiction to consider the order dismissing the foster
parents’ complaint to intervene. Similarly, in In re Interest of
Nizigiyimana R., 295 Neb. 324, 331, 889 N.W.2d 362, 369
(2016), in which adoptive parents of a biological sibling of
the juvenile sought to intervene, we stated that “[w]e exercise
jurisdiction over an appeal from an order denying intervention
even if the appellant would not have standing to appeal from
the court’s final order or judgment on the merits.” Under this
precedent, we understand that even though the Todds may not
appeal the portion of the juvenile court’s order changing place-
ment, Andrew may appeal the portion of the order in which the
juvenile court denied him leave to intervene as a sibling.
In considering Andrew’s arguments regarding the denial to
intervene, we refer to In re Interest of Nizigiyimana R., supra,
wherein we cited In re Interest of Enyce J. & Eternity M., 291
Neb. 965, 870 N.W.2d 413 (2015), for the proposition that a
juvenile court lacks authority to permit an equitable interven-
tion. We further rejected the argument that a sibling had a
statutory right to intervene pursuant to § 43-1311.02, which
imposed a duty on DHHS to make reasonable efforts with
regard to placement with the juvenile’s siblings. We deter-
mined that the statute, as it existed at the time, specifically
limited the right to enforce such duties to parties and that a
sibling was not considered a party. We concluded that “the only
persons who can enforce [DHHS’] duties under § 43-131[1].02
are a guardian ad litem, on behalf of an adjudicated child, or an
adjudicated child’s parent, guardian, or custodian.” 295 Neb. at
342, 889 N.W.2d at 375.
However, after our decision in In re Interest of Nizigiyimana
R., supra, the Legislature amended § 43-1311.02 to add sub-
section (9), which provides as follows: “A sibling of a child
under the jurisdiction of the court shall have the right to inter-
vene at any point in the proceedings for the limited purpose of
seeking joint-sibling placement, sibling visitation, or ongoing
interaction with their sibling.” Therefore, § 43-1311.02(9) now
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provides a sibling a limited right to intervene for the specific
listed purposes.
The juvenile court in this case recognized the limited right
of intervention under § 43-1311.02(9), but it determined that
Andrew did not have the right to intervene. The court appeared
to accept that Andrew was a sibling of Jordon. However, the
court determined that § 43-1311.02(9) did not apply to an adult
sibling, like Andrew, and that § 43-1311.02(9) only applied
to siblings who were children. In their brief of appellants, the
Todds claim that the juvenile court erred when it determined
that the right of intervention under § 43-1311.02(9) does not
apply to an adult sibling.
We note that in her cross-appeal, Boydston, the guardian
ad litem, does not dispute the decision to deny Andrew inter-
vention, but she claims that the juvenile court erred when it
concluded that Andrew was a “sibling” regardless of Andrew’s
age. If Boydston’s argument that Andrew is not a “sibling”
under § 43-1311.02(9) is correct, then we would not need
to consider whether the statute applies to adult siblings. We
therefore consider Boydston’s claim next, because, as will be
discussed below, our resolution of that question determines the
intervention issue.
Before moving on, we note that when the Legislature
amended § 43-1311.02 to give siblings a limited right to inter-
vene, it did not simultaneously amend § 43-2,106.01 to include
siblings among those who may appeal a juvenile court order.
The statutes therefore appear to create a situation in which a
sibling may intervene to advocate on the specified issues but
does not have a statutory right to appeal an adverse determina-
tion on those issues.
Andrew Is Not a “Sibling” of Jordon and Therefore
Did Not Have a Right to Intervene
Pursuant to § 43-1311.02(9).
As noted above, Boydston, as Jordon’s guardian ad litem,
may appeal the juvenile court’s order pursuant to § 43-2,106.01.
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Boydston claims on cross-appeal that the juvenile court erred
when it found that Andrew was a “sibling” of Jordon, but that
as an adult sibling, Andrew could not intervene. Boydston
argues that Andrew and Jordon are simply not siblings regard-
less of age because they do not have a common parent.
We agree.
Neb. Rev. Stat. § 43-1301(1) (Reissue 2016) of the Act
defines “[s]iblings” as “biological siblings and legal siblings,
including, but not limited to, half-siblings and stepsiblings.”
The Act also provides in Neb. Rev. Stat. § 43-1311.01(1)
(Reissue 2016) that “sibling means an individual who is con-
sidered by Nebraska law to be a sibling or who would have
been considered a sibling under Nebraska law but for a termi-
nation of parental rights or other disruption in parental rights
such as the death of a parent.” We note that although these
definitions set forth the types of siblings that are considered
“siblings” under the Act—including half siblings, stepsiblings,
and those who would be considered siblings but for a termina-
tion or disruption of parental rights—the definitions are circu-
lar in that they use the word “sibling” to define “sibling.” We
therefore resort to rules of construction to determine the mean-
ing of “sibling” under the Act.
[15,16] Statutory language is to be given its plain and ordi-
nary meaning, and an appellate court will not resort to inter-
pretation to ascertain the meaning of statutory words which
are plain, direct, and unambiguous. In re Guardianship of
Jill G., ante p. 108, 977 N.W.2d 913 (2022). Black’s Law
Dictionary defines “sibling” as a “brother or sister,” Black’s
Law Dictionary 1660 (11th ed. 2019), and it defines “brother”
as a “male who has one parent or both parents in common with
another person,” id. at 241, and “sister” as a “female who has
one parent or both parents in common with another person,” id.
at 1667. The plain and ordinary meaning of “sibling” requires
a common parent or parents. Therefore, we conclude that
“sibling,” under the Act generally and under § 43-1311.02(9)
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specifically, means a person with whom one shares a common
parent or parents.
Andrew argues that he is a “stepbrother” to Jordon because
he and Jordon have siblings in common. Jordon is a sibling to
his two older brothers because they share common biological
parents, and although the biological parents’ rights to the older
brothers have been terminated, pursuant to § 43-1311.01(1),
they are still considered Jordon’s siblings under the Act.
Andrew’s mother Lesley adopted Jordon’s older brothers, and
therefore, Andrew shares a common parent with, and is a sib-
ling to, Jordon’s older brothers under § 43-1301(1) as a legal
sibling and a half sibling. But although Andrew and Jordon
share two brothers as common siblings, Andrew and Jordon
are not siblings. Having a common sibling does not in itself
make two people siblings to one another. Instead, the two must
have a common parent or parents, and Andrew and Jordon
have no common parent. Andrew is a stepbrother to Jordon’s
mother Leah, which makes him a stepuncle rather than a step-
brother to Jordon, and sharing two brothers in common does
not make Andrew and Jordon siblings in the absence of a com-
mon parent.
Because Andrew is not a “sibling” to Jordon under the
Act, we need not consider the juvenile court’s reasoning that
§ 43-1311.02(9) does not apply to Andrew because he is an
adult sibling rather than a child sibling, and we make no
comment on that reasoning. The limited right to intervene
under § 43-1311.02(9) does not apply to Andrew because he
is not a “sibling” to Jordon. Therefore, based on different
reasoning, we determine that the juvenile court did not err
when it denied Andrew leave to intervene as a sibling under
§ 43-1311.02(9).
Boydston Did Not Request Appointment of Counsel.
Boydston also claims on cross-appeal that the juvenile court
erred when it failed to appoint counsel to represent her after
Andrew challenged the credibility and veracity of her guardian
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ad litem report. We determine that because Boydston did not
request appointment of counsel, the juvenile court did not err
when it failed to do so.
Boydston’s argument that the juvenile court erred when it
did not appoint counsel to represent her or different counsel
to represent Jordon appears to focus on testimony by Andrew
at the hearing wherein he disagreed with certain aspects of
her guardian ad litem report. Boydston also notes a portion of
the Todds’ brief on appeal in which they assert that her guard-
ian ad litem report raises “misleading and baseless concerns”
regarding their care of Jordon and that such concerns were
“disproven by the evidence.” See brief for appellants at 16.
[17] However, it does not appear that Boydston asked the
juvenile court to appoint counsel. Boydston does not assert in
her brief that she made such request, and the record does not
appear to include such a request. An issue not presented to or
decided by the trial court is not appropriate for consideration
on appeal. In re Trust of Shire, 299 Neb. 25, 907 N.W.2d 263
(2018). Because the juvenile court was neither presented with
nor ruled upon a request for appointment of counsel, whether
such appointment was warranted is not appropriate for consid-
eration on appeal. Therefore, we do not consider this assign-
ment of error raised on cross-appeal.
CONCLUSION
We conclude that as foster parents, the Todds did not have
the right to intervene as parties and did not have the right
to appeal the juvenile court’s placement order. As urged by
Boydston in her cross-appeal, we also conclude that Andrew is
not a “sibling” to Jordon under the Act and that therefore, he
did not have a right to intervene pursuant to § 43-1311.02(9).
We therefore affirm the juvenile court’s order in which it denied
intervention by the Todds as foster parents or by Andrew as a
sibling. No party with a right to appeal has challenged the
juvenile court’s change of placement, and we therefore also
affirm the juvenile court’s placement order.
Affirmed. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487124/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
- 502 -
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312 Nebraska Reports
KINGERY CONSTR. CO. V. 6135 O ST. CAR WASH
Cite as 312 Neb. 502
Kingery Construction Co., appellee,
v. 6135 O Street Car Wash, LLC,
a Nebraska limited liability
company, appellant.
___ N.W.2d ___
Filed September 23, 2022. No. S-21-797.
1. Arbitration and Award. Whether a stay of proceedings should be
granted and arbitration required is a question of law.
2. Judgments: Appeal and Error. When reviewing questions of law, an
appellate court has an obligation to resolve the questions independently
of the conclusion reached by the trial court.
3. Jurisdiction: Appeal and Error. Before reaching the legal issues
presented for review, it is the duty of an appellate court to determine
whether it has jurisdiction over the matter before it, and this is so even
where neither party has raised the issue.
4. Arbitration and Award: Final Orders: Appeal and Error. A court
order staying an action pending arbitration is a final, appealable
order because it affects a substantial right and is made in a special
proceeding.
5. Federal Acts: Arbitration and Award: Contracts. If arbitration arises
from a contract involving interstate commerce, it is governed by the
Federal Arbitration Act.
6. ____: ____: ____. The Federal Arbitration Act, 9 U.S.C. § 2 (2018),
preempts inconsistent state laws that apply solely to the enforceability
of arbitration provisions in contracts evidencing a transaction involving
interstate commerce.
7. ____: ____: ____. Under the Federal Arbitration Act, 9 U.S.C. § 3
(2018), the court in which a suit or proceeding is pending, upon being
satisfied that the issue involved in the suit or proceeding is refer-
able to arbitration under an agreement in writing for arbitration, shall
on application of one of the parties stay the trial of the action until
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arbitration has been had in accordance with the terms of the agree-
ment, provided the applicant for the stay is not in default in proceeding
with arbitration.
8. Arbitration and Award. Under the Federal Arbitration Act, 9 U.S.C.
§ 4 (2018), the court shall hear the parties and, upon being satisfied
that the making of the agreement for arbitration or the failure to comply
therewith is not in issue, shall make an order directing the parties to
proceed to arbitration in accordance with the terms of the agreement.
9. Judgments: Intent: Words and Phrases. While the doctrine of stare
decisis is entitled to great weight, it was never intended to indefinitely
perpetuate erroneous decisions.
10. Waiver: Words and Phrases. “Waiver” of a right is voluntary and
intentional relinquishment of a known right, privilege, or claim, and
may be demonstrated by or inferred from a person’s conduct.
Appeal from the District Court for Lancaster County:
Lori A. Maret, Judge. Reversed and remanded for further
proceedings.
Jordan W. Adam, of Fraser Stryker, P.C., L.L.O., for
appellant.
Brian S. Koerwitz, of Endacott, Peetz, Timmer & Koerwitz,
P.C., L.L.O., for appellee.
Miller-Lerman, Cassel, Stacy, Funke, Papik, and
Freudenberg, JJ., and Hall, District Judge.
Funke, J.
INTRODUCTION
Kingery Construction Co. (Kingery) sued 6135 O Street Car
Wash, LLC (OSCW), for breach of contract and later moved
to stay the case for arbitration under 9 U.S.C. § 3 (2018) of
the Federal Arbitration Act (FAA). OSCW opposed Kingery’s
motion, arguing that Kingery waived its right to arbitration by
its litigation-related conduct. The district court found that there
was no waiver because OSCW was not prejudiced by Kingery’s
conduct. In so finding, the district court relied on our decision
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KINGERY CONSTR. CO. V. 6135 O ST. CAR WASH
Cite as 312 Neb. 502
in Good Samaritan Coffee Co. v. LaRue Distributing, 1 which
adopted a three-part test of waiver based on litigation-related
conduct used by the U.S. Court of Appeals for the Eighth
Circuit. OSCW appealed. While the appeal was pending, the
U.S. Supreme Court ruled in Morgan v. Sundance, Inc., 2 that
the Eighth Circuit erred in conditioning a waiver of the right to
arbitration on a showing of prejudice. In light of Morgan, we
reverse, and remand for further proceedings.
BACKGROUND
OSCW and Kingery entered a $2,087,092 agreement for the
construction of a carwash in Lincoln, Nebraska, on March 30,
2020. They based their agreement on the 2017 version of the
American Institute of Architects’ “Standard Abbreviated Form
of Agreement Between Owner and Contractor.”
Section 5.1 of the agreement provides, “Arbitration pursu-
ant to Section 21.6 of this Agreement” shall be the method of
binding dispute resolution “[f]or any claim subject to, but not
resolved by, mediation pursuant to Section 21.5.”
Section 21.6, in turn, requires that arbitration be admin-
istered by the American Arbitration Association (AAA) in
accordance with the “Construction Industry Arbitration Rules”
in effect on the date of the agreement, unless the parties agree
otherwise. Section 19.2 further prescribes that the FAA “shall
govern Section 21.6” if the parties select arbitration as their
method of binding dispute resolution.
In addition, § 21.3, captioned “Time Limits on Claims,”
requires that the parties commence all claims and causes of
action against each other arising out of or related to the agree-
ment “in accordance with the requirements of the final dispute
resolution method selected in this Agreement . . . within the
1
Good Samaritan Coffee Co. v. LaRue Distributing, 275 Neb. 674, 748
N.W.2d 367 (2008).
2
Morgan v. Sundance, Inc., ___ U.S.___, 142 S. Ct. 1708, 212 L. Ed. 2d
753 (2022).
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period specified by applicable law, but in any case not more
than 10 years after the date of Substantial Completion of the
Work.” Section 21.3 also provides that the parties “waive all
claims and causes of action not commenced in accordance with
[the agreement’s] Section 21.3.”
Kingery sued OSCW for breach of contract on April 16,
2021, seeking recovery of $41,698.57 allegedly owed to
Kingery for work performed under the agreement, as well as
attorney fees and interest under the Nebraska Construction
Prompt Payment Act, codified at Neb. Rev. Stat. § 45-1201 et
seq. (Reissue 2021).
OSCW moved to dismiss Kingery’s complaint with preju-
dice on May 19, 2021, arguing that Kingery waived its breach
of contract claim under § 21.3 of the agreement by filing suit
on the claim, rather than commencing it in arbitration. Kingery
responded by filing a demand for arbitration with the AAA on
June 8 and a motion to stay the case for arbitration with the
district court on June 9.
The AAA contacted OSCW and Kingery on June 23, 2021,
to inform them that the matter was being administered under
the “Fast Track Procedures” of the Construction Industry
Arbitration Rules and that OSCW had until June 30 to make
any answer or counterclaim.
The district court held a hearing on June 29, 2021, to con-
sider Kingery’s motion to stay and motion to compel arbitra-
tion, as well as OSCW’s motion to dismiss. At the hearing,
OSCW reiterated its argument that Kingery waived its breach
of contract claim under § 21.3 of the parties’ agreement.
OSCW also argued that Kingery waived its right to stay the
case for arbitration under § 3 of the FAA by its litigation-
related conduct based on the three-part test of waiver set
forth in LaRue Distributing. 3 Specifically, OSCW asserted
that Kingery’s knowledge of its right to arbitration cannot be
disputed, given that “it’s now trying to initiate an arbitration
3
See Good Samaritan Coffee Co. v. LaRue Distributing, supra note 1.
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action”; that Kingery acted inconsistently with this right by
filing suit; and that Kingery’s litigation-related conduct preju-
diced OSCW because there have been “hearing[s] on . . . a
couple motions, travel time, time, and [the] expense of brief-
ing this and so forth.” OSCW further maintained that the
motion to arbitrate was “prejudicial in and of itself” because
Kingery filed it to avoid a court ruling “here, now at this
time” dismissing its claim with prejudice. OSCW also asked
the district court to stay the AAA arbitration case pending the
court’s decision.
Kingery disputed OSCW’s interpretation of § 21.3 of the
parties’ agreement, arguing that it provides for waiver only
of claims not brought within the prescribed time, rather than
claims not commenced in arbitration. As to waiver under the
FAA, Kingery did not dispute its awareness of its right to
arbitration, but asserted “[n]o Court has ever held” that filing
a lawsuit is inconsistent with the right to arbitration. Kingery
also disputed OSCW’s claim of prejudice because less than 2
months passed between when Kingery filed suit and when it
moved for a stay and because OSCW had not yet briefed the
issue. Kingery asserted this fell short of the litigation-related
conduct seen in LaRue Distributing.
On June 30, 2021, 1 day after the hearing and the day
OSCW’s answer and counterclaim were due to the AAA, the
district court granted OSCW’s motion to stay the arbitra-
tion case.
Subsequently, on September 1, 2001, the district court
reversed that order and granted Kingery’s motion to stay
the district court case under § 3 of the FAA. In so doing,
the court adopted OSCW’s arguments regarding Kingery’s
knowledge of its right to arbitration and action inconsistent
with that right. However, the court agreed with Kingery that
OSCW suffered no prejudice because of Kingery’s litigation-
related conduct. In so finding, it noted that it had not decided
any substantive issue, that “less than 2 months” had passed
between the lawsuit’s filing and the motion for a stay, and
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Cite as 312 Neb. 502
that “minimal litigation . . . ha[d] occurred to this point.” The
district court also noted that it did not reach the merits of
OSCW’s motion to dismiss with prejudice due to Kingery’s
alleged waiver of its claim under § 21.3 of the parties’
agreement.
OSCW appealed to the Nebraska Court of Appeals, and
we moved the matter to our docket. After oral argument in
this court, we requested supplemental briefing by the parties
addressing what constitutes default in proceeding with arbitra-
tion under § 3 of the FAA after the U.S. Supreme Court’s deci-
sion in Morgan. 4 The parties promptly submitted supplemental
briefs, which we have considered.
ASSIGNMENTS OF ERROR
OSCW assigns, restated, that the district court erred in (1)
requiring a showing of prejudice to prove a party waived its
right to arbitration under the FAA, given that § 2 of the FAA
calls for state law to be applied when determining whether
agreements to arbitrate are valid and enforceable and that prej-
udice is not otherwise required to show waiver under Nebraska
contract law, and, alternatively, (2) concluding OSCW was
not prejudiced under the three-part test of waiver set forth in
LaRue Distributing. 5
STANDARD OF REVIEW
[1,2] Whether a stay of proceedings should be granted and
arbitration required is a question of law. 6 When reviewing
questions of law, this court has an obligation to resolve the
questions independently of the conclusion reached by the trial
court. 7
4
See Morgan v. Sundance, Inc., supra note 2.
5
See Good Samaritan Coffee Co. v. LaRue Distributing, supra note 1.
6
Noah’s Ark Processors v. UniFirst Corp., 310 Neb. 896, 970 N.W.2d 72
(2022).
7
Id.
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ANALYSIS
The district court granted Kingery’s motion to stay its
breach of contract case against OSCW based on the three-
part test of waiver that we adopted in LaRue Distributing. 8
Under this test, a party seeking arbitration may be found to
have waived its right to arbitration if it (1) knew of an exist-
ing right to arbitration; (2) acted inconsistently with that right;
and (3) prejudiced the other party by these inconsistent acts. 9
As relevant here, OSCW was required to show it was preju-
diced by Kingery’s litigation-related conduct. OSCW argued
before the district court that it suffered such prejudice because
of “hearing[s] on . . . a couple motions, travel time, time,
and [the] expense of briefing this and so forth.” However, on
appeal, it also argued that prejudice should not be required
when determining whether a party has waived its right to stay
a case for arbitration.
It is generally true that when a party raises an issue for
the first time in an appellate court, the court will disregard
it because a lower court cannot commit error in resolving an
issue never presented and submitted to it for disposition. 10
However, we have previously found that this rationale does not
apply in cases, like this one, where the party would have had
to ask a lower court not to follow a controlling decision from
this court in order to preserve for appeal an issue that the party
claims we incorrectly decided. 11
As such, in light of the U.S. Supreme Court’s decision
in Morgan, 12 we agree and overrule our decision in LaRue
8
See Good Samaritan Coffee Co. v. LaRue Distributing, supra note 1.
9
Id.
10
Eletech, Inc. v. Conveyance Consulting Group, 308 Neb. 733, 956 N.W.2d
692 (2021).
11
See, e.g., State v. Vann, 306 Neb. 91, 944 N.W.2d 503 (2020); Bassinger v.
Nebraska Heart Hosp., 282 Neb. 835, 806 N.W.2d 395 (2011).
12
Morgan v. Sundance, Inc., supra note 2.
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Distributing 13 and cases relying on it to the extent they can be
read to hold that prejudice is necessary for a waiver based on
litigation-related conduct.
Jurisdiction
[3] Before reaching the legal issues presented for review,
it is the duty of an appellate court to determine whether it
has jurisdiction over the matter before it. 14 This is so even
where, as here, neither party has raised the issue. 15 Under Neb.
Rev. Stat. § 25-1911 (Reissue 2016), for an appellate court to
acquire jurisdiction of an appeal, there must be a final judg-
ment or final order entered by the tribunal from which the
appeal is taken. 16
[4] We have previously found that a court order staying an
action pending arbitration is a final, appealable order under
Neb. Rev. Stat. § 25-1902 (Cum. Supp. 2020) because it affects
a substantial right and is made in a special proceeding. 17 In
this context, a stay has the same effect as a dismissal, because
the “‘parties cannot litigate their dispute in state courts.’” 18
Accordingly, this court has jurisdiction to consider this appeal
of the district court’s order granting Kingery’s motion to stay
the pending case in district court.
Prejudice as Requirement for Waiver
[5,6] Congress enacted the FAA 19 nearly a century ago, in
1925, with the stated goal of placing arbitration agreements
13
Good Samaritan Coffee Co. v. LaRue Distributing, supra note 1.
14
Cullinane v. Beverly Enters. - Neb., 300 Neb. 210, 912 N.W.2d 774
(2018).
15
Id.
16
In re Estate of Anderson, 311 Neb. 758, 974 N.W.2d 847 (2022).
17
Citizens of Humanity v. Applied Underwriters, 299 Neb. 545, 909 N.W.2d
614 (2018).
18
Id. at 555, 909 N.W.2d at 624.
19
9 U.S.C. §§ 1 through 16 (2018).
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“‘upon the same footing as other contracts, where [they]
belong[],’” and overcoming courts’ “longstanding refusal”
to enforce such agreements. 20 Section 2 of the FAA, some-
times described as its “key provision,” provides that written
arbitration agreements in contracts involving interstate com-
merce are “‘valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any
contract.’” 21 The U.S. Supreme Court has held that state law
applies when determining whether an arbitration agreement is
valid and enforceable under § 2, 22 and we have found that the
FAA preempts inconsistent state laws that apply solely to the
enforceability of arbitration provisions in contracts involving
interstate commerce. 23
[7,8] Sections 3 and 4 of the FAA, in turn, “establish[] pro-
cedures” by which the “substantive rule” of § 2 may be imple-
mented. 24 Specifically, they prescribe that “any . . . court[] of
the United States” in which a suit or proceeding is brought on
an issue that may be referred to arbitration shall stay the case
for arbitration upon a party’s application so long as the “appli-
cant . . . is not in default in proceeding with . . . arbitration.” 25
20
Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 219, 105 S. Ct. 1238,
84 L. Ed. 2d 158 (1985), quoting H.R. Rep. No. 96, 68th Cong., 1st Sess.
(1924).
21
Prima Paint v. Flood & Conklin, 388 U.S. 395, 400, 87 S. Ct. 1801, 18 L.
Ed. 2d 1270 (1967), quoting 9 U.S.C. § 2.
22
See, e.g., Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630-31, 125 S.
Ct. 2129, 161 L. Ed. 2d 1008 (2009) (“‘[s]tate law’ . . . is applicable to
determine which contracts are binding under § 2 . . . ‘if that law arose to
govern issues concerning the validity, revocability, and enforceability of
contracts generally’”).
23
See, e.g., Aramark Uniform & Career Apparel v. Hunan, Inc., 276 Neb.
700, 757 N.W.2d 205 (2008); Dowd v. First Omaha Sec. Corp., 242 Neb.
347, 495 N.W.2d 36 (1993).
24
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 68, 130 S. Ct. 2772, 177
L. Ed. 2d 403 (2010).
25
9 U.S.C. § 3.
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They similarly provide for a party aggrieved by another’s
“alleged failure, neglect, or refusal . . . to arbitrate” to ask the
court for an order compelling arbitration. 26 We have noted that
the U.S. Supreme Court has never held that these “procedural
sections” of the FAA apply to state courts. 27 However, we have
previously taken the view that § 3 applies to state court pro-
ceedings 28 and have ruled on motions to stay and compel made
under §§ 3 and 4. 29
In our 2008 decision in LaRue Distributing, we relied
upon a test of waiver used by the Eighth Circuit that included
prejudice when considering whether the district court erred
in denying the defendants’ motion to stay trial and compel
arbitration under §§ 3 and 4 of the FAA. 30 Their agreement
with the complainant required that “‘[a]ll controversies relat-
ing to, in connection with, or arising out of this contract’”
be settled by arbitration. 31 However, when the complainant
sued for breach of contract and tortious interference with a
business relationship, the defendants did not initially seek
arbitration. 32 Instead, over a 3-year period, they served sev-
eral sets of written discovery requests on the complainant,
26
9 U.S.C. § 4.
27
See, e.g., Kremer v. Rural Community Ins. Co., 280 Neb. 591, 599, 788
N.W.2d 538, 547 (2010).
28
Dowd v. First Omaha Sec. Corp., supra note 23, 242 Neb. at 350, 495
N.W.2d at 39 (“[t]he U.S. Supreme Court has held that the FAA requires
state courts, as well as federal courts, to grant stays pending arbitration”),
citing Moses H. Cone Hospital v. Mercury Constr. Corp., 460 U.S. 1, 26,
103 S. Ct. 927, 74 L. Ed. 2d 765 (1983) (“state courts, as much as federal
courts, are obliged to grant stays . . . under § 3 of the [FAA]”).
29
See, e.g., Cullinane v. Beverly Enters. - Neb., supra note 14; Good
Samaritan Coffee Co. v. LaRue Distributing, supra note 1; Dowd v. First
Omaha Sec. Corp., supra note 23.
30
See Good Samaritan Coffee Co. v. LaRue Distributing, supra note 1.
31
Id. at 676, 748 N.W.2d at 370.
32
Good Samaritan Coffee Co. v. LaRue Distributing, supra note 1.
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exchanged pleadings, filed a counterclaim, and filed and
received a ruling on a motion for summary judgment. 33 Only
then did they move to stay the case and compel arbitration. 34
The district court denied the motion, the defendants appealed,
and we affirmed. 35
In so doing, we first noted that § 3 of the FAA requires a
court case to be stayed for arbitration only if the party seeking
the stay “‘is not in default in proceeding with . . . arbitration’”
and that “‘default’” has been interpreted to “include” waiver. 36
We next applied the Eighth Circuit’s test for waiver, without
expressly holding that this test is required to be used. 37 In
doing so, we found that all three factors “weigh[ed] in favor”
of waiver in the LaRue Distributing defendants’ case 38: There
was no contention or evidence that they were unaware of their
right to arbitration, that they acted inconsistently with this right
with their litigation-related conduct over 3 years, and that their
conduct “had the inevitable effect of causing [the complainant]
to expend substantial time and resources in connection with
this case.” 39
The same Eighth Circuit test that we adopted in LaRue
Distributing—and that the district court relied upon when
granting Kingery’s motion to stay this case—was at issue in the
U.S. Supreme Court’s decision on May 23, 2022, in Morgan. 40
Robyn Morgan had sued her former employer, Sundance,
Inc., for alleged violations of federal labor law. As part of her
job application, Morgan agreed to “‘use confidential binding
33
Id.
34
Id.
35
Id.
36
Id. at 682, 748 N.W.2d at 374.
37
Good Samaritan Coffee Co. v. LaRue Distributing, supra note 1.
38
Id. at 684, 748 N.W.2d at 375.
39
Id. at 686, 748 N.W.2d at 377.
40
Morgan v. Sundance, Inc., supra note 2.
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arbitration, instead of going to court.’” 41 However, when
Morgan sued, Sundance did not initially move to stay the case
and compel arbitration. Instead, over a period of 8 months, it
filed a motion to dismiss and an answer and engaged in media-
tion, before invoking arbitration.
The district court found that Sundance had waived its right
to arbitration with its litigation-related conduct, but the Eighth
Circuit disagreed on the grounds that Morgan suffered no prej-
udice because 4 of the 8 months were spent waiting for a deci-
sion from the court on a “quasi-jurisdictional” issue, no discov-
ery was conducted, and Morgan would not need to “duplicate
her efforts during arbitration.” 42 Morgan sought review from
the U.S. Supreme Court, which agreed to hear the case because
the federal courts of appeals took different views as to whether
prejudice is required to show a waiver of the right to arbitration
under the FAA. 43 Morgan argued, like OSCW did on appeal
before this court, that prejudice should not be required, because
§ 2 of the FAA calls for state law to be used in determining
whether an agreement to arbitrate is enforceable and because
state contract law generally does not require prejudice for a
waiver. Sundance countered that waiver involves § 3, not § 2,
and that thus, federal rules govern and impose no deadline for
seeking arbitration.
The U.S. Supreme Court ruled in favor of Morgan, but
based its decision on § 6 of the FAA, which, it observed,
provides that “any application [to the court thereunder] ‘shall
be made and heard in the manner provided by law for the
making and hearing of motions,’” except as otherwise therein
expressly provided. 44 Specifically, the Supreme Court found
that the phrase “any application” in § 6 of the FAA includes
41
Id., 142 S. Ct. at 1711.
42
Morgan v. Sundance, Inc., 992 F.3d 711, 715 (8th Cir. 2021), vacated and
remanded, Morgan v. Sundance, Inc., supra note 2.
43
Morgan v. Sundance, Inc., supra note 2.
44
Id., 142 S. Ct. at 1714, quoting 9 U.S.C. § 6.
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applications to stay a court case and compel arbitration under
§§ 3 and 4 of the FAA and noted that “a federal court assess-
ing waiver does not generally ask about prejudice.” 45 As such,
the Morgan Court concluded that the Eighth Circuit erred in
imposing an arbitration-specific requirement of prejudice. It
noted that the Eighth Circuit and other federal courts which
required prejudice did so based on the federal “‘policy favor-
ing arbitration,’” but found that that policy “does not authorize
federal courts to invent special, arbitration-preferring proce-
dural rules.” 46
[9] In light of the U.S. Supreme Court’s decision in Morgan,
we overrule our earlier decision in LaRue Distributing and
cases relying on it to the extent they can be read to hold that
prejudice is required for a waiver based on litigation-related
conduct. 47 While the doctrine of stare decisis is entitled to
great weight, it was never intended to indefinitely perpetuate
erroneous decisions, 48 and LaRue Distributing is erroneous
insofar as it appears to condition a waiver of the right to stay
a case for arbitration under § 3 of the FAA upon a show-
ing of prejudice. LaRue Distributing applied a three-part test
of waiver used by the Eighth Circuit that the U.S. Supreme
Court has held is erroneous. As such, continued application
of the Eighth Circuit’s test by this court would be erroneous.
However, our decision leaves untouched the central holding
of LaRue Distributing that the court, rather than the arbitrator,
should generally determine whether a party waived its right to
arbitration under the FAA based on litigation-related conduct. 49
Only the language adopting the Eighth Circuit’s prejudice
requirement is disapproved.
45
Id., 142 S. Ct. at 1713.
46
Id.
47
See, Morgan v. Sundance, Inc., supra note 2; Good Samaritan Coffee Co.
v. LaRue Distributing, supra note 1.
48
See Heckman v. Marchio, 296 Neb. 458, 894 N.W.2d 296 (2017).
49
Good Samaritan Coffee Co. v. LaRue Distributing, supra note 1.
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In overruling this aspect of LaRue Distributing, we are
aware that Morgan was directed to the federal courts and that
questions have been raised about the application of the FAA
generally and § 3 specifically to state court proceedings. 50
However, OSCW and Kingery both acknowledge that the FAA
applies here under § 19.2 of the agreement, which calls for
the FAA to govern arbitration proceedings if the parties select
arbitration as their method of binding dispute resolution, as
they did. Moreover, even if the parties were not of this view,
we find nothing in Morgan to suggest that modifications must
be made to our earlier decisions which, directly or inferentially,
apply §§ 3 and 4 of the FAA to Nebraska state court proceed-
ings at this time in light of the facts and circumstances of this
case. OSCW asserts that the U.S. Supreme Court has “held
that Section 3 is inapplicable to state court lawsuits,” but the
cases cited in support of this proposition state only that the
U.S. Supreme Court has never held that § 3 applies to State
court proceedings. 51
Morgan also “assume[d] without deciding” that the federal
courts are correct to “resolve[] cases like this one as a mat-
ter of federal law, using the terminology of waiver,” 52 and
expressly gave the Eighth Circuit the option to determine
whether Sundance knowingly relinquished the right to arbi-
tration by acting inconsistently with that right or “determine
50
See, e.g., Badgerow v. Walters, ___ U.S. ___, 142 S. Ct. 1310, 1326, 212
L. Ed. 2d 355 (2022) (Breyer, J., dissenting) (“we cannot be sure that state
courts have the same powers under the FAA that federal courts have”);
DirectTV, Inc. v. Imburgia, 557 U.S. 47, 136 S. Ct. 463, 193 L. Ed. 2d 365
(2015) (Thomas, J., dissenting) (FAA as whole inapplicable to state court
proceedings); Southland Corp. v. Keating, 465 U.S. 1, 104 S. Ct. 852, 79
L. Ed. 2d 1 (1984) (O’Connor, J., dissenting; Rehnquist, J., joins) (§§ 3
and 4 of FAA inapplicable to state court proceedings).
51
Supplemental brief for appellant at 14. See, Volt Info. Sciences v. Leland
Stanford Jr. U., 489 U.S. 468, 109 S. Ct. 1248, 103 L. Ed. 2d 488 (1989);
Southland Corp. v. Keating, supra note 50.
52
Morgan v. Sundance, Inc., supra note 2, 142 S. Ct. at 1712.
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that a different procedural framework (such as forfeiture) is
appropriate.” 53 Nonetheless, we find that waiver remains a suit-
able term and focus for analysis for now. OSCW and Kingery
agree that the standards for default, waiver, and forfeiture are
much the same under Nebraska law, although they disagree
about the conclusions to be drawn based upon the application
of these standards in this case, and Nebraska law as to waiver
is generally consistent with federal law.
[10] Under federal and Nebraska law, “waiver” of a right
is voluntary and intentional relinquishment of a known right,
privilege, or claim, and may be demonstrated by or inferred
from person’s conduct. 54 We have noted that an agreement
to arbitrate can be waived by the parties. 55 We have further
held that state law governs the formation of contracts, as well
as the validity, revocability, and enforceability of contracts
generally, 56 and the U.S. Supreme Court has declared that state
contract law applies to contracts with arbitration agreements
governed by the FAA. 57
Since the district court here decided the matter upon a
legal framework which has since been found erroneous and
because waiver is a question of fact, 58 the matter must be
remanded back to the trial court for further proceedings.
Upon remand, the district court should apply our ordinary
53
Id., 142 S. Ct. at 1714.
54
Compare U.S. Pipeline v. Northern Natural Gas Co., 303 Neb. 444, 930
N.W.2d 460 (2019) (waiver of right under contract) with State v. Figures,
308 Neb. 801, 957 N.W.2d 161 (2021) (waiver of defendant’s right to be
present at trial) and Morgan v. Sundance, Inc., supra note 2 (similar as to
contract and other cases).
55
Boyd v. Cook, 298 Neb. 819, 906 N.W.2d 31 (2018).
56
Cullinane v. Beverly Enters. - Neb., supra note 14.
57
Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681, 116 S. Ct. 1652, 134
L. Ed. 2d 902 (1996).
58
See Siouxland Ethanol v. Sebade Bros., 290 Neb. 230, 859 N.W.2d 586
(2015).
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waiver standards to determine whether Kingery has waived
its right to arbitrate.
Because the order is reversed and the cause remanded to
the district court for further proceedings, we need not consider
OSCW’s other assignments of error. An appellate court is not
obligated to engage in an analysis that is not necessary to adju-
dicate the case and controversy before it. 59
CONCLUSION
Because we find prejudice is not required to prove a party
waived its right to stay a court case pending arbitration under
§ 3 of the FAA after the U.S. Supreme Court’s decision in
Morgan, 60 we reverse the order of the district court and remand
the cause for further proceedings consistent with this opinion.
Reversed and remanded for
further proceedings.
Heavican, C.J., not participating.
59
State v. Huston, 298 Neb. 323, 903 N.W.2d 907 (2017).
60
Morgan v. Sundance, Inc., supra note 2. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487130/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
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State of Nebraska, appellee, v.
Christina M. Greer, appellant.
___ N.W.2d ___
Filed September 2, 2022. No. S-21-601.
1. Jury Instructions: Appeal and Error. Whether a jury instruction is
correct is a question of law, regarding which an appellate court is obli-
gated to reach a conclusion independent of the determination reached
by the trial court.
2. Trial: Expert Witnesses: Appeal and Error. An appellate court reviews
the record de novo to determine whether a trial court has abdicated its
gatekeeping function when admitting expert testimony.
3. ____: ____: ____. When the trial court has not abdicated its gatekeeping
function when admitting expert testimony, an appellate court reviews
the trial court’s decision to admit or exclude the evidence for an abuse
of discretion.
4. Sentences: Appeal and Error. A sentence imposed within the statutory
limits will not be disturbed on appeal in the absence of an abuse of dis-
cretion by the trial court.
5. Judges: Words and Phrases. A judicial abuse of discretion exists
only when the reasons or rulings of a trial judge are clearly untenable,
unfairly depriving a litigant of a substantial right and denying a just
result in matters submitted for disposition.
6. Jury Instructions: Appeal and Error. Jury instructions are subject
to harmless error review, and an erroneous jury instruction requires
reversal only if the error adversely affects the substantial rights of the
complaining party.
7. Jury Instructions: Proof: Appeal and Error. In an appeal based upon
a claim of an erroneous jury instruction, the appellant has the burden
to show that the questioned instruction was prejudicial or otherwise
adversely affected a substantial right of the appellant.
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8. Rules of Evidence: Expert Witnesses. Four preliminary questions
must be answered in order to determine whether an expert’s testi-
mony is admissible: (1) whether the witness qualifies as an expert
pursuant to Neb. Rev. Stat. § 27-702 (Reissue 2016); (2) whether
the expert’s testimony is relevant; (3) whether the expert’s testimony
will assist the trier of fact to understand the evidence or determine
a controverted factual issue; and (4) whether the expert’s testimony,
even though relevant and admissible, should be excluded in light of
Neb. Rev. Stat. § 27-403 (Reissue 2016) because its probative value
is substantially outweighed by the danger of unfair prejudice or other
considerations.
9. Trial: Expert Witnesses. A trial court acts as a gatekeeper to ensure
the evidentiary relevance and reliability of an expert’s opinion, and this
gatekeeping function entails a preliminary assessment whether the rea-
soning or methodology underlying the testimony is valid and whether
that reasoning or methodology properly can be applied to the facts
in issue.
10. ____: ____. Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S.
579, 113 S. Ct. 2786, 125 L. Ed. 2d 469 (1993), does not create a special
analysis for answering questions about the admissibility of all expert
testimony. Not every attack on expert testimony amounts to a Daubert
claim. If a witness is not offering opinion testimony, that witness’ testi-
mony is not subject to inquiry pursuant to Daubert.
11. Sentences: Appeal and Error. When sentences imposed within stat-
utory limits are alleged on appeal to be excessive, the appellate
court must determine whether the sentencing court abused its discre-
tion in considering well-established factors and any applicable legal
principles.
12. Judges: Words and Phrases. A judicial abuse of discretion exists only
when a trial court’s decision is based upon reasons that are untenable
or unreasonable or if its action is clearly against justice or conscience,
reason, and evidence.
13. Sentences. When imposing a sentence, a sentencing judge should con-
sider the defendant’s (1) age, (2) mentality, (3) education and experi-
ence, (4) social and cultural background, (5) past criminal record or
record of law-abiding conduct, and (6) motivation for the offense, as
well as (7) the nature of the offense and (8) the amount of violence
involved in the commission of the crime.
14. ____. The sentencing court is not limited to any mathematically applied
set of factors, but the appropriateness of the sentence is necessarily a
subjective judgment that includes the sentencing judge’s observations
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of the defendant’s demeanor and attitude and all the facts and circum-
stances surrounding the defendant’s life.
15. ____. It is within the discretion of the trial court to direct that sen-
tences imposed for separate crimes be served consecutively. The test
of whether consecutive sentences may be imposed under two or more
counts charging separate offenses, arising out of the same transaction or
the same chain of events, is whether the offense charged in one count
involves any different elements than an offense charged in another
count. The test is whether some additional evidence is required to prove
one of the other offenses.
Appeal from the District Court for Sarpy County: George
A. Thompson, Judge. Affirmed.
Thomas P. Strigenz, Sarpy County Public Defender, for
appellant.
Douglas J. Peterson, Attorney General, and Melissa R.
Vincent for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Heavican, C.J.
INTRODUCTION
The defendant, Christina M. Greer, was charged with 13
counts in four separate cases, all relating to allegations of
sexual assault of a child. Greer was convicted of 11 of those
counts and sentenced to an aggregate sentence of 64 to 102
years’ imprisonment. Greer appeals. We affirm.
BACKGROUND
Charges Against Greer.
Greer was charged in four separate cases. In the first case,
she was originally charged with one count of first degree sex-
ual assault of W.F. (also known as A.F.), a 13-year-old boy who
was friends with Greer’s 11-year-old daughter. That charge was
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later amended to one count of first degree sexual assault of a
child and two counts of witness tampering.
In the second case, Greer was charged with three counts of
first degree sexual assault of a child, J.H., a 13-year-old boy
who was friends with Greer’s 9-year-old son. In the third case,
Greer was charged with six counts of intentional child abuse of
A.F. and J.H.; of Greer’s daughter; and of A.R., A.J., and C.P.,
identified as friends of Greer’s daughter. In the fourth case,
Greer was charged with child enticement of P.M., a 13-year-old
boy who attended school with Greer’s daughter.
These four cases were consolidated for trial on January 21,
2021.
Pretrial Motions.
Greer was first charged in March 2018, but did not come to
trial until March 2, 2021. Since that time, Greer has had three
attorneys: appointed counsel; retained counsel; and at trial, the
Sarpy County public defender, who was appointed on April 2,
2020, and represents Greer in this appeal.
As relevant to this appeal, the primary reason for the delay
in Greer’s trial was various motions filed by the State under
Neb. Rev. Stat. § 27-404 (Reissue 2016) (other bad acts) and
Neb. Rev. Stat. § 27-414 (Reissue 2016) (prior sexual con-
duct). Generally, the State sought to introduce evidence that
Greer (1) had engaged in uncharged sex acts with other chil-
dren, (2) had engaged in uncharged sex acts with already iden-
tified victims, and (3) was “grooming” the children through the
supplying of alcohol and marijuana edibles. In support of its
contention that evidence relating to Greer’s grooming of chil-
dren who came to her home, the State offered the testimony of
Colleen Brazil, the forensic interview program manager at a
child advocacy center.
The first such motion regarding §§ 27-404 and 27-414 was
filed on December 26, 2018. At a hearing on February 7, 2019,
Brazil testified about the concept of “grooming” and the behav-
iors it encompasses. Greer’s daughter and J.H. testified about
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Greer’s conduct in the cases wherein each was a named victim.
The State’s motion was granted on March 1.
On August 6, 2019, Greer sought a motion in limine to
prevent the State from mentioning or using the term “groom-
ing” without the court’s permission, as it was a “term of art
that requires expert testimony.” On August 7, the district court
granted the State’s motion to continue and noted that it would
take up the motions in limine at a later hearing. The district
court held a hearing on Greer’s motions in limine on March 3,
2020, and denied the motions, noting that it had addressed the
issue in various § 27-404 hearings.
Brazil’s Testimony.
Trial began on March 2, 2021. On March 3, Greer filed
a motion seeking an order to strike Brazil as an expert wit-
ness, as well as to strike her testimony regarding grooming,
because such theories violated standards set forth in Daubert
v. Merrell Dow Pharmaceuticals, Inc., 1 and Schafersman v.
Agland Coop. 2
The State called Brazil to testify on March 4, 2021. Greer
objected when the State asked Brazil if she was familiar with
the term “grooming.” The district court initially indicated
that “grooming” was not an appropriate topic for a Daubert
hearing and that Brazil was an expert in the field of child
advocacy. But the district court ultimately agreed to hold a
Daubert hearing.
At that hearing, Brazil once again testified on the concept
of grooming. Brazil also testified that she knew very little
about the facts of Greer’s case and that she would not offer
an opinion as to whether Greer’s alleged victims were, in fact,
groomed by Greer. The State also offered three court opinions
and an article about grooming.
1
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct.
2786, 125 L. Ed. 2d 469 (1993).
2
Schafersman v. Agland Coop, 262 Neb. 215, 631 N.W.2d 862 (2001).
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In ruling for the State, the court indicated that it did not
think Daubert should apply, but that the Nebraska Court of
Appeals’ opinion in State v. Edwards 3 held that Daubert did
apply. The district court explicitly noted it believed that the
difference between the Edwards case and Greer’s situation
was based on the fact that the expert in Edwards specifically
opined that the defendant in that case had engaged in groom-
ing. The district court found that Brazil was an expert and
allowed her to testify, but noted that the State should not
stray into questions about whether Greer’s actions amounted
to grooming.
When Greer’s counsel sought to clarify the grounds of the
court’s ruling, the court explained that it was ruling that Brazil
was a qualified expert, that grooming was part of her expertise,
that there was sufficient peer review on the topic of grooming,
and that the evidence was more probative than prejudicial, but
that it also believed Daubert did not apply because Brazil was
not opining on whether Greer’s conduct amounted to groom-
ing. Brazil then testified at trial, subject to Greer’s continu-
ing objection.
The jury ultimately found Greer guilty of counts 1 through
3 and 5 through 12, and not guilty of counts 4 (sexual assault
of a child) and 13 (child enticement). Greer was sentenced to
a total of 64 to 102 years’ imprisonment, or 25 to 40 years’ for
the three counts of first degree sexual assault of a child, 2 to 3
years’ imprisonment on the six counts of child abuse, and 1 to
2 years’ imprisonment on the two counts of witness tampering.
The sentences were ordered to be served consecutively, except
that the 25-to-40-year sentence on count 6 was ordered to run
concurrent to Greer’s other sentences.
Jury Instructions.
Prior to closing arguments, the district court instructed the
jury, then took a brief recess. After the recess, the jury was
3
State v. Edwards, 28 Neb. App. 893, 949 N.W.2d 799 (2020).
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informed that instruction No. 4, the definition of the term
“penetration,” while taken from the Nebraska pattern jury
instructions, 4 was incomplete. As such, over Greer’s objection,
the instruction was revised to mirror the pattern instruction and
was read again to the jury.
Greer appeals from her convictions and sentences.
ASSIGNMENTS OF ERROR
Greer assigns, restated, that the district court erred in (1) the
procedure utilized in instructing the jury as to the definitions
included in instruction No. 4, specifically of the term “penetra-
tion”; (2) allowing Brazil to testify as an expert on the issue of
grooming; and (3) imposing excessive sentences.
STANDARD OF REVIEW
[1] Whether a jury instruction is correct is a question of
law, regarding which an appellate court is obligated to reach
a conclusion independent of the determination reached by the
trial court. 5
[2,3] An appellate court reviews the record de novo to
determine whether a trial court has abdicated its gatekeeping
function when admitting expert testimony. 6 When the trial
court has not abdicated its gatekeeping function, an appellate
court reviews the trial court’s decision to admit or exclude the
evidence for an abuse of discretion. 7
[4,5] A sentence imposed within the statutory limits will
not be disturbed on appeal in the absence of an abuse of
discretion by the trial court. 8 A judicial abuse of discre-
tion exists only when the reasons or rulings of a trial judge
are clearly untenable, unfairly depriving a litigant of a
4
NJI2d Crim. 4.6.
5
State v. Pope, 305 Neb. 912, 943 N.W.2d 294 (2020).
6
See Hemsley v. Langdon, 299 Neb. 464, 909 N.W.2d 59 (2018).
7
See id.
8
State v. Blake, 310 Neb. 769, 969 N.W.2d 399 (2022).
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substantial right and denying a just result in matters sub
mitted for disposition. 9
ANALYSIS
Jury Instructions.
Greer first assigns that the district court erred in instruct-
ing the jury when it initially read an incomplete version of
instruction No. 4, then later read the complete version of that
same instruction. Greer asserts that the second reading of that
particular instruction, which included the definition of the term
“penetration,” was prejudicial to her because it emphasized
penetration to the jury in a case where she had strongly denied
committing an act of penetration. Greer suggests that at a mini-
mum, the district court ought to have read again all instruc-
tions in order to de-emphasize any one instruction.
[6,7] Jury instructions are subject to harmless error review,
and an erroneous jury instruction requires reversal only if the
error adversely affects the substantial rights of the complain-
ing party. 10 In an appeal based upon a claim of an erroneous
jury instruction, the appellant has the burden to show that the
questioned instruction was prejudicial or otherwise adversely
affected a substantial right of the appellant. 11
We find Greer’s arguments on appeal unpersuasive. We
first observe that the only instruction in our record relevant
to this assignment of error is the complete instruction No. 4,
read to the jury upon the court’s realization that the initial
instruction No. 4 was incomplete and later sent back with
the jury for its use during deliberations. Greer had the bur-
den to show that she was prejudiced by the court’s giving of
the original instruction. Yet Greer has provided no record of
what that initial, incomplete instruction contained. We can-
not determine whether Greer was prejudiced by the second
9
Id.
10
State v. Dady, 304 Neb. 649, 936 N.W.2d 486 (2019).
11
State v. Bao, 263 Neb. 439, 640 N.W.2d 405 (2002).
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reading of the instruction if we do not know the full contents
of the first instruction.
And even if we could proceed based on our limited knowl-
edge of the contents of the incomplete instruction, we would
still conclude that Greer has failed to meet her burden to show
that the instruction procedure followed was prejudicial. First,
the cases upon which Greer relies—State v. Abram 12 and State
v. Claycamp 13—are distinguishable.
In Abram, the written jury instruction, which was not
objected to by the defendant or the State, read in relevant part
that “‘[t]he fact that the [d]efendant did not testify must be
considered by you as an admission of guilt . . . .’” 14 Copies of
the instruction containing this plainly incorrect language were
provided to the members of the jury to use while deliberating.
However, in orally instructing the jury, the court stated that
“‘[t]he fact that the [d]efendant did not testify must not be
considered by you as an admission of guilt . . . .’” 15 In other
words, the correct version of the instruction was read to the
jury, but the incorrect language was provided to the jury in
written form.
We held in Abram that this was not structural error, but sub-
ject to harmless error analysis. We concluded that even though
the correct language was actually read to the jury, the error was
not harmless. In so concluding, we reasoned that the incorrect
instructions were emphasized by virtue of having been written
and available to the jury during its deliberations.
In Claycamp, the defendant raised a defense of self-defense
at trial. At the conclusion of evidence, the court read to the jury
its instructions. The State and the defense then made closing
arguments. In response to some comments made by the State
in its argument, the court admonished the jury that it was
12
State v. Abram, 284 Neb. 55, 815 N.W.2d 897 (2012).
13
State v. Claycamp, 14 Neb. App. 675, 714 N.W.2d 455 (2006).
14
State v. Abram, supra note 12, 284 Neb. at 60, 815 N.W.2d at 903.
15
Id.
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“‘not to consider any sort of [the victim’s] conduct or the
consequences of his conduct. This is about the defendant . .
. .’” 16 The Court of Appeals noted that the admonishment to
the jury was contradictory to the earlier instructions regarding
the defendant’s defense of self-defense. The Court of Appeals
applied a harmless error standard and concluded that the error
was not harmless and that reversal was warranted.
Unlike Abram and Claycamp, where the instruction provided
was inconsistent with other instructions, was incorrect, or both,
here, there is no suggestion that the initial part of instruction
No. 4 read to the jury was incorrect—only that it was incom-
plete. This is reflected in the exchange between the court and
counsel when the court explained that it would be adding to
the instruction and reading it again. In fact, as we have noted
above, this record does not even include the language origi-
nally read to the jury—whether it be the original instruction the
court read from or a transcript of the court’s verbal instruction
as it would appear in the bill of exceptions.
In this case, we apply a harmless error standard and decline
to find any. First, this court lacks a complete record. Moreover,
there is no allegation that the initial instruction as read to the
jury was incorrect, but only that it was incomplete. Nor is there
any allegation that the final instruction read to the jury and sent
back with the jury during its deliberations was incorrect. We
note Greer’s argument that the reading again of the definition
of penetration emphasized that concept to the jury. However,
we conclude that it is not possible to determine whether any
alleged emphasis would have helped or harmed Greer, espe-
cially where Greer has directed us to no authority on point.
Greer has failed to meet her burden to show that she was
prejudiced by the procedure followed by the district court with
respect to instruction No. 4. As such, we find no merit to this
assignment of error.
16
State v. Claycamp, supra note 13, 14 Neb. App. at 680, 714 N.W.2d at
459.
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Brazil’s Testimony.
In Greer’s second assignment of error, she assigns that the
district court erred in allowing Brazil to testify as an expert
on the issue of grooming. We construe Greer’s brief to argue
that the district court did not “adequately demonstrate specific
findings on the record that it had performed its duty as a gate-
keeper to find her as an expert on the issues of grooming.” 17
Greer further asserts that “grooming [was not] a scientifically
valid methodology.” 18
[8] Neb. Rev. Stat. § 27-702 (Reissue 2016) provides that
“[i]f scientific, technical, or other specialized knowledge will
assist the trier of fact to understand the evidence or to deter-
mine a fact in issue, a witness qualified as an expert by knowl-
edge, skill, experience, training, or education, may testify
thereto in the form of an opinion or otherwise.” Four prelimi-
nary questions must be answered in order to determine whether
an expert’s testimony is admissible: (1) whether the witness
qualifies as an expert pursuant to § 27-702; (2) whether the
expert’s testimony is relevant; (3) whether the expert’s testi-
mony will assist the trier of fact to understand the evidence
or determine a controverted factual issue; and (4) whether the
expert’s testimony, even though relevant and admissible, should
be excluded in light of Neb. Rev. Stat. § 27-403 (Reissue 2016)
because its probative value is substantially outweighed by the
danger of unfair prejudice or other considerations. 19
[9,10] Under our Daubert 20 and Schafersman 21 jurispru-
dence, a “trial court acts as a gatekeeper to ensure the evi-
dentiary relevance and reliability of an expert’s opinion,” and
this gatekeeping function “entails a preliminary assessment
17
Brief for appellant at 22.
18
Id.
19
City of Lincoln v. Realty Trust Group, 270 Neb. 587, 705 N.W.2d 432
(2005).
20
Daubert v. Merrell Dow Pharmaceuticals, Inc., supra note 1.
21
Schafersman v. Agland Coop, supra note 2.
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whether the reasoning or methodology underlying the tes-
timony is valid and whether that reasoning or methodology
properly can be applied to the facts in issue.” 22 Still, “Daubert
does not create a special analysis for answering questions about
the admissibility of all expert testimony. Not every attack on
expert testimony amounts to a Daubert claim. If a witness is
not offering opinion testimony, that witness’ testimony is not
subject to inquiry pursuant to Daubert.” 23
Finally, we have noted that
courts need not reinvent the wheel each time that special-
ized evidence is adduced. The proponent need not contin-
uously go through the exercise of re-proving reliability of
the same evidence in every case. Instead, once a Nebraska
trial court has actually examined and assessed the reli-
ability of a particular scientific wheel under Daubert, and
its determination has been affirmed on appeal, then other
courts may simply take judicial notice and ride behind.
In such cases, the proponent establishes a prima facie
case of reliability by relying on precedent, and the burden
shifts to the opponent to show that recent developments
raise doubts about the validity of previously relied-upon
theories or techniques. 24
We find no merit to Greer’s arguments on appeal. First, we
agree with the district court that Daubert was inapplicable
in this case. As noted above, our case law is clear that not
every instance of expert testimony is a Daubert issue. In this
case, prior to testifying, Brazil indicated that she did not have
any particular knowledge about Greer or the alleged victims
in this case and that she was not prepared to testify as to
whether Greer’s conduct qualified as grooming. And indeed,
22
State v. Robinson, 272 Neb. 582, 618, 724 N.W.2d 35, 68 (2006), abro
gated on other grounds, State v. Thorpe, 280 Neb. 11, 783 N.W.2d 749
(2010).
23
State v. Schreiner, 276 Neb. 393, 405, 754 N.W.2d 742, 754 (2008).
24
State v. Casillas, 279 Neb. 820, 838, 782 N.W.2d 882, 898 (2010).
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her testimony was in conformity with her testimony at pre-
trial hearings—at no point did she offer any opinion about
Greer’s conduct.
Moreover, even if we were to conclude that Daubert was
applicable, a decision we need not reach here, the record shows
that the district court held a Daubert hearing. At that hearing,
Brazil testified to her many years of experience in conducting
and monitoring forensic interviews of child sexual assault vic-
tims, including attending and teaching seminars on that topic.
We find no abuse of discretion in the district court’s conclu-
sion, set out in the record, that Brazil qualified as an expert and
that her testimony was admissible.
We note also the confusion that seems to have resulted from
the Court of Appeals’ opinion in Edwards, which we find dis-
tinguishable and inapplicable. 25 The district court concluded
the factor that made Daubert an issue in Edwards was that
the pediatrician who testified regarding grooming in that case
testified the defendant’s actions were, in fact, grooming. The
distinction noted by the district court is in keeping with our
case law as set out above and is consistent with our conclusion
in this case. We further note that to the extent that Edwards
could be read to categorically reject such testimony, it is
disapproved.
There is no merit to Greer’s assignment of error regarding
Brazil’s testimony.
Excessive Sentences.
Finally, Greer assigns that the sentences imposed upon her
were excessive. As an initial matter, we note that all of Greer’s
sentences were within statutory limits and that the record
shows the court considered Greer’s presentence investigation
and all of the relevant factors as set forth in case law.
Instead, Greer primarily takes issue with the consecutive
nature of her sentences:
25
State v. Edwards, supra note 3.
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The record reflects that counts 7 [through] 12 all arose
out of the same transactions and series of events. The
State agrees with this assertion as it filed a motion to
consolidate stating the same. . . . Because child abuse
allegations all arose out of the same times as count 1, they
therefore should be concurrent with each other as well as
to count 1.
Additionally, counts 5 and 6 should be concurrent with
one another as they are the same victim and are part of
the same series and chain of events. Finally, the evidence
shows that counts 2 and 3 all arose out of the same series
of transactions.
It is logical that the charges should be served
concurrently. 26
[11,12] When sentences imposed within statutory limits are
alleged on appeal to be excessive, the appellate court must
determine whether the sentencing court abused its discretion in
considering well-established factors and any applicable legal
principles. 27 A judicial abuse of discretion exists only when a
trial court’s decision is based upon reasons that are untenable
or unreasonable or if its action is clearly against justice or con-
science, reason, and evidence. 28
[13,14] When imposing a sentence, a sentencing judge
should consider the defendant’s (1) age, (2) mentality, (3)
education and experience, (4) social and cultural background,
(5) past criminal record or record of law-abiding conduct,
and (6) motivation for the offense, as well as (7) the nature
of the offense and (8) the amount of violence involved in
the commission of the crime. 29 The sentencing court is not
limited to any mathematically applied set of factors, but the
26
Brief for appellant at 26.
27
State v. Blake, supra note 8.
28
Id.
29
Id.
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appropriateness of the sentence is necessarily a subjective
judgment that includes the sentencing judge’s observations of
the defendant’s demeanor and attitude and all the facts and
circumstances surrounding the defendant’s life. 30
[15] It is within the discretion of the trial court to direct
that sentences imposed for separate crimes be served consecu
tively. 31 The test of whether consecutive sentences may be
imposed under two or more counts charging separate offenses,
arising out of the same transaction or the same chain of events,
is whether the offense charged in one count involves any dif-
ferent elements than an offense charged in another count. The
test is whether some additional evidence is required to prove
one of the other offenses. 32
We turn first to Greer’s contention that her sentence on
count 5 (first degree sexual assault of a child—J.H.) should
run concurrent to her sentence on count 6 (also first degree
sexual assault of a child—J.H.). We observe that, in fact, her
sentence on count 4 was ordered to be served concurrent to
the remainder of her sentences. As such, there is no merit to
this assertion.
Greer also argues that the child abuse counts against her all
arose out of the same transactions and series of events. But
while they involve the same general conduct on Greer’s part,
they also involve six different children and the State had to
separately prove the elements of child abuse as to each of the
children in order to obtain guilty verdicts.
Greer additionally argues that the child abuse counts arose
from the same set of facts as count 1 (first degree sexual
assault of a child—A.F.), and so, the sentences for child abuse
should run concurrently. But the elements the State had to
prove for child abuse are distinct from those for first degree
30
Id.
31
State v. Andersen, 238 Neb. 32, 468 N.W.2d 617 (1991).
32
Id.
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sexual assault of a child. We find no abuse of discretion in the
district court’s order sentencing Greer consecutively for any of
these convictions.
Finally, Greer argues that the tampering with a witness
counts arise from the same series of transactions. Again, as
to these counts, the State had to prove the elements of those
crimes as occurring on different occasions, and thus, different
evidence was required.
Because all of the counts required the proving of different
elements or different evidence, there was no abuse of discre-
tion in the district court’s sentences. There is no merit to this
assignment of error.
CONCLUSION
The district court’s judgments and convictions are affirmed.
Affirmed. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487132/ | Nebraska Supreme Court Online Library
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11/18/2022 08:06 AM CST
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State of Nebraska, appellee, v.
Tyeric L. Lessley, appellant.
___ N.W.2d ___
Filed August 26, 2022. No. S-21-768.
1. Postconviction: Constitutional Law: Appeal and Error. In appeals
from postconviction proceedings, an appellate court reviews de novo
a determination that the defendant failed to allege sufficient facts to
demonstrate a violation of his or her constitutional rights or that the
record and files affirmatively show that the defendant is entitled to
no relief.
2. Postconviction: Judgments: Appeal and Error. Whether a claim raised
in a postconviction proceeding is procedurally barred is a question of
law. When reviewing a question of law, an appellate court reaches a
conclusion independent of the lower court’s ruling.
3. Appeal and Error. Alleged errors of the lower court must be both spe-
cifically assigned and specifically argued in the brief of the party assert-
ing the errors to be considered by an appellate court.
4. Postconviction: Constitutional Law: Judgments. Postconviction relief
is available to a prisoner in custody under sentence who seeks to be
released on the ground that there was a denial or infringement of his or
her constitutional rights such that the judgment was void or voidable.
5. Postconviction: Constitutional Law: Proof. In a motion for postcon-
viction relief, the defendant must allege facts which, if proved, consti-
tute a denial or violation of his or her rights under the U.S. or Nebraska
Constitution, causing the judgment against the defendant to be void
or voidable.
6. ____: ____: ____. The district court must grant an evidentiary hearing
to resolve the claims in a postconviction motion when the motion con-
tains factual allegations which, if proved, constitute an infringement of
the defendant’s rights under the state or federal Constitution.
7. Postconviction: Pleadings. The allegations in a motion for postconvic-
tion relief must be sufficiently specific for the district court to make
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a preliminary determination as to whether an evidentiary hearing is
justified.
8. Postconviction: Constitutional Law: Proof. An evidentiary hearing is
not required on a motion for postconviction relief when (1) the motion
does not contain factual allegations which, if proved, constitute an
infringement of the movant’s constitutional rights rendering the judg-
ment void or voidable; (2) the motion alleges only conclusions of fact or
law without supporting facts; or (3) the records and files affirmatively
show that the defendant is entitled to no relief.
9. Postconviction: Proof: Appeal and Error. When a district court denies
postconviction relief without conducting an evidentiary hearing, an
appellate court determines de novo whether the petitioner has alleged
facts that would support the claim and, if so, whether the files and
records affirmatively show that he or she is entitled to no relief.
10. Records: Appeal and Error. The appellate court will not scour the
record on appeal to understand unclear arguments or find support for
broad conclusions.
11. Appeal and Error. When an issue is raised for the first time in an
appellate court, it will be disregarded inasmuch as a lower court cannot
commit error in resolving an issue never presented and submitted to it
for disposition.
12. Trial: Appeal and Error. An issue not presented to or decided on by
the trial court is not an appropriate issue for consideration on appeal.
13. Postconviction. The need for finality in the criminal process requires
that a defendant bring all claims for relief at the first opportunity.
14. Postconviction: Appeal and Error. A motion for postconviction relief
cannot be used to secure review of issues that were known to the
defendant and which were or could have been litigated on direct
appeal.
15. Judgments: Claim Preclusion. Claim preclusion bars litigation of any
claim that has been directly addressed or necessarily included in a for-
mer adjudication, as long as (1) the former judgment was rendered by
a court of competent jurisdiction, (2) the former judgment was a final
judgment, (3) the former judgment was on the merits, and (4) the same
parties or their privies were involved in both actions.
16. Records: Appeal and Error. It is the appellant’s responsibility to
present a record that permits appellate review of the issue assigned
as error.
17. Postconviction: Appeal and Error. When the defendant is represented
both at trial and on direct appeal by the same counsel, the defendant’s
first opportunity to assert ineffective assistance of trial counsel is in a
motion for postconviction relief.
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18. Effectiveness of Counsel: Proof. To prevail on a claim of ineffective
assistance of counsel under Strickland v. Washington, 466 U.S. 668, 104
S. Ct. 2052, 80 L. Ed. 2d 674 (1984), the defendant must show that his
or her counsel’s performance was deficient and that this deficient per
formance actually prejudiced the defendant’s defense.
19. ____: ____. To show that counsel’s performance was deficient, the
defendant must show counsel’s performance did not equal that of a
lawyer with ordinary training and skill in criminal law. To show preju-
dice under the prejudice component of the Strickland v. Washington,
466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984), the defendant
must demonstrate a reasonable probability that but for his or her coun-
sel’s deficient performance, the result of the proceeding would have
been different.
20. ____: ____. A reasonable probability does not require that it be more
likely than not that the deficient performance altered the outcome of the
case; rather, the defendant must show a probability sufficient to under-
mine confidence in the outcome. The likelihood of a different result
must be substantial, not just conceivable.
21. Effectiveness of Counsel: Presumptions: Proof. The two prongs of the
test under Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80
L. Ed. 2d 674 (1984), may be addressed in either order, and the entire
ineffectiveness analysis should be viewed with a strong presumption that
counsel’s actions were reasonable.
22. Postconviction. In a motion for postconviction relief, a defendant is
required to specifically allege what the testimony of potential witnesses
would have been if they had been called at trial in order to avoid dis-
missal without an evidentiary hearing.
23. ____. Absent specific allegations, a motion for postconviction relief
effectively becomes a discovery motion to determine whether evidence
favorable to a defendant’s position actually exists.
24. Trial: Constitutional Law: Testimony: Attorney and Client: Waiver.
A defendant has a fundamental constitutional right to testify, and the
right to testify is personal to the defendant and cannot be waived by
defense counsel’s acting alone.
25. Trial: Attorney and Client: Testimony. Defense counsel bears the pri-
mary responsibility for advising a defendant of his or her right to testify
or not to testify, of the strategic implications of each choice, and that the
choice is ultimately for the defendant to make.
26. Trial: Attorney and Client: Effectiveness of Counsel: Testimony:
Waiver. Defense counsel’s advice to waive the right to testify can pre
sent a valid claim of ineffective assistance of counsel in two instances:
(1) if the defendant shows that counsel interfered with his or her
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freedom to decide to testify or (2) if counsel’s tactical advice to waive
the right was unreasonable.
27. Postconviction: Effectiveness of Counsel: Testimony: Proof. In a
postconviction action, when a defendant raises a claim of ineffective
assistance of trial counsel related to counsel’s failure with regard to
advising the defendant on his or her right to testify, an appellate court
subjects the claim to the Strickland v. Washington, 466 U.S. 668, 104 S.
Ct. 2052, 80 L. Ed. 2d 674 (1984), standard and requires the defendant
to show how trial counsel’s alleged deficient performance prejudiced
the defense.
28. Postconviction: Appeal and Error. In an appeal from the denial of
postconviction relief, an appellate court will not consider for the first
time on appeal claims that were not raised in the verified motion.
Appeal from the District Court for Douglas County: Marlon
A. Polk, Judge. Affirmed.
Tyeric L. Lessley, pro se.
Douglas J. Peterson, Attorney General, and Erin E. Tangeman
for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Freudenberg, J.
I. INTRODUCTION
The defendant challenges the district court’s denial of his
motion for postconviction relief without holding an evidentiary
hearing. The defendant alleged in the motion multiple errors
committed by the trial court and multiple claims of ineffective
assistance of trial counsel. The district court found that each of
the allegations were either procedurally barred, insufficiently
alleged, or affirmatively refuted by the record. We affirm.
II. BACKGROUND
1. Convictions
Tyeric L. Lessley was charged with first degree murder
under alternative theories of premeditated murder or felony
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murder, in violation of Neb. Rev. Stat. § 28-303(1) and (2)
(Reissue 2016); two counts of use of a deadly weapon to com-
mit a felony, in violation of Neb. Rev. Stat. § 28-1205(1)(a)
and (c) (Reissue 2016); first degree assault, in violation of
Neb. Rev. Stat. § 28-308 (Reissue 2016); and possession of a
firearm by a prohibited person, in violation of Neb. Rev. Stat.
§ 28-1206(1)(a)(b) (Reissue 2016).
Lessley filed a motion to suppress all evidence obtained
from a cell phone search. After a hearing, the motion to sup-
press was denied. The district court held that Lessley waived
his right to speedy trial.
Before Lessley’s 5-day jury trial began, the State was
allowed to amend its information by interlineation to remove
the premeditated murder theory of proof with regard to the first
degree murder charge. At trial, the State pursued the remaining
theory of felony murder.
Further details may be found in this court’s opinion on
direct appeal, 1 but the evidence at trial generally showed as
follows:
(a) Events of October 29, 2016
Between 4 and 4:30 a.m. on October 29, 2016, Curtis
Goodwin was paying bills on his laptop computer in the home
shared with his fiance, Suzanne Pope, in Omaha, Nebraska,
while Pope was sleeping in a bed in the main floor living room
of the residence, which the couple used as their bedroom.
During this time, Goodwin left the home through the back
door to investigate a knocking sound he heard at the front of
the house. Goodwin testified that family and friends never used
the front door of the residence, but instead entered and exited
through the rear door.
Goodwin grabbed a baseball bat before leaving the house.
Goodwin then walked around to his front door, where he dis-
covered a man knocking on the door. Goodwin asked the man
if he could help him. The man pointed a gun in Goodwin’s face
1
State v. Lessley, 301 Neb. 734, 919 N.W.2d 884 (2018).
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and responded, “Yeah, n-----, I’m your worst mother f------
nightmare.” The man, whom Goodwin testified he did not rec-
ognize, then told Goodwin to go into the house.
The two walked around the side of the house to the back
entrance. Goodwin testified that at some point along the way,
he dropped the bat. Once inside, the man told Goodwin to
“give me all your money and your shit.” Goodwin woke Pope
to tell her that someone was there to rob them. According
to Goodwin, both he and Pope told the intruder they did not
have any money. At that point, the intruder shot Pope, took
Goodwin’s laptop, and shot Goodwin as Goodwin lunged
at him.
Goodwin was able to follow the intruder out of the house
and into the backyard, where Goodwin collapsed as the
intruder ran down the street carrying Goodwin’s laptop. At this
time, Goodwin noticed an unfamiliar dark-colored Chevrolet
Suburban or Tahoe parked in his driveway, which was located
in the backyard of the residence. Goodwin testified that this
vehicle had no license plates and described the back doors
as opening “like kitchen cabinets.” The intruder walked back
past Goodwin. By this time, Goodwin had retrieved the bat he
dropped earlier and swung it in the direction of the intruder.
Goodwin testified that he hit “something,” but did not know
if it was the intruder. The intruder then shot Goodwin again,
dropped the laptop, and drove away.
Pope was killed and Goodwin was injured in this incident.
Goodwin was in a coma for nearly 3 months and sustained the
loss of one of his kidneys, his spleen and gallbladder, and sev-
eral feet of his small intestine. Complications from his injuries
caused Goodwin to fall into a second coma, during which he
nearly died.
“Shotspotter” evidence corroborated the timing of the gun-
shots. Shotspotter is a technology utilized by the Omaha Police
Department to determine the location of gunshots based upon
sounds captured by microphones positioned in certain parts of
the city. Here, Shotspotter captured the sound of two gunshots
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at 4:30 and 4:31 a.m., 20 seconds apart, sounding from out-
side Goodwin and Pope’s residence. Neighbors also testified
they heard gunshots around that time.
In addition, neighbors witnessed a vehicle travel west from
the residence after they heard the gunshots. One neighbor
testified that she saw a dark blue, green, or black Suburban
or Tahoe. A second neighbor testified that he witnessed a
dark-colored Suburban or Tahoe with a loud exhaust, custom
wheels, and tinted windows, and that based upon his experi-
ence with vehicles, he estimated the vehicle was between a
1996 and 1999 model.
(b) DNA and Other Evidence
Goodwin’s laptop computer was found in the backyard near
the driveway. It had a partial shoeprint on its cover. A tread
expert testified that the shoeprint was consistent with a Nike
“Shox” tennis shoe.
Various items of evidence were also recovered from the
scene and tested. The State’s DNA expert testified that the
blood and baseball bat found at the scene were both swabbed
and tested. Each produced a statistical match to Lessley’s
DNA.
Law enforcement later determined that on October 12, 2016,
Lessley had purchased a 2001 green Chevrolet Suburban from
an Omaha dealership. That dealership had global positioning
system records placing the Suburban less than a mile southeast
of the Goodwin-Pope residence at 4:18 a.m. on October 29.
One of the investigating officers testified that it had taken him
about 2 minutes to drive from the residence to the location
noted in the global positioning system records.
Lessley was arrested in January 2017. At the time of arrest,
Lessley was wearing a pair of Nike Shox shoes, which were
consistent with the shoeprint found on the laptop computer.
Lessley’s Suburban was impounded at the time of his arrest.
The Suburban still had in-transit signs and no license plates.
It also had tinted windows, “barn-door” style rear doors, and
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a louder-than-stock exhaust. A search of Lessley’s residence
recovered custom aftermarket rims.
At the time of the shooting, Lessley and his girlfriend lived
a 3-minute drive northwest of the Goodwin-Pope residence.
Lessley’s girlfriend testified that Lessley returned from work
on October 28, 2016, between 11:45 p.m. and 12 a.m. She fell
asleep shortly after Lessley returned home and was awoken
before 5:30 a.m. by Lessley’s talking on the telephone. At
this time, Lessley’s girlfriend noticed a “hole” in the right
side of Lessley’s forehead that he did not have when he
came home from work. Lessley’s cell phone records show
that he was on the cell phone between 4:58 and 5:06 a.m. on
October 29.
The jury was instructed only on the felony murder theory
and was not instructed as to any other theory of first degree
murder, or as to any other degree of murder. Lessley did not
object to the instructions as given and did not offer any pro-
posed instructions.
The jury found Lessley guilty on all five counts. At the sen-
tencing hearing, the district court initially sentenced Lessley
to life imprisonment for first degree murder, 20 to 20 years’
imprisonment for first degree assault, 3 to 3 years’ imprison-
ment for possession of a deadly weapon by a prohibited per-
son, and 5 to 5 years’ imprisonment on both use of a deadly
weapon to commit a felony convictions. After counsel for the
State and for Lessley raised the issue of indeterminate sen-
tences, telling the district court that the sentences had to be
different, the district court amended its sentences for counts
II through V, where it added 1 day to the maximum term of
each sentence so the minimum and maximum terms would
not be the same. All sentences were ordered to be served
consecutively.
2. Direct Appeal and Resentencing
On direct appeal, Lessley, with trial counsel, assigned that
there was insufficient evidence to support his convictions
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and that the district court erred in not instructing the jury
on the lesser-included offense of manslaughter. This court
affirmed Lessley’s convictions and determined that the dis-
trict court did not err when it did not instruct the jury on
manslaughter. However, this court found plain error in the
sentences imposed for counts II through V. This court con-
cluded that the original sentences imposed for these convic-
tions were valid because the maximum term imposed by the
court (5 years and 3 years) was not greater than the maximum
term provided for by law (50 years) and the minimum term
was the minimum term provided for by law (5 years and 3
years), as set forth in Neb. Rev. Stat. § 29-2204(1)(b) (Reissue
2016). Therefore, this court vacated the modified sentences
and remanded the cause for resentencing in conformity with
the initial sentences of 5 to 5 years’ imprisonment for each
use conviction and 3 to 3 years’ imprisonment for the posses-
sion conviction.
3. Postconviction Proceedings
Lessley filed a timely motion for postconviction relief.
The motion alleged various claims of ineffective assistance of
counsel at trial and on direct appeal and numerous claims of
error by the trial court. Many claims made in Lessley’s post-
conviction motion have not been raised in his appeal.
Relevant to the issues being raised on appeal, Lessley
asserted in his postconviction motion that his trial counsel
was ineffective for (1) advising him to waive his speedy trial
rights, (2) failing to interview potential witnesses, (3) refus-
ing to allow Lessley to testify regarding an extramarital affair
he had with Pope and an altercation that ensued between him
and Goodwin, (4) failing to present readily available expert
testimony such as a serology expert, and (5) failing to object
to the State’s amendment of the first degree murder charge on
the first day of trial. Lessley further asserted that his appel-
late counsel was ineffective for failing to raise on appeal the
district court’s error in allowing the State to amend its infor-
mation on the first day of trial and his excessive sentences
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issue. Lessley also claimed the district court erred when rul-
ing on the motion to suppress and instructing the jury. Lessley
alleged his trial counsel was ineffective for failing to success-
fully pursue the motion to suppress and object to erroneous
jury instructions at trial and was ineffective on appeal for
failing to pursue those issues.
The district court entered a written order denying Lessley’s
motion for postconviction relief without an evidentiary hear-
ing, finding that each of the claims were either procedur-
ally barred, insufficiently alleged, or affirmatively refuted by
the record.
III. ASSIGNMENTS OF ERROR
Lessley assigns, consolidated and restated, that the district
court erred when it (1) denied his request for appointment
of postconviction counsel without a hearing, (2) denied his
motion for postconviction relief without allowing the State
to respond, and (3) denied his motion for postconviction
relief without an evidentiary hearing as being without merit
or procedurally barred. He also assigns that the district court
erred during the trial stage of his proceedings by (1) failing
to suppress evidence derived from an unlawful search warrant
and supporting affidavit, (2) failing to find the State’s use of
peremptory challenges to exclude jurors of a specific racial
class violated his rights to due process and equal protection,
(3) abusing its discretion by supporting a verdict that was
insufficient to support his conviction for first degree murder,
and (4) giving certain jury instructions.
IV. STANDARD OF REVIEW
[1] In appeals from postconviction proceedings, an appellate
court reviews de novo a determination that the defendant failed
to allege sufficient facts to demonstrate a violation of his or her
constitutional rights or that the record and files affirmatively
show that the defendant is entitled to no relief. 2
2
State v. Cullen, 311 Neb. 383, 972 N.W.2d 391 (2022).
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[2] Whether a claim raised in a postconviction proceeding
is procedurally barred is a question of law. 3 When reviewing a
question of law, an appellate court reaches a conclusion inde-
pendent of the lower court’s ruling. 4
[3] Alleged errors of the lower court must be both specifi-
cally assigned and specifically argued in the brief of the party
asserting the errors to be considered by an appellate court. 5
V. ANALYSIS
Lessley asserts on appeal, broadly, that the district court
erred in denying postconviction relief without first conducting
an evidentiary hearing and in determining that his claims are
without merit and are procedurally barred. More specifically,
Lessley asserts multiple errors by the trial court and multiple
claims of ineffective assistance of counsel.
Before addressing the specific claims of postconviction
relief that Lessley believes the court should have held an evi-
dentiary hearing on, we set forth the general legal principles
governing our analysis of appeals from the denial of postcon-
viction claims without an evidentiary hearing and dispose of
any claims Lessley raised that are procedurally barred or not
properly before us for appellate review.
[4-6] Postconviction relief is available to a prisoner in cus-
tody under sentence who seeks to be released on the ground
that there was a denial or infringement of his or her consti-
tutional rights such that the judgment was void or voidable.
Thus, in a motion for postconviction relief, the defendant must
allege facts which, if proved, constitute a denial or violation of
his or her rights under the U.S. or Nebraska Constitution, caus-
ing the judgment against the defendant to be void or voidable. 6
3
State v. Jaeger, 311 Neb. 69, 970 N.W.2d 751 (2022).
4
Id.
5
Id.
6
Cullen, supra note 2.
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The district court must grant an evidentiary hearing to resolve
the claims in a postconviction motion when the motion
contains factual allegations which, if proved, constitute an
infringement of the defendant’s rights under the state or fed-
eral Constitution. 7
[7,8] However, the allegations in a motion for postconvic-
tion relief must be sufficiently specific for the district court to
make a preliminary determination as to whether an evidentiary
hearing is justified. 8 An evidentiary hearing is not required on
a motion for postconviction relief when (1) the motion does
not contain factual allegations which, if proved, constitute an
infringement of the movant’s constitutional rights rendering
the judgment void or voidable; (2) the motion alleges only
conclusions of fact or law without supporting facts; or (3)
the records and files affirmatively show that the defendant is
entitled to no relief. 9
[9,10] When a district court denies postconviction relief
without conducting an evidentiary hearing, an appellate court
determines de novo whether the petitioner has alleged facts
that would support the claim and, if so, whether the files and
records affirmatively show that he or she is entitled to no
relief. 10 The appellate court does not conduct this review sua
sponte, however; as with all appeals, the alleged errors of the
lower court must be both specifically assigned and specifically
argued in the brief of the party asserting the errors to be con-
sidered by the appellate court. 11 The appellate court will not
scour the record on appeal to understand unclear arguments or
find support for broad conclusions. 12
7
Id.; Jaeger, supra note 3.
8
Jaeger, supra note 3.
9
Id.
10
Id.
11
Id.
12
Id.
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1. Claims Not Properly Brought
for Appellate Review
With these general principles in mind, this court notes that
Lessley assigns many errors on appeal that he does not spe-
cifically argue in his brief. Lessley assigns that the district
court erred in denying his request for appointment of counsel
without a hearing, failing to suppress evidence derived from
an unlawful search warrant and supporting affidavit, failing to
find the State’s use of peremptory challenges to exclude jurors
of a specific racial class violated his rights to due process and
equal protection, and supporting a verdict based on evidence
that was insufficient to support a conviction of Lessley as
guilty beyond a reasonable doubt for felony murder. These
errors were not specifically argued in Lessley’s appellate brief,
and we accordingly decline to consider these assignments in
this appeal.
[11,12] Other issues that are not properly before an appel-
late court for review are issues that are not preserved below.
A motion for postconviction relief must mirror the arguments
made in a party’s appellate brief because we have said that
when an issue is raised for the first time in an appellate court,
it will be disregarded inasmuch as a lower court cannot com-
mit error in resolving an issue never presented and submitted
to it for disposition. 13 Therefore, an issue not presented to or
decided on by the trial court is not an appropriate issue for
consideration on appeal. 14
Lessley asserts in one general statement in his brief that
“[t]rial counsel rendered ineffective assistance of counsel by
not making proper objections to evidence discovered in vio-
lation of [Lessley’s] 4th amendment right to be free from
unreasonable search and seizure.” 15 Lessley words this allega-
tion in his motion for postconviction relief as “[t]rial counsel
13
See State v. Nadeem, 284 Neb. 513, 822 N.W.2d 372 (2012).
14
State v. Lee, 304 Neb. 252, 934 N.W.2d 145 (2019).
15
Brief for appellant at 11.
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rendered ineffective assistance of counsel when said counsel
fumbled what should have been a successful motion to sup-
press evidence seized pursuant to the search warrant of his
home, cell phone[,] and the questioning of his minor daughter
. . . without a guard[ian] present at [the] interview.” These
allegations are different. One focuses on the pretrial motion to
suppress hearing, and the other focuses on trial counsel’s fail-
ure to object to the evidence received at trial after the motion
to suppress was denied.
Lessley also contends in his appellate brief that counsel was
ineffective because counsel failed to object to the court’s con-
tinued delay of pretrial proceedings and that this caused him
to unknowingly waive his speedy trial right. In contrast, in his
motion, Lessley alleged that trial counsel was ineffective for
advising him to waive his statutory right to speedy trial and
argued that if he had not done so, the prosecution would have
been pressed to move forward with trial with less than 30 days
on the speedy trial clock.
With both of these issues, Lessley is asserting for the first
time on appeal that trial counsel was ineffective for failing to
object during trial, but he raised different allegations in his
motion for postconviction relief. Since the district court was
not presented with these arguments, and thus did not decide
whether trial counsel was ineffective for failing to object, it is
inappropriate for this court to consider them on appeal.
2. Claims That Are Procedurally Barred
Lessley also assigns and argues errors that the district court
correctly determined are procedurally barred. Lessley contends
that the district court abused its discretion when it “meted out
an invalid indeterminate sentence by imposing a fix[ed] inde-
terminate sentence plus one day” and when it “failed and/or
neglected to adjudicate this claim on postconviction relief.” 16
Further, Lessley raises an issue with the jury instructions given
16
Id. at 13 and 14.
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at trial, asserting that the trial court improperly defined reason-
able doubt as a lower standard by which the State had to prove
him guilty and in giving an instruction regarding the elements
of “intent” because “[i]ntent is a mental element of the crime
of [f]irst degree [m]urder (felony) and assault in the [f]irst
[d]egree” and “[t]he trial court failed to give proper instruc-
tions of willful, knowingly, with specific intent to [commit] the
allege[d] crime, resulting in prejudice to [Lessley].” 17
On direct appeal, 18 Lessley contended that the district court
erred in not instructing the jury on the lesser-included offense
of manslaughter and that there was insufficient evidence to
support his convictions. The State raised the issue of Lessley’s
sentences. We affirmed Lessley’s convictions and determined
that it was not error for the district court to not instruct the
jury on manslaughter. We also determined that the district
court’s modifying Lessley’s sentences by adding 1 day to his
maximum sentences was an invalid modification because the
original sentences for the use and possession convictions were
valid. We remanded the cause for resentencing, directing the
district court to resentence Lessley according to the original
sentences imposed.
Lessley attempts to argue again that his sentences with 1
day added were invalid indeterminate sentences. Lessley’s
argument fails to take into account that these are no longer his
sentences based on our remand in his direct appeal. Further,
his motion attempts to argue that other jury instructions were
incorrect. Since we considered a different issue regarding the
instructions to the jury in his direct appeal, these issues should
have been known to Lessley and should have been raised on
his direct appeal. Therefore, we decline to consider these argu-
ments here.
[13-15] The need for finality in the criminal process
requires that a defendant bring all claims for relief at the first
17
Id. at 9.
18
Lessley, supra note 1.
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opportunity. 19 We have consistently said that a motion for post-
conviction relief cannot be used to secure review of issues that
were known to the defendant and which were or could have
been litigated on direct appeal. 20 To the extent these arguments
are being raised for the first time in relation to his motion for
postconviction relief, they have not been brought at the first
opportunity. To the extent these issues were raised and directly
addressed or necessarily decided in our decision on direct
appeal, they are barred by claim preclusion. Claim preclusion
bars litigation of any claim that has been directly addressed or
necessarily included in a former adjudication, as long as (1)
the former judgment was rendered by a court of competent
jurisdiction, (2) the former judgment was a final judgment, (3)
the former judgment was on the merits, and (4) the same par-
ties or their privies were involved in both actions. 21
3. Due Process
An issue that is properly before us and appropriate for
appellate review is Lessley’s contention that the district court
erred when it failed to allow the State the opportunity to
respond to his motion for postconviction relief before rul-
ing upon it. Lessley acknowledges that the petitioner has the
burden of pleading and proving the facts necessary to entitle
him to relief, but he argues that the State had the burden of
pleading grounds of preclusion and then the burden returns to
the petitioner to disprove the preclusion’s existence. He asserts
that because the State was “never given the opportunity to
respond,” the record was not complete for the district court to
make a factual finding. 22
Lessley’s motion for postconviction relief was filed on
February 3, 2020, and the district court’s order denying
19
State v. Jackson, 296 Neb. 31, 892 N.W.2d 67 (2017).
20
State v. Betancourt-Garcia, 310 Neb. 440, 967 N.W.2d 111 (2021).
21
State v. Marrs, 295 Neb. 399, 888 N.W.2d 721 (2016).
22
Brief for appellant at 7.
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Lessley’s motion was filed on September 1, 2021. Lessley
asserts in his brief that “[i]t has been the formal policy of the
Douglas County District Court judges to allow the State 60 to
90 days to respond to formal pleading of postconviction once
the court has had an opportunity to review the postconviction
pleading.” 23 While this may be true, the State had substantially
more time than 60 to 90 days to respond to Lessley’s motion
if it wished to.
The State was not required to respond to Lessley’s motion
for postconviction relief, and the district court was not in
error in failing to order the State to respond. Neb. Rev. Stat.
§ 29-3001(2) (Reissue 2016) states, in relevant part:
Unless the motion and the files and records of a case
show to the satisfaction of the court that the prisoner is
entitled to no relief, the court shall cause notice thereof to
be served on the county attorney, grant a prompt hearing
thereon, and determine the issues and make findings of
fact and conclusions of law with respect thereto.
In State v. Burries, 24 we declined to conclude that the State
has an obligation to raise issues concerning a postconvic-
tion action at a time prior to that mandated by the statute. In
Burries, the State had filed a motion to dismiss in response
to the defendant’s first motion for postconviction relief. The
defendant later filed a second amended motion for postcon-
viction relief and argued on appeal that when the State failed
to file a brief in response, the State effectively withdrew its
motion to dismiss and conceded that he was entitled to relief.
We acknowledged that though the State, through its county
attorneys, can, and often does, participate at earlier points in
the process, the State is only called upon to take action with
respect to a motion once it receives notice from the court. And,
under § 29-3001(2), that notice is only mandated once the court
determines that a prisoner is entitled to a hearing. Therefore,
23
Id. at 7-8.
24
State v. Burries, 310 Neb. 688, 969 N.W.2d 96 (2022).
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we declined to conclude that the State has an obligation prior
to the notice mandated through § 29-3001(2) to respond to a
petitioner’s motion for postconviction relief.
Similarly here, the district court determined that Lessley was
not entitled to an evidentiary hearing on any claim he raised
in his motion for postconviction relief. Therefore, the court
was never required to provide notice to the State to issue a
response, and the State was not obligated to provide a response
to Lessley’s motion. Thus, the district court did not err in rul-
ing on Lessley’s motion for postconviction relief without first
receiving a response from the State.
[16] To the extent Lessley argues the record was not com-
plete without the State’s response, we reiterate that it is the
appellant’s responsibility to present a record that permits appel-
late review of the issue assigned as error. 25 Therefore, Lessley
could not depend on any action from the State in order for the
record to be complete for the district court to make a decision
or for the appellate court to review its decision. The district
court’s decision regarding whether a motion for postconviction
relief is entitled to an evidentiary hearing is based solely on
the facts alleged in the petitioner’s motion and the files and
records of the case, which need not require a response from
the State. 26
4. Ineffective Assistance of Counsel
[17] Lessley’s remaining contentions are ineffective assist
ance of counsel claims. Generally, a motion for postconviction
relief cannot be used to secure review of issues that were or
could have been litigated on direct appeal. However, when, as
here, the defendant is represented both at trial and on direct
appeal by the same counsel, the defendant’s first opportunity to
assert ineffective assistance of trial counsel is in a motion for
postconviction relief. 27
25
State v. Lester, 295 Neb. 878, 898 N.W.2d 299 (2017).
26
See § 29-3001.
27
Jaeger, supra note 3.
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[18-21] To prevail on a claim of ineffective assistance of
counsel under Strickland v. Washington, 28 the defendant must
show that his or her counsel’s performance was deficient and
that this deficient performance actually prejudiced the defend
ant’s defense. 29 To show that counsel’s performance was defi-
cient, the defendant must show counsel’s performance did
not equal that of a lawyer with ordinary training and skill in
criminal law. To show prejudice under the prejudice compo-
nent of the Strickland test, the defendant must demonstrate a
reasonable probability that but for his or her counsel’s deficient
performance, the result of the proceeding would have been
different. A reasonable probability does not require that it be
more likely than not that the deficient performance altered the
outcome of the case; rather, the defendant must show a prob-
ability sufficient to undermine confidence in the outcome. The
likelihood of a different result must be substantial, not just
conceivable. 30 The two prongs of this test may be addressed
in either order, and the entire ineffectiveness analysis should
be viewed with a strong presumption that counsel’s actions
were reasonable. 31
Lessley asserts that trial counsel was ineffective when coun-
sel (1) failed to interview and investigate potential alibi wit-
nesses, (2) refused to allow him to testify, (3) did not make
readily available expert witnesses, and (4) failed to object to
the State’s amendment of the information. We will discuss each
of these claims individually.
(a) Failure to Investigate or
Interview Alibi Witnesses
Lessley argues that trial counsel was ineffective because
counsel failed to interview and investigate potential alibi
28
Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674
(1984).
29
State v. Stricklin, 300 Neb. 794, 916 N.W.2d 413 (2018).
30
Id.
31
Cullen, supra note 2.
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witnesses, such as Cordell Westbrook. Lessley asserts that
Westbrook would have given testimony that he was with
Lessley between 1:30 and 4:30 a.m. on October 29, 2016.
Lessley argues that “[h]ad counsel interviewed and investi-
gated . . . Westbrook as part of his trial investigation of the
facts of the case, compelling testimony likely would have been
given resulting in [Lessley’s] acquittal of aforemention[ed]
charge to which the jury found him guilty.” 32
In his motion for postconviction relief, Lessley added the
allegation that Westbrook would have testified that he observed
the “scar” on Lessley’s head at that time; however, we will
not consider this allegation in our analysis because it was not
alleged in Lessley’s brief. An appellate court considers errors
that are both specifically assigned and specifically argued in
the brief of the party asserting the error and will not read the
brief together with a motion for postconviction relief in order
to discern what the appellant’s complete argument is.
[22,23] A defendant is required to specifically allege what
the testimony of potential witnesses would have been if they
had been called at trial in order to avoid dismissal without an
evidentiary hearing. 33 Absent specific allegations, a motion for
postconviction relief effectively becomes a discovery motion to
determine whether evidence favorable to a defendant’s position
actually exists. 34
In State v. Munoz, 35 we determined the defendant’s allega-
tions regarding witness testimony did not warrant an eviden-
tiary hearing because they were insufficiently specific. In
Munoz, the defendant alleged in his motion for postconviction
relief that trial counsel was deficient in failing to depose or
interview certain named witnesses who had knowledge of his
whereabouts during the crime. The defendant claimed one
32
Brief for appellant at 11.
33
State v. Munoz, 309 Neb. 285, 959 N.W.2d 806 (2021).
34
Id.
35
Id.
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named witness’ testimony would have presented a rebuttable
presumption to the State’s theory of how he allegedly mur-
dered the victim and “‘would have contradicted the [S]tate’s
evidence underlining proof of [his] alibi during the time of the
victim’s murder.’” 36 But the defendant did not elaborate as to
this potential testimony in any further detail. As to this wit-
ness, we concluded that the defendant’s allegations consisted
entirely of legal conclusions and conclusions of fact without
supporting facts.
The defendant in Munoz also alleged that another named
witness had engaged in a conversation with the defendant’s son
that was instrumental to his desire to travel out of town during
the time the crime took place and that this testimony would
have been pivotal because the witness possessed knowledge
of the events leading to the defendant’s desire to travel. While
the facts alleged by the defendant were more specific regarding
the witness’ testimony, we found it was still insufficient to war-
rant an evidentiary hearing. We explained that the defendant
failed to allege when the conversation regarding his desire to
travel with the witness took place—specifically whether the
conversation took place before the murder—and the testimony
would not have been exculpatory under the facts of the case
because the alleged alibi was for when the victim, who had
been murdered several days before, was found, not when she
was murdered. We also noted that the testimony would have
been inadmissible hearsay.
In contrast, we found the facts alleged by the defendant in
State v. Stricklin 37 were sufficient to show, if proved, both defi-
cient performance and prejudice regarding his alibi defense. In
Stricklin, the defendant alleged that on the day of the crimes,
he took his stepson to a barber shop at 10 a.m., left the barber
shop around noon, and drove to his grandmother’s house, dur-
ing which drive he made a call on his cell phone at 12:34 p.m.
36
Id. at 295, 959 N.W.2d at 812.
37
Stricklin, supra note 29.
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The defendant alleged that four specifically named witnesses
and his cell phone records would corroborate this alibi. At trial,
the State relied on cell phone evidence that linked the defend
ant and his codefendant to the crime scene between 11:42 a.m.
and 12:36 p.m. We noted that, based on the State’s theory of
the case, the crimes occurred during the general time period
the defendant’s alleged alibi witnesses would confirm he was
someplace else. Since the defendant alleged that counsel knew
of this alibi information and was deficient in failing to pre
sent it, we found that the defendant had alleged facts which,
if proved, were sufficient to show both deficient performance
and prejudice regarding his alibi defense and that the defendant
was entitled to an evidentiary hearing on whether trial counsel
was ineffective for failing to file notice of and present evi-
dence of the defendant’s alibi defense.
While Lessley alleged Westbrook would have attested that
he was with Lessley between 1:30 and 4:30 a.m. on the day
of Pope’s murder and Goodwin’s assault, he did not allege
where Westbrook would have testified he and Lessley were
at those times. Thus, this alleged potential testimony was not
inconsistent with Westbrook’s being with Lessley outside of
the victims’ house. Unlike in Stricklin, it was not potential
evidence that Lessley was somewhere else. It was not alibi evi-
dence. The allegation that had counsel interviewed and inves-
tigated Westbrook as part of his trial investigation of the facts
of the case, “compelling testimony likely would have been
given resulting in [his] acquittal,” 38 is a factual conclusion and
also insufficient.
The district court did not err in denying Lessley’s motion
without an evidentiary hearing on this claim.
(b) Refusal to Allow Lessley to Testify
Lessley asserts that trial counsel was ineffective because
counsel refused to allow him to testify to an extramarital affair
with Pope and the altercation that ensued between him and
38
Brief for appellant at 11.
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Goodwin between 12:30 and 1:15 a.m. the night of Pope’s
murder. Lessley argues that had this testimony been presented
to the jury, it would have explained some of the circumstantial
evidence present at the crime scene, which we presume means
his DNA and his shoe print on Goodwin’s laptop.
[24-27] A defendant has a fundamental constitutional right
to testify, and the right to testify is personal to the defendant
and cannot be waived by defense counsel’s acting alone. 39
Defense counsel bears the primary responsibility for advising
a defendant of his or her right to testify or not to testify, of
the strategic implications of each choice, and that the choice
is ultimately for the defendant to make. 40 Defense counsel’s
advice to waive the right to testify can present a valid claim
of ineffective assistance of counsel in two instances: (1) if the
defendant shows that counsel interfered with his or her free-
dom to decide to testify or (2) if counsel’s tactical advice to
waive the right was unreasonable. 41 In a postconviction action,
when a defendant raises a claim of ineffective assistance of
trial counsel related to counsel’s failure with regard to advising
the defendant on his or her right to testify, we have subjected
the claim to the Strickland standard and required the defendant
to show how trial counsel’s alleged deficient performance
prejudiced the defense. 42
Lessley does not specifically allege supporting facts that
show how counsel interfered with his decision on whether
to testify or if counsel’s advice to waive his right to testify
was unreasonable. Lessley provides no detail regarding what
discussions he had with counsel that would show counsel
interfered with his right to testify and little detail as to what
his testimony actually would have been. His allegation that
counsel refused to let him testify to an extramarital affair
39
State v. Golyar, 301 Neb. 488, 919 N.W.2d 133 (2018).
40
Cullen, supra note 2.
41
Stricklin, supra note 29.
42
Cullen, supra note 2.
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with Pope and an altercation between him and Goodwin is a
conclusory factual statement that is insufficient without sup-
porting facts.
Lessley failed to allege sufficient facts that, if proved, would
show counsel’s performance was ineffective with respect to
Lessley’s right to testify. The district court did not err when it
denied this claim without an evidentiary hearing.
(c) Failure to Offer Expert Witnesses
Lessley contends that trial counsel did not perform as a
competent attorney because counsel did not make readily avail-
able expert witnesses who would have presented scientific and
forensic testimony to “refute the State’s evidence.” 43 More
specifically, Lessley asserts that had counsel elicited testimony
of a serology expert, “an expert would have testified the blood-
spatter from the baseball bat and laptop was a mixture of . . .
Goodwin and possibly [Lessley]” and would have “testified to
the [n]ew testing procedures and the flaw[ed] testing proce-
dures use[d] by the State[’]s forensic department.” 44 Lessley
generally asserts that the failure to consult with an expert
prejudiced his defense.
[28] We will not consider Lessley’s argument that this
expert would have testified to the flawed testing proce-
dures by the State because this allegation does not appear in
Lessley’s motion for postconviction relief. In an appeal from
the denial of postconviction relief, we will not consider for
the first time on appeal claims that were not raised in the
verified motion. 45
As for the remaining assertions, Lessley fails to allege how
a serology expert’s testimony that the blood spatter was a mix-
ture of Goodwin’s and Lessley’s blood would have changed
the outcome of the trial. Lessley does not seem to dispute that
at least some of the blood on the bat was his, and in light of
43
Brief for appellant at 12.
44
Id.
45
State v. Britt, 310 Neb. 69, 963 N.W.2d 533 (2021).
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all the evidence offered against him at trial, it is unclear how
this expert testimony that would “refute the State’s evidence”
would be enough to alter the outcome of the trial.
Again, the facts Lessley alleges are insufficient to require
an evidentiary hearing. The district court did not err in denying
an evidentiary hearing on the alleged ineffectiveness of fail-
ing to elicit testimony of a serology expert.
(d) Failure to Object to Amendment
of Information
Finally, Lessley generally asserts trial counsel was ineffec-
tive because counsel failed to object to the State’s amending
the information on the first day of trial. Lessley argues that this
prejudiced him “in that there was no time to prepare for the
new charges.” 46
The record affirmatively refutes this. The State is correct
when it argues that there was no prejudice to Lessley. The
State did not change or add charges when it amended the
information; rather, it simply removed one of the theories of
first degree murder that Lessley had been charged with. The
State removed the premeditated murder theory and proceeded
to trial on only the felony murder theory. Therefore, Lessley
did not have to “prepare for the new charges” 47 or “prepare
and present a new defense strategy” as he asserts. Lessley fails
to allege facts to show that he was prejudiced by this amend-
ment and that counsel was ineffective for failing to object to it.
The district court did not err in denying Lessley an evidentiary
hearing on this claim.
VI. CONCLUSION
For the foregoing reasons, we affirm the order of the district
court denying Lessley’s motion for postconviction relief with-
out an evidentiary hearing.
Affirmed.
46
Brief for appellant at 12.
47
Id. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487135/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
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CARRIZALES V. CREIGHTON ST. JOSEPH
Cite as 312 Neb. 296
Natasha Carrizales, individually and on behalf of
Nina Carrizales, a minor, as her guardian and next
friend, and Nina Carrizales, by and through her
mother, guardian, and next friend, Natasha
Carrizales, appellants, v. Creighton Saint
Joseph Regional Healthcare System,
LLC, et al., appellees.
___ N.W.2d ___
Filed August 26, 2022. No. S-21-150.
1. Judgments: Jurisdiction: Appeal and Error. The question of juris-
diction is a question of law, upon which an appellate court reaches a
conclusion independent of the trial court; however, findings of the lower
court as to underlying factual disputes, if any, in regard to the jurisdic-
tional issue will be upheld unless they are clearly erroneous.
2. Limitations of Actions: Dismissal and Nonsuit. Neb. Rev. Stat.
§ 25-217 (Reissue 2016) is self-executing, so that an action is dismissed
by operation of law, without any action by either the defendant or the
court, as to any defendant who is named in the action and not served
with process within the time set forth in the statute.
3. Limitations of Actions: Dismissal and Nonsuit: Jurisdiction. After
dismissal of an action by operation of law under Neb. Rev. Stat.
§ 25-217 (Reissue 2016), there is no longer an action pending and the
district court has no jurisdiction to make any further orders except to
formalize the dismissal.
4. Evidence: Appeal and Error. Generally, the control of discovery is a
matter for judicial discretion, and decisions regarding discovery will be
upheld on appeal in the absence of an abuse of discretion.
5. Appeal and Error. Appellate review of a district court’s use of inherent
power is for an abuse of discretion.
6. Judgments: Words and Phrases. An abuse of discretion occurs when
a trial court’s decision is based upon reasons that are untenable or
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unreasonable or if its action is clearly against justice or conscience,
reason, and evidence.
7. Courts. Nebraska courts, through their inherent judicial power, have
the authority to do all things necessary for the proper administration
of justice.
8. Summary Judgment: Appeal and Error. An appellate court affirms a
lower court’s grant of summary judgment if the pleadings and admitted
evidence show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts and that
the moving party is entitled to judgment as a matter of law.
9. ____: ____. An appellate court reviews the district court’s grant of 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.
10. Summary Judgment: Malpractice: Physicians and Surgeons:
Affidavits: Proof. At the summary judgment stage, it is well settled that
a physician’s self-supporting affidavit suffices to make a prima facie
case that the physician did not commit medical malpractice.
11. Expert Witnesses. A court should not admit expert testimony if it
appears the witness does not possess facts that will enable him or her
to express an accurate conclusion, as distinguished from a mere guess
or conjecture.
Appeal from the District Court for Douglas County: James
T. Gleason, Judge. Affirmed.
Theodore R. Boecker, Jr., of Boecker Law, P.C., L.L.O., for
appellants.
Joseph S. Daly and Mary M. Schott, of Evans & Dixon,
L.L.C., for appellees.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Papik, J.
Natasha Carrizales, individually and on behalf of her
minor daughter, Nina Carrizales (individually and collectively
Carrizales), brought a medical malpractice action alleging neg-
ligence during Nina’s birth. The district court found that one
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defendant was dismissed by operation of law as a result of
Carrizales’ failure to timely serve it. The district court granted
summary judgment in favor of the remaining defendants after
granting a motion to strike Carrizales’ expert witness. Carrizales
appeals these rulings. Finding no error, we affirm.
I. BACKGROUND
Carrizales filed her lawsuit on October 30, 2013. In her
complaint, Carrizales alleged that on October 30, 2011, she
was admitted to an Omaha, Nebraska, hospital and that she
gave birth to her daughter that day. Carrizales also alleged
that various doctors responsible for her and her daughter’s
care negligently failed to respond to signs of fetal distress and
that, as a result, her daughter was born with severe disabilities,
which will reduce her life expectancy and require extended
medical attention throughout the course of her life.
Among the defendants named in the lawsuit were Creighton
University Medical Center-Saint Joseph Hospital (Creighton
University Medical Center) and Creighton University. Carrizales
alleged that Creighton University Medical Center operated
the hospital at which the birth took place and that Creighton
University employed or granted privileges to practice medicine
at the hospital to several individual defendants. The individ
uals named as defendants included three doctors: Caron J.
Gray, Nicholas L. Wulf, and Richard G. Arms III (collectively
the doctors). Carrizales alleged that the doctors provided care
and treatment to Carrizales and her daughter during the course
of Carrizales’ hospital stay.
At issue in this appeal is the district court’s disposition of
Carrizales’ claims against Creighton University and the doc-
tors. Carrizales filed a motion for default judgment against
Creighton University, alleging that it had failed to respond to the
complaint. The district court concluded, however, that because
Carrizales failed to serve Creighton University within the dead-
line provided at the time in Neb. Rev. Stat. § 25-217 (Reissue
2016), Creighton University was dismissed by operation of
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law. The district court granted summary judgment in favor of
the doctors after entering an order striking Carrizales’ expert
witness. The district court also denied Carrizales’ motion to
alter or amend. Additional background regarding these issues
is provided in the analysis section below.
II. ASSIGNMENTS OF ERROR
Carrizales assigns, condensed and restated, that the dis-
trict court erred (1) in finding that Creighton University was
dismissed by operation of law under § 25-217, (2) in failing
to grant her motion for default judgment against Creighton
University, (3) in striking her expert witness, (4) in granting
the doctors’ motion for summary judgment, and (5) in denying
her motion to alter or amend.
III. ANALYSIS
1. Dismissal of Creighton University
(a) Background
As noted above, Carrizales filed her lawsuit on October 30,
2013. On October 31, Carrizales filed a praecipe for a sum-
mons to be served on Creighton University, in care of its reg-
istered agent, James S. Jansen, by certified mail. The clerk of
the district court issued the summons the same day consistent
with the instructions of the praecipe. The summons was No.
226226. There is no dispute that Carrizales did not immedi-
ately serve this summons.
Months later, on April 16, 2014, Carrizales filed a sec-
ond praecipe to issue a summons. Like the October 2013
praecipe, it requested a summons to be served on Creighton
University, in care of its registered agent, Jansen, by certified
mail. Later the same day, the clerk of the court issued a sum-
mons. The summons, however, listed the party to be served as
Creighton University Medical Center. This second summons
was No. 255379.
Carrizales filed a service return in the district court on April
28, 2014. The service return listed the No. 226226 summons
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in the upper right-hand corner. It indicated that copies of the
summons were sent by certified mail to “Creighton University
Medical Center” care of “James S. Jansen, RA” on April 17.
An accompanying return receipt showed the certified mail was
received April 21.
Over 4 years later, in July 2018, Carrizales filed a motion
asking the district court to enter a default judgment against
Creighton University. It alleged that Creighton University had
been served with the summons, but had not responded to the
complaint. At the hearing on Carrizales’ motion for default
judgment, Creighton University argued that a default judgment
should not be entered against it, because it was not obligated to
respond to Carrizales’ complaint. Creighton University argued
that it was not obligated to respond because Carrizales either
served the wrong party or served the October 2013 summons
after it expired.
In support of the motion for default judgment, Carrizales
offered an affidavit signed by her counsel. That affidavit stated
that Carrizales “filed a Praecipe for issuance of Summons and
Complaint upon Creighton University” on April 14, 2014.
It also stated that “[w]ithin ten days of the issuance of the
Summons by the Clerk, [Carrizales] caused a Summons to
be issued and said Summons was served via certified mail
. . . . A copy of the Summons and Complaint are attached as
Exhibit 2.” The attached exhibit 2 was a copy of summons
No. 255379, dated April 16, 2014. The affidavit also stated
that “[s]ervice was accomplished upon Creighton University
by delivery of a Summons and Complaint upon its registered
agent . . . on or about April 21, 2014, as reflected in the return
of service, a copy of which is attached hereto as Exhibit 6.”
The attached exhibit 6 is a copy of the service return that was
filed with the district court, which lists No. 226226 in the
upper right-hand corner.
The district court entered a written order in December
2020, addressing Carrizales’ motion for default judgment. In
the order, the district court observed that the service return
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Carrizales filed listed the document number associated with
the summons issued in October 2013. The district court found
that the October 2013 summons was not delivered until April
2014 and was thus not sent within 10 days of issuance as
required by Neb. Rev. Stat. § 25-505.01(1)(c) (Reissue 2016).
Based on this determination, the district court concluded
that Carrizales failed to serve Creighton University within 6
months of the filing of her lawsuit and that, under § 25-217,
the action against Creighton University was thus dismissed
without prejudice by operation of law.
(b) Standard of Review
[1] By finding that Carrizales’ claims against Creighton
University were dismissed by operation of law, the district
court concluded it lacked subject matter jurisdiction over those
claims. See, Stone Land & Livestock Co. v. HBE, 309 Neb.
970, 962 N.W.2d 903 (2021); Kovar v. Habrock, 261 Neb.
337, 622 N.W.2d 688 (2001). The question of jurisdiction is a
question of law, upon which an appellate court reaches a con-
clusion independent of the trial court; however, findings of the
lower court as to underlying factual disputes, if any, in regard
to the jurisdictional issue will be upheld unless they are clearly
erroneous. Walksalong v. Mackey, 250 Neb. 202, 549 N.W.2d
384 (1996).
(c) Analysis
Carrizales argues that rather than finding that Creighton
University was dismissed by operation of law, the district
court should have entered a default judgment against it. We
focus our attention on the district court’s determination that
Creighton University was dismissed by operation of law. If that
determination is correct, the district court obviously did not
err by declining to enter a default judgment against Creighton
University.
Carrizales makes both factual and legal arguments in con-
tending that the district court erred by finding that Creighton
University was dismissed by operation of law pursuant to
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§ 25-217. She argues that the district court erred by making
the factual finding that the summons that Carrizales served in
April 2014 was the summons that was issued in October 2013.
Alternatively, she argues that even if she served the summons
issued in October 2013 in April 2014, the district court erred
by finding as a matter of law that § 25-217 applied.
We will address Carrizales’ factual argument first. Carrizales
argues that her counsel’s affidavit established that the sum-
mons served in April 2014 was the summons issued earlier
that month and that there is no evidence to the contrary. We
disagree with Carrizales that her counsel’s affidavit conclu-
sively established that the summons served in April 2014 was
the summons issued that month. Carrizales’ counsel clearly
averred that he served “a Summons” in April 2014, but it is
not clear to us from the face of the affidavit that he was aver-
ring that he served the summons the clerk had issued earlier
that month. Furthermore, as noted above, Carrizales’ counsel
averred in the affidavit that service of “a Summons” was
accomplished in April 2014 “as reflected in the return of serv
ice.” The service return, however, listed the document number
corresponding to the summons issued in October 2013. We
also note that while counsel for Carrizales expressed a belief at
oral argument that the summons served in April 2014 was the
summons issued in April 2014, he also acknowledged “some
chance” that it was actually the summons issued in October
2013 that was served in April 2014. Given the evidence before
the district court, we do not find that its determination that
Carrizales served the summons issued in October 2013 was
clearly erroneous.
Having found no grounds to reverse the district court’s deci-
sion based on its factual determination, we turn to Carrizales’
legal argument. Here, Carrizales argues that even if the sum-
mons served on Creighton University was not served within
10 days of issuance as required by § 25-505.01(1)(c), she
nonetheless “served” Creighton University within the deadline
set by § 25-217. She also argues that if Creighton University
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had some objection to the summons or service of process,
it was obligated to file a motion under Neb. Ct. R. Pldg.
§ 6-1112(b)(4) or (5). By not filing such a motion, she argues,
Creighton University waived any objection to the service it
received.
At the time Carrizales filed her complaint, § 25-217 pro-
vided that an action “shall stand dismissed without prejudice
as to any defendant not served within six months from the
date the complaint was filed.” Carrizales’ argument requires
us to determine what a plaintiff must do in order for a defend
ant to be “served” for purposes of the version of § 25-217 in
effect at the time the complaint was filed in this case. On this
point, Carrizales suggested at oral argument that a defendant
is “served” for purposes of § 25-217 when it actually receives
a copy of the summons and complaint pursuant to a method
of service authorized by statute. In Carrizales’ view then,
Creighton University was “served” because service by certified
mail is authorized by statute and it actually received a copy of
the complaint with a summons, albeit an expired one. We are
not persuaded by this argument.
A similar question was at issue in State Farm Mut. Auto
Ins. Co. v. Allstate Ins. Co., 268 Neb. 439, 684 N.W.2d 14
(2004). There, we had to determine when service for pur-
poses of § 25-217 occurred in a situation in which a plaintiff
attempted to serve a defendant by publication. We consid-
ered § 25-217 in pari materia with Neb. Rev. Stat. § 25-519
(Reissue 2016), the statute directing how service by publica-
tion is to be accomplished, and concluded that the defendant
was not served under § 25-217 until the publication had been
printed in a newspaper in 3 successive weeks, as required by
§ 25-519.
In line with State Farm Mut. Auto Ins. Co., supra, we
believe it appropriate in this case to consider § 25-217 in pari
materia with § 25-505.01(1)(c). The latter statute directs how
service by certified mail is to be accomplished—by send-
ing the summons to the defendant by certified mail “within
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ten days of issuance.” Id. In this case, however, the district
court found that Carrizales failed to send a summons to
Creighton University within 10 days of its issuance, and, as we
have stated, that finding was not clearly erroneous. Because
Carrizales failed to follow the statute that directs how certi-
fied mail service is to be accomplished, we find that Creighton
University was not served for purposes of § 25-217.
[2,3] We likewise find no merit to Carrizales’ argument
that without a motion from Creighton University under
§ 6-1112(b)(4) or (5) of the rules of pleading, the district court
could not find that the claim against Creighton University was
dismissed by operation of law pursuant to § 25-217. As we
have explained on many occasions, § 25-217 is self-executing,
so that an action is dismissed by operation of law, without any
action by either the defendant or the court, as to any defend
ant who is named in the action and not served with process
within the time set forth in the statute. See Davis v. Choctaw
Constr., 280 Neb. 714, 789 N.W.2d 698 (2010). After dismissal
of an action by operation of law under § 25-217, there is no
longer an action pending and the district court has no jurisdic-
tion to make any further orders except to formalize the dis-
missal. Davis, supra. That is what the district court did here
with respect to Creighton University, and for reasons we have
explained, we find that was not erroneous.
2. Striking of Expert Witness
(a) Background
In September 2017, after this case had been pending for
nearly 4 years, the doctors filed a motion requesting that
the district court enter an order striking Dr. Fred Duboe as
an expert witness for Carrizales. In the motion to strike, the
doctors asserted that after Carrizales designated Duboe, a
physician based in Illinois, as an expert witness in August
2015, their counsel contacted counsel for Carrizales on several
occasions between March 2016 and August 2017. The motion
claimed that the doctors’ counsel asked that Carrizales’ counsel
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provide dates on which Duboe could be deposed, but that no
deposition was ever scheduled.
In response to the doctors’ September 2017 motion to strike,
the district court issued an order on February 22, 2018. The
order did not grant the motion to strike, but directed that
Carrizales “shall within 14 days from the date hereof find
and determine dates upon which [Duboe] can be available for
deposition, which dates must be reasonably agreeable to [the
doctors].” It also provided that “[s]aid deposition must be taken
and concluded within two months from the date hereof.” The
order expressly warned that if “said deposition is not com-
pleted within two months from the date hereof, the Court will
strike [Duboe] as an expert witness.”
On May 3, 2018, the doctors filed another motion to strike
Duboe as an expert witness, asserting that Duboe’s deposi-
tion had not been taken and dates had not been identified for
such a deposition. At the hearing on this motion to strike,
the doctors offered and the district court received copies
of correspondence exchanged by counsel for the doctors,
Carrizales, and Creighton University Medical Center after the
district court’s order on the initial motion to strike. The corre
spondence included a letter from counsel for the doctors dated
February 23, 2018, identifying several dates in March and
April on which he would not be available for a deposition; a
copy of an email dated March 8, 2018, from Carrizales’ counsel
in which he asked the other attorneys if they would be avail-
able on April 23 to 25 for a deposition of Duboe and advised
that there were limited days on which both he and counsel
for the doctors were available; an email dated March 9, 2018,
from Carrizales’ counsel stating that he was also available for
a deposition of Duboe on April 11; an email dated March 9,
2018, from counsel for the doctors saying that he would be
available on April 23 and 24, but not April 11; and an email
dated March 13, 2018, from counsel for Creighton University
Medical Center stating that she was available for a deposition
on April 23 and 24.
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The district court also received at the hearing an affidavit
from Carrizales’ counsel. In the affidavit, he stated that by the
time April 23 and 24, 2018, were identified as feasible dates
for defense counsel, Duboe advised counsel for Carrizales
that he was no longer available on those dates. Counsel for
Carrizales also stated in his affidavit that while the first motion
to strike, filed in September 2017, was pending, he sent an
email to defense counsel indicating that Duboe would be avail-
able for a deposition on October 10, but that counsel for the
doctors replied that he wanted to “wait and see what happens”
at the hearing on the motion to strike.
The district court entered an order granting the motion to
strike Duboe as an expert witness.
(b) Standard of Review
[4-6] Generally, the control of discovery is a matter for
judicial discretion, and decisions regarding discovery will be
upheld on appeal in the absence of an abuse of discretion.
Putnam v. Scherbring, 297 Neb. 868, 902 N.W.2d 140 (2017).
Similarly, appellate review of a district court’s use of inherent
power is for an abuse of discretion. Id. An abuse of discretion
occurs when a trial court’s decision is based upon reasons that
are untenable or unreasonable or if its action is clearly against
justice or conscience, reason, and evidence. Id.
(c) Analysis
Carrizales contends that the district court erred by striking
Duboe as an expert witness. She first argues that the district
court could not strike Duboe’s testimony because the doctors
never served a notice of deposition or subpoena upon him.
Alternatively, she argues that the district court’s order striking
Duboe was unduly harsh.
We begin by addressing Carrizales’ argument that the dis-
trict court could not strike Duboe’s testimony because the
doctors did not serve a notice of deposition or subpoena
upon him. In support of this argument, Carrizales points to
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decisions in which courts have held that sanctions cannot
be imposed under provisions analogous to Neb. Ct. R. Disc.
§ 6-337 (Rule 37) for a deponent’s nonappearance at a deposi-
tion if the deponent was not compelled to appear by a proper
subpoena. See, e.g., Laws v. Louisville Ladder, Inc., 146 So.
3d 380 (Miss. App. 2014). We find those cases inapposite,
because, as we will explain, we disagree that the district
court order striking Duboe’s testimony was issued as a Rule
37 sanction.
[7] Rule 37 provides “a range of sanctions” that a court may
impose for specific violations of discovery rules. See John P.
Lenich, Nebraska Civil Procedure, § 28:2 at 1199 (2022). In
this case, Carrizales does not appear to have committed any
of those violations. But Rule 37 sanctions are not the only
tool trial courts have to manage discovery. Nebraska courts,
through their inherent judicial power, have the authority to do
all things necessary for the proper administration of justice.
Putnam, supra. We have recognized that this inherent power
authorizes trial courts to issue and enforce progression orders
related to discovery. See id. Indeed, we have noted that trial
courts are encouraged to issue and enforce such orders in order
to meet case progression standards adopted by this court and
that members of the bar are responsible for cooperating with
the judiciary in attempting to meet these standards. See id., cit-
ing Neb. Ct. R. § 6-101(B)(5) and (C) (rev. 2013).
We understand the district court’s February 22, 2018, order
to have been a type of progression order—it ordered deadlines
by which the parties were to identify dates for Duboe’s deposi-
tion and by which the deposition was to be completed. It also
specified that if the deposition was not completed by the dead-
line, Duboe would not be permitted to testify. We understand
the district court to have enforced that order when it issued its
subsequent order striking Duboe’s testimony.
The fact that the district court’s orders concerning Duboe’s
deposition were issued pursuant to its inherent power does
not shield them from all review. A trial court’s exercise of its
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inherent power is reviewed for an abuse of discretion. See
Putnam v. Scherbring, 297 Neb. 868, 902 N.W.2d 140 (2017).
We have emphasized, however, that this is “a fairly deferential
standard” and that a court abuses its discretion “when its deci-
sion is based upon reasons that are untenable or unreasonable
or if its action is clearly against justice or conscience, reason,
and evidence.” Id. at 878, 902 N.W.2d at 146 (emphasis in
original). We have also recognized that a trial court has broad
discretion to make discovery and evidentiary rulings condu-
cive to the conduct of a fair trial. Id. We find that neither the
district court’s February 22, 2018, order nor its subsequent
order striking Duboe as an expert witness was an abuse of this
broad discretion.
By February 22, 2018, the lawsuit had been pending for
over 4 years and Carrizales’ expert witness had not yet been
deposed. Case progression standards adopted by this court
provide that 98 percent of civil jury cases are to be disposed of
within 18 months of filing. See § 6-101(A). It appears that the
district court could have and should have done more at earlier
stages in this case to expedite its completion. But even if the
district court’s initial case management efforts were wanting,
we do not believe that precluded the district court from even-
tually taking steps to hasten the resolution of a case that had
been pending for over twice as long as our case progression
standards state the vast majority of cases of this type should.
Specifically, we do not find it unreasonable that the district
court imposed a relatively short deadline by which the parties
were required to identify dates when Duboe could be deposed
and to complete the deposition. We reach this conclusion even
assuming Carrizales was not solely to blame for the fact that
Duboe had not yet been deposed or for the overall delay in
bringing this case to completion.
As for the district court’s order striking Duboe as an expert
witness, we cannot, under the circumstances, say that was an
abuse of discretion either. The district court’s February 22,
2018, order required Carrizales to, within 14 days from the
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date of the order, identify dates within the next 2 months in
which both Duboe and the defendants’ counsel were avail-
able for Duboe’s deposition to be taken. The evidence in our
record demonstrates that Carrizales did not comply with this
portion of the order. The evidence shows that the only dates
Carrizales’ counsel identified on which both he and defense
counsel would be available were April 23 and 24, 2018.
Setting aside the fact that April 23 and 24 were just outside
the district court’s 2-month deadline, counsel for Carrizales
stated in his affidavit that by the time both defense counsel
confirmed they would be available on those dates, counsel for
Carrizales learned Duboe was no longer available.
We would perhaps have a different case before us if, after
failing to identify dates in which Duboe and the necessary
lawyers were available for Duboe to be deposed, counsel for
Carrizales had promptly alerted the district court of the dif-
ficulty of complying with its order. There is nothing in our
record, however, showing that counsel for Carrizales did any-
thing to bring the issue to the attention of the district court
until the doctors filed a motion to strike in May 2018. By that
time, more than 2 months had passed and Duboe still had not
been deposed. Only then did the district court do what it said it
would do in its February 22, 2018, order and strike Duboe as
an expert witness.
Under these circumstances, we do not believe that the
district court’s decision to strike Duboe as an expert witness
was based on reasons that were untenable or unreasonable.
See Putnam v. Scherbring, 297 Neb. 868, 902 N.W.2d 140
(2017). Neither can we find that the district court’s action was
clearly against justice or conscience, reason, and evidence.
See id. Rather, it appears that the district court concluded that
Carrizales had not complied with its earlier order and had not
offered a compelling reason for noncompliance, and therefore,
it enforced the order in the manner it said that it would. We
find no abuse of discretion.
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3. Summary Judgment
(a) Factual Background
Shortly after the district court issued its order striking Duboe
as an expert witness, Creighton University Medical Center
and the doctors filed motions for summary judgment. Prior to
the hearing on the motion for summary judgment, Carrizales
voluntarily dismissed her case against Creighton University
Medical Center.
At the hearing on the doctors’ motion for summary judg-
ment, they offered, among other things, an affidavit of Gray.
Gray’s affidavit stated that she, Wulf, and Arms provided
medical care to Carrizales in connection with the birth of
Carrizales’ daughter; that Gray was familiar with the allega-
tions in Carrizales’ complaint; that she was familiar with the
standard of care required of physicians monitoring the labor of
patients and the delivery of children; and that based upon her
review of the medical records, her personal knowledge, and
her training, education, and experience, she, Wulf, and Arms
met the applicable standard of care in treating Carrizales and
Carrizales’ daughter.
Carrizales objected to the receipt of Gray’s affidavit, argu-
ing that the doctors failed to designate her as an expert witness
and that her testimony lacked foundation. In opposition to
the motion for summary judgment, Carrizales offered, among
other things, various discovery responses of the doctors, por-
tions of a deposition of Gray, portions of a deposition of a
midwife who provided care to Carrizales during the labor and
delivery, and an affidavit of Carrizales. Carrizales also offered
an affidavit of Duboe in which Duboe averred that the doctors
breached the standard of care during the labor and delivery
process. The district court sustained the doctors’ objection to
Duboe’s affidavit, referring to its earlier ruling striking Duboe
as an expert witness.
The district court issued an order granting the doctors’
motion for summary judgment. The district court concluded
that Gray’s affidavit could be considered for purposes of the
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doctors’ summary judgment motion and that it was sufficient
to make a prima facie case that each of the doctors met the
applicable standard of care. The district court then found that
Carrizales failed to create a genuine issue of material fact as to
whether the doctors met the standard of care. It explained that
in order to create a genuine issue of material fact as to whether
the doctors breached the standard of care, Carrizales was
required to provide expert testimony contradicting Gray’s testi-
mony that the doctors had met the standard of care. The district
court stated that it had stricken Duboe as an expert witness and
that Carrizales had failed to provide other expert testimony that
would create a genuine issue of material fact.
(b) Standard of Review
[8] An appellate court affirms a lower court’s grant of sum-
mary judgment if the pleadings and admitted evidence show
that there is no genuine issue as to any material facts or as to
the ultimate inferences that may be drawn from the facts and
that the moving party is entitled to judgment as a matter of law.
Lassalle v. State, 307 Neb. 221, 948 N.W.2d 725 (2020).
[9] An appellate court reviews the district court’s grant of
summary judgment de novo, viewing the record in the light
most favorable to the nonmoving party and drawing all reason-
able inferences in that party’s favor. Id.
(c) Analysis
Carrizales argues on appeal that the district court erred both
by finding that Gray’s affidavit established a prima facie case
that the doctors met the standard of care and by finding that
Carrizales failed to present evidence showing the existence of
a genuine issue of material fact. We address each of these argu-
ments below.
[10] At the summary judgment stage, it is well settled that
a physician’s self-supporting affidavit suffices to make a prima
facie case that the physician did not commit medical malprac-
tice. Lombardo v. Sedlacek, 299 Neb. 400, 908 N.W.2d 630
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(2018). Carrizales contends that because of certain discovery
responses provided by the doctors and certain testimony in
Gray’s deposition, however, the district court should not have
found that Gray’s affidavit made such a prima facie case here.
As we will explain, we disagree.
Carrizales first argues that the doctors should not have been
permitted to rely on Gray’s affidavit because they failed to
designate her as an expert witness. In support of this argu-
ment, Carrizales argues that if the doctors desired to rely on
an affidavit from Gray in support of their motion for summary
judgment, they were obligated to disclose their intention to
do so in discovery. Specifically, Carrizales argues that the
doctors did not disclose their intention to rely on Gray as an
expert in their expert witness designation, in response to vari-
ous requests for production of documents, and in response to
interrogatories.
We are not persuaded that the doctors were required to dis-
close an intention to rely on Gray for purposes of summary
judgment. The interrogatories Carrizales relies on sought the
identity of persons the doctors expected or intended to call
“at the trial.” The doctors’ expert witness designation likewise
identified those experts “who will be called to testify on behalf
of [the doctors] at a trial of this case.” The doctors did not
seek to call Gray as a witness at trial; they offered her affidavit
in support of their motion for summary judgment. As for the
doctors’ responses to Carrizales’ requests for production, the
requests for production at issue sought reports of or commu-
nications with experts the doctors either “retained” or “com-
missioned.” Carrizales has not directed us to anything in our
record suggesting that Gray, a party to the case, was retained
or commissioned as an expert witness, and even assuming she
was, Carrizales has not shown that the doctors failed to pro-
duce documents responsive to these requests.
Carrizales also argues that even if Gray’s affidavit could
shift the burden to Carrizales as to the claim against Gray, it
could not do so with respect to the claims against the other
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doctors. On this point, however, Carrizales argues only that the
other doctors also did not identify Gray in response to inter-
rogatories seeking the identity of persons the other doctors
expected or intended to call at trial. As mentioned above, Gray
was not called as a witness at trial.
Carrizales next contends that Gray’s affidavit testimony
lacked adequate foundation. In support of this argument,
Carrizales relies primarily on portions of Gray’s deposition
testimony. Gray stated in that deposition that she lacked an
independent recollection of Carrizales’ labor apart from her
medical records. She also stated that she had not reviewed the
medical records of Carrizales’ daughter and did not have an
opinion as to whether Carrizales’ daughter suffered an injury
on the day she was born. Counsel for the doctors also stated
during the deposition that Gray would not be expressing an
opinion as to what caused Carrizales’ daughter’s current con-
dition. Carrizales argues that these statements showed Gray
lacked adequate foundation to provide an opinion that she and
the other doctors met the standard of care. We disagree.
[11] A court should not admit expert testimony if it appears
the witness does not possess facts that will enable him or her
to express an accurate conclusion, as distinguished from a mere
guess or conjecture. Orchard Hill Neighborhood v. Orchard
Hill Mercantile, 274 Neb. 154, 738 N.W.2d 820 (2007). Gray
may have needed to rely on medical records to assess the care
provided by the doctors, and she may not have formed opinions
as to whether Carrizales’ daughter was injured or the causation
thereof, but we do not believe any of this would preclude her
from offering an accurate conclusion as to whether the doctors
met the standard of care.
Finally, Carrizales contends that the district court should not
have granted summary judgment to the doctors because she
offered evidence that created a genuine issue of material fact.
Gray’s affidavit shifted the burden to Carrizales to produce
admissible evidence that would create a genuine issue of mate-
rial fact as to whether the doctors complied with the standard
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of care. See Lombardo v. Sedlacek, 299 Neb. 400, 908 N.W.2d
630 (2018). Generally, expert testimony from a medical profes-
sional is required to establish the standard of care in a medical
malpractice action. See id. The only expert opinion Carrizales
offered that contradicted Gray’s standard of care opinion was
expressed by Duboe. As we have already concluded, however,
the district court acted within its discretion when it precluded
Carrizales from relying on Duboe as an expert.
There is an exception to the general rule requiring expert
testimony as to the medical standard of care. Under the com-
mon knowledge exception, expert testimony is not required
where a layperson with common knowledge can infer neg-
ligence. See, e.g., Green v. Box Butte General Hosp., 284
Neb. 243, 818 N.W.2d 589 (2012). Although Carrizales does
not rely expressly on this exception, she claims that other
evidence in the summary judgment record besides Duboe’s
affidavit created a genuine issue of material fact. She points
to statements in her own affidavit that she was told during
her labor she would undergo a cesarean section but that the
procedure was never performed. She also directs us to depo-
sition testimony of a midwife involved in Carrizales’ labor
and delivery who disagreed with Gray’s deposition testimony
that Gray was merely a consulting physician. The midwife
testified to her belief that Gray was supervising the midwife.
None of this evidence, however, can create a genuine issue
of material fact as to whether the doctors complied with the
standard of care. There is no expert testimony contradicting
Gray’s opinion that the doctors met the standard of care, and
we do not believe a layperson could infer negligence under
these circumstances.
We find no merit to Carrizales’ arguments that the district
court erred by granting summary judgment to the doctors.
4. Motion to Alter or Amend
Carrizales also argues that the district court erred by deny-
ing her motion to alter or amend. In support of her contention
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that the district court should have granted her motion to alter
or amend, Carrizales merely repeats the arguments we have
already rejected above. We find no error in the district court’s
denial of the motion to alter or amend.
IV. CONCLUSION
Because we find no error on the part of the district court,
we affirm.
Affirmed. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487127/ | Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
11/18/2022 08:06 AM CST
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DIETZEL ENTERS. V. J. A. WEVER CONSTR.
Cite as 312 Neb. 426
Dietzel Enterprises, Inc., appellant, v.
J. A. Wever Construction, L.L.C., appellee.
___ N.W.2d ___
Filed September 16, 2022. No. S-21-106.
1. Breach of Contract: Damages. A suit for damages arising from a
breach of contract presents an action at law.
2. Judgments: Appeal and Error. In a bench trial of a law action, a trial
court’s factual findings have the effect of a jury verdict and will not be
set aside on appeal unless clearly wrong.
3. ____: ____. After a bench trial of a law action, an appellate court does
not reweigh evidence, but considers the evidence in the light most
favorable to the successful party and resolves evidentiary conflicts in
favor of the successful party.
4. Damages: Appeal and Error. The amount of damages to be awarded is
a determination solely for the fact finder, and its action in this respect
will not be disturbed on appeal if it is supported by evidence and bears
a reasonable relationship to the elements of the damages proved.
5. Fraud. In determining whether an individual reasonably relied on a
misrepresentation, courts consider the totality of the circumstances,
including the nature of the transaction; the form and materiality of the
representation; the relationship of the parties; the respective intelli-
gence, experience, age, and mental and physical condition of the parties;
and their respective knowledge and means of knowledge.
6. Negligence: Fraud. In both negligent and fraudulent misrepresentation
cases, whether the plaintiff exercised ordinary prudence is relevant to
whether the plaintiff justifiably relied on the misrepresentation when the
means of discovering the truth was in the plaintiff’s hands.
7. Contracts. In order for the implied covenant of good faith and fair deal-
ing to apply, there must be in existence a legally enforceable contrac-
tual agreement.
8. Contracts: Parties. The implied covenant of good faith and fair deal-
ing exists in every contract and requires that none of the parties do
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anything which will injure the right of another party to receive the
benefit of the contract.
9. ____: ____. The nature and extent of an implied covenant of good faith
and fair dealing are measured in a particular contract by the justifiable
expectations of the parties. Where one party acts arbitrarily, capri-
ciously, or unreasonably, that conduct exceeds the justifiable expecta-
tions of the second party.
10. Contracts. The question of a party’s good faith in the performance of a
contract is a question of fact.
11. Breach of Contract: Words and Phrases. A material breach is a failure
to do something that is so fundamental to a contract that the failure to
perform that obligation defeats the essential purpose of the contract or
makes it impossible for the other party to perform under the contract.
12. Breach of Contract. A material breach will excuse the nonbreaching
party from its performance of the contract.
13. ____. Whether or not a breach is material and important is a question
of degree which must be answered by weighing the consequences of the
breach in light of the actual custom of persons in the performance of
contracts similar to the one involved in the specific case.
14. Damages: Evidence. Evidence of damages must be sufficient to enable
the trier of fact to estimate actual damages with a reasonable degree of
certainty and exactness.
15. Damages: Evidence: Proof. Proof of damages to a mathematical cer-
tainty is not required; however, a plaintiff’s burden of offering evidence
sufficient to prove damages cannot be sustained by evidence which is
speculative and conjectural.
16. Breach of Contract: Damages. In a breach of contract case, the ulti-
mate objective of a damages award is to put the injured party in the
same position the injured party would have occupied if the contract had
been performed, that is, to make the injured party whole.
17. Damages: Proof. A claim for lost profits must be supported by some
financial data which permit an estimate of the actual loss to be made
with reasonable certitude and exactness.
Appeal from the District Court for Douglas County: James
M. Masteller, Judge. Affirmed in part, and in part reversed
and remanded with directions.
Patrick T. Vint and Todd W. Weidemann, of Woods &
Aitken, L.L.P., for appellant.
Zachary W. Lutz-Priefert and Frederick D. Stehlik, of Gross,
Welch, Marks & Clare, for appellee.
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Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Papik, J.
J. A. Wever Construction, L.L.C. (Wever), contracted with
Dietzel Enterprises, Inc. (Dietzel), to perform excavation work
for the construction of a transmission line. While Wever and
Dietzel do not agree on who is to blame, all agree that the proj-
ect did not go well. Dietzel eventually abandoned the project
before its work was done. Unsurprisingly, litigation followed.
Dietzel filed a lawsuit asserting various claims against Wever,
and Wever asserted a breach of contract counterclaim against
Dietzel. Following a bench trial, the district court found that
Dietzel was the first party to materially breach the contract and
awarded Wever damages. From this judgment, Dietzel appeals,
arguing that the district court erred in its rejection of some of
its claims, in its finding that Dietzel was not entitled to suspend
its performance on the project, and in its damages award. We
find that the evidence in the record did not support the entirety
of the damages award to Wever but that the district court did
not otherwise err. Accordingly, we affirm in part, and in part
reverse and remand with directions.
I. BACKGROUND
The setting for this case is the construction site for a trans-
mission line in Maryland owned by Baltimore Gas & Electric
(BG&E). MasTec North America, Inc. (MasTec), was the proj-
ect’s general contractor. Wever and Dietzel, two Nebraska
companies, worked as subcontractors on the project. MasTec
subcontracted with Wever to lay certain concrete foundations
for the line, and Wever subcontracted with Dietzel to excavate
the holes where the foundations would be laid.
The parties experienced difficulties from the start. Work was
to begin on the project in April 2015, but Dietzel was unable to
arrive at the jobsite at the time directed by MasTec. To avoid a
delay, the parties agreed that Wever would rent equipment and
begin the excavation process until Dietzel could arrive.
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After Dietzel arrived, more problems arose. Dietzel had
difficulty performing the excavations, and the project began
to fall behind schedule. Wever’s witnesses at trial generally
blamed Dietzel employees’ allegedly poor excavation strategy
as the cause of the problems and delays. Dietzel’s witnesses
blamed the jobsite conditions, including the presence of alleg-
edly “undrillable” rock. Dietzel contended that before it sub-
mitted its bid, Wever led it to believe that no such rock would
be present.
Dietzel later became concerned that it was not being paid
for the time and materials it was expending on the project. Of
particular concern was whether it would receive payment for
change orders it submitted to Wever for the excavation of hard
rock it contended was not covered by the contract. Under the
contract, however, Wever was not obligated to make payments
to Dietzel unless and until it received payment from MasTec,
and there was evidence that MasTec was slow to pay bills sub-
mitted by Wever.
This all came to a head in the fall of 2015. At that time,
Dietzel requested assurance from Wever that Wever was seek-
ing payment of its change orders from MasTec and that Dietzel
would be paid for those change orders. Approximately 2 weeks
later, Dietzel abandoned the project.
Dietzel later filed this lawsuit alleging claims of breach of
contract, unjust enrichment, negligent misrepresentation, and
breach of the implied covenant of good faith and fair dealing.
Wever filed a breach of contract counterclaim.
Following a bench trial, the district court issued a writ-
ten order. The district court found that Dietzel committed the
first material breach of the contract when it abandoned the
project, and it awarded Wever $2,758,250.47 in damages for
that breach. It found in favor of Wever on Dietzel’s claims of
negligent misrepresentation and breach of the implied cov-
enant of good faith and fair dealing, but found that Wever had
been unjustly enriched in the amount of $328,507, because it
received a payment from MasTec for Dietzel’s work but had
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not passed that payment on to Dietzel. After offsetting the
amounts, the district court determined Wever was entitled to
judgment in the amount of $2,429,743.47. Dietzel appealed,
and we moved this case to our docket on our own motion.
Additional relevant background is provided in the analysis
section below.
II. ASSIGNMENTS OF ERROR
Dietzel assigns, renumbered and restated, that the district
court erred (1) by finding that Wever was not liable for neg-
ligent misrepresentation, (2) by finding that Wever was not
liable for a breach of the implied covenant of good faith
and fair dealing, (3) by finding that Dietzel did not have the
right to stop performance of the contract on the grounds that
Wever failed to provide adequate assurances of payment, (4)
by finding that Wever’s failure to make a timely payment was
not a material breach of contract, and (5) in its calculation
of damages.
III. STANDARD OF REVIEW
[1] A suit for damages arising from a breach of contract
presents an action at law. Goes v. Vogler, 304 Neb. 848, 937
N.W.2d 190 (2020).
[2,3] In a bench trial of a law action, a trial court’s factual
findings have the effect of a jury verdict and will not be set
aside on appeal unless clearly wrong. McGill Restoration v.
Lion Place Condo. Assn., 309 Neb. 202, 959 N.W.2d 251
(2021). After a bench trial of a law action, an appellate court
does not reweigh evidence, but considers the evidence in the
light most favorable to the successful party and resolves evi-
dentiary conflicts in favor of the successful party. Id.
[4] The amount of damages to be awarded is a determina-
tion solely for the fact finder, and its action in this respect will
not be disturbed on appeal if it is supported by evidence and
bears a reasonable relationship to the elements of the damages
proved. Funk v. Lincoln-Lancaster Cty. Crime Stoppers, 294
Neb. 715, 885 N.W.2d 1 (2016).
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IV. ANALYSIS
We address each of Dietzel’s assignments of error below.
We take the assignments up in the chronological order of the
underlying facts.
1. Negligent Misrepresentation
(a) Additional Background
Dietzel claims that it came to be involved in the transmis-
sion line project as a result of a misrepresentation by Wever.
The alleged misrepresentation occurred in January 2015. At
that time, Joshua Dezort, acting on behalf of Wever, sent an
email to Brandon Kreiling, the operations manager for Dietzel.
Kreiling had been involved with estimating projects for Dietzel
since 2008 and, at the time, managed Dietzel’s submission of
bids for potential projects. The email sought a bid from Dietzel
for excavation work.
Dezort’s email stated:
Graceton Tline just north of Baltimore. Transmission
line runs from Bel Air to Pylesville. 82 Drilled pier. There
will be an outage so no energized lines overhead. Work
would start end of Feb. Top 4˝ is loose running around
5 to 7 blows. Then increases about 30 blow from 7´ to
20´. 20´ plus runs around 50 blows with some holes a 90
blows down 30´. There is an adder for rock excavation
if required. The rock is Schist, which is sheet like rock
consisting of mud and clay. Let me know if you are good
with $1000 per cubic yard for rock excavation if required.
There is 15 holes that you will hit rock on. On the sched-
ule it shows depth of rock and depth of hole.
Within 30 minutes of this email, Dezort sent Kreiling a
geotechnical report. The geotechnical report provided details
about small test holes drilled in the area of the jobsite.
Thirteen test holes had a notation of “auger refusal,” which
indicated that when the test hole was being drilled, the device
used to drill the test hole hit something that prevented it from
going any deeper. Kreiling testified that “auger refusal” could
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have been caused by encountering rocks that were small in
comparison to the excavating equipment, by a rock shelf,
or by full rock. The geotechnical report also indicated that
“[v]ery hard materials were encountered in . . . 19 of the 31
borings at depths ranging from 13.5 to 33.5 feet below the
existing ground surface.”
The geotechnical report also had a section titled “Regional
Geology.” This section stated:
[T]he project area is underlain by residual soils derived
primarily from the in-situ weathering of the underly-
ing bedrock (Wissahickon Formation) and several of its
members in this portion of the county, which include
the Lower Peltic Schist, and Boulder Gneiss, which are
comprised primarily of a fine to medium grained chlorite,
muscovite schist with zones of quartzite, metagraywacke,
and gneiss. A small portion of the transmission align-
ment also appears to be underlain by rocks associated
with the Ultramafic and Gabbroic Rock, comprised of
metagabbros, talcs, serpentinites, actinolite schists.
Dezort testified that metagraywacke is “a type of quartz
schist rock,” that gneiss is “similar to schist, but . . . much
harder and more compressed over time,” and that “muscovite
schist with zones of quartzite” would mean that there would
be a possibility of hitting quartz. Kreiling admitted that the
geotechnical report was the best source of information about
subsurface conditions and that it was available to him when he
formulated Dietzel’s bid.
Dietzel submitted a bid to Wever to perform the excavation
work for $722,000 and estimated that it would be able to com-
plete the work in 100 days. Wever accepted Dietzel’s bid.
When Dietzel began its excavation work, it discovered
granite and quartz. According to Dietzel, this was contrary to
a sentence in Dezort’s initial email stating that the rock would
be “[s]chist, [a] sheet like rock consisting of mud and clay.”
Dietzel’s president, Andrew Dietzel, alleged at trial that the
hard rock Dietzel encountered was “undrillable” and that if he
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had known the project was going to require the excavation of
granite and quartz, Dietzel would not have submitted a bid.
Kreiling also testified that, based on Dezort’s representation
that the rock was schist, he bid the job believing that any rock
encountered would “break up well” and be easily excavated.
Based on this information, Dietzel asserted a claim of neg-
ligent misrepresentation. The district court rejected the claim,
finding that Dietzel did not justifiably rely on the representa-
tion in Dezort’s email.
(b) Analysis
Dietzel contends that the district court erred in finding that
it did not justifiably rely on Dezort’s representation and that
it proved all other elements of its negligent misrepresentation
claim. We focus on the issue of justifiable reliance, because we
find it resolves Dietzel’s argument.
[5,6] In order to prevail on a claim of negligent misrepre-
sentation, the plaintiff must prove justifiable reliance on the
alleged misrepresentation. See, e.g., Lucky 7 v. THT Realty,
278 Neb. 997, 775 N.W.2d 671 (2009). In determining whether
an individual reasonably relied on a misrepresentation, courts
consider the totality of the circumstances, including the nature
of the transaction; the form and materiality of the representa-
tion; the relationship of the parties; the respective intelligence,
experience, age, and mental and physical condition of the par-
ties; and their respective knowledge and means of knowledge.
Nathan v. McDermott, 306 Neb. 216, 945 N.W.2d 92 (2020). In
both negligent and fraudulent misrepresentation cases, whether
the plaintiff exercised ordinary prudence is relevant to whether
the plaintiff justifiably relied on the misrepresentation when
the means of discovering the truth was in the plaintiff’s hands.
Id. We have treated the question of whether a plaintiff jus-
tifiably relied on a representation as a question of fact. See
Lucky 7, supra.
Dietzel contends that the statement in Dezort’s email regard-
ing schist was a positive statement of fact and that thus, under
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our law, Dietzel was justified in relying upon it and had no
obligation to further investigate it. In support of this conten-
tion, Dietzel correctly points out that we have said that a
plaintiff is justified in relying upon a positive statement of fact
if an investigation would be required to discover its truth. See
Nathan, supra. We have stated, however, that this is a “general
rule.” Lucky 7, 278 Neb. at 1003, 775 N.W.2d at 676. Accord
Omaha Nat. Bank v. Manufacturers Life Ins. Co., 213 Neb.
873, 332 N.W.2d 196 (1983). And we have also made clear that
this principle does not permit a plaintiff to focus exclusively on
an alleged misrepresentation and ignore other information in its
possession. See Lucky 7, supra.
Here, Kreiling claims to have understood Dezort’s email
to represent that the only rock Dietzel would encounter in its
excavation would be schist, a “sheet like rock consisting of
mud and clay.” Significant evidence, however, suggested that
Dietzel was not justified in relying on such an understanding.
The alleged misrepresentation appears in a terse email intro-
ducing the idea of Dietzel’s submitting a bid on the project. In
that email, Dezort did not specifically state that the only rock
in the area would be schist or otherwise indicate that the area
would not have other rock that was more difficult to drill. In
addition, shortly after sending the introductory email, Dezort
sent the geotechnical report, which contained detailed and
more technical information. Kreiling, who had years of experi-
ence reviewing such information and submitting bids, admitted
that this additional information was the best source of informa-
tion regarding subsurface conditions. This information reported
the “auger refusal” that occurred during testing and the discov-
ery of “[v]ery hard materials” in a number of locations. It also
listed various types of rock found in the area, which Dezort
testified indicated the presence of rock that was “much harder
[than] schist,” as well as quartz. Viewing all this evidence in
the light most favorable to Wever, we cannot conclude that the
district court clearly erred by finding that Dietzel did not estab-
lish justifiable reliance.
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2. Good Faith and Fair Dealing
(a) Additional Background
Dietzel also contends that Wever is liable for failing to
take certain actions shortly after it began work on the proj-
ect. Wever arrived at the project site in early April 2015, but
Dietzel was unable to begin work at that time. To avoid fall-
ing behind schedule, the parties agreed that Wever would rent
equipment and begin to perform a portion of the excavation
work for which Dietzel had submitted a bid.
Wever began excavation work at a location provided by
MasTec, but it soon encountered materials that were too hard
for it to excavate. Wever responded by moving to another
location where Wever did not encounter the same difficulties.
Wever did not, however, inform Dietzel about the hard rock
discovered in its initial excavation work.
When Dietzel arrived at the scene several weeks later, it was
directed to begin excavating in the area where Wever encoun-
tered hard rock. Like Wever, Dietzel encountered hard rock
that was difficult to excavate.
Dietzel alleged that Wever’s failure to disclose that it had
discovered hard rock was a breach of its implied covenant
of good faith and fair dealing. The district court rejected
the claim, reasoning that Wever was not obligated to inform
Dietzel about the hard rock, because the existence of hard
rock was something Dietzel should have contemplated given
the information that was available to it at the time it submitted
its bid.
(b) Analysis
Dietzel contends that the district court erred by finding that
Wever did not breach the implied covenant of good faith and
fair dealing. Relying again on the reference in Dezort’s email
to schist, Dietzel contends that Wever was obligated to inform
Dietzel about the hard rock. When it did not, Dietzel sub-
mits, Wever breached the implied covenant of good faith and
fair dealing.
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[7] We note that at the time Wever initially discovered hard
rock in early April 2015, the parties’ subcontract had not been
executed. The subcontract was dated April 24, 2015. Dietzel
apparently takes the position that Wever’s implied duty of
good faith and fair dealing arose prior to the execution of the
subcontract. We have said that in order for the covenant of
good faith and fair dealing to apply, there must be in existence
a legally enforceable contractual agreement. Acklie v. Greater
Omaha Packing Co., 306 Neb. 108, 944 N.W.2d 297 (2020).
At least one court has expressly held that the duty of good
faith and fair dealing is not imposed until an agreement has
been reached and that a plaintiff must rely on other theories of
recovery for alleged deception prior to a contract being formed.
See Husman, Inc. v. Triton Coal Co., 809 P.2d 796 (Wyo.
1991). We nonetheless assume for the purpose of our analysis
that Wever was bound by the covenant of good faith and fair
dealing when it discovered the hard rock.
[8-10] The implied covenant of good faith and fair dealing
exists in every contract and requires that none of the parties do
anything which will injure the right of another party to receive
the benefit of the contract. In re Application of Northeast Neb.
Pub. Power Dist., 300 Neb. 237, 912 N.W.2d 884 (2018). The
nature and extent of an implied covenant of good faith and fair
dealing are measured in a particular contract by the justifiable
expectations of the parties. Id. Where one party acts arbitrarily,
capriciously, or unreasonably, that conduct exceeds the justifi-
able expectations of the second party. Id. The question of a
party’s good faith in the performance of a contract is a question
of fact. Spanish Oaks v. Hy-Vee, 265 Neb. 133, 655 N.W.2d
390 (2003).
We find no clear error in the district court’s conclusion that
Wever did not breach the implied covenant of good faith and
fair dealing. For reasons we have already explained, the dis-
trict court did not clearly err by finding that Dietzel could not
justifiably rely on Dezort’s email to believe that only schist
would be encountered in the excavation. The same evidence
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that supports that conclusion supports a conclusion that Wever
did not breach the implied covenant of good faith and fair
dealing. If Dietzel could not justifiably rely on Dezort’s email
to believe the work involved only schist, we do not see how it
could justifiably expect to be informed if Wever encountered
rock other than schist, nor do we see how Wever could be said
to have acted arbitrarily, capriciously, or unreasonably by not
disclosing that information.
3. Adequate Assurances
(a) Additional Background
Dietzel’s next two assignments of error pertain to its conten-
tion that when it abandoned the project in October 2015, it was
legally entitled to do so. In order to discuss these assignments
of error, it is necessary to set forth a fairly detailed discussion
of the way in which parties on the project were paid.
The parties entered into what they refer to as a “paid-when-
paid” contract. The phrase “paid-when-paid” refers to the fact
that Wever was contractually required to make payment to
Dietzel only after it received payment from MasTec. The con-
tract provided that Wever was to make payment within 7 days
of receiving payment from MasTec.
Dietzel sent Wever two types of invoices. One type sought
“progress payments” under the contract—the payment Dietzel
was owed for the percentage of work it had completed from its
scope of work. The other sought payment of “change orders”—
a request for payment for additional work Dietzel claimed was
not covered by the contract. Wever was then expected to sub-
mit these requests for payment, with a contractually authorized
markup, to MasTec.
Dietzel submitted an invoice to Wever dated July 1, 2015,
for progress payments for April, May, and June. Wever sent
checks to Dietzel for progress payments in July, August, and
September: It sent Dietzel a check for $41,706 dated July 17,
2015; a check for $68,708 dated August 10, 2015; and a check
for $15,143.06 dated September 30, 2015. Kathryn Hisel, the
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chief financial officer of Wever, testified that it often took
MasTec 60 to 90 days after Wever sent a bill to send a payment
to Wever.
Dietzel submitted its first change order for excavating hard
rock on July 19, 2015. The change order sought payment of
$328,507.
The owner of Wever, James Wever, testified that he attended
a meeting in late July 2015 in which the change order was dis-
cussed. James Wever testified that Andrew Dietzel and repre-
sentatives of BG&E and MasTec were also present. According
to James Wever, BG&E and MasTec did not commit to paying
the change order, but did agree to review it and provide them
with an answer “at a later time.”
Dietzel employees made inquiries with Wever regarding the
status of the change order after it was submitted. On August
6, 2015, a Dietzel employee emailed Dayna Wever, Wever’s
president, and asked about the change order. Dayna Wever
responded:
[T]he rock change order is out if [sic] our hands and is on
the table with Mas[T]ec and BG[&]E. Change orders are
not paid until approved by owner. We will pay you when
and if we are paid. . . . As I told Andrew [Dietzel] in our
phone conversation last week, I am emailing and asking
about it everyday [sic] and when we hear something I will
definitely pass it on to you!!
On August 14, 2015, Dietzel submitted a second change
order for excavating hard rock, requesting an additional
$73,943.
Hisel and Dezort testified that Dietzel’s change orders were
submitted to MasTec. Dezort testified that when a change
order was pending, Wever would “keep on asking [about] the
status of that change order during the duration of the project.”
Andrew Dietzel acknowledged during his testimony that no
one at Wever ever disputed his change order requests, indi-
cated that they were rejecting a change order request, or stated
that they would not pursue the change orders.
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At some point, BG&E clarified that it would not grant
Dietzel’s change orders related to rock excavation until 288
cubic yards of rock had been excavated. On September 7,
2015, Andrew Dietzel communicated to Wever by email that,
unless its change orders were granted, Dietzel would not
excavate where it had encountered hard rock. In response,
Wever sent a letter explaining it had “pursued a change order
with MasTec and BG[&]E on [Dietzel’s] behalf”; that pursu-
ant to the subcontract, it would pay Dietzel only if it first
received payment; and that MasTec and BG&E had denied the
change order request until 288 cubic yards of rock had been
excavated.
On September 24, 2015, Dietzel sent a letter requesting that
Wever provide assurance within 7 days that it was “pursuing
Dietzel’s claims for outstanding progress payments and change
orders” and that it would “receive payment of these outstanding
amounts.” On September 25, Dayna Wever forwarded Andrew
Dietzel an email from a representative of MasTec. The MasTec
representative had asked in his email, “Which foundations hit
undrillable rock?” Andrew Dietzel responded with information
about the specific foundations.
On October 5, 2015, Dietzel abandoned the project. Andrew
Dietzel sent Dayna Wever a letter explaining Dietzel’s decision
to leave. Among the reasons he cited were Wever’s failure to
provide assurances of payment and failure to provide docu-
mentation that it was “prosecuting Dietzel’s claims.” Based on
these failures and others, Andrew Dietzel wrote, Dietzel con-
sidered Wever in material breach of the contract. The district
court found that Dietzel committed the first material breach of
the contract when it abandoned the project.
(b) Analysis
Dietzel argues that the district court erred by finding
that it committed the first material breach of the contract.
Dietzel contends that when it did not receive adequate assur-
ance that Wever was pursuing its change order requests with
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MasTec and that Wever would pay Dietzel for its change
order requests, Dietzel had the right to suspend contractual
performance.
Dietzel cites the Restatement (Second) of Contracts § 251
(1981) to argue that it had the right to request assurance
of Wever’s performance of the subcontract and that because
Wever did not provide such adequate assurance within a rea-
sonable time, Dietzel was permitted to treat the failure as a
repudiation of the subcontract. While this court has not yet
adopted § 251 of the Restatement, see McKinnis Roofing v.
Hicks, 282 Neb. 34, 803 N.W.2d 414 (2011), we need not
decide whether to adopt it here, because, even if we were to
adopt it, Dietzel cannot show that it would apply.
Section 251 states:
(1) Where reasonable grounds arise to believe that
the obligor will commit a breach by non-performance
that would of itself give the obligee a claim for damages
for total breach under § 243, the obligee may demand
adequate assurance of due performance and may, if rea-
sonable, suspend any performance for which he has not
already received the agreed exchange until he receives
such assurance.
(2) The obligee may treat as a repudiation the obligor’s
failure to provide within a reasonable time such assurance
of due performance as is adequate in the circumstances of
the particular case.
Restatement (Second) of Contracts § 251 at 276-77.
Dietzel argues that Wever was obligated to assure it that it
was “prosecuting” Dietzel’s change orders with MasTec and
that it would pay Dietzel for its change orders. But Wever
would have such an obligation under § 251 only if Dietzel had
“reasonable grounds . . . to believe” that Wever would “com-
mit a breach by non-performance.” Viewing the evidence in
the light most favorable to Wever, we cannot say that Dietzel
had reasonable grounds to believe that Wever was or would be
committing a breach.
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Significant evidence was introduced at trial showing that
Dietzel did not have reasonable grounds to believe that Wever
was not pursuing payment of the change orders. Wever employ-
ees testified that Dietzel’s change orders were submitted to
MasTec. Andrew Dietzel acknowledged that no one at Wever
suggested otherwise. Beyond that, there was testimony that
Andrew Dietzel was present at a meeting with James Wever
and representatives from BG&E and MasTec in which the first
change order was discussed. Further, Dayna Wever’s email to
a Dietzel employee stated that Dayna Wever was repeatedly
asking MasTec about it and she had told Andrew Dietzel as
much. Finally, the September 9, 2015, letter informed Dietzel
that Wever had “pursued a change order with MasTec and
BG[&]E on your behalf.”
Faced with all this evidence that Wever was submitting its
change orders and pressing MasTec to approve them, Dietzel
focuses on the September 25, 2015, email Dayna Wever for-
warded to Andrew Dietzel, in which a MasTec representa-
tive asked, “[w]hich foundations hit undrillable rock?” Dietzel
argues that this email shows that Wever had not been submit-
ting its change orders because the MasTec representative did
not know that Dietzel had been excavating undrillable rock.
This does not strike us as a likely interpretation, let alone the
only reasonable one. Taken at face value, the question simply
sought clarification on which foundations were at issue.
Based on the evidence that Wever was consistently com-
municating that the change orders were being pursued, as
well as the evidence that Dietzel had actual knowledge that
the July 2015 change order was submitted, Dietzel did not
have reasonable grounds to believe that Wever had or would
breach any obligation with respect to the pursuit of Dietzel’s
change orders.
We also conclude that at the time of its September 24, 2015,
letter requesting assurances, Dietzel did not have reasonable
grounds to believe that Wever would breach the subcontract
by not making payment on its change orders. Here, it was not
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enough for Dietzel to show that it had a reason to believe that
it might not receive payment for all the change orders it sub-
mitted. Rather, Dietzel must have had reasonable grounds to
believe that Wever would breach the subcontract by not pay-
ing its change orders. See Restatement (Second) of Contracts
§ 251 at 276 (obligation to provide assurance applies “[w]here
reasonable grounds arise to believe that the obligor will com-
mit a breach by non-performance”). This distinction is relevant
because of the paid-when-paid clause. Because the subcontract
obligated Wever to make payment only if it received pay-
ment from MasTec, Dietzel must show that it had reasonable
grounds to believe that Wever might receive payment from
MasTec on a Dietzel change order and refuse to pass along
payment to Dietzel. The evidence does not support a finding
that Dietzel had reasonable grounds to believe this. At the time
that the request for assurances was made, Wever had timely
made contractually obligated payments to Dietzel, and Dietzel
does not direct us to anything in the record suggesting that it
would not do so in the future.
4. Material Breach
(a) Additional Background
In addition to its adequate assurances theory, Dietzel con-
tends that it was also legally entitled to abandon the project
on October 5, 2015, because Wever had materially breached
the contract. Its claim of material breach rests on Wever’s
receipt of a payment from MasTec on September 22 and fail-
ure to make payment to Dietzel for the portion to which it was
entitled by September 29, as required by the paid-when-paid
clause.
There appears to be no dispute that Wever did, in fact,
receive payment from MasTec on September 22, 2015. On
September 30, Dayna Wever emailed Andrew Dietzel stating
that Wever had received a payment from MasTec and would
be sending Dietzel its contractually required portion promptly.
The district court found that Dietzel received the check for
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$15,143.06 on October 6, which was 1 day after it abandoned
the jobsite.
The district court determined that because the payment was
not made by the time required by the subcontract, Wever com-
mitted a breach. The district court concluded, however, that
the breach was not material and that thus, Dietzel’s nonper
formance of the contract was not excused.
(b) Analysis
[11,12] Dietzel argues that the district court erred when
it found that Wever’s untimely payment was not a material
breach of the subcontract. A material breach is a failure to do
something that is so fundamental to a contract that the failure
to perform that obligation defeats the essential purpose of the
contract or makes it impossible for the other party to perform
under the contract. Siouxland Ethanol v. Sebade Bros., 290
Neb. 230, 859 N.W.2d 586 (2015). A material breach will
excuse the nonbreaching party from its performance of the
contract. Id. Unless there is only one reasonable conclusion
regarding the issue, in which case a court decides the issue as
a matter of law, whether a breach was material is a question of
fact. See id.
We understand Dietzel to primarily argue that any delayed
payment to a construction contractor is a material breach as a
matter of law. Dietzel claims that because timely payment to
a contractor is critical to the contractor’s ability to cover its
expenses and continue working, delayed payments are always
material breaches. We are not persuaded.
[13] We have said that whether or not a breach is mate-
rial and important is a question of degree which must be
answered by weighing the consequences of the breach in
light of the actual custom of persons in the performance of
contracts similar to the one involved in the specific case.
Siouxland Ethanol, supra. A test that considers the degree
and consequences of the breach does not lend itself to the
kind of bright-line rule Dietzel asks us to adopt. Furthermore,
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this does not appear to be the prevailing rule in construction
law. A construction law treatise relied on by Dietzel states,
“Nonpayment [of a construction contractor] for limited periods
or in insignificant amounts, while annoying, rarely are deemed
to constitute material breaches.” 5 Philip L. Bruner & Patrick
J. O’Connor, Jr., Bruner and O’Connor on Construction Law,
§ 18:26 at 959 (2002). A case Dietzel cites similarly disavows
the “suggest[ion] that every delay in payment will justify a
contractor in terminating performance under an installment
contract.” Zulla Steel, Inc. v. A & M Gregos, Inc., 174 N.J.
Super. 124, 132, 415 A.2d 1183, 1187 (1980).
Dietzel nonetheless maintains that under Nebraska law,
delayed payments to contractors are material breaches. In sup-
port of this argument, Dietzel relies on a fairly recent case,
Goes v. Vogler, 304 Neb. 848, 937 N.W.2d 190 (2020), and
a very old one, Howard County v. Pesha, 103 Neb. 296, 172
N.W. 55 (1919). While Goes affirmed a district court’s find-
ing that a particular nonpayment to a contractor was material,
we did not hold that all such delayed payments are material.
As for Howard County, in that case, this court did find that a
county’s failure to pay a contractor as required by the contract
entitled the contractor to suspend performance. And, to be fair,
the court quoted some language from other jurisdictions that
could be read to suggest that the failure to make payments to
a contractor as required justifies the contractor in abandon-
ing the work. That said, in more than a century since Howard
County was published, we do not appear to have ever cited
the case in a published decision and the idea that any delay
in paying a construction contractor is a material breach as a
matter of law is inconsistent with our material breach juris-
prudence. To the extent Howard County suggests otherwise, it
is disapproved.
Of course, none of this precluded Dietzel from contend-
ing that, under the circumstances of this case, Wever’s delay
in payment amounted to a material breach. The district court
rejected that argument, however, and therefore, we may reverse
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its factual determination only if we find that it was clearly
wrong. We do not believe it was. When Dietzel abandoned the
project, the payment was about a week late, but Wever had
communicated to Dietzel 1 day after the payment was due that
it would be forthcoming. That is the only evidence we have
of Wever’s making a late payment under the contract. Further,
Dietzel does not contend that Wever ultimately paid less than
the amount due, and the amount paid was relatively small in
comparison to the overall value of the contract. Neither does
Dietzel direct us to any specific evidence in the record that
without this payment, it would have been unable to continue
its work.
For the reasons provided above, we find the district court
did not err in concluding that Dietzel committed the first mate-
rial breach of the parties’ contract.
5. Damages
(a) Additional Background
Wever relied on testimony from Hisel in an attempt to prove
damages for Dietzel’s alleged breach of contract. Hisel testi-
fied about several expenses Wever incurred in the course of the
transmission line project. For each such expense, she identified
a specific amount for which Wever was claiming damages. She
testified that she arrived at those amounts by taking expenses
Wever incurred and increasing them by 15 percent pursuant
to a contractual term which permitted Wever to add a markup
to expenses incurred by Dietzel. With respect to most of the
expenses she testified to, Hisel testified that they were costs
Wever incurred after Dietzel had left the job. She admitted,
however, that some of the expenses Wever incurred prior to
Dietzel’s departure.
In addition to expenses incurred by Wever, Hisel briefly
testified that as a result of Dietzel’s actions, Wever lost the
ability to complete a segment of the transmission line project
and that, as a result, Wever lost $1,795,317. She testified that
number “was what [the lost segment] was supposed to be, our
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gross proceeds.” She did not further explain how the number
was calculated. Hisel also testified that her calculations did not
include an amount for the loss of future work with MasTec,
because there was “no way to give that an actual number.”
The district court received a spreadsheet summarizing Hisel’s
testimony regarding the damages sought by Wever. The spread-
sheet included expenses Wever incurred, as well as a line item
for “Lost Revenue” for the “Lost Segment” of the project in
the amount of $1,795,317. Those items totaled $4,263,479.99.
On cross-examination, the district court received into evi-
dence several invoices corresponding to Wever’s claimed dam-
ages. These exhibits showed some additional expenses ref-
erenced by Hisel were incurred before Dietzel abandoned
the jobsite. Hisel also admitted on cross-examination that
the invoices demonstrated that when she had increased the
expenses to account for the contractual markup, she had erro-
neously increased the expenses by 20 percent rather than 15
percent. Additional details about the evidence related to dam-
ages are incorporated in the analysis below.
The district court found that Wever was entitled to damages
that resulted from Dietzel’s materially breaching the contract
when it abandoned the jobsite. It stated that it found that
Dietzel’s abandonment resulted in damages to Wever, includ-
ing the loss of a portion of the project. It acknowledged that
evidence and testimony at trial revealed calculation errors in
Wever’s claimed damages, but found that Wever proved dam-
ages proximately caused by Dietzel’s breach in the amount of
$2,758,250.47. The district court specifically stated that this
damages amount was for damages caused by Dietzel’s aban-
doning the project.
The district court also noted an argument from Wever that
it suffered damages in the form of lost profits from jobs that
it could have otherwise completed while it was completing
this project and from future work with MasTec. The district
court then stated, “The Court finds that Wever failed to prove
its claims for lost profit related to future MasTec jobs or
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other lost profit as proximately caused by Dietzel’s breach
of contract.”
The district court offset its damages award to Wever by
$328,507, an amount it found Wever had been unjustly enriched
by Dietzel. After including the offset, it found that Wever was
entitled to $2,429,743.47. Wever does not challenge the unjust
enrichment damages on appeal.
(b) Analysis
Dietzel argues that even if the district court did not err in
finding it liable for breach of contract, it erred in its calcula-
tion of Wever’s damages. It argues that the evidence does not
support the amount of damages awarded by the district court.
Before addressing Dietzel’s arguments, we briefly review the
governing legal standards.
[14,15] We have said that “damages, like any other element
of the plaintiff’s [cause of action], must be pled and proved and
that the burden is on the plaintiff to offer evidence sufficient
to prove the plaintiff’s alleged damages.” Pan v. IOC Realty
Specialist, 301 Neb. 256, 276, 918 N.W.2d 273, 291 (2018).
Evidence of damages must be sufficient to enable the trier of
fact to estimate actual damages with a reasonable degree of
certainty and exactness. Id. Proof of damages to a mathemati-
cal certainty is not required; however, a plaintiff’s burden of
offering evidence sufficient to prove damages cannot be sus-
tained by evidence which is speculative and conjectural. Id.
Although the standard of review on appeal for the amount of
damages is generally deferential to the trier of fact, the ques-
tion of whether the evidence of damages is reasonably certain
is a question of law. See, id. (damages award “will not be dis-
turbed on appeal if it is supported by evidence and bears a rea-
sonable relationship to the elements of the damages proved”);
Pribil v. Koinzan, 266 Neb. 222, 227, 665 N.W.2d 567, 572
(2003) (“[w]e have consistently framed the question whether
the evidence of damages is ‘reasonably certain’ as a question
of law . . .”).
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(i) Expenses Incurred Before
Dietzel Abandoned Jobsite
Dietzel argues that a number of the expenses Hisel testified
to cannot support the district court’s damages award because
the evidence shows that they were incurred prior to Dietzel’s
abandonment of the project. Dietzel argues that the following
expenses fall into that category: expenses associated with the
rental and delivery of an auger; the rental, delivery, repair, and
return of a “Watson” drill; the rental of a hammer drill and
compressor; “slurry”; and a lump sum requested for miscella-
neous equipment Wever rented from United Rentals; as well as
various expenses from Greene Construction.
We agree with Dietzel as to the auger delivery, Watson
drill delivery and repair, hammer drill and compressor, and
slurry, because the undisputed evidence showed those were
expenses Wever incurred before Dietzel abandoned the jobsite.
As for the other expenses, invoices received by the district
court show that an identifiable portion of the expenses were
incurred after Dietzel departed. We find that the evidence
would thus support an award of damages for those identifiable
portions. Adjusting for Hisel’s calculation error on the contrac-
tual markup, we find that the evidence would support award-
ing Wever $4,443.60 for the return of the Watson drill, $1,886
for the expenses from Greene Construction, and $5,942.63 for
the auger rental.
This leaves the costs for renting the Watson drill and the
miscellaneous rentals from United Rentals. We find the evi-
dence for these two expenses suffer from the same deficiency:
The finder of fact would have been forced to speculate as to
what amount of the requested damages were incurred after
Dietzel abandoned the jobsite.
On the Watson drill, the record is inadequate to determine
with reasonable certainty what portion of the damages were
related to the drill and Dietzel’s abandonment of the jobsite.
Although the record includes invoices for those months after
Dietzel’s departure, the invoices list a single price for the
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Watson drill and a “2012 John Deere 350G-LC Excavator.”
The record is devoid of any references to whether or not this
additional excavator was somehow connected to the Watson
drill, whether it was necessary to perform work Dietzel would
have performed after Dietzel abandoned the jobsite, or what
portion of the invoices could be attributed to the Watson drill.
Without such evidence, the finder of fact would be left to
only speculate about what damages would be appropriate to
award to Wever for the rental of the Watson drill.
As for the rental expenses from United Rentals, the extent
of Hisel’s testimony on those expenses was that they were
incurred “when we started having to rent more support stuff
to perform their scope” and that Wever began to incur the
expenses in August 2015, which was prior to Dietzel’s leaving
the project. Hisel did not identify what equipment was rented,
for how long Wever rented it, or if all of the equipment was
rented for the same period of time. We find no basis in the
evidence by which to estimate what portion of these expenses
were incurred after Dietzel abandoned the jobsite. Thus, we
find that the record does not support awarding Wever damages
for equipment rented from United Rentals.
(ii) “SR-80” Drill
Wever presented evidence that it excavated holes after
Dietzel’s departure using a rented “SR-80” drill (SR-80). Hisel
testified that expenses for the SR-80 after Dietzel left the job-
site amounted to $418,382.62. Dietzel argues that the damages
for the SR-80 are unrelated to Dietzel’s abandonment of the
jobsite. Here, Dietzel presents several points, and we address
them in turn.
Dietzel argues that the SR-80 costs are unrelated to Dietzel’s
abandonment of the jobsite. It contends that MasTec reim-
bursed Wever for some of the expenses associated with the
SR-80 and that the SR-80 was not within Dietzel’s scope of
work. We disagree. Hisel testified that the only damages she
requested for the SR-80 were not reimbursed by MasTec. She
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also testified that Wever used the SR-80 to excavate holes
after Dietzel abandoned the jobsite. Dietzel also argues that
invoices received into evidence demonstrate that Wever rented
the SR-80 prior to Dietzel’s departure. There are invoices
indicating as much, but Hisel testified that she had identified
expenses Wever incurred after Dietzel’s abandonment.
Finding no merit to Dietzel’s arguments specific to the
SR-80, we find that the record provided competent evidence
by which to conclude that Wever had been damaged by the
continued use of the SR-80 after Dietzel abandoned the job-
site. However, because Hisel acknowledged that the requested
amount incorrectly added a 20-percent markup rather than one
of 15 percent, we adjust the amount for which the evidence
supported a damages award accordingly. We find that the evi-
dence would support an award of $400,950.01 for expenses
associated with the SR-80.
(iii) Operators and Administrative Expenses
Wever requested $538,162.50 in damages for what it
labeled “Operators Expense” and $234,000 for administrative
expenses. Hisel testified that the first category was determined
by multiplying 7,174.5 hours by a billed rate of $75 per hour.
Hisel testified that this expense was for the additional time “it
took [for Wever employees] to run a drill rig” after Dietzel
abandoned the jobsite. She also said that she was “trying to
recoup[]” money Wever spent on additional hotels, per diems,
rental pickups, and other miscellaneous expenses. She testified
that the administrative expenses were calculated by multiplying
3,120 hours by a billed rate of $75 per hour. Hisel testified that
this expense reflected the additional time Dezort and Dayna
Wever spent at the jobsite and that she and other “coordina-
tors” spent managing the project.
Hisel testified that in using the $75 per hour rate, she “was
just trying to use a medium range cost that could . . . easily be
backed up between the hourly wages and the per diem and the
hotels and meals.” She testified that Wever billed at $110 per
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hour for their superintendents’ time and “about $85” per hour
for its laborers’ time.
Dezort testified that Wever originally planned on a crew
of eight people for the project. He also testified that Wever
“ended up sticking probably about 3 of our crews on this job”
and “the job ended up taking about 6 months longer than it
should have.” Earlier, Dezort had testified that “[f]or smaller
jobs, [Wever] ran about five crews, five guys per crew.”
Dietzel argues that awarding Wever damages for operators
and administrative expenses requested by Wever would have
been clear error, because the evidence was speculative and
conjectural. Viewing the evidence in the light most favorable
to the Wever, we disagree.
Hisel’s testimony about the additional work completed by
Wever employees and how she arrived at $75 per hour, if cred-
ited, would provide the finder of fact a reasonably certain basis
to determine that Wever was damaged and the extent of those
damages. Dezort’s testimony about the additional man-hours
required by Wever employees further supported the existence
and scope of the damages. We conclude that the amounts
requested for operators and administrative expenses, in the
amounts of $538,162.50 and $234,000, respectively, were sup-
ported by the evidence. These amounts were not affected by
Hisel’s calculation error for other damages requested, so these
amounts remain unaltered.
(iv) Auger Purchase
Hisel testified that Wever was forced to purchase an auger
after Dietzel abandoned the jobsite and requested damages in
the amount of $33,391.78. Dietzel argues that awarding Wever
damages for this auger would be clear error, because Wever
can still use the auger.
We find there was sufficient evidence to support an award
of damages for this expense. Wever offered evidence that it
was forced to purchase the auger because Dietzel abandoned
the jobsite. Hisel testified that Wever rented equipment unless
- 452 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
DIETZEL ENTERS. V. J. A. WEVER CONSTR.
Cite as 312 Neb. 426
it could not do so. Although Hisel acknowledged that Wever
still owns the auger, nothing in the record suggests that Wever
would have purchased the auger at a later date if it had not
been forced to do so by Dietzel’s abandonment of the job-
site. Accounting for Hisel’s calculation error, we find that the
record would support $32,000.46 in damages for the purchase
of the auger.
(v) Remaining Items
Dietzel concedes that Wever presented sufficient evidence
regarding several expenses that were attributable to Dietzel’s
abandonment of the jobsite, including costs associated with
an “IMT” drill, moving drill rigs, and “[d]rilling [m]ud.”
Accounting for Hisel’s calculation error, we find the evidence
supported a damages award for these expenses in the amount
of $217,229.73.
Hisel also testified regarding a number of other expenses to
which Dietzel does not present specific arguments on appeal.
Therefore, we presume that the record contained adequate sup-
port for the district court to award Wever damages for those
items. See Nathan v. McDermott, 306 Neb. 216, 945 N.W.2d
92 (2020) (to be considered by appellate court, alleged error
must be both specifically assigned and specifically argued in
brief of party asserting error). These items include expenses for
equipment from Jeffrey Machine, “Vac Trucks,” “Frac Tanks,”
steel casing, concrete, and “Teeth.” Accounting for Hisel’s cal-
culation error, these expenses amount to $308,289.10.
(vi) Lost Revenue
Hisel briefly testified that Wever lost $1,795,317 in “gross
proceeds” because, as a result of Dietzel’s breach, it was not
permitted to complete its work on a segment of the project.
Wever’s damages spreadsheet also listed this amount as “Lost
Revenue.”
Dietzel argues that the district court specifically found that
Wever was not entitled to any recovery for the lost segment
- 453 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
DIETZEL ENTERS. V. J. A. WEVER CONSTR.
Cite as 312 Neb. 426
of the project. It is not so clear to us that is the case. Dietzel
points to the language quoted above in which the district court
stated that Wever “failed to prove its claims for lost profit
related to future MasTec jobs or other lost profit as proxi-
mately caused by Dietzel’s breach of contract.” That language,
however, immediately follows a reference to Wever’s claims
for lost profits from future work with MasTec or other work it
could have completed while finishing this project. Even so, we
agree with Dietzel that the evidence did not support an award
of damages for the segment of the project Wever was not able
to complete.
[16] Hisel asserted in her testimony that if Dietzel’s breach
had not caused Wever to lose a segment of the project,
Wever’s “gross proceeds” or “lost revenue” would have been
$1,795,317. Wever was not entitled to an award of damages for
lost revenue. In a breach of contract case, the ultimate objec-
tive of a damages award is to put the injured party in the same
position the injured party would have occupied if the contract
had been performed, that is, to make the injured party whole.
TNT Cattle Co. v. Fife, 304 Neb. 890, 937 N.W.2d 811 (2020).
An award of lost revenue, however, would have made Wever
more than whole, because it would not account for the addi-
tional expenses Wever would have incurred to complete the
work for which it would have received the lost revenue.
[17] A party can, with adequate evidence, recover lost prof-
its. See, e.g., Aon Consulting v. Midlands Fin. Benefits, 275
Neb. 642, 748 N.W.2d 626 (2008). Here, however, Wever’s
evidence was not adequate. Hisel did not provide any mean-
ingful explanation as to how the $1,795,317 figure for “gross
proceeds” was calculated, let alone what Wever’s expenses
likely would have been to earn those proceeds. A claim for lost
profits must be supported by some financial data which permit
an estimate of the actual loss to be made with reasonable certi-
tude and exactness. World Radio Labs. v. Coopers & Lybrand,
251 Neb. 261, 557 N.W.2d 1 (1996). We note that even Wever
appears to recognize the frailty of its claim for an award of
- 454 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
DIETZEL ENTERS. V. J. A. WEVER CONSTR.
Cite as 312 Neb. 426
damages for lost revenue associated with the lost segment of
the project. On redirect, Wever’s counsel asked Hisel what
Wever’s recovery would be if the lost revenue evidence was
completely deficient, and on appeal, Wever does not attempt
to argue that its evidence supported an award for lost revenue
associated with the lost segment of the project.
(vii) Summary
Considering each of the above, we find that viewing the evi-
dence in the light most favorable to Wever, the record would
support awarding Wever damages for the following expenses in
the following dollar amounts:
Item Amount
Operator’s Expense $ 538,162.50
Administrative Expense 234,000.00
SR-80 400,950.01
Watson Drill Return 4,443.60
Greene Construction 1,886.00
90˝ Auger Rental 5,942.63
90˝ Auger Purchase 32,000.46
IMT Drill 185,769.85
Moving Drill Rigs 27,370.00
Drilling Mud 4,089.88
Jeffrey Machine 42,006.96
Vac Trucks 98,673.11
Frac Tanks 17,940.59
Steel Casing 66,936.13
355.89 CY Concrete 80,626.88
Teeth 2,105.43
TOTAL $1,742,904.03
Because the evidence would not support the entirety of
the damages awarded by the district court, we must reverse
that portion of the judgment and remand the cause to the dis-
trict court with directions to enter judgment in the amount of
$1,742,904.03.
- 455 -
Nebraska Supreme Court Advance Sheets
312 Nebraska Reports
DIETZEL ENTERS. V. J. A. WEVER CONSTR.
Cite as 312 Neb. 426
V. CONCLUSION
We find that the district court did not err by rejecting
Dietzel’s claims of negligent misrepresentation and breach
of the implied covenant of good faith and fair dealing. We
likewise find no error in the district court’s conclusions that
Dietzel was not entitled to suspend contractual performance
due to Wever’s failure to provide adequate assurances and that
Dietzel committed the first material breach of the contract.
Because, however, we find that the evidence did not sup-
port the entirety of the damages awarded by the district court,
we reverse the district court’s damages award and remand the
cause to the district court with directions to enter judgment
against Dietzel and in favor of Wever on Wever’s breach of
contract claim in the amount of $1,742,904.03 and, taking
into account the offset for Wever’s unjust enrichment liabil-
ity, to order that Dietzel is liable to Wever in the amount of
$1,414,397.03. In all other respects, the judgment of the dis-
trict court is affirmed.
Affirmed in part, and in part reversed
and remanded with directions. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487144/ | IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Matthew P. Dec, :
Appellant :
:
v. : No. 1276 C.D. 2021
:
Commonwealth of Pennsylvania, :
Department of Transportation, :
Bureau of Driver Licensing : Submitted: August 26, 2022
OPINION NOT REPORTED
MEMORANDUM OPINION
PER CURIAM FILED: November 18, 2022
Matthew P. Dec (Licensee) appeals, pro se, from the October 15, 2021 Order
of the Court of Common Pleas of Butler County (Trial Court), which denied his
statutory appeal from the 18-month suspension of his operating privilege imposed
by the Department of Transportation, Bureau of Driver Licensing (DOT). DOT
imposed the suspension due to Licensee’s refusal to submit to chemical testing
pursuant to Section 1547(b)(1)(ii) of the statute commonly known as the Implied
Consent Law, 75 Pa. C.S. § 1547(b)(1)(ii),1 in connection with his arrest for driving
1
Section 1547(b)(1)(ii) provides in pertinent part:
(1) If any person placed under arrest for a violation of [S]ection 3802 [of the
Vehicle Code, 75 Pa. C.S. § 3802 (relating to driving under the influence of alcohol
or a controlled substance),] is requested to submit to chemical testing and refuses
to do so, the testing shall not be conducted but upon notice by the police officer,
[DOT] shall suspend the operating privilege of the person as follows:
....
(ii) For a period of 18 months if any of the following apply:
(Footnote continued on next page…)
under the influence of alcohol or a controlled substance (DUI). We affirm the Trial
Court’s Order and dismiss as moot Licensee’s Motion for Expedited Decision.
Background
On September 25, 2020, Licensee was driving a pickup truck on Route 8 in
Center Township, Butler County. Trial Ct. 1925(a) Op., 1/7/22, at 1. Pennsylvania
State Trooper Matthew Stimac initiated a traffic stop of the truck for multiple traffic
violations. Id. During the stop, Trooper Stimac observed an open container of
alcohol inside the vehicle and smelled an odor of alcohol emanating from the
vehicle. Id. A passenger inside the truck was also in possession of marijuana. Id.
When Trooper Stimac asked Licensee if he had consumed any alcohol, Licensee
responded that he had. Id. at 1-2.
Trooper Stimac performed field sobriety and impaired driving enforcement
tests at the scene, which indicated that Licensee was impaired. Id. at 2. Trooper
Stimac placed Licensee under arrest for suspicion of DUI. Id. Trooper Stimac asked
Licensee if he would submit to a drug recognition evaluation, and Licensee agreed.
Id.
Trooper Stimac transported Licensee to the State Police barracks for further
testing. Id. A portable breath test performed on Licensee was positive for alcohol.
Pennsylvania State Trooper Philip Treadway, a certified drug recognition expert,
evaluated Licensee. The evaluation resulted in more than the required number of
(A) The person’s operating privileges have previously been suspended
under this subsection.
(B) The person has, prior to the refusal under this paragraph, been sentenced
for[] . . . an offense under [S]ection 3802[] . . . .
75 Pa. C.S. § 1547(b)(1)(ii).
2
indicators to signify impairment. Id. Trooper Treadway concluded that Licensee
was not capable of safely operating his vehicle due to impairment caused by alcohol
and marijuana. Id.
Licensee was then transported to Butler Memorial Hospital for a blood test.
Id. Trooper Treadway read the implied consent warnings on DOT’s DL-26B Form2
to Licensee, informing him of the consequences of refusing to consent to chemical
testing. Id. Trooper Stimac observed Trooper Treadway read the DL-26B Form to
Licensee. Id.
After reading the required sections of the DL-26B Form, Trooper Treadway
asked Licensee if he would submit to a chemical blood test. Id. Licensee stated that
he would agree to a blood test only if the Troopers first obtained a search warrant.
Id. The Troopers deemed this response a refusal. Id. Both Troopers signed the DL-
26B Form, certifying that they had read the implied consent warnings to Licensee
2
The DL-26B Form warnings are as follows:
1. You are under arrest for driving under the influence of alcohol or a controlled
substance in violation of Section 3802 of the Vehicle Code.
2. I am requesting that you submit to a chemical test of blood.
3. If you refuse to submit to the blood test, your operating privilege will be
suspended for at least 12 months. If you previously refused a chemical test or were
previously convicted of driving under the influence, your operating privilege will
be suspended for up to 18 months. If your operating privilege is suspended for
refusing chemical testing, you will have to pay a restoration fee of up to $2,000 in
order to have your operating privilege restored.
4. You have no right to speak with an attorney or anyone else before deciding
whether to submit to testing. If you request to speak with an attorney or anyone
else after being provided these warnings or you remain silent when asked to submit
to a blood test, you will have refused the test.
DOT Br., App. A.
3
and had given him the opportunity to submit to chemical testing. Licensee refused
to sign the DL-26B Form. Id.; see DOT Br., App. A.
On October 16, 2020, DOT notified Licensee that his operating privilege was
suspended for 18 months, effective November 20, 2020, for his failure to submit to
chemical testing on September 25, 2020. Licensee filed a statutory appeal with the
Trial Court, which held a de novo hearing on October 15, 2021.3
Following the hearing, the Trial Court entered an Order denying Licensee’s
appeal. In its subsequent Pa.R.A.P. 1925(a) Opinion, the Trial Court rejected
Licensee’s assertion that the United States Supreme Court’s decision in Birchfield
v. North Dakota, 579 U.S. 438 (2016), required the Troopers to obtain a search
warrant before requesting a blood test. The Trial Court concluded that “[t]he statutes
at issue before the Birchfield Court[] . . . were criminal statutes with criminal
penalties, and not civil, administrative remedies,” and, therefore, Birchfield does
“not apply to civil license suspensions for refusal to submit to a chemical blood test.”
Trial Ct. 1925(a) Op., 1/7/22, at 3-4. The Trial Court also concluded that Licensee’s
“statement that he would not submit to a chemical blood test without the Troopers
first procuring a search warrant constitute[d] a refusal to submit to chemical testing
in violation of” the Implied Consent Law. Id. at 4. Licensee now appeals to this
Court.4
3
Licensee was not represented by counsel in the proceedings before the Trial Court.
4
This Court’s review is limited to determining whether the Trial Court committed an error
of law or abused its discretion or whether the Trial Court’s factual findings are supported by
substantial evidence. Reinhart v. Dep’t of Transp., Bureau of Driver Licensing, 954 A.2d 761,
765 n.3 (Pa. Cmwlth. 2008).
4
Issues
Licensee presents three issues for this Court’s review: (1) whether the Trial
Court erred in concluding that Trooper Treadway was not required to obtain a search
warrant before requesting a blood sample from Licensee; (2) whether the Trial Court
erred in finding that Licensee refused chemical testing when he asked Trooper
Treadway to obtain a search warrant after reading the implied consent warnings to
Licensee; and (3) whether the Troopers committed a federal crime by punishing
Licensee for requesting that they obtain a search warrant before requesting a blood
sample.
Analysis
1. Search Warrant
Relying on Birchfield, Licensee first asserts that “a warrant is required to draw
blood from a motorist thereby nullifying the ‘Implied Consent’ doctrine that was
formally observed within this Commonwealth.” Licensee Am. Br. at 6. We
disagree.
In Birchfield, the Supreme Court, applying a Fourth Amendment analysis,
reviewed state laws in North Dakota and Minnesota that made it a crime for a
motorist arrested for DUI to refuse a warrantless blood test. The Birchfield Court
held that a state may not criminally prosecute a motorist for refusing a request for a
warrantless blood test following a DUI arrest. In Pennsylvania, however, a licensee
arrested for DUI has a right to refuse chemical testing, see 75 Pa. C.S. § 1547(b)(1)
and (b.1)(1); Com. v. Eisenhart, 611 A.2d 681, 684 (Pa. 1992),5 and it is not a crime
for a licensee arrested for DUI to refuse chemical testing. Consequently, Birchfield
is distinguishable. In fact, the Supreme Court expressly limited its holding to
5
Eisenhart was subsequently overruled in part on other grounds by Commonwealth v.
Myers, 164 A.3d 1162 (Pa. 2016).
5
implied consent laws imposing criminal penalties, stating that “nothing we say here
should be read to cast doubt on” state “implied[ ]consent laws that impose civil
penalties and evidentiary consequences on motorists who refuse to comply.”
Birchfield, 579 U.S. at 476-77.
Furthermore, in Boseman v. Department of Transportation, Bureau of Driver
Licensing, 157 A.3d 10 (Pa. Cmwlth. 2017), this Court held that Birchfield is
inapplicable to a civil license suspension imposed by DOT for a licensee’s refusal
to submit to a blood test under the Implied Consent Law. We explained:
[A] license suspension stemming from a refusal to submit to chemical
testing is a separate administrative proceeding from a criminal DUI
proceeding arising out of the same incident. It is not a crime to refuse
chemical testing under Pennsylvania’s Implied Consent Law.
....
. . . Birchfield addressed the constitutionality of a [s]tate statute that
made it a crime to refuse a warrantless blood test after being arrested
for DUI. In short, although Birchfield may have some impact in
criminal DUI proceedings in Pennsylvania where enhanced penalties
based on a refusal of a blood test are imposed, such is not the case
before us in this civil license suspension appeal under the Implied
Consent Law. Consequently, [the l]icensee’s Fourth Amendment
challenge to the Implied Consent Law fails.
Boseman, 157 A.3d at 21 (internal citation omitted) (second emphasis added).
This Court has repeatedly reaffirmed its holding in Boseman in subsequent
decisions. See, e.g., Patane v. Dep’t of Transp., Bureau of Driver Licensing, 192
A.3d 335, 349 (Pa. Cmwlth. 2018) (en banc) (“We reiterate here again that Birchfield
does not apply to civil license suspension proceedings.”); Renfroe v. Dep’t of
Transp., Bureau of Driver Licensing, 179 A.3d 644, 651 (Pa. Cmwlth. 2018) (en
banc) (“Consistent with our decisions in Boseman and Marchese [v. Department of
6
Transportation, Bureau of Driver Licensing, 169 A.3d 733 (Pa. Cmwlth. 2017)], we
conclude that the trial court did not err by holding that Birchfield does not apply to
civil license suspensions.”); Garlick v. Dep’t of Transp., Bureau of Driver Licensing,
176 A.3d 1030, 1037 (Pa. Cmwlth. 2018) (en banc) (“We have held that Birchfield
does not invalidate a civil license suspension based on an argument that a warrant
was required to obtain the requested blood test.”); Fetherman v. Dep’t of Transp.,
Bureau of Driver Licensing, 167 A.3d 846, 854 (Pa. Cmwlth. 2017) (“Birchfield, by
its own language, does not apply to civil suspensions under Pennsylvania’s Implied
Consent Law.”). Consistent with this binding precedent, we conclude that Birchfield
is inapplicable to this case, and, therefore, Trooper Treadway was not required to
obtain a search warrant before requesting that Licensee submit to a blood test.
2. Chemical Test Refusal
Next, Licensee asserts that he never actually refused a chemical blood test
because he merely asked Trooper Treadway to first obtain a search warrant.
Licensee Am. Br. at 7. We disagree.
It is well settled that when a police officer requests one of the chemical tests
authorized by the Implied Consent Law, “any response from a licensee that is
‘anything less than an unqualified, unequivocal assent’ to submit to testing
constitutes a refusal.” Todd v. Dep’t of Transp., Bureau of Driver Licensing, 723
A.2d 655, 658 (Pa. 1999) (citation omitted) (emphasis added); see also Factor v.
Dep’t of Transp., Bureau of Driver Licensing, 199 A.3d 492, 497 (Pa. Cmwlth.
2018) (“Pennsylvania courts have long and consistently held that anything less than
7
an unqualified, unequivocal assent to submit to chemical testing constitutes a refusal
to consent thereto.”).6
Here, Licensee did not reply affirmatively when Trooper Treadway asked that
he submit to a blood test. Instead, Licensee insisted that Trooper Treadway first
obtain a search warrant. Because Licensee had no right to demand a search warrant,
as explained above, his demand for a search warrant was not “an unqualified,
unequivocal assent” to submit to the blood test under our case law. Therefore, the
Trial Court correctly determined that Licensee refused chemical testing when he did
not consent to Trooper Treadway’s request for a blood test at the hospital.
3. Federal Crime
Lastly, Licensee asserts that two federal statutes – 18 U.S.C. § 241 (relating
to conspiracy against rights) and 18 U.S.C. § 242 (relating to deprivation of rights
under color of law)7 – make it a federal crime for police officers to threaten and
6
“The question of whether a licensee refuses to submit to a chemical test is a legal one,
based on the facts found by the trial court.” Nardone v. Dep’t of Transp., Bureau of Driver
Licensing, 130 A.3d 738, 748 (Pa. 2015).
7
18 U.S.C. § 241 provides in relevant part:
If two or more persons conspire to injure, oppress, threaten, or intimidate any
person in any State, Territory, Commonwealth, Possession, or District in the free
exercise or enjoyment of any right or privilege secured to him by the Constitution
or laws of the United States, or because of his having so exercised the same[] . . .
[t]hey shall be fined under this title or imprisoned not more than ten years, or both[]
....
18 U.S.C. § 242 provides in relevant part:
Whoever, under color of any law, statute, ordinance, regulation, or custom,
willfully subjects any person in any State, Territory, Commonwealth, Possession,
or District to the deprivation of any rights, privileges, or immunities secured or
protected by the Constitution or laws of the United States, or to different
(Footnote continued on next page…)
8
punish a person “for exercising [his c]onstitutional [r]ight to request a warrant.”
Licensee Am. Br. at 11. In particular, he contends that “[t]o civilly punish a citizen
for the ‘infraction’ of exercising [his r]ight to request a warrant prior to consenting
to [a] blood draw is a violation of the 5th Amendment” to the United States
Constitution. Id. at 5, 12. We conclude that Licensee has waived this claim.
Licensee did not raise this issue in the proceedings before the Trial Court.
Licensee also failed to raise this issue in his Pa.R.A.P. 1925(b) Statement, and, as a
result, the Trial Court did not address the issue in its Pa.R.A.P. 1925(a) Opinion.
Therefore, this issue is waived. See Pa.R.A.P. 302(a) (“[I]ssues not raised in the
[trial] court are waived and cannot be raised for the first time on appeal.”); Pa.R.A.P.
1925(b)(4)(vii) (stating that issues not included in the appellant’s Pa.R.A.P. 1925(b)
statement are waived).
Conclusion
Accordingly, we affirm the Trial Court’s Order and dismiss as moot
Licensee’s Motion to Expedite Decision.
punishments, pains, or penalties, on account of such person being an alien, or by
reason of his color, or race, than are prescribed for the punishment of citizens, shall
be fined under this title or imprisoned not more than one year, or both[] . . . .
9
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Matthew P. Dec, :
Appellant :
:
v. : No. 1276 C.D. 2021
:
Commonwealth of Pennsylvania, :
Department of Transportation, :
Bureau of Driver Licensing :
PER CURIAM
ORDER
AND NOW, this 18th day of November, 2022, the October 15, 2021 Order of
the Court of Common Pleas of Butler County is hereby AFFIRMED, and Matthew
P. Dec’s Motion to Expedite Decision is hereby DISMISSED AS MOOT. | 01-04-2023 | 11-18-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/8487137/ | [Cite as In re Resignation of D’Atri, ___ Ohio St.3d ___, 2022-Ohio-4110.]
IN RE RESIGNATION OF D’ATRI.
[Cite as In re Resignation of D’Atri, ___ Ohio St.3d ___, 2022-Ohio-4110.]
Attorneys at law—Resignation with disciplinary action pending—Gov.Bar R.
VI(11)(C).
(No. 2022-1249—Submitted October 6, 2022—Decided November 18, 2022.)
ON APPLICATION FOR RETIREMENT OR RESIGNATION
PURSUANT TO GOV.BAR R. VI(11).
_________________
{¶ 1} Edward Langenbach D'Atri, Attorney Registration No. 0019237, last
known business address in Canton, Ohio, who was admitted to the bar of this state
on October 16, 1963, submitted an application for retirement or resignation
pursuant to Gov.Bar R. VI(11). The application was referred to disciplinary
counsel pursuant to Gov.Bar R. VI(11)(B). On October 6, 2022, the Office of
Attorney Services filed disciplinary counsel’s report, under seal, with this court in
accordance with Gov.Bar R. VI(11)(B)(2). A supplemental report was filed on
November 7, 2022.
{¶ 2} On consideration thereof, it is ordered by the court that pursuant to
Gov.Bar R. VI(11)(C), the resignation as an attorney and counselor at law is
accepted as a resignation with disciplinary action pending.
{¶ 3} It is further ordered and adjudged that from and after this date all
rights and privileges extended to respondent to practice law in the state of Ohio be
withdrawn, that henceforth respondent shall cease to hold himself forth as an
attorney authorized to appear in the courts of this state, and that respondent shall
not attempt, either directly or indirectly, to render services as an attorney or
counselor at law to or for any individuals, corporation, or society, nor in any way
perform or seek to perform services for anyone, no matter how constituted, that
SUPREME COURT OF OHIO
must by law be executed by a duly appointed and qualified attorney within the state
of Ohio.
{¶ 4} It is further ordered that respondent desist and refrain from the
practice of law in any form, either as principal or agent or clerk or employee of
another, and hereby is forbidden to appear in the state of Ohio as an attorney and
counselor at law before any court, judge, board, commission, or other public
authority, and hereby is forbidden to give another an opinion as to the law or its
application or advise with relation thereto.
{¶ 5} It is further ordered that before entering into an employment,
contractual, or consulting relationship with any attorney or law firm, respondent
shall verify that the attorney or law firm has complied with the registration
requirements of Gov.Bar R. V(23)(C). If employed pursuant to Gov.Bar R. V(23),
respondent shall refrain from direct client contact except as provided in Gov.Bar R.
V(23)(A)(1) and from receiving, disbursing, or otherwise handling any client trust
funds or property.
{¶ 6} It is further ordered that respondent shall not enter into an
employment, contractual, or consulting relationship with an attorney or law firm
with which respondent was associated as a partner, shareholder, member, or
employee at the time respondent engaged in the misconduct that resulted in this
acceptance of respondent’s resignation with discipline pending.
{¶ 7} It is further ordered that respondent shall surrender respondent’s
certificate of admission to practice to the clerk of the court on or before 30 days
from the date of this order and that respondent's name be stricken from the roll of
attorneys maintained by this court.
{¶ 8} It is further ordered by the court that within 90 days of the date of this
order, respondent shall reimburse any amounts that have been awarded against
respondent by the Lawyers’ Fund for Client Protection pursuant to Gov.Bar R.
VIII(7)(F). It is further ordered by the court that if after the date of this order the
2
January Term, 2022
Lawyers’ Fund for Client Protection awards any amount against respondent
pursuant to Gov.Bar R. VIII(7)(F), respondent shall reimburse that amount to the
Lawyers’ Fund for Client Protection within 90 days of the notice of that award.
{¶ 9} It is further ordered that on or before 30 days from the date of this
order, respondent shall do the following:
{¶ 10} 1. Notify all clients being represented in pending matters and any
cocounsel of respondent’s resignation and consequent disqualification to act as an
attorney after the effective date of this order and, in the absence of cocounsel, also
notify the clients to seek legal services elsewhere, calling attention to any urgency
in seeking the substitution of another attorney in respondent’s place;
{¶ 11} 2. Regardless of any fees or expenses due, deliver to all clients being
represented in pending matters any papers or other property pertaining to the client
or notify the clients or cocounsel, if any, of a suitable time and place where the
papers or other property may be obtained, calling attention to any urgency for
obtaining such papers or other property;
{¶ 12} 3. Refund any part of any fees or expenses paid in advance that are
unearned or not paid and account for any trust money or property in the possession
or control of respondent;
{¶ 13} 4. Notify opposing counsel or, in the absence of counsel, the adverse
parties in pending litigation of respondent’s disqualification to act as an attorney
after the effective date of this order and file a notice of disqualification of
respondent with the court or agency before which the litigation is pending for
inclusion in the respective file or files;
{¶ 14} 5. Send all notices required by this order by certified mail with a
return address where communications may thereafter be directed to respondent;
{¶ 15} 6. File with the clerk of this court and disciplinary counsel of the
Supreme Court an affidavit showing compliance with this order, showing proof of
3
SUPREME COURT OF OHIO
service of the notices required herein, and setting forth the address where
respondent may receive communications; and
{¶ 16} 7. Retain and maintain a record of the various steps taken by
respondent pursuant to this order.
{¶ 17} It is further ordered that until such time as respondent fully complies
with this order, respondent shall keep the clerk and disciplinary counsel advised of
any change of address where respondent may receive communications.
{¶ 18} It is further ordered that all documents filed with this court in this
case shall meet the filing requirements set forth in the Rules of Practice of the
Supreme Court of Ohio, including requirements as to form, number, and timeliness
of filings. All case documents are subject to Sup.R. 44 through 47, which govern
access to court records.
{¶ 19} It is further ordered that service shall be deemed made on respondent
by sending this order and all other orders in this case to respondent’s last known
address.
{¶ 20} It is further ordered that the clerk of this court issue certified copies
of this order as provided for in Gov.Bar R. V(17)(E)(1) and that publication be
made as provided for in Gov.Bar R. V(17)(E)(2).
O’CONNOR, C.J., and KENNEDY, FISCHER, DEWINE, DONNELLY, STEWART,
and BRUNNER, JJ., concur.
_________________
4 | 01-04-2023 | 11-18-2022 |
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