State: Nebraska
Volume: 274
Term: 2007-2008
Jurisdiction(s): Nebraska
Source: https://static.case.law/neb/274.pdf

Barpara L. Poppe, PERSONAL REPRESENTATIVE OF
THE EsTATE OF HEATHER A. Poppe, DECEASED,
APPELLANT, V. ROBIN F, SIEFKER, APPELLEE.
735 N.W.2d 784

Filed July 27, 2007. No. S-05-670.

wv

Robert R. Moodie, of Friedman Law Offices, for appellant.

Cathy S. Trent-Vilim, of Wolfe, Snowden, Hurd, Luers & Ahl,
L.LP., for appellee.

Wricut, ConNnoLty, GeRRARD, STEPHAN, McCormack, and
Muter-Lerman, JJ.

Gerrarb, J.
NATURE OF CASE

Heather A. Poppe was killed in an automobile accident
when her car was struck by a car driven by Robin F. Siefker.
Barbara L. Poppe, as personal representative of Heather’s
estate, filed a wrongful death lawsuit against Siefker. The
only issue tried to the jury was the extent of the damages. The
jury returned a verdict in favor of the estate for a total sum of
$46,925.60. Following the trial, the court staff found in the
jury deliberation room a “Personal Financial Slide-Calculator”
and an inflation rate written on a “Post-it” note. The estate
filed a motion for a new trial, asserting jury misconduct and
inadequacy of the damage award. The district court denied the
motion. The estate now appeals from the judgment and order
of the district court denying the motion for new trial.

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BACKGROUND

Heather A. Poppe (Heather) was killed in an automobile
accident on November 28, 2002. Heather had been driving
west on Interstate 80 when her vehicle was struck head on by
a car driven by Siefker while he was driving east in the west-
bound lane. Barbara L. Poppe (Barbara), Heather’s mother,
brought a wrongful death lawsuit on behalf of the estate against
Siefker. At trial, Siefker admitted the accident was caused by
his negligence. The only issue tried to the jury was the extent
of the damages.

Heather was adopted by Arthur Poppe (Arthur) and Barbara
in 1983, less than 3 days after she was born. Heather was raised
in Kearney, Nebraska, in the same residence where Arthur and
Barbara currently live. Heather graduated from high school in
2001 and moved from Kearney to Milford, Nebraska, where
she began attending classes in automobile body repair at the
Milford campus of Southeast Community College. Along with
going to school full time, Heather worked Monday through
Friday at a fast-food restaurant in Lincoln, Nebraska, and
worked at another fast-food restaurant in Kearney on the week-
ends. Even though Heather was attending school on scholar-
ship, Barbara testified that they had to take out additional
school loans to cover some of her expenses. On occasion,
Heather’s parents would also help her pay other bills.

Although Heather was attending school in Milford, she
stayed in frequent contact with her family in Kearney. Barbara
testified that she talked to Heather on the telephone, usually
every day, and would occasionally drive to Milford to see
Heather. Barbara also testified that Heather would come home
to Kearney every weekend. It is undisputed that Heather had a
loving and caring relationship with her parents.

The record, however, also reflects that Heather had a boy-
friend in Kearney whom she had been dating for a number of
years. Heather’s boyfriend had a daughter from another rela-
tionship who, at the time of trial, had just turned 6 years old.
Barbara testified that at the same time that Heather was main-
taining a relationship with her boyfriend, she was building a
relationship with her boyfriend’s daughter. Heather would spend

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time with her boyfriend and his daughter on the weekends when
she was not working.

The evidence further reveals that as Heather became older,
she decided she wanted to reconnect with her biological parents.
Heather’s biological father lives in Fremont, Nebraska, with his
current wife, and Heather’s biological mother lived in Omaha,
Nebraska, but later moved to Alabama. Heather would talk on
the telephone with her biological father and would spend time
with him as often as their schedules would allow. Heather also
began corresponding with her biological mother. While her bio-
logical mother was living in Omaha, Heather would frequently
visit her on weekends. After her biological mother moved to
Alabama, Heather would travel there to visit.

Evidence was also presented at trial relating to the health
conditions of Heather’s parents. Barbara testified that she re-
cently suffered from a “medical emergency related to a blood
clot” that blocked the flow of blood to her liver. As a result of
this condition, she spent 2 weeks in the hospital and remains
on blood thinners. At the time of trial, the blood clot had not
been dissolved. Barbara testified that doctors are “very cau-
tiously making sure that everything is smooth where that is
concerned, because if it compromises again, it could cost [her
her] life.”

In July 1999, Arthur suffered a heart attack that left him
with “less than half a functioning heart” and “has had repeated
close calls since.” As a result of the heart attack, Arthur has had
seven stents inserted in his body to help restore the blood flow.
Arthur testified that on bad days, he suffers from shortness of
breath and chest pain. Arthur has been told by doctors that his
heart condition is not going to improve.

At the close of all the evidence, the estate moved for a
directed verdict on its claim for funeral and burial expenses.
The motion was granted, and the district court directed a ver-
dict in the estate’s favor for $6,925.60 on this claim. The court
then proceeded to instruct the jury on the estate’s claim for
damages on behalf of Heather’s parents for loss of consortium,
services, society, companionship, and counsel resulting from
the death of their daughter. With regard to calculating the

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present value of any damages, the jury was given instruction
No. 8 which stated:

If you decide the Estate of Heather A. Poppe is entitled.
to recover damages for any future losses, then you must
reduce those damages to their present cash value. You must
decide how much money must be given to the estate today
to compensate it fairly for future losses.

The case was then submitted to the jury which returned a
verdict in favor of the estate for $40,000 regarding the claim
on behalf of Heather’s parents. Accordingly, judgment was
entered by the court in favor of the estate for the total sum of
$46,925.60.

Following receipt of the verdict and discharge of the jury, the
court staff was cleaning the jury deliberation room and found
an item labeled “Personal Financial Slide-Calculator.” Attached
to the personal financial slide calculator was a “Post-it” note
which contained a handwritten inflation rate of 3.5 percent,
averaged over 23 years. The court contacted counsel for both
parties, marked these items collectively as exhibit 4, and, on its
own motion, received them into evidence.

The personal financial slide calculator is divided into three
separate sections, each of which performs different calcula-
tions. The user adjusts the figures in the calculation by moving
an insert. The first section is entitled “One-time investment”
and allows the user to calculate the amount of income that
will be reinvested monthly on an initial investment based on
the number of years invested and the rate of return. This sec-
tion contains figures for initial investments of $1,000, $10,000,
$25,000, and $50,000 over a period ranging from 5 to 25
years, and invested at hypothetical return rates of 6, 8, 10, and
12 percent. The second section is entitled “Initial investment
with additional monthly investments.” This section performs
the same calculations as the first section, using the same initial
investment figures and rates of return, except this section cal-
culates the total return based on the assumption that the user is
making additional monthly investments of either $100 or $250.
The third section is entitled “Retirement income investment.”
This section allows the user to determine the number of years

Loe

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a total investment will last based on a range of monthly with-
drawals and various rates of return.

The estate filed a motion for new trial, asserting jury mis-
conduct and inadequacy of the damage award. In support of
its motion, the estate submitted affidavits of two of the jurors
in this case. The district court denied the estate’s motion. The
court determined that the damages awarded were supported by
the evidence and the presence of exhibit 4 in the jury room was
not shown, by clear and convincing evidence, to have preju-
diced the estate. The estate appealed.

ASSIGNMENTS OF ERROR
The estate assigns that the district court erred in denying its
motion for a new trial based on (1) jury misconduct and (2)
inadequacy of the damage award.

STANDARD OF REVIEW

HM A motion for new trial is addressed to the discretion
of the trial court, whose decision will be upheld in the absence
of an abuse of that discretion.’ A judicial abuse of discretion
exists when a judge, within the effective limits of authorized
judicial power, elects to act or refrain from action, but the
selected option results in a decision which is untenable and
unfairly deprives a litigant of a substantial right or a just re-
sult in matters submitted for disposition through the judicial
system.”

Hl The amount of damages to be awarded is a determina-
tion solely for the fact finder, and the fact finder’s decision will
not be disturbed on appeal if it is supported by the evidence
and bears a reasonable relationship to the elements of the dam-
ages proved.?

ANALYSIS

Jury Misconpucr
The estate argues that the personal financial slide calcu-
lator and the inflation rate on the “Post-it” note constitute

! Roth v. Wiese, 271 Neb. 750, 716 N.W.2d 419 (2006).
? Hamit v. Hamit, 271 Neb. 659, 715 N.W.2d 512 (2006).
3 Shipler v. General Motors Corp., 271 Neb. 194, 710 N.W.2d 807 (2006).

extraneous prejudicial information pursuant to Neb. Rev. Stat.
§ 27-606(2) (Reissue 1995). The estate contends that given the
presence of these items in the jury deliberation room, the dis-
trict court abused its discretion in denying the estate’s motion
for new trial.

Section 27-606(2) prohibits a juror from testifying as to in-
formation relating to the process of jury deliberations, except
that evidence may be adduced “on the question whether extra-
neous prejudicial information was improperly brought to the
jury’s attention.” The affidavits offered by the estate were rel-
evant to the issue of whether extraneous prejudicial information
was improperly brought to the jury’s attention. The issue before
this court, then, is whether, in light of the evidence presented,
the estate has met its burden of proving that prejudice has oc-
curred. We conclude that the estate has not met this burden and
therefore affirm the judgment of the district court.

HMB An application for new trial may properly be based
upon allegations of misconduct of the jury.‘ In a motion for
new trial, allegations of misconduct by jurors must be substan-
tiated by competent evidence.> The misconduct complained of
must relate to a disputed matter that is relevant to the issues
in the case and must have influenced the jurors in arriving at
the verdict.®

HE In order for a new trial to be ordered because of juror
misconduct, the party claiming the misconduct has the bur-
den to show by clear and convincing evidence that prejudice
has occurred.” Clear and convincing evidence is that amount
of evidence which produces in the trier of fact a firm belief
or conviction about the existence of a fact to be proved.*
Extraneous material or information considered by a jury may

4 See, Neb. Rev. Stat. § 25-1142 (Cum. Supp. 2006); Leavitt v. Magid, 257
Neb. 440, 598 N,W.2d 722 (1999).

5 Smith v. Papio-Missouri River NRD, 254 Neb. 405, 576 N.W.2d 797 (1998);
Nichols v. Busse, 243 Neb. 811, 503 N.W.2d 173 (1993).

6 Smith, supra note 5.

7 Hunt v. Methodist Hosp., 240 Neb. 838, 485 N.W.2d 737 (1992).
8 Dillon Tire, Inc. v. Fifer, 256 Neb. 147, 589 N.W.2d 137 (1999).

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be deemed prejudicial without proof of actual prejudice if the
material or information relates to an issue submitted to the jury
and there is a reasonable possibility that the extraneous mate-
rial or information affected the verdict to the detriment of a
litigant.” The trial court’s ruling on a question involving jury
misconduct will not be disturbed on appeal absent an abuse
of discretion.’° :

In support of its motion for new trial, the estate offered
the affidavits of jurors L.O. and S.W. Juror L.O. averred that
exhibit 4 belonged to him and was in his sports coat pocket
when the jury began deliberations. Juror L.O. further averred
that the “Post-it” note with the inflation rate was also his and
was attached to the personal financial slide calculator when it
came out of his coat in the jury room. Juror L.O. explained
that he “looked at Exhibit No. 4 during the deliberations but
did not pass it around to other jurors.” Juror S.W. stated in
her affidavit that “she did not look at Exhibit No. 4 during the
jury deliberations” but she did observe “other jurors looking at
Exhibit No. 4 during the course of deliberations.”

The estate contends that in light of these affidavits, there is
a reasonable possibility that exhibit 4 affected the verdict to
its detriment. The court denied the estate’s motion for a new
trial, concluding that the estate had failed to show by clear and
convincing evidence that it was prejudiced by the presence of
exhibit 4. We agree. While we do not condone the presence
of these nonevidentiary items in the jury deliberation room
without the knowledge of the court, we nonetheless cannot say,
under these circumstances, that the presence of exhibit 4 in the
deliberation room rises to the level of prejudice which warrants
setting aside the jury’s verdict.

The personal financial slide calculator, in this instance, was
nothing more than a device which allowed the user to perform
mathematic calculations quickly and easily." It was not itself

2 In re Petition of Omaha Pub. Power Dist., 268 Neb. 43, 680 N.W.2d 128
(2004).

10 Ig.
" See State v. Lihosit, 131 N.M. 426, 38 P.3d 194 (N.M. App. 2002).

Pe :
evidence of a fact at issue, nor did it create evidence that the
jury could have considered.” A juror referencing the slide cal-
culator would have to decide each and every variable that went
into the calculation of the verdict, including the amount of
money, rate of interest, and period of time." In reality, all the
slide calculator did was perform a mathematical calculation that
could have been done with a pencil and paper, except that the
slide calculator potentially made the calculation easier and the
result more accurate."

In evaluating prejudice, we also note that neither party pre-
sented any evidence to the jury with regard to the process by
which the jury was to calculate the present value of any dam-
ages. In this regard, the only guidance the jury received was
given by the court in jury instruction No. 8, which instructed
the jury to reduce damages for future losses to their present cash
value, but did not explain how this was to be done.

Given that the jury was not provided any evidence on
present value, nor instructed as to how present value was to
be calculated, the personal financial slide calculator and the
handwritten inflation rate could not have contradicted any of
the evidence presented at trial. Nor could the jury have given
undue weight to these items, while disregarding other evidence
adduced at trial, because there simply was no evidence pre-
sented on this issue.

We also note that the affidavits are not clear as to how many
of the jurors actually saw the personal financial slide calcula-
tor and inflation rate during deliberations. The estate offered
the affidavits of two jurors. Only one of those jurors looked
at exhibit 4. Although juror S.W. stated that “other jurors”
looked at exhibit 4, it is unclear whether juror S.W.’s reference
o “other jurors” indicated anyone other than juror L.O. Juror

See, Imperial Meat Company v. United States, 316 F.2d 435 (10th Cir.
1963); Lihosit, supra note 11.

13 See Lihosit, supra note 11.

4 See, Imperial Meat Company, supra note 12; Lihosit, supra note 11, See,
also, Zenda Grain & Supply Co. v. Farmland Industries, Inc., 20 Kan. App.
2d 728, 894 P.2d 881 (1995); Bobbie Brooks, Inc. v. Goldstein, 567 S.W.2d
902 (Tex. Civ. App. 1978).

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L.O.’s affidavit plainly states that he “did not pass [exhibit 4]
around to other jurors.” The evidence is at best inconclusive
as to how many other jurors, if any, viewed exhibit 4 during
deliberations.

Furthermore, there is no evidence that exhibit 4 influenced
the jury’s decision in any way, much less that it influenced
the decision in any particular way. While it is possible that the
presence of exhibit 4 in the jury deliberation room resulted in a
decreased award, it is equally possible that its presence resulted
in an increase in the award. We have no basis, other than specu-
lation, upon which to determine how a juror’s calculation of
present value would be affected by exhibit 4, if it was affected
at all.

In short, the record does not contain clear and convincing
evidence that prejudicial jury misconduct occurred. Given the
circumstances of this case, we cannot say that the estate was
prevented from receiving a fair trial. Accordingly, we conclude
that the estate has not met its burden of proving prejudicial jury
misconduct, and the trial court did not abuse its discretion in
denying the estate’s motion for a new trial on this basis.

ADEQUACY OF VERDICT

HEB The estate also contends that the damage award
was inadequate. This court has consistently recognized that
a plaintiff in an action for wrongful death of a child may
recover damages for loss of the deceased’s society, comfort,
and companionship which are shown by the evidence to have
a pecuniary value. The term “society” embraces a broad
range of mutual benefits each family member receives from
the other’s continued existence, including love, affection, care,
attention, companionship, comfort, and protection.'* Parental
loss is not limited to or necessarily dependent upon depriva-
tion of the child’s monetary contribution toward parental well-
being."” However, damages on account of mental suffering or

15 See Brandon v. County of Richardson, 264 Neb. 1020, 653 N.W.2d 829
(2002).

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"Wa

bereavement or as solace to the next of kin on account of the
death are not recoverable."

HE Ac award of damages may be set aside as inad-
equate when, and not unless, it is so inadequate as to be the
result of passion, prejudice, mistake, or some other means not
apparent in the record.” If an award of damages shocks the
conscience, it necessarily follows that the award was the result
of passion, prejudice, mistake, or some other means not apparent
in the record.

With regard to the adequacy of a verdict, we have stated that
“‘TiJt is virtually impossible to “color match” cases’ to deter-
mine whether a verdict in a particular case was adequate.”?4
One common thread runs throughout all wrongful death cases,
namely, that damages in any wrongful death case are incapable
of precise computation and are largely a matter for the jury.”

In the present case, there is uncontroverted evidence of a
close and loving relationship between Heather and her par-
ents. The testimony presented at trial shows that Heather was
a bright, considerate, dependable, and loving child who had a
variety of interests both in and out of school. However, based
on the facts and circumstances of this case, we cannot say that
the jury verdict was so inadequate as to be the result of passion,
prejudice, mistake, or some other means not apparent in the
record. The jury was instructed, without objection, to consider
the following factors when arriving at a verdict:

(1) Any financial support, services, comfort or compan-
ionship that Heather Poppe gave to her parents before her
death and the prospect that there would have been changes
in the future;

(2) the physical and mental health of Heather Poppe had
she lived;

18 See Nelson v. Dolan, 230 Neb. 848, 434 N.W.2d 25 (1989).

18 Brandon, supra note 15.

2 Id.

1 Reiser v. Coburn, 255 Neb. 655, 660, 587 N.W.2d 336, 340 (1998).
? See id.

12 Es

(3) Heather Poppe’s life expectancy immediately before
her death; and
(4) the life expectancy of Heather Poppe’s parents.

At the time of her death, Heather was 19 years old and had
moved away from her parents in Kearney to attend school in
Milford. Although Heather kept in contact with her family and
came home to Kearney every weekend, the evidence reveals that
Heather’s time with her parents was limited and was becom-
ing increasingly so as a result of the many activities in her life.
The jury was also entitled to consider, in its determination of
damages, the life expectancy of Heather’s parents. A significant
amount of testimony was presented at trial indicating that Arthur
and Barbara each had a history of health problems that could
affect their life expectancies.

The amount of damages to be awarded is a determination
solely for the fact finder, and the fact finder’s decision will not
be disturbed on appeal if it is supported by the evidence and
bears a reasonable relationship to the elements of the damages
proved.* Given our standard of review and the record with
which we are presented, we conclude that the evidence pre-
sented at trial was adequate to support the award of $46,925.60,
and therefore, the district court did not abuse its discretion in
overruling the estate’s motion for new trial.

CONCLUSION
For the foregoing reasons, we affirm the judgment of the
district court.
AFFIRMED.
Heavican, C.J., not participating.

% Shipler, supra note 3.

Jupira A. HUGHES, IN HER OWN RIGHT, AND JupirH A. HuGHEs,
AS PERSONAL REPRESENTATIVE OF THE Estate oF Nicxotas J.
HUGHES, DECEASED, APPELLANT, V. OMAHA PuBLic Power

District, A NEBRASKA POLITICAL SUBDIVISION, ET AL., APPELLEES.

Juprra A. HUGHES, IN HER OWN RIGHT, AND JupirH A. HucHes,
AS PERSONAL REPRESENTATIVE OF THE EstaTE oF Nicxoxas J.
HUGHES, DECEASED, APPELLANT, v. NEBRASKA COMMUNICATIONS,
Inc., A NEBRASKA CORPORATION, AND RADIODETECTION
CorporaTION, A New JERSEY CORPORATION, APPELLEES.

735 N.W.2d 793

Filed July 27, 2007. Nos. S-05-1223, S-06-216.

“4 Es

Raymond E. Baker, of Law Offices of Raymond E. Baker,
P.C., and Michael W. Heavey, of Colombo & Heavey, P.C., for
appellant.

Rex A. Rezac and Russell A. Westerhold, of Fraser, Stryker,
Meusey, Olson, Boyer & Bloch, P.C., for appellee Omaha Public
Power District.

Daniel P. Chesire, of Lamson, Dugan & Murray, L.LP.,
and Raymond E. Walden, of Walden Law Office, for appellee
Radiodetection Corporation.

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Stephen S. Gealy and Amanda A. Dutton, of Baylor,
Evnen, Curtiss, Grimit & Witt, L.L.P., for appellee Nebraska
Communications, Inc.

Heavican, C.J., Wricut, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

STEPHAN, J.

Nickolas J. Hughes suffered fatal injuries when he came into
contact with an underground electrical line owned by Omaha
Public Power District (OPPD) while working in an excavation.
Judith A. Hughes, his widow and the personal representa-
tive of his estate, brought this personal injury and wrongful
death action against OPPD; Nebraska Communications, Inc.
(NebCom); and Radiodetection Corporation (RDC). The district
court granted OPPD’s motion for summary judgment, conclud-
ing that it owed no legal duty to Hughes. Subsequently, in a
separate order, the court entered summary judgment in favor
of NebCom and RDC, determining as a matter of law that by
his actions, Hughes had assumed the risk of injury. The per-
sonal representative perfected timely appeals from both orders,
and we consolidated the appeals. We conclude that the record
supports the judgment entered by the district court in favor of
OPPD but does not support the judgment in favor of NebCom
and RDC.

I. BACKGROUND

1. Omana Pusiic Power District
OPPD is a publicly owned utility company providing elec-
trical power to Omaha, Nebraska, and portions of southeastern
Nebraska. It is a political subdivision of the State.

(a) Underground Electrical Powerline
OPPD maintains a buried, 8,000-volt, three-phase powerline
in a public utility easement along portions of the east side
of 120th Street in Omaha. The installation consists of three
individual phase cables and one neutral cable, each housed in
unmarked PVC conduit approximately 3 inches in diameter.

' See Neb. Rev. Stat. § 13-903(1) (Cum. Supp. 2006).

16 Es

The conduits are buried 3 to 4 feet below the surface of the
ground. The relevant portions of the powerline along 120th
Street were installed in 1980 and 1985.

At the time the powerlines were installed, OPPD had an in-
ternal reference drawing which provided design specifications
on buried cable trenches. That standard provided that when
specified by an OPPD design engineer, a warning or identify-
ing tape may be buried 1 foot below the surface’ of the ground
directly above the buried powerlines. The tape was described
as a “thin piece of plastic with some type of verbiage” indicat-
ing the presence of a buried cable below. Testimony indicated
that the decision on whether to specify the identifying tape
is discretionary with OPPD design engineers. When asked the
circumstances in which such specification would be made, an
OPPD representative testified:

This particular cable was located in public right away
[sic]. The people digging in those types of facilities are,
generally, contractors and people in the business. If we
were to go across private property, like, the homeowners’,
we never called in to get a locate. The engineer would
have probably specified it or might have specified if he
thought it was necessary.

A buried-cable industry standard also existed at the time
the powerlines were installed. The relevant standards for the
buried powerlines in question were the 1977 and 1984 edi-
tions of the American National Standards Institute’s National
Electrical Safety Code. Both standards specified, among other
things, the minimum horizontal clearances between cables and
minimum burial depth. However, neither standard required that
the conduit or sheathing contain warning markings, nor did
either require that warning or identifying tape be buried with
the cable.

(b) One-Call Notification System Act
In 1994, the Legislature enacted the One-Call Notification

System Act, Neb. Rev. Stat. §§ 76-2301 to 76-2330 (Reissue
1996).? As the owner of buried electrical utilities, OPPD is an

? See 1994 Neb. Laws, L.B. 421.

operator for purposes of the act.? At all relevant times to this
action, Diggers Hotline of Nebraska operated the statewide call
center providing the buried utility notification services required
by the act.‘ In 2001, the act provided:

(1) A person shall not commence any excavation with-
out first giving notice to every operator. An excavator’s
notice to the center shall be deemed notice to all opera-
tors. An excavator’s notice to operators shall be ineffec-
tive for purposes of this subsection unless given to the
center. Notice to the center shall be given at least two full
business days, but no more than ten business days, before
commencing the excavation . . . . An excavator may com-
mence work before the elapse of two full business days
when (a) notice to the center has been given as provided
by this subsection and (b) all the affected operators have
notified the excavator that the location of all the affected
operator’s underground facilities have been marked or that
the operators have no underground facilities in the location
of the proposed excavation.

(2) The notice required pursuant to subsection (1) of
this section shall include (a) the name and telephone num-
ber of the person making the notification, (b) the name,
address, and telephone number of the excavator, (c) the
location of the area of the proposed excavation . . . (d) the
date and time excavation is scheduled to commence, (e)
the depth of excavation, (f) the type and extent of excava-
tion being planned . . . and (g) whether the use of explo-
sives is anticipated.*

The act requires that operators receiving notice from the
center of a planned excavation “shall advise the excavator of
the approximate location of underground facilities in the area
of the proposed excavation by marking or identifying the loca-
tion of the underground facilities with stakes, flags, paint, or

3 See § 76-2313.
4 See §§ 76-2305 and 76-2318.
5 § 76-2321.

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any other clearly identifiable marking or reference point.”* The

act further specifies that marking or identification of under-

ground facilities
shall be done in a manner that will last for a minimum
of five business days on any nonpermanent surface and a
minimum of ten business days on any permanent surface.
If the excavation will continue for longer than five busi-
ness days, the operator shall remark or reidentify the loca-
tion of the underground facility upon the request of the
excavator. The request for remarking or reidentification
shall be made through the center.”

The act imposes strict liability for property damage on exca-
vators who fail to give notice of an excavation and subsequently
damage underground facilities. The act further imposes civil
penalties on operators and excavators who violate the notifica-
tion and marking provisions of the act.?

2. RADIODETECTION CORPORATION
RDC is a New Jersey corporation which manufactures
equipment used to locate underground utilities. One of its prod-
ucts is the “GatorCam System,” which includes, among other
things, a “Gator Locator,” and a “Gator Transmitter.” The sys-
tem can be used in different modes of operation, depending on
the type of buried utility that is sought to be located.

3. NEBRASKA COMMUNICATIONS ~
NebCom is a telecommunications contractor located in
Sarpy County, Nebraska. It acts as a general contractor for
telecommunications companies requiring installation and main-
tenance projects. In 2001, NebCom served as a general contrac-
tor for Qwest Communications, formerly known as U S West
Communications.

§ § 76-2323(1).
7 § 76-2323(2),
8 See § 76-2324,
9 See § 76-2325.

a °
On June 14, 2001, Qwest Communications engaged NebCom
to clean out an empty PVC conduit buried in the utility ease-
ment along the east side of 120th Street in Omaha, south of
Miracle Hills Drive. NebCom subcontracted the work to Burton
Plumbing Services, Inc. (Burton), a plumbing contractor located
in Omaha. NebCom did not notify Diggers Hotline at any time
relevant to the project.

4. NicxoLas Hucues

Hughes was employed by Burton as a lead drain technician.
He had been employed by Burton since about 2000 and was
supervised by Bruce Arp and, on specific projects, by Patrick
Morse. Arp testified that Hughes had been instructed on how
to use the GatorCam system. Other testimony established that
Burton employees attended periodic safety training and had
generally been instructed that they were not to cut into any
object unless the employee was absolutely sure of what it was.
One employee testified that he was not specifically instructed
on this point by Burton but that he knew from experience and
common sense not to cut a line without knowing what it was.

5. Hucues’ ACCIDENT

Sometime between June 14 and June 22, 2001, Hughes and
Steven Sinnett, another Burton employee, began the work of
cleaning the buried conduit along 120th Street. They used a spe-
cialized commercial pressure washer called a jetter which they
inserted into the empty conduit from a manhole access point
located on the east side of 120th Street south of Miracle Hills
Drive. They extended the jetter through the conduit to the next
manhole access point to the north, a distance of about 400 to
500 feet. When the jetter had been completely fed through the
conduit, they connected a separate cable to the jetter head and
attempted to pull the jetter and cable back through the conduit.
During this process, the jetter became stuck. Burton employees
used various methods to attempt to dislodge the jetter from the
conduit, but were unsuccessful. At some point, Burton informed
NebCom of the situation. The NebCom maintenance supervi-
sor testified that she offered to hire an excavation contractor to
retrieve the jetter for Burton, but Hughes declined that offer,
indicating that Burton was capable of such excavation project.

20 —

On or about June 27, 2001, Burton employees Danny
Anderson and Richard Griffen were sent to excavate in the area
of the stuck jetter. They were under the supervision of Morse.
Based on the estimated amount of jetter hose which had been
fed into the conduit, they began digging a hole about 300 feet
south of Miracle Hills Drive. The evidence reflects that no one
from Burton called Diggers Hotline before commencing this
excavation. However, Anderson, Griffen, and Morse testified
that they saw paint markings along the sidewalk indicating the
existence of buried utilities. The record indicates that another
excavating contractor had previously called Diggers Hotline
regarding excavation work on the east side of 120th Street,
south of Miracle Hills Drive, which was unrelated to this action.
Because they were aware from markings on the ground that
other buried utilities, including electrical lines, were in the area,
Anderson and Griffen used shovels and a probe rod, instead of
a backhoe, to excavate. Griffen testified: “We hand-excavated
all the utilities because there were so many utilities right in
that area there is no way that you could safely get a piece of
equipment in there to excavate it. So we hand-dug everything.”
In this manner, they exposed four conduits. Anderson testified
that his instructions were not to touch anything, but to “just dig
it up, expose it, and leave it.”

Morse testified that he and Hughes discussed the situation
at the 120th Street jobsite at Burton’s shop on June 27, 2001.
Morse informed Hughes that he intended to place a request
through Diggers Hotline to have the utility companies, includ-
ing OPPD, come to the site to identify the exposed conduits.
Morse testified that he mentioned the risk of electrocution
and told Hughes not to cut any of the conduits until they were
identified. Morse also testified that on the following morning,
while working with Hughes at another jobsite, he again told
him not to cut any of the exposed conduits at the 120th Street
site until they were identified. Morse told Hughes that he had
to go to another site, but that he would meet him at the 120th
Street site and that Hughes should not do anything until Morse
arrived there.

On the morning of June 28, 2001, Sinnett a:rived at the 120th
Street site and attempted to use an RDC GatorCam system

Se °
owned by Burton to verify that the stuck jetter was located in
the excavated area. Sinnett pushed a metal “fish tape” into the
conduit as far as it would go, thereby reaching the location at
which he assumed the jetter was stuck. He then connected one
Gator transmitter lead to the fish tape and the other lead to a
grounding rod. Using the Gator locator, Sinnett was able to
detect a signal emanating from the fish tape. The signal was not
detected by the Gator locator beyond the excavated hole. Sinnett
concluded that the jetter was located in one of the exposed con-
duits in the excavation.

Hughes arrived at the excavation scene later that morning.
He used the Gator locator in the same manner as had Sinnett.
Standing in the excavation, Hughes then used a multipurpose
handtool to tap on each of the four exposed conduits. Sinnett
heard Hughes say that one of the conduits sounded hollow, and
then Sinnett observed as Hughes began cutting it with the hand-
tool. Another eyewitness, Burton employee Paul Barrett, testi-
fied that immediately before cutting the conduit, Hughes joked
about the possibility that it might be a sprinkler line and that
he could be sprayed with water. Sinnett, Barrett, and Anderson,
who was also present at the jobsite, testified that shortly after
Hughes began cutting into the conduit, a ball of fire erupted
from the excavated hole. After the fire subsided, the three pulled
Hughes from the excavation. Hughes suffered severe burn inju-
ties from which he died on the following day.

6. ProceDuRAL History
(a) Pleadings

On June 25, 2003, the personal representative filed this
action in the district court for Douglas County against OPPD,
NebCom, and RDC, seeking damages for Hughes’ injuries and
death. In her complaint, she alleged, restated, that OPPD was
negligent in (1) failing to warn of the presence of the buried
electrical transmission line, (2) failing to conspicuously mark
the buried lines with warnings, and (3) burying the lines directly
adjacent to other utility conduits. She further alleged, restated,
that NebCom was negligent in (1) failing to provide precau-
tions regarding the safe conduct of the work, (2) failing to
provide a safe workplace, (3) placing its utility conduit directly

22 Ee

adjacent to electrical powerlines, (4) failing to exercise its right
to control the safety and supervise the work of Hughes, and (5)
failing to provide adequate training and/or equipment to Burton
employees. The personal representative also alleged negligence
and strict liability claims against RDC.

OPPD answered, denying its negligence and raising several
affirmative defenses, including assumption of risk. In their an-
swers, NebCom and RDC also pled assumption of the risk as an
affirmative defense.

(b) Summary Judgment as to OPPD:
Case No. S-05-1223

All three defendants subsequently moved for summary judg-
ment. After conducting a hearing at which evidence was offered
in support of and in opposition to the motions, the district
court sustained OPPD’s motion for summary judgment but
denied those of NebCom and RDC. The district court reasoned
that because OPPD did not have hotice of the excavation in
the area of its buried powerlines as required under the One-
Call Notification System Act, it did not owe a duty to warn
Hughes of such lines. The court also determined that the per-
sonal representative did not present expert testimony on the
issue of standard of care. In the same order, the district court
denied the motions for summary judgment filed by NebCom
and RDC, determining that there were genuine issues of mate-
rial fact with respect to some claims and defenses, including
assumption of risk. Pursuant to Neb. Rev. Stat. § 25-1315(1)
(Cum. Supp. 2004), the district court directed that the judgment
in favor of OPPD was final. From that order, the personal rep-
resentative perfected a timely appeal, which we moved to our
docket on our own motion.’ That appeal is docketed as case
No. S-05-1223.

(c) Summary Judgment as to NebCom and RDC:
Case No. S-06-216
After conducting additional discovery, NebCom and RDC
again moved for summary judgment. Following a hearing at

1 See Neb. Rey. Stat. § 24-1106(3) (Reissue 1995).

SC °
which additional evidence was received, the district court sus-
tained both motions, determining as a matter of law that the
personal representative’s claims were barred by the assump-
tion of risk defenses asserted by NebCom and RDC. The court
determined that Hughes knew of and understood the specific
tisk posed to him by the powerline, that Hughes voluntarily
exposed himself to the danger, and that Hughes’ death occurred
as a result of his exposure fo the danger. After the district court
directed entry of a final judgment pursuant to § 25-1315(1),
the personal representative timely appealed. We granted the
petitions of the personal representative and NebCom to bypass
the Nebraska Court of Appeals and consolidated this appeal
with the appeal involving OPPD.'' The appeal from the order
dismissing the action as to NebCom and RDC is before us as
case No. S-06-216.

IL. ASSIGNMENTS OF ERROR

In the action against OPPD, the personal representative
assigns, restated and consolidated, that the district court erred in
finding that (1) OPPD did not owe a duty to warn Hughes and
(2) she failed to carry her burden of proof by failing to provide
expert testimony.

In the action against NebCom and RDC, the personal rep-
resentative assigns, restated and consolidated, that the district
court erred in finding that Hughes knew and appreciated the
danger that existed.

Il. STANDARD OF REVIEW

HM Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue as
to any material fact or as.to the ultimate inferences that may
be drawn from those facts and that the moving party is entitled
to judgment as a matter of law.” In reviewing a summary judg-
ment, an appellate court views the evidence in a light most
favorable to the party against whom the judgment is granted

1 See § 24-1106(2).
” City of Lincoln v. Hershberger, 272 Neb. 839, 725 N.W.2d 787 (2007).

24 a

and gives such party the benefit of all reasonable inferences
deducible from the evidence."

Hl When reviewing questions of law, an appellate court
resolves the questions of law independently of the trial court’s
conclusions.'*

Iv. ANALYSIS

1. Case No. S-05-1223: Summary JUDGMENT
IN Favor or OPPD

The personal representative alleged that OPPD was
negligent in failing to warn of the existence and location of
its underground powerline. The threshold issue in any negli-
gence action is whether the defendant owes a legal duty to the
plaintiff.'> If there is no legal duty, there is no actionable neg-
ligence.© The question of what duty is owed and the scope of
that duty is multifaceted.”’ First, and foremost, the question of
whether a duty exists at all is a question of law.'®

(a) Statutory Duty

At the time of the accident, OPPD had certain duties under
the One-Call Notification System Act. The act was intended “to
establish a means by which excavators may notify operators of
underground facilities in an excavation area so that operators
have the opportunity to identify and locate the underground
facilities prior to excavation.” The purpose of the act was “to
aid the public by preventing injury to persons and damage to
property and the interruption of utility services resulting from

8 ia. .
"City of Elkhorn y. City of Omaha, 272 Neb. 867, 725 N.W.2d 792 (2007).

15 Washington v. Qwest Communications Corp., 210 Neb. 520, 704 N.W.2d
542 (2005); Fuhrman v. State, 265 Neb. 176, 655 N.W.2d 866 (2003).

6 Ia.

Cerny v. Cedar Bluffs Jr/Sr. Pub. Sch., 262 Neb. 66, 628 N.W.2d 697
(2001).

8 Id.
© § 76-2302(1).

SC °
accidents caused by damage to underground facilities”? The
term “underground facility” as used in the act includes buried
electric lines." As noted above, the duty is triggered by notice,
transmitted through Diggers Hotline, that a person intends to
excavate in a particular area.” The act requires that operators
receiving notice from the center of a planned excavation “shall
advise the excavator of the approximate location of underground
facilities in the area of the proposed excavation by marking
or identifying the location of the underground facilities with
stakes, flags, paint, or any other clearly identifiable marking
or reference point.” The act further specifies that marking or
identification of underground facilities

shall be done in a manner that will last for a minimum
of five business days on any nonpermanent surface and a
minimum of ten business days on any permanent surface.
If the excavation will continue for longer than five busi-
ness days, the operator shall remark or reidentify the loca-
tion of the underground facility upon the request of the
excavator. The request for remarking or reidentification
shall be made through the center.”

There is no evidence that OPPD violated its statutory duty
imposed by the One-Call Notification System Act. It is uncon-
troverted that no one from Burton notified Diggers Hotline
before commencing the excavation. The record reflects that
in response to notices transmitted to Diggers Hotline by other
contractors in the weeks preceding the accident, OPPD marked
its underground lines in the vicinity of 120th Street and
Miracle Hills Drive. There is no evidence or claim that it did
so in a manner contrary to the requirements of the act. There is
no evidence that OPPD had actual or constructive knowledge
that Burton employees had excavated and were working in the
area in which the accident occurred.

2 § 76-2302(2).
2 § 76-2317.
See § 76-2321.
 § 76-2323(1).
% § 76-2323(2).

26 Ee

(b) Common-Law Duty

HMM Our jurisprudence defining the duty of electric utili-
ties to protect against electrocution is derived primarily from
cases involving inadvertent contact with powerlines situated at
or above ground level. In such cases, we have recognized that
a power company engaged in the transmission of electricity
is required to exercise reasonable care in the construction and
maintenance of its lines. The degree of care a power company
must exercise varies with the circumstances, but it must be
commensurate with the dangers involved, and where wires are
designed to carry electricity of high voltage, the law imposes
the duty to exercise the utmost care and prudence consistent
with the practical operation of the power company’s business
to avoid injury to persons and property.?° However, power com-
panies are not insurers and are not liable for damages in the
absence of negligence.”’

HM Power companies must anticipate and guard against
events which may reasonably be expected to occur, and the
failure to do so is negligence.”* Where circumstances are such
that the probability of danger to persons having the right to be

25 Marshall v. Dawson Cty. Pub. Power Dist., 254 Neb. 578, 578 N.W.2d
428 (1998); Engleman v. Nebraska Public Power Dist., 228 Neb. 788, 424
N.W.2d 596 (1988); Tiede v. Loup Power Dist., 226 Neb. 295, 411 N.W.2d
312 (1987); Roos v. Consumers Public Power Dist. 171 Neb. 563, 106
N.W.2d 871 (1961).

26 Engleman v. Nebraska Public Power Dist, supra note 25; Tiede v. Loup
Power Dist., supra note 25; Roos v. Consumers Public Power Dist., supra
note 25.

27 Marshall v, Dawson Cty. Pub. Power Dist, supra note 25; Engleman v.
Nebraska Public Power Dist., supra note 25; Tiede v. Loup Power Dist.,
supra note 25; Suarez v. Omaha PP. Dist., 218 Neb. 4, 352 N.W.2d 157
(1984); Lorence v. Omaha P. P. Dist., 191 Neb. 68, 214 N.W.2d 238 (1974);
Gillotte v. Omaha Public Power Dist., 185 Neb. 296, 176 N.W.2d 24 (1970);
Roos v. Consumers Public Power Dist., supra note 25.

28 Engleman v. Nebraska Public Power Dist., supra note 25; Tiede v. Loup
Power Dist., supra note 25; Suarez v. Omaha PP. Dist. supra note 27;
Lorence v. Omaha P. P. Dist., supra note 27; Gillotte v. Omaha Public
Power Dist., supra note 27; Roos v. Consumers Public Power Dist., supra
note 25.

— 21
be

near an electrical line is reasonably foreseeable, power compa-
nies may be held liable for injury or death resulting from con-
tact between the powerline and a movable machine.” A failure
to anticipate and guard against a happening which would not
have arisen except under exceptional or unusual circumstances
is not negligence.*°

In Schmidt v. Omaha Pub. Power Dist.;! we considered the
claim of an excavator who was electrocuted when he struck
an underground powerline with an auger while digging post-
holes on commercial property. Before digging, the excavator’s
employer called Nebraska Underground Hotline to have any
buried utilities marked. The hotline passed the information on
to utility companies, including OPPD. OPPD then marked the
buried powerlines it owned on the property but did not mark
any secondary powerlines it did not own. Neither OPPD nor the
hotline warned the excavator or his employer of this fact. The
excavator subsequently came into contact with an unmarked
secondary powerline. This court reversed a summary judgment
entered in favor of OPPD on procedural grounds without dis-
cussing whether OPPD had a duty to warn beyond marking the
underground powerlines that it owned. In discussing whether
the hotline owed a duty, we noted: “It is common knowledge
that electricity is a dangerous commodity, and it requires little
imagination to perceive the risk of electric shock to an indi-
vidual who digs in an area containing hidden underground.
electric lines.”

HM Based upon OPPD’s reference drawing, the personal
representative contends that OPPD had a duty to bury an iden-
tifying tape above the powerline to warn of its presence. In
determining whether OPPD owed this duty to Hughes and others

2° Engleman v. Nebraska Public Power Dist., supra note 25; Tiede v. Loup
Power Dist., supra note 25; Gillotte v. Omaha Public Power Dist., supra
note 27.

°° Roos v. Consumers Public Power Dist., supra note 25.

31 Schmidt v. Omaha Pub. Power Dist., 245 Neb. 776, 515 N.W.2d 756
(1994).

® Jd. at 786, 515 N.W.2d at 763.

28 Es

similarly situated, we employ a risk-utility test, considering (1)
the magnitude of the risk, (2) the relationship of the parties, (3)
the nature of the attendant risk, (4) the opportunity and ability
to exercise care, (5) the foreseeability of the harm, and (6) the
policy interest in the proposed solution.

(i) Magnitude and Nature of Risk

Obviously, electricity is a dangerous commodity. As noted,
however, most of our cases involving the duty owed by elec-
tric utility companies involve powerlines placed above ground
level. Underground powerlines present a somewhat different
risk, which we identified in Schmidt as “the risk of electric
shock to an individual who digs in an area containing hidden
underground electric lines.” In this case, Hughes was not
involved in the excavation which exposed the underground
line. Burton employees who performed the excavation were
aware of the existence of the buried powerlines from surface
markings requested by other contractors. Using a probe and
shovels, they carefully exposed the conduits. Once exposed,
the powerline sheathed in its PVC conduit posed no risk unless
intentionally or accidentally cut.

(ii) Relationship of Parties
The record reflects no employment or contractual relation-
ship between OPPD and Hughes or Burton. At the time of the
accident, OPPD had not been given actual or constructive no-
tice that Burton employees had exposed the underground pow-
erline and were working in its vicinity.

(iii) Opportunity and Ability to Exercise Care
The personal representative contends that OPPD had the
opportunity to exercise care by simply implementing the inter-
nal design standards OPPD had in place at the time it originally

33 See, Fuhrman v. State, supra note 15; Sharkey v. Board of Regents, 260 Neb.
166, 615 N.W.2d 889 (2000).

4 See, Schmidt v. Omaha Pub. Power Dist., supra note 31; Lorence v. Omaha
P. P. Dist., supra note 27; Gillotte v. Omaha Public Power Dist., supra note
27.

35 Schmidt v. Omaha Pub. Power Dist., supra note 31, 245 Neb. at 786, 515
N.W.2d at 763.

a °
installed the buried powerlines. Those internal standards indi-
cate that OPPD will bury a warning or identifying tape about 1
foot below the surface of the ground directly above the power
cables “when specified” by an OPPD design engineer. OPPD
asserts that the decision whether to specify the identifying tape
is discretionary with its engineers. Furthermore, OPPD argues
that the One-Call Notification System Act eliminated the need
for OPPD to use the identifying tape.

Clearly, OPPD design engineers could have specified the
identifying tape, although there were no code or industry
standards mandating its use. It is not clear, however, that iden-
tifying tape would have prevented the accident. At most, the
presence of the tape would have warned excavators that they
were about to encounter an underground powerline. The Burton
employees who did the actual excavation knew this and for that
reason, carefully exposed the conduits using handtools instead.
of power equipment. Because Hughes was not present during
the excavation, we cannot say on this record that he would ever
have been aware of the identifying tape even if it had been
specified and used.

(iv) Foreseeability of Harm
Hi In the context of whether a legal duty exists, foreseeability
refers to
“<“the knowledge of the risk of injury to be apprehended.
The risk reasonably to be perceived defines the duty to
be obeyed; it is the risk reasonably within the range of
apprehension, of injury to another person, that is taken into
account in determining the existence of the duty to exercise
care”? 736
As we noted in Schmidt, the risk of accidental harm to a per-
son who excavates in the vicinity of underground electric lines
without knowledge of their existence is certainly foreseeable.
But that is not the risk at issue in this case. Here, the ques-
tion is whether the “risk reasonably to be perceived” included

% Knoll v. Board of Regents, 258 Neb. 1, 7, 601 N.W.2d 757, 763 (1999)
(quoting Clohesy v. Food Circus Supermkts., 149 N.J. 496, 694 A.2d 1017
(1997)).

30 |

a contractor’s employee intentionally cutting an excavated and
exposed underground conduit located in a public right-of-way
before it had been identified by a utility company, in violation
of his employer’s policies. The circumstances of Hughes’ fatal
injuries are certainly unusual, if not unique. We conclude that
these circumstances were not reasonably foreseeable at the time
OPPD installed the underground powerline.

(v) Policy Interests

The personal representative argues that because of the dan-
gerous character of electricity, the public has an interest in
the prevention of accidents arising from contact with buried
powerlines. This argument finds support in Schmidt, where we
recognized that “[t]he public certainly has a vital interest in
preventing accidents from electrical shock.”3’ We note, however,
that Schmidt involved events which occurred before the enact-
ment of the One-Call Notification System Act in 1994, which
furthers the policy of the State “to aid the public by preventing
injury to persons . . . resulting from accidents caused by dam-
age to underground facilities.”** In articulating this policy, the
Legislature placed the burden on excavators to give notice so
that utilities could mark underground facilities before any exca-
vation occurred.

(vi) Conclusion

Upon consideration of the risk-utility factors in light of
the facts of this case, we conclude that OPPD did not owe a
common-law duty to Hughes. The powerline was situated in a
public right-of-way where contractors would reasonably expect
to find underground utilities. No statute or code required use of
identifying tape at the time the powerline was installed. Most
importantly, the circumstances of Hughes’ accident do not fall
within the “tisk reasonably to be perceived” from underground
powerlines, as articulated in Schmidt. The accident arose from
exceptional and unusual circumstances. Because we conclude
that OPPD did not owe a common-law duty to Hughes, we

37 Schmidt v. Omaha Pub. Power Dist., supra note 31, 245 Neb. at 790, 515
N.W.2d at 765.

38 § 76-2302(2).

Se °
need not address the issue of whether the One-Call Notification
System Act abrogated any preexisting common-law duty. Nor
is it necessary for us to address the district court’s ruling with
respect to the absence of expert testimony as to the standard of
care. We affirm the district court’s grant of summary judgment
in favor of OPPD.

2. Case No. S-06-216: Summary JUDGMENT
IN Favor oF NesCom anp RDC

HH The issue in this appeal is whether the district court erred
in granting the motions for summary judgment of NebCom and
RDC based upon the affirmative defense of assumption of risk.
As currently codified, “assumption of risk” as an affirmative
defense means that (1) the person knew of and understood the
specific danger, (2) the person voluntarily exposed himself or
herself to the danger, and (3) the person’s injury or death or the
harm to property occurred as a result of his or her exposure to
the danger.® It is undisputed that Hughes acted intentionally
and voluntarily in cutting into one of the exposed underground
conduits and that his death was the result of that act. The issue
we must decide is whether, as a matter of law, he acted with

knowledge and understanding of the specific danger.

(a) Identification of Specific Danger

The district court defined the specific danger as “cutting into
a power line causing an explosion or electrocution.” While this
describes the mechanism by which the fatal injury occurred, we
do not accept it as a description of the “specific danger” which
confronted Hughes when he stepped into the excavation and
observed the exposed conduits. Nor do we accept the personal
representative’s argument that Hughes could not have assumed
the risk of injury unless he knew that the specific conduit which
he intentionally cut contained electricity. The record supports
a reasonable inference that Hughes believed he had identified
the conduit which contained the jetter he was attempting to
dislodge. The specific danger was that at least one of the ex-
posed conduits in the excavation actually contained electrical

3° Neb. Rev. Stat. § 25-21,185.12 (Reissue 1995); Burke v. McKay, 268 Neb.
14, 679 N.W.2d 418 (2004).

32 Es

current sufficient to cause injury or death. The question, thus,
is whether Hughes knew and appreciated this fact when he cut
into the conduit in which he believed the jetter was lodged.

(b) Knowledge and Understanding of Specific Danger

The doctrine of assumption of risk applies a sub-
jective standard, geared to the individual plaintiff and his or
her actual comprehension and appreciation of the nature of the
danger he or she confronts.” This subjective standard involves
an inquiry into what the particular plaintiff in fact sees, knows,
understands, and appreciates.‘! The doctrine of assumption of
tisk applies to known dangers and not to those things from
which, in possibility, danger may flow.” As a respected com-
mentator has explained:

“Knowledge of the risk is the watchword of assump-
tion of risk.” Under ordinary circumstances the plaintiff
will not be taken to assume any risk of either activities or
conditions of which he has no knowledge. Moreover, he
must not only know of the facts which create the danger,
but he must comprehend and appreciate the nature of the
danger he confronts. . . . If, because of age or lack of infor-
mation or experience, he does not comprehend the risk
involved in a known situation, he will not be taken to con-
sent to assume it. His failure to exercise ordinary care to
discover the danger is not properly a matter of assumption
of risk, but of the defense of contributory negligence.”

In applying this subjective standard, our cases recognize
that a plaintiff’s knowledge of a general danger inherent in

4° Burke v. McKay, supra note 39; Jay v. Moog Automotive, 264 Neb. 875, 652
N.W.2d 872 (2002).

4 See, Dukat v. Leisery, Inc., 255 Neb. 750, 587 N.W.2d 96 (1998); Williamson
v. Provident Group, Inc., 250 Neb. 553, 550 N.W.2d 338 (1996); Restatement
(Second) of Torts § 496D comment c. (1965).

® Pleiss v. Barnes, 260 Neb. 770, 619 N.W.2d 825 (2000); Vanek v. Prohaska,

233 Neb. 848, 448 N.W.2d 573 (1989); Hickman v. Parks Construction Co.,
162 Neb. 461, 76 N.W.2d 403 (1956).

“3 W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 68 at 487
(th ed. 1984).

SC °
a particular activity is not enough to establish assumption of
risk. Rather, the plaintiff must have actual knowledge of the
specific danger which caused the injury. For example, in Pleiss
v. Barnes, we held that the jury should not have been instructed
on assumption of risk in a case involving a person who fell
from a ladder when it “‘flipped, twisted and started to slide’”
as he placed shingles on a roof.“ We reasoned that the plain-
tiff’s admission that he knew that ladders could “‘get shaky
and fall’” was simply an acknowledgment that he was aware
of the general danger involved in using ladders, but did not
constitute knowledge of the specific risk that the ladder from
which he fell could perform as it did. In Burke v. McKay,** an
action involving a claim that a rodeo stock provider furnished
an unusually dangerous bucking horse to a high school rodeo,
we noted that the plaintiff rider’s acknowledged familiarity
with the general risks of injury inherent in rodeo competition
could not form the basis of an assumption of risk defense.
However, we concluded that the rider had actual knowledge of
the specific danger posed by the horse because he had observed
a previous incident in which a rider was injured when the same
horse performed in the same unusual manner which caused
his injury.

[HMB The issue in this case is not whether Hughes should
have known that one or more of the exposed conduits con-
tained electrical current, but whether he actually knew, under-
stood, and appreciated this specific danger. There is no direct
evidence in the form of an admission or other statement by
Hughes prior to his death that he had such knowledge. However,
knowledge in the context of assumption of risk involves a
state of mind or mental process which may be proved by cir-
cumstantial evidence.” In concluding that Hughes knew and

4 Pleiss v. Barnes, supra note 42, 260 Neb. at 771, 619 N.W.2d at 827.
45 Id. at 775, 619 N.W.2d at 829.
46 Burke v. McKay, supra note 39.

“7 See, Sikyta v. Arrow Stage Lines, 238 Neb. 289, 470 N.W.2d 724 (1991);
Mandery v. Chronicle Broadcasting Co., 228 Neb. 391, 423 N.W.2d 115
(1988).

34 Le

understood the danger, the district court relied primarily on
evidence of red markings in the area of the excavation which
indicated the presence of underground powerlines, as well as
statements made to Hughes by Burton employees about the
danger of cutting into unidentified lines.

As we have noted, neither Burton nor NebCom contacted
Diggers Hotline to request identification of underground utilities
prior to the accident. However, several witnesses testified that
there were visible red markings on the ground in the immediate
vicinity of the excavation, apparently remaining from previous
construction work in the area, which indicated the presence
of underground electrical utilities. Arp, Burton’s field supervi-
sor, testified that the company held safety meetings at which
the significance of “color codes” used to mark underground
utilities was discussed with employees. There is evidence that
Burton instructed its employees, including Hughes, never to cut
into an underground line which had not been identified. Morse,
Burton’s utility superintendent, testified that on the afternoon
prior to the accident, he told Hughes that he intended to call
Diggers Hotline to request identification of the exposed conduits
and that Hughes was not to cut anything until this was done.
Morse repeated these instructions to Hughes on the following
morning before Hughes went to the worksite. Although he could
not recall exactly what he said, Morse testified: “I’m sure we
discussed not cutting into anything until we find out what the
lines are. We don’t want to get killed, more or less, probably
said that.” When then asked “[w]hat was said about what could
have happened,” Morse testified: “It would probably cost us a
$100,000 a day until they get it fixed, or could be electrocuted
or anything like that. I mean, you just don’t break them, you
don’t cut into them, you don’t do that.”

This evidence supports an inference that Hughes was aware
of the specific danger posed by one or more electrical lines in
the excavation. But when considered with other evidence, a con-
trary inference that Hughes was only aware of the general dan-
gers is also possible. Arp responded affirmatively when asked if
Hughes “knew or had the ability to find out what the different
color lines signified after the utilities had been marked.” Under
the subjective standard applicable to assumption of risk, it must

Se °
be shown that Hughes had actual knowledge of the specific
danger posed by the existence of an electrical powerline in the
excavation where he was working.** If he did not, whether he
could have discovered the danger is not relevant to the defense.

The record reflects that at least one of Hughes’ coworkers
was unaware of the powerline and that there was no discussion
of it at the jobsite prior to the accident. Sinnett, one of Hughes’
coworkers who witnessed the accident, testified that he had
been employed by Burton for 2 weeks prior to the accident and
had received no training on the subject of underground utility
markings. Sinnett also testified that he did not realize the sig-
nificance of the color markings at the time of the accident and
did not receive training on this subject until after the accident
occurred. He testified that he did not discuss the markings with
Hughes on the day of the accident and did not know if Hughes
understood their significance. Sinnett further testified that he
did not know what any of the conduits contained and that it
did not occur to him that cutting into one of them could be
hazardous. Barrett, another Burton employee who witnessed the
accident, testified that there had been no discussion involving
Hughes regarding the presence of an electrical line in the exca-
vation and that Hughes had joked that the line he was about to
cut could be a waterline. The conduits all looked the same and
were not marked to identify their contents.

The issue before us in this appeal is not whether Hughes was
negligent in cutting into one of the conduits before it was identi-
fied, but whether he actually knew that his action could have a
fatal consequence because of the presence of an electrical line
among the conduits in the excavation. From this record, a finder
of fact could reasonably infer that Hughes did not have such
knowledge. The evidence that Burton instructed its employ-
ees not to cut into unidentified underground lines, including
Morse’s warning that one “could be electrocuted” if he did so,
could be viewed as a reference to the general risk of working
around unmarked utility lines, as opposed to a specific warning
that the excavation at 120th Street and Miracle Hills Drive actu-
ally contained an electrical powerline.

48 See Pleiss v. Barnes, supra note 42.

36 Es

We are not persuaded by RDC’s argument that two of our
prior decisions involving injuries caused by overhead electrical
powerlines support its position that Hughes assumed the risk of
electrocution as a matter of law. In Rodgers v. Chimney Rock
PP. Dist.,° we affirmed a finding by the trial court that the
plaintiff’s decedent had assumed the risk of electrocution when
he used a long metal pipe to clean a well situated beneath the
powerline. Applying a standard of review requiring deferenee
to the factual findings of the trial court, we noted evidence that
the powerline had been in place for approximately 15 years
prior to the accident and that the plaintiff’s decedent knew of
its existence and the danger which it posed at the time of the
accident. We held that the evidence was sufficient to support the
trial court’s finding of contributory negligence and assumption
of risk. Rodgers differs from the instant case both in the proce-
dural posture in which it reached this court and in the uncon-
troverted nature of the evidence regarding the accident victim’s
knowledge of the specific danger posed by the electrical lines
in the area where he was working. Although our opinion in
Disney v. Butler County Rural P. P. Dist. mentions the govern-
ing principles of assumption of risk, it affirmed the trial court’s
dismissal of a personal injury claim “primarily on the ground
that the plaintiff was guilty of contributory negligence as a mat-
ter of law.” We noted that the plaintiff was at all times aware of
the 7,200-volt powerline traversing his yard and driveway and
that he failed to exercise due care in operating power equipment
in its vicinity. No issues of contributory negligence are before
us in this appeal.

The governing standard of review for an order of summary
judgment should be, and continues to be, one favorable to the
nonmoving party.*' Applying this standard, which requires that
we view the evidence in a light most favorable to the party
against whom the summary judgment is granted and give such

*® Rodgers v. Chimney Rock PP, Dist., 216 Neb. 666, 345 N.W.2d 12 (1984).

50 Disney v. Butler County Rural P. P. Dist., 183 Neb. 420, 421, 160 N.W.2d
757, 758 (1968).

+! Controlled Environ. Constr. v. Key Indus. Refrig., 266 Neb. 927, 670 N.W.2d
771 (2003).

Se "
party the benefit of all reasonable inferences deducible from the
evidence, we conclude that there are genuine issues of material
fact on the issue of whether Hughes knew and appreciated the
specific danger posed by the underground electrical line when
he took the action which resulted in his death. For this reason,
the district court erred in concluding as a matter of law that by
such action, Hughes assumed the risk of fatal injury.

V. CONCLUSION
Because we conclude as a matter of law that OPPD did not
owe a duty to Hughes under the circumstances of this case, we
affirm the judgment of the district court in case No. S-05-1223.
However, because we conclude that there are genuine issues
of material fact as to the question of whether Hughes assumed
the risk of injury, we reverse the judgment entered in favor of
NebCom and RDC in case No. S-06-216 and remand the cause to
the district court for Douglas County for further proceedings.
Jupement IN No, S-05-1223 AFFIRMED.
JupcmenT IN No. S-06-216 REVERSED,
AND CAUSE REMANDED FOR FURTHER
PROCEEDINGS.

ConnoLty, J., dissenting.

The assumption of risk doctrine applies a subjective stan-
dard, geared to the individual plaintiff and his or her actual com-
prehension and appreciation of the danger he or she confronts.!
The assumption of risk defense requires that (1) Nickolas J.
Hughes knew of and understood the specific danger; (2) Hughes
voluntarily exposed himself to the danger; and (3) Hughes’
injury or death occurred from his exposure to the danger.”

The majority decision defines the “specific danger” as the
danger that at least one of the conduits in the excavation con-
tained electricity sufficient to cause injury or death. I would
define the specific danger confronting Hughes differently than

| Burke v. McKay, 268 Neb. 14, 679 N.W.2d 418 (2004). See Pleiss v. Barnes,
260 Neb. 770, 619 N.W.2d 825 (2000).

2 Neb. Rev. Stat. § 25-21,185.12 (Reissue 1995). See, also, Burke v. McKay,
supra note 1.

38 Le

the majority. I believe the specific danger was that Hughes
could be electrocuted or killed if he cut one of the four uniden-
tified conduits in the 120th Street excavation. I disagree that
Hughes must have known there would actually be electricity
in a conduit to have assumed the risk of electrocution or death.
I believe Hughes could assume the risk of being electrocuted
simply by knowing that any conduit at that particular site, if
cut, could be deadly. Further, the evidence shows that Hughes
knew of the specific danger involved in cutting the exposed
conduit at the 120th Street jobsite and assumed the risk of
his actions.

In concluding that genuine issues of material fact exist re-
garding whether Hughes knew of the risk posed by the electri-
cal line, the majority opinion discusses the deposition testimony
of Hughes’ colleagues. As the majority opinion acknowledges,
Patrick Morse’s testimony supports an inference that Hughes
was aware of the specific danger. Morse testified that the day
before the accident, he warned Hughes not to cut into any line
until it had been identified. The morning of the accident, he
again warned Hughes not to cut into anything. The record shows
the following exchange:

[Counsel for NebCom:] Did you tell him not to cut into
anything or do anything else until after the utilities specifi-
cally identified which line was which?

[Morse:] Correct.

Q. He responded by saying I won’t do that or what did
he say?

A. Yes, I would use them words, yes, he did, he said
okay, I won’t.

Q All right.

A. I was pretty adamant about it.

Q. So you believe you made it crystal clear to him that
the absolutely should not do that?

A. Yes.

Q. Do you have any question in your mind that he
understood what you were telling him?

A. There is no question in my mind. He understood
what I told him.

a °

More important, Morse testified that during his conversations
with Hughes, they discussed that they would not cut into the
lines before they were identified because they would not “want
to get killed” and that one “could be electrocuted.”

I believe the warnings Hughes received established that he
knew of the specific dangers of electrocution or death associ-
ated with cutting an unidentified conduit at the 120th Street
jobsite. Although the majority opinion suggests that Morse’s
warning about electrocution could be viewed as a reference
to the general risk of working around unmarked utilities, I
disagree. The conversations that took place show that Morse’s
warnings undoubtedly focused on the specific danger at the
120th Street jobsite.

Further, other evidence the majority opinion cites regarding
Hughes’ knowledge is irrelevant. The majority opinion reasons
that because one of the other employees present when the acci-
dent occurred did not know that cutting a conduit could be dan-
gerous, a jury might infer that Hughes also did not know of the
danger. Another person’s knowledge or lack thereof, however,
has no bearing on what Hughes knew. Whether the employees
discussed the risk among themselves before the accident also
does not show what Hughes knew. Hughes’ remark that the
line he was about to cut could be a water line demonstrates
that despite Morse’s warnings, Hughes had decided to cut into
a line that he had not positively identified. This does not sup-
port an inference that he either did or did not understand the
tisk associated with his decision.

I believe that the evidence concerning Hughes knowledge
of the risk he encountered shows that he knew and understood
that cutting a conduit before identifying it could have fatal
consequences. And the evidence the majority opinion cites to
oppose this view is not germane to whether Hughes subjec-
tively appreciated the danger. I would affirm the district court’s
decision that Hughes assumed the risk of his actions.

Heavican, C.J., joins in this dissent.

&

Stare OF NEBRASKA, APPELLEE AND CROSS-APPELLANT, V.
Jack E. Harris, APPELLANT AND CROSS-APPELLEE.
735 N.W.2d 774

Filed July 27, 2007. No. S-06-062.

James R. Mowbray and Jerry L. Soucie, of Nebraska
Commission on Public Advocacy, for appellant.

| .
Jon Bruning, Attorney General, and Kimberly A. Klein for
appellee.

Wricut, CONNOLLY, GERRARD, STEPHAN, McCormack, and
MIier-Lerman, JJ., and Hannon, Judge, Retired.

McCormack, J.
NATURE OF CASE

After a trial by jury, Jack E. Harris was convicted of first
degree murder and use of a deadly weapon to commit a
felony in connection with the killing of Anthony Jones. We
affirmed Harris’ conviction in State v. Harris’ (Harris I. After
Harris I, Harris filed for postconviction relief. In State v.
Harris (Harris I], we reversed the collateral order of the post-
conviction court which summarily denied postconviction relief
on certain claims, and we remanded the cause for an eviden-
tiary hearing. After an evidentiary hearing, the postconviction
court denied Harris’ motion for postconviction relief. Harris
now appeals from that judgment.

BACKGROUND

The facts surrounding Harris’ trial and conviction are fully
set forth in Harris I and Harris II, and are repeated here only
as relevant. The principal evidence against Harris at trial was
the confession of his accomplice, Howard “Homicide” Hicks,
and the testimony of three inmates at the jail where Harris
was incarcerated that Harris admitted to killing Jones with the
assistance of someone named “Homicide.”

An Omaha police detective, Leland Cass, also testified at the
trial. Cass described an interview with one of the inmate wit-
nesses during which the inmate first revealed that Harris had
admitted to Jones’ murder. The State pointed out that the report
of the inmate interview did not identify Hicks by his given
name, but referred to “Homicide,” and foundation was laid to
establish that “Homicide” and Hicks were the same person. The
State then asked: “And at any point in time, Detective, were
you able to establish whether or not this defendant Jack Harris

1 State v, Harris, 263 Neb. 331, 640 N.W.2d 24 (2002).
2 State v. Harris, 267 Neb. 771, 677 N.W.2d 147 (2004).

knew Howard Hicks as Homicide?” Cass answered, without
objection, that he did. Cass did not otherwise elaborate on this
statement, but instead went on to testify as to his interview with
another of the inmate witnesses.

Upon inquiry during cross-examination, Harris’ attorney dis-
covered from Cass that the statement that Harris knew Hicks as
“Homicide” was contained in a police report authored by Cass
(the Cass report). It is now undisputed that although the State
agreed to provide Harris with a copy of all police reports, the
State failed to provide Harris with a copy of the Cass report
prior to trial.

The report detailed Harris’ statements during an inter-
view with Omaha police officers and the Federal Bureau of
Investigation in an unrelated drug trafficking investigation.
Harris’ statements during the interview were made pursuant to
a proffer agreement with the U.S. Attorney’s office which stated
that Harris’ statements during the interview would not be used
against him.

The Cass report details that Harris was able to name a num-
ber of people involved in drug trafficking, including Hicks.
Harris identified Hicks by the nickname “Homicide.” Harris did
not discuss, in that interview, the Jones murder or any informa-
tion directly relating to that murder.

Based on the prior nondisclosure and alleged inadmissibil-
ity of the report, Harris’ counsel argued that he was entitled
to a Jackson v. Denno’ hearing on the voluntariness of Harris’
statement that he knew Hicks as “Homicide.” Counsel also
argued that the failure to disclose constituted a violation of
Brady v. Maryland‘ and that the statement was inadmissible
because of the proffer agreement, although he later said he had
“misspoke” with regard to the allegation of a Brady violation.
Counsel moved for a mistrial. Counsel stated that had he been
informed of the statement earlier, he would have filed a motion
to suppress. Counsel did not move for a continuance.

3 See Jackson v. Denno, 378 U.S. 368, 84 S. Ct. 1774, 12 L. Ed. 2d 908
(1964).

* See Brady v. Maryland, 373 U.S. 83, 83 S. Ct. 1194, 10 L. Bd. 2d 215
(1963).

m7 °

The court denied Harris’ motions. The court did, however,
express its concern that the statement had been obtained after
the proffer agreement. Therefore, despite the court’s conclusion
that the statement was “innocuous,” the court offered Harris the
option of either having Cass’ testimony stricken from the record
or cross-examining Cass on the issue.

Harris chose to cross-examine Cass. On cross-examination,
Harris elicited testimony from Cass that Harris had never indi-
cated to Cass that Harris knew Hicks personally. Rather, Harris
indicated only that he had heard of Hicks by his nickname.
Cass testified that he did not know how Harris had learned
Hicks’ nickname, and Cass did not have any personal knowl-
edge that Harris was actually acquainted with Hicks.

In the direct appeal of his convictions and sentences, Harris
raised the failure of the trial court to conduct a Jackson v.
Denno hearing on the voluntariness of his statement that he
knew Hicks as “Homicide,” but we held that the court had not
abused its discretion, in the absence of dispositive proof as to
whether the prosecution actually failed to provide Harris with
the Cass report.>

Thereafter, Harris filed a postconviction motion alleging,
among other matters, violations of his constitutional rights
because of the late disclosure of the Cass report and the
jury’s having heard the statement that Harris knew Hicks as
“Homicide.” The postconviction judge granted an evidentiary
hearing on some of the issues presented by Harris’ postconvic-
tion petition, but denied a hearing on others. In an interlocutory
appeal, we reversed the postconviction court’s denial of an evi-
dentiary hearing on the issue of prosecutorial misconduct relat-
ing to the late disclosure of the Cass report. On remand, a full
evidentiary hearing was held and the court ultimately denied
postconviction relief. Harris now appeals the postconviction
court’s order.

Further facts will be set forth below, as necessary to our
analysis.

5 Harris I, supra note 1,

© Harris Il, supra note 2.

44 Es

ASSIGNMENTS OF ERROR

Harris assigns that the trial court erred (1) when the trial
judge granted the State’s motion for recusal based solely on
his comments regarding our decision in Harris J; (2) in failing
to grant postconviction relief on the basis that Harris had been
denied his right to a Jackson v. Denno hearing on the admis-
sibility of his statement in the Cass report and on the grounds
that his statements were used against him at trial to negate an
essential point of the defense, in violation of Harris’ statutory
tight to move for suppression of involuntary statements’ and
the Sth, 6th, and 14th Amendments to the U.S. Constitution; (3)
in failing to grant postconviction relief based on prosecutorial
misconduct in failing to disclose the Cass report in violation
of the Due Process Clause of the 14th Amendment and the
decision in Brady v. Maryland and its progeny; (4) in failing
to grant postconviction relief based on a conflict of interest
created by George Thompson, who was an associate at the law
firm of Fabian & Thielen, where Harris’ trial attorney, Emil
M. Fabian, worked, leaving the Fabian & Thielen law firm and
joining the Douglas County Attorney’s office in violation of
the 6th and 14th Amendments; and (5) in failing to grant post-
conviction relief based on the fact that during the representa-
tion of Harris by Fabian & Thielen, one of Fabian’s associates
left that firm and joined the Douglas County Attorney’s office
in violation of the Nebraska “bright line” rule.

The State cross-appeals, asserting that the postconviction
court erred in permitting Harris to amend his postconviction
motion to include the conflict of interest claim because such
amendment exceeded the order of remand in Harris II. Harris
moves for summary dismissal of the State’s cross-appeal.

STANDARD OF REVIEW
Hl On appeal from a proceeding for postconviction relief, the
lower court’s findings of fact will be upheld unless such find-
ings are clearly erroneous.®

7 Neb. Rev. Stat. § 29-115 (Reissue 1995).
8 State v. Wagner, 271 Neb. 253, 710 N.W.2d 627 (2006).

| °
ANALYSIS

ALLEGED PREJUDICE RELATING TO Cass REPORT

We first address Harris’ assignments of error relating to the
Cass report. Harris argues that because of the State’s pros-
ecutorial misconduct in failing to disclose the Cass report in
a timely manner, the jury was allowed to hear testimony as to
Harris’ inadmissible prejudicial statement that he knew Hicks
by his nickname “Homicide.” Harris explains that this statement
should have been suppressed before being heard by the jury, but
because Harris was unaware of the report, he could not make a
timely motion to suppress. Harris asserts that his due process
tights under the 14th Amendment to the U.S. Constitution were
thus violated. He also asserts his Fifth Amendment rights were
violated, apparently in reference to the privilege against self-
incrimination. We note that although Harris’ amended petition
for postconviction relief made several allegations of ineffective
assistance of trial counsel, Harris does not assign or argue in
this appeal that the postconviction court erred in denying these
ineffective assistance claims.

HEME Postconviction relief is a very narrow category of re-
lief.? 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.°
The appellant in a postconviction proceeding has the burden of
alleging and proving that the claimed error is prejudicial."

Harris argues that his constitutional rights were violated,
tendering his conviction void or voidable, by invoking the prin-
ciples (1) requiring a voluntariness hearing under Jackson v.
Denno, (2) prohibiting nondisclosure of exculpatory evidence
under Brady v. Maryland, and (3) prohibiting late disclosure
of material evidence under Neb. Rev. Stat. § 29-1912 (Reissue
1995). The question of whether a constitutional error has oc-
curred may differ depending upon the constitutional principles

° See State v. Barnes, 272 Neb. 749, 724 N.W.2d 807 (2006).
19 State v, Moore, 272 Neb. 71, 718 N.W.2d 537 (2006).
1 State v. Brunzo, 262 Neb. 598, 634 N.W.2d 767 (2001).

46 Le

invoked. Harris’ burden to show that he was prejudiced is the
same, regardless of what constitutional provision he is claiming
was violated.

Ultimately, the only prejudice which Harris asserts is the
fact that the jury heard the statement that Harris knew Hicks as
“Homicide.” This, in turn, Harris argues, “forced” trial counsel
to abandon Harris’ theory of defense that Harris and Hicks did
not even know each other.'? Harris does not assert that the late
disclosure of the Cass report impeded the ability of defense
counsel to timely prepare Harris’ defense. Harris’ counsel did
not make a motion to continue the trial in light of the late-
discovered report. In fact, it appears that the contents of the
report, if not the existence of the report itself, were already
known to the defense. This is only reasonable, given that Harris
was a participant in the interview with Cass and presumably
knew what happened during it.

Assuming, without deciding, that a constitutional error
occurred, Harris has failed to sustain his burden on postconvic-
tion review to show that the constitutional error was prejudicial.
The statement complained of was that Harris knew Hicks as
“Homicide.” It is unclear whether this statement was brought
forth in an attempt to reconcile testimony as to who “Homicide”
was or whether it was meant to establish a relationship between
Hicks and Harris. In any event, Harris’ attorney, on cross-
examination of Cass, clearly established that Harris had indi-
cated to Cass only that he had heard of Hicks and that he knew
his nickname was “Homicide.” Cass specifically testified during
cross-examination that Harris never said he knew Hicks person-
ally. Thus, the cross-examination mitigated any prejudice that
might have resulted from the more ambiguous statement made
by Cass on direct examination. There is scant evidence that
Harris’ defense strategy was that Hicks and Harris did not know
each other, but, in any event, such a strategy was not irreparably
harmed, given the cross-examination.

Hl A court making the prejudice inquiry in a postconvic-
tion proceeding must ask if the defendant has met the burden
of showing that the decision reached would reasonably likely

" Brief for appellant at 42.

a 47
Le

have been different absent the errors.’ The postconviction court
found that there was nothing in the Cass report that could have
led to other evidence, to help prepare defense witnesses, or
could have been used to impeach a prosecution witness. The
postconviction court further concluded that the statement from
the report entered into the record did not materially influence
the jury. In summary, the postconviction court found that Harris
did not suffer any actual prejudice in relation to the late disclo-
sure of the Cass report. We agree. In light of the other evidence
presented at trial, including the testimony of Hicks and three
witnesses who stated that Harris had admitted to the crime, we
conclude that Harris has failed to meet his burden on postcon-
viction to prove that the claimed constitutional errors relating to
the Cass report were prejudicial. The postconviction court thus
properly denied postconviction relief on the issues pertaining to
the Cass report.

ConeLicr oF INTEREST OF TRIAL ATTORNEYS

Harris also claims that trial counsel’s imputed conflict of
interest warrants postconviction relief. After our remand of
the cause in Harris II, the county attorney requested leave to
withdraw as counsel for the State and requested the appoint-
ment of a special prosecutor. The basis for the request was that
Thompson, the associate at the same law firm as the attorney
representing Harris at trial, had been hired by the Douglas
County Attorney’s office. This was the first time that Harris’
postconviction counsel was aware of this, and counsel was
granted leave to amend the motion for postconviction relief to
include claims based on this conflict of interest.

The evidence at the postconviction hearing regarding the
conflict of interest was that Thompson was an associate at the
firm where Harris’ trial attorney worked. Thompson’s relation-
ship with the firm was somewhat akin to an office-sharing
arrangement. The firm did not actually pay Thompson. Thompson
was responsible for bringing his own cases to the firm, and he
set his own fee schedule and generated his own income. At the

© State v. Boppre, 252 Neb. 935, 567 N.W.2d 149 (1997), disapproved on
other grounds, State v. Silvers, 255 Neb. 702, 587 N.W.2d 325 (1998).

48 Le

end of the month, Thompson would pay half of his earnings to
the firm and he would keep the other half.

Thompson testified that although he knew that Fabian had
been appointed to represent Harris, Thompson never met with
Harris, never did any legal work on Harris’ case, and did not
recall having any confidential information relating to Harris’
case. The only connection Thompson had with the case was
voluntarily attending a preliminary hearing, in the courtroom
gallery, to learn how such matters were handled. Although
both Thompson and Fabian stated that it was possible they had
informal conversations about Harris’ case, neither specifically
recalled any such conversation.

In December 1998, Thompson left Fabian & Thielen to accept
employment with the juvenile division of the county attorney’s
office. Thompson primarily worked on termination of parental
rights cases. Thompson had no direct contact with the criminal
division of the county attorney’s office, which was located in
a different building from where Thompson worked. Thompson
testified that he never discussed the Harris case with anyone in
the county attorney’s office.

The postconviction court ultimately found that Thompson
did not have any confidential information regarding Harris’
case. In addition, the postconviction court found that during the
entire period in question, Thompson “was effectively screened
off” from the entirely separate criminal division of the county
attorney’s office, located in a different building. The court thus
concluded that no actual conflict of interest of the attorneys
involved in Harris’ trial existed and that there was no basis for
postconviction relief.

HMMM Harris correctly notes that under Strickland v.
Washington, there is a limited presumption of prejudice if
a criminal defendant can show (1) that his counsel actively
represented conflicting interests and (2) that an actual conflict
of interest adversely affected his lawyer’s performance. But

“ Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674
(1984).

5 Id. See, also, Cuyler v. Sullivan, 446 U.S. 335, 100 S. Ct. 1708, 64 L. Bd. 2d
333 (1980); State v. Schneckloth, 235 Neb. 853, 458 N.W.2d 185 (1990).

| °
Harris’ reliance on principles of imputed conflict of interests is
misguided. The U.S. Supreme Court, in Cuyler v. Sullivan, has
held that “the possibility of conflict is insufficient to impugn a
criminal conviction.”'* In order to obtain relief in a postconvic-
tion action based upon the alleged conflict of interest of trial
counsel, the defendant must show an actual, as opposed to an
imputed, conflict of interest.’ We determine that the postconvic-
tion court did not clearly err in concluding that no actual con-
flict of interest was present in this case. As such, Harris has no
conflict of interest claim which warrants postconviction relief.
The State’s cross-appeal asserts that the postconviction court
lacked the power to allow Harris’ motion to amend the post-
conviction petition with the conflict of interest allegations. The
State argues that issue was not within the purview of our man-
date in Harris II remanding the cause for an evidentiary hear-
ing. Having affirmed the denial of postconviction relief on other
grounds, we need not reach this issue.

TriaL Jupce’s RECUSAL

Finally, we address Harris’ argument that the court com-
mitted reversible error in the postconviction proceedings when
the trial judge granted the State’s motion to recuse himself
from presiding. At a hearing on the recusal motion, the State
called a witness who testified that the trial judge had previously
expressed his view that this court should have reversed for a
new trial in Harris I. Also, the trial judge’s court reporter testi-
fied that the trial judge had expressed his view that we should
have granted a new trial in Harris J and that the trial judge was
inclined “to grant a postconviction relief for the defendant.” The
court reporter was unsure, however, whether the trial judge’s
statements referred to the ultimate result of postconviction pro-
ceedings, or only to the decision to grant an evidentiary hear-
ing on Harris’ petition for postconviction relief. The trial judge

6 Cuyler v. Sullivan, supra note 15, 446 US. at 350.

7 See, Com. v. Padden, 783 A.2d 299 (Pa. Super. 2001); Newby v. State, 967
P.2d 1008 (Alaska App. 1998); State v. Walden, 861 S.W.2d 182 (Mo. App.
1993). See, also, State v. Narcisse, 264 Neb. 160, 646 N.W.2d 583 (2002);
State v. Schneckloth, supra note 15.

concluded that “a reasonable person might conclude that as the
finder of fact in this case, I am predisposed.” The trial judge
stated that this required him to grant the State’s motion, and
he accordingly entered an order of recusal. The postconviction
action was then reassigned to another judge.

Citing the First Circuit cases of Blizard v. Frechette'® and
In re Union Leader Corporation," Harris argues that the trial
judge had a duty to remain as the judge for the postconviction
action absent objective facts requiring his removal. He asserts
that the facts alleged at the recusal hearing were insufficient
to require his removal. Harris asserts that the trial judge is
uniquely situated to understand the issues relating to a post-
conviction action and that parties must be prevented from too
easily obtaining a strategic disqualification.

Hl Because the trial judge is uniquely situated to understand
the issues relating to a postconviction action, it is true that we
do not condone recusals based on the simple fact that the post-
conviction judge was also the judge at trial. However, it does
not follow that a defendant has a cognizable right to have the
trial judge be the judge presiding over a postconviction action.
Generally, while a defendant may be entitled to an impartial
judge,” a defendant does not have the right to have his or her
case heard before any particular judge." Harris does not con-
tend that the postconviction judge was not fair and impartial or
that the recusal resulted in prejudicial delay.

A motion to disqualify a trial judge on account of
prejudice is addressed to the sound discretion of the trial court.

18 Blizard v. Frechette, 601 F.2d 1217 (1st Cir. 1979).

19 In re Union Leader Corporation, 292 F.2d 381 (1st Cir. 1961).

2 Ward v. Village of Monroeville, 409 U.S. 57, 93 S. Ct. 80, 34 L. Ed. 2d 267
(1972).

2! Palmore v. United States, 411 U.S. 389, 93 S. Ct. 1670, 36 L. Ed. 2d 342
(1973); Sinito v. United States, 750 F.2d 512 (6th Cir. 1984); United States v.
Braasch, 505 F.2d 139 (7th Cir. 1974); Padie v. State, 566 P.2d 1024 (Alaska
1977); Lane v. State, 226 Md. 81, 172 A.2d 400 (1961). Cf. State v. Gales,
269 Neb. 443, 694 N.W.2d 124 (2005).

2 State v. Terrell, 220 Neb. 137, 368 N.W.2d 499 (1985).

m7 *
A judge must be careful not to appear to act in the dual capacity

of judge and advocate.*> We find no abuse of discretion in the
trial judge’s decision to recuse himself in this case.

CONCLUSION
For the reasons already stated, we affirm the denial of post-
conviction relief. Harris’ motion for summary dismissal of the
State’s cross-appeal is denied.
AFFIRMED.
Heavican, C.J., not participating.

%3 Jim’s, Inc. v. Willman, 247 Neb. 430, 527 N.W.2d 626 (1995), disapproved
on other grounds, Gibilisco v. Gibilisco, 263 Neb. 27, 637 N.W.2d 898
(2002).

Hannon, Judge, Retired, concurring in part, and in part
dissenting.

I agree with the majority’s opinion on all of the points consid-
ered by the majority’s opinion except one. I must dissent from.
that portion of the opinion which concludes that the prosecutor’s
conduct was not prejudicial to Jack E. Harris. I understand that
this court is bound by the finding of the trial court that the
prosecutor did not deliver the report to the defense counsel and
that her failure to do so was not deliberate. However, in my
opinion, a combination of that unintentional conduct and the
method of the prosecutor’s direct examination of Officer Leland
Cass enabled the State to get before the jury a crucial admission
which appeared to be clearly inadmissible.

On direct examination, Cass was allowed to testify that
he learned that Harris knew Howard Hicks by his nickname,
“Homicide,” which is a crucial fact when Harris was claiming
he did not know Hicks. Because the prosecutor had not delivered
the report which showed Cass learned of that fact as part of a
proffer, defense counsel had no way of preventing that evidence
from being presented to the jury, but the prosecutor would have
had the report and must have interviewed Cass to learn of the
basis of his testimony.

Viewed in the light of the other evidence, in my opinion, the
admission of this evidence was very prejudicial. Cass’ testimony

52 Le

was that of a disinterested, reputable, and unimpeachable wit-
ness of a nonjudicial admission of a party. In my opinion, that
is powerful evidence, usually dispositive of the point admitted
by a party. An admonishment by the judge that the jury should
disregard such evidence would be useless. Without Cass’ testi-
mony, the evidence before the jury was that Harris testified he
did not have an association with Hicks at the time that Hicks
testified that they murdered Jones together. The State had the
unsupported testimony of Hicks that he did. Hicks’ testimony on
his association was weak and unsupported. The testimony that
Harris admitted to the crimes was given by three jail inmates
with obvious motives to lie.

Without the evidence obtained by the proffer statement, in
my opinion, a jury would have difficulty in finding Harris to be
guilty beyond a reasonable doubt. Therefore, I think the prosecu-
tor’s conduct was prejudicial to Harris’ getting a fair trial.

Loren W. Kocu, APPELLEE AND CROSS-APPELLANT, V.
Ronap E. AUPPERLE AND Mary ANN AUPPERLE, APPELLANTS,
AND Lower PLatte SourH Natura Resources District,
INTERVENOR~APPELLANT AND CROSS-APPELLEE.

737 N.W.24 869

Filed August 3, 2007. No. S-06-264.

Steven G. Seglin and Thomas E. Jeffers, of Crosby Guenzel,
L.L.P., for appellants and intervenor-appellant.

Stephen D. Mossman, of Mattson, Ricketts, Davies, Stewart
& Calkins, for appellee.

Heavican, C.J., Wricut, Connotty, GeRRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

STEPHAN, J.
This case involves a water dispute between neighboring land-
owners. Ronald E. Aupperle and Mary Ann Aupperle, with

54 Ee

the cooperation of the Lower Platte South Natural Resources
District (LPSNRD), commenced construction of a small dam
to create a farm pond along the banks of an unnamed tributary
of Weeping Water Creek in Cass County, Nebraska. Loren W.
Koch, a downstream user of the waters of the tributary, sought
to enjoin the construction of the dam, and LPSNRD intervened.
After a bench trial, the district court for Cass County enjoined
the Aupperles from constructing the dam without a device to
permit water to pass through the dam so as not to “appreciably
diminish” the water which would naturally flow onto Koch’s
property or materially affect the continuity of such flow. The
Aupperles and LPSNRD appeal. Based upon our de novo review,
we conclude that Koch was not entitled to injunctive relief.

I. BACKGROUND

In June 2005, Koch filed an action to enjoin the Aupperles
from constructing a dam to create a small farm pond on the
unnamed tributary. In his verified complaint, Koch asserted
that he is a downstream user of the tributary and that in 1989,
he dammed the waters of the tributary and developed a pond
of approximately 3 acres on his property. The pond is stocked
with fish and is appurtenant to Koch’s residence. Koch alleged
that he also used the stream water to water cattle. He alleged
that his pond had been reduced in size over the several years
preceding the action due to drought conditions in Cass County.
Koch alleged that the Aupperle dam would prevent his pond
from filling and deprive him of the use of the stream water
for livestock watering. On July 5, the district court entered a
temporary injunction preventing the Aupperles from complet-
ing construction of their dam. On the same date, Koch posted a
$1,000 cash bond.

On July 26, 2005, LPSNRD filed a complaint in intervention
and an answer. Koch subsequently filed a motion to strike the
complaint in intervention on the basis that LPSNRD lacked a
direct and legal interest in the outcome of the controversy. After
a hearing on the motion to strike, the district court determined
that because LPSNRD had entered into a cost-share arrangement
with the Aupperles to provide funds for the dam construction
and had been involved in the design and construction stages of

ma °
the proposed dam, it had a direct financial interest in the final
construction of the dam and pond and was therefore entitled
to intervene.

LPSNRD and the Aupperles then filed a motion to dismiss
or, in the alternative, to transfer the matter to the Department
of Natural Resources (DNR), alleging that that agency had
“primary, exclusive, and original jurisdiction to adjudicate the
respective surface water rights of the parties.” In denying the
motion, the district court concluded that it had jurisdiction to
determine the action and that the doctrine of primary jurisdiction
was not applicable.

At trial, Koch testified that he purchased his property in 1981
and that aside from two brief time periods in the previous 2
years, he had observed a constant flow of water in the tributary.
His dam, built in 1989, impounded approximately 40 to 50 acre-
feet of water. The pond took approximately a year and a half
to fill and seal. In 1990, he stocked the pond with largemouth
bass, bluegill, and catfish, and the pond, by the time of trial, had
become “one of the best little fishing ponds around.”

Koch testified that he used his pond to water his livestock
from the time it was constructed until 1997. He had no livestock
from 1997 until shortly before trial. He stated that he intended
to have a small number of cattle on his property again and that
he had recently obtained 7 head; he anticipated having a maxi-
mum of 45 head. Although he admitted that he had other water
sources for cattle on his property, he testified that he preferred
to use the running water from the tributary because “it’s the
most trouble-free watering you can get for livestock” and was
the most convenient source of water for him.

Koch testified that the pond was also used for recreational
boating. He also testified that he built his house in 1997 to over-
look the pond and had made some improvements on the pond,
including the installation of a boat dock. According to Koch, due
to drought conditions in the 4 to 5 years preceding the trial, the
water level in the pond was down 6 to 8 feet.

Koch testified that he did not obtain permits prior to con-
structing his dam, but that when he learned that permits were
necessary, he made the required permit applications. He was
concerned that if the drought continued and the Aupperles were

56 Es

allowed to construct their pond, no water would pass through to
his pond and it would dry up and kill his fish. He requested that
the court require a “six-inch draw down” in the Aupperle dam so
that water could be passed through the Aupperle structure until
Koch’s pond was full.

On cross-examination, Koch conceded that he had no appro-
priative right to use the water in the tributary. He further testified
that he wanted all the water in the tributary until his pond was
full and that then, the court could authorize upstream impound-
ment by the Aupperles. He admitted that he had other sources
of water that he could use for his livestock, including several
other ponds, a well, rural water spigots, and stock tanks. He
further admitted that he had not quantified the amount of water
he would need for watering his livestock, nor had he analyzed
at what point the fish in his pond would be endangered. Koch
testified that his dam did not contain a drawdown device similar
to the one he sought for the Aupperle dam.

Robert Kalinski testified as an expert on behalf of Koch.
Kalinski is a licensed professional civil engineer with bachelor’s
and master’s degrees in geology and a doctorate degree in
engineering. Summarized, Kalinski testified that the rate of the
ground water-based or spring-based flow in the tributary was
greater above the proposed Aupperle dam than it was below
the dam. He further testified that the Koch dam had a drainage
basin of approximately 260 acres and that the Aupperle basin
would take up 178, or approximately 69 percent, of those same
acres. Drainage basins are relevant to determining how much
precipitation-based runoff will flow into a stream.

Over a continuing foundational objection, Kalinski opined
that “significant” spring flows would be eliminated by the
construction of the Aupperle dam. He stated that with regard to
runoff flows, “just reduction of the drainage basin, particularly
during times during years of lower flows, below average pre-
cipitation, that that would again significantly reduce the amount
of water that was available to flow into . . . Koch’s dam.”
Kalinski testified that during the time the Aupperle pond was
filling, there would be little flow to the Koch property.

On cross-examination, Kalinski admitted that the flows in the
stream could vary from day to day and location to location and

Pe °
that the variance could be quite significant. He clarified that his
ultimate opinion was that “there’s a potential reduction in water
that’s available to flow to . . . Koch’s dam.”

The Aupperles and LPSNRD called Michael Jess as an
expert witness. Jess has a master’s degree in civil engineer-
ing and formerly served as the director and deputy direc-
tor of the Department of Water Resources. Summarized, Jess
agreed with Kalinski’s calculations regarding drainage basins
and streamflows, but disagreed as to the effect of the Aupperle
dam. According to Jess, during average precipitation years, the
Aupperle dam would not have a significant or substantial effect
on the streamflow available to Koch. During times of drought,
he opined that neither structure was likely to fill and that thus,
the proposed Aupperle dam would not have an adverse effect
on Koch’s pond. Jess further testified that in times of abundant
precipitation, both dams were likely to fill and that the Aupperle
dam could serve as flood control. He clarified that his opinions
were based solely on precipitation-based runoff and that any
spring flows would produce an additional volume of water.
Ultimately, Jess testified that based upon a comparison of flow
to Koch’s dam during drought years, both with the Aupperle
dam in existence and without it, the difference in the flow would
not be so significant as to make the installation of the Aupperle
dam an unreasonable use of the stream water.

Paul Zillig, the assistant manager of LPSNRD, testified that
based on data compiled by the Natural Resources Conservation
Service, an entity that designed the Aupperle farm pond, there
was sufficient water in the tributary to support both ponds. He
stated that LPSNRD would not have participated in the Aupperle
project had it thought that it would have prevented downstream
flows. He testified that virtually all small ponds like the Aupperle
pond would at some point reduce downstream flows. He also
testified that farm ponds like the Aupperles’ are customarily
designed without auxiliary passthrough devices, because they
are not subject to DNR permit requirements. He explained that
the state requires a passthrough device because there is a legal
requirement to be able to draw down a pond to 15 acre-feet.

Ronald Aupperle testified that he relied upon the expertise of
LPSNRD and the Natural Resources Conservation Service for

58 a

the planning and design of his pond. He stated that if he were
lawfully directed by the DNR to release flows from his dam, he
would comply. On cross-examination, Ronald Aupperle testified
that he loved wildlife and trees and that he hoped to eventually
establish an arboretum as part of the pond area that school chil-
dren could visit. He stated that aside from one period during the
drought, he had always observed water flowing in the tributary.

On February 10, 2006, the district court entered an order
in which it found that both parties intended to use impounded
water from the tributary “primarily for aesthetic and recrea-
tional purposes with grade stabilization, erosion control, and
domestic use (watering cattle) being secondary in nature.” The
court further found that while both parties intended to use the
water for the same purpose, Koch “has priority of appropriation
due to the fact that his dam was constructed back in 1989 and
has existed since that time.” On this basis, the court concluded
that “Koch’s use of the water from the stream is superior to
[the] Aupperles.” The district court permanently enjoined the
Aupperles from constructing their farm pond “until such time as
the dam structure contains a draw-down or similar device which
will allow for the passage of water through the dam structure.”
The Aupperles and LPSNRD filed this timely appeal, and we
granted their petition to bypass.!

IL. ASSIGNMENTS OF ERROR

The Aupperles and LPSNRD assign, restated, that the district
court erred in (1) failing to recognize the primary, exclusive,
and original jurisdiction of the DNR; (2) failing to apply the
doctrine of unclean hands to Koch’s claims; (3) granting Koch a
surface water appropriation; (4) finding that the Nebraska stat-
utes required them to install an outlet structure in their dam; (5)
finding that Koch had a superior right to use the surface water
in the unnamed tributary; (6) admitting the expert testimony
of Kalinski; (7) finding that Koch met his burden of proof and
granting him injunctive relief; (8) failing to award attorney fees,
costs, and other damages for an improperly granted injunction;
and (9) dismissing LPSNRD’s complaint in intervention.

' See Neb. Rev. Stat. § 24-1106(2) (Reissue 1995).

Le °
On cross-appeal, Koch assigns that the district court erred

in failing to strike LPSNRD’s complaint to intervene and cor-
responding answer.

If. STANDARD OF REVIEW
Hl An action for injunction sounds in equity. On appeal from
an equity action, an appellate court tries factual questions de
novo on the record and, as to questions of both fact and law, is
obligated to reach a conclusion independent of the conclusion
reached by the trial court.”

IV. ANALYSIS

1. InrRopUCTION

This is one of two cases on our docket involving the dispute
between Koch and the Aupperles regarding their respective
rights to water in the unnamed tributary of Weeping Water
Creek. From filings in the other case also decided today,? we
are aware that after the entry of the injunction in this case, the
DNR granted Koch’s application to impound up to 50.5 acre-
feet of water per year on his property. We are also aware from
that case that the Aupperles claim a statutory right to impound
up to 10 acre-feet of water behind their proposed dam pursu-
ant to Neb. Rev. Stat. § 46-241(2) (Cum. Supp. 2006). Koch’s
appropriation was not in existence when this case was tried, and
the Aupperles claimed no statutory right in this proceeding.

HBAs a general rule, an appellate court disposes of a case on
the theory presented in the district court.t This case was tried
on the theory that by virtue of his “senior use” of waters in the
tributary, Koch had common-law rights “to the continued sup-
ply of water for his pond as well as riparian rights in its use for
agricultural purposes” and that the upstream impoundment by
the Aupperles would impair such rights. We limit our de novo

2 Lambert v. Holmberg, 271 Neb. 443, 712 N.W.2d 268 (2006); State ex rel.
City of Alma v. Furnas Cty. Farms, 266 Neb. 558, 667 N.W.2d 512 (2003).

3 In re Applications of Koch, post p. 96, 736 N.W.2d 716 (2007).

4 Wise v. Omaha Public Schools, 271 Neb. 635, 714 N.W.2d 19 (2006); Borley
Storage & Transfer Co. v. Whitted, 271 Neb. 84, 710 N.W.2d 71 (2006).

60 be

review to that common-law theory without consideration of any
subsequent appropriative or claimed statutory rights.

2. Susrecr MATTER JURISDICTION

Il We begin by addressing the Aupperles and LPSNRD’s
claim that the district court was without subject matter jurisdic-
tion because of the “primary, original, and exclusive jurisdic-
tion” of the DNR.> When a lower court lacks the authority to
exercise its 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.‘

Since 1895, Nebraska law governing appropriation of surface
water has been statutory.’ The DNR regulates surface water
appropriations under this statutory scheme.’ It has statutory
authority to “make proper arrangements for the determination
of priorities of right to use the public waters of the state” and
to fix “[tJhe method of determining the priority and amount
of appropriation .. . .”? The Legislature has given the DNR
jurisdiction “over all matters pertaining to water rights for
irrigation, power, or other useful purposes except as such juris-
diction is specifically limited by statute.” In cases involving
disputes arising under this statutory scheme, we have noted that
the DNR has “original and exclusive” jurisdiction to hear and
adjudicate all matters pertaining to water rights for irrigation

5 Brief for appellants at 26.

© Cumming v. Red Willow Sch. Dist. No. 179, 273 Neb. 483, 730 N.W.2d
794 (2007); In re Interest of Michael U., 273 Neb. 198, 728 N.W.2d 116
(2007).

7 See, 1895 Neb. Laws, ch. 69, §§ 1 to 69, pp. 244-69; Neb. Rev. Stat.
§ 46-201 et seq. (Reissue 2004 & Supp. 2005); Richard S. Harnsberger &
Norman W. Thorson, Nebraska Water Law & Administration 69-70 (1984).

8 See id. See, also, Neb. Rev. Stat. § 61-201 et seq. (Reissue 2003 & Cum.
Supp. 2004); Spear T Ranch v. Knaub, 269 Neb. 177, 691 N.W.2d 116
(2005).

> § 46-226.

1 § 61-206(1).

Te .
and other purposes, including jurisdiction to cancel and termi-
nate such rights."4

Hl But prior to the 1895 appropriation law, the common law
determined the rights of riparian landowners.” The enactment
of the appropriation law did not abolish previously vested ripar-
ian rights." In this case, Koch asserts a riparian right which he
claims to be superior to that of the Aupperles, thereby entitling
him to equitable relief. As we have recently noted, courts have
jurisdiction to adjudicate common-law claims involving impair-
ment of water rights.’* The district court correctly concluded that
it had subject matter jurisdiction.

HM The district court was also correct in concluding that the
primary jurisdiction doctrine was inapplicable to this case. That
doctrine applies whenever enforcement of a claim, originally
cognizable in the courts, requires the resolution of issues that
have been placed within the special competence of an admin-
istrative body in accordance with the purposes of a regulatory
scheme.'5 Exercise of the primary jurisdiction doctrine is inap-
propriate in cases involving common-law claims for impair-
ment of water rights, because such actions are traditionally
cognizable by the courts without reference to agency expertise
or discretion.'® Thus, the district court had jurisdiction over the
subject matter of this action, and we likewise have jurisdiction
over the appeal.

3. INTERVENTION
In his cross-appeal, Koch contends that the district court erred
in not striking LPSNRD’s complaint to intervene and answer
prior to trial. LPSNRD and the Aupperles contend that the

" State ex rel. Blome v. Bridgeport Ir. Dist., 205 Neb. 97, 103, 286 N.W.2d
426, 431 (1979). Accord Hickman v. Loup River Public Power Dist., 173
Neb. 428, 113 N.W.2d 617 (1962).

2 See Wasserburger v. Coffee, 180 Neb. 149, 141 N.W.2d 738 (1966).
'3 Id.; Harnsberger & Thorson, supra note 7.

¥ See Spear T Ranch v. Knaub, supra note 8.
15 Id.; In re Interest of Battiato, 259 Neb. 829, 613 N.W.2d 12 (2000).
© See Spear T Ranch v. Knaub, supra note 8.

62 be

district court erred in dismissing the complaint in intervention
in its order of permanent injunction.

Intervention in Nebraska is governed by statute. Neb. Rev.
Stat. § 25-328 (Cum. Supp. 2006) provides:

Any person who has or claims an interest in the mat-
ter in litigation, in the success of either of the parties to
an action, or against both, in any action pending or to be
brought in any of the courts of the State of Nebraska, may
become a party to an action between any other persons
or corporations, either by joining the plaintiff in claim-
ing what is sought by the complaint, or by uniting with
the defendants in resisting the claim of the plaintiff, or
by demanding anything adversely to both the plaintiff and
defendant, either before or after issue has been joined in
the action, and before the trial commences.

The intervention shall be by complaint, “which shall set forth
the facts on which the intervention rests.”””

Hl We have held that these statutes require a party to have a
direct and legal interest in the controversy, which is “an inter-
est of such character that the intervenor will lose or gain by the
direct operation and legal effect of the judgment which may
be rendered in the action.”!* In its complaint in intervention,
LPSNRD pled that in February 2003, pursuant to its statutory
authority to enter into cost-sharing arrangements with land-
owners, it entered into an agreement with the Aupperles that
provided assistance in the planning and design of the proposed
farm pond and “also a cost-share arrangement with [LPSNRD’s]
paying 60% of the construction cost.” It alleged that the esti-
mated cost of the project was $20,000 and that as of the date
of the complaint, its staff had expended approximately 200
hours in planning and designing the farm pond. Attached to the
complaint was the cost-share agreement entered into between
LPSNRD and the Aupperles. LPSNRD alleged that it had a
financial interest in the construction of the farm pond and that

7 Neb. Rev. Stat. § 25-330 (Cum. Supp. 2006).

"8 Douglas Cty. Sch. Dist. 0001 v. Johanns, 269 Neb. 664, 671, 694 N.W.2d
668, 674 (2005).

Le °
it had an interest in promoting the implementation of its cost-
share program.

The district court determined that LPSNRD had already
invested money in the farm pond in terms of labor it paid in the
design and planning stage. It further noted that LPSNRD had
at risk a contractual obligation to pay 60 percent of the con-
struction cost and that the injunction prevented it from seeking
completion of its project. The court determined that LPSNRD
had a direct and legal interest sufficient to allow it to intervene.
We agree with the court’s reasoning and conclusion.

In its complaint in intervention, LPSNRD prayed for an order
vacating the temporary injunction, dismissing Koch’s com-
plaint, taxing costs to Koch, and for attorney fees. We regard
the dismissal of the complaint in intervention at the conclusion
of the case as a denial of such relief, inasmuch as the court
decided the case in Koch’s favor. Whether this decision on the
merits was in error, as LPSNRD and the Aupperles contend, is
discussed below.

4. Merrrs

(a) Did Koch Have Superior Right to Water in Tributary?

HM At common law, persons owning land bounding upon
a watercourse were called “riparian proprietors” and possessed
certain rights to use the water as an incident of ownership of the
land.” “The basic concept of riparian rights is that an owner of
Jand abutting a waterbody has the right to have the water con-
tinue to flow across or stand on the land, subject to the equal
rights of each owner to make proper use of the water??? As
explained by one commentator:

The doctrine of riparian rights is based upon the propo-
sition that each riparian has a right to make a beneficial use
of the water of the stream for any purpose so long as such
use does not unreasonably interfere with the enjoyment of
the same privilege by other riparians.”*

© James A. Doyle, Water Rights in Nebraska, 20 Neb. L. Rev. 1, 2 (1941).
20 1 Waters and Water Rights § 7.01 at 7-2 (Robert E. Beck ed., 2001).
1 Doyle, supra note 19, at 13.

64 |

The riparian theory developed in England, at a time and in
a climate where there was little use of water for irrigation.”
Riparian rights extend only to the use of the water, not to its
ownership; a riparian right is thus said to be usufruct only.”
“One of the most significant maxims of riparianism is that,
unlike the rule of the prior appropriation system, there is no pri-
ority among riparian proprietors utilizing the supply. All riparian
proprietors have an equal and correlative right to use the waters
of an abutting stream.”™ Of “equal importance” with this maxim
is that “use of the water does not create the [riparian] right and
disuse neither destroys nor qualifies” the right.*

In Meng v. Coffee,® a dispute among riparian landowners,
this court noted that the common law considered running water
“publici juris,”

and while it will not permit any one man to monopolize all
the water of a running stream when there are other riparian
owners who need and may use it also, neither does it grant
to any riparian owner an absolute right to insist that every
drop of the water flow past his land exactly as it would in
a state of nature.
We further noted that the common-law rule gives a riparian land-
owner “only a right to the benefit and advantage of the water
flowing past his land so far as consistent with a like right in all
other riparian owners.””” The purpose of the common-law rule
was “to secure equality in the use of the water by riparian own-
ers, as near as may be, by requiring each to exercise his rights
reasonably and with due regard to the right of other riparian

2 Harnsberger & Thorson, supra note 7.

%3 Crawford Co. v, Hathaway, 67 Neb. 325, 93 N.W. 781 (1903), overruled
on other grounds, Wasserburger v. Coffee, supra note 12; Harnsberger &
Thorson, supra note 7.

24 Harnsberger & Thorson, supra note 7 at 24.

25 Id, at 25.

26 Meng v. Coffee, 67 Neb. 500, 503, 93 N.W. 713, 714 (1903).
2 Id, at 505, 93 N.W. at 714.

Le °
owners to apply the water to the same or to other purposes.””*
Under the common law, “[ilf the rights of the upper owner in the
water are no more than those of the lower owner, they are at the
same time no less.”?

HH Applying these principles, we conclude as a matter of
law that Koch could not have acquired any “senior” riparian
tight by constructing his dam in 1989. Any riparian right he
may have to use water in the tributary would be equal and cor-
relative to the rights of other riparian proprietors. The rights
of one riparian landowner vis-a-vis another is determined by
examining the reasonableness of each landowner’s respective
use of the water.°

(b) Did Koch Meet His Burden of Proof for
Entitlement to Injunctive Relief?

Our determination that Koch did not have a senior right does
not necessarily resolve the appeal. As a part of our de novo
review, we must still address the question of whether he proved
facts sufficient to entitle him to injunctive relief under the appli-
cable legal principles.

(i) Existence of Riparian Right

The first question we must decide is whether Koch has a
riparian right, inasmuch as “a person may not be heard to com-
plain, either in a court of law or before an administrative tribu-
nal, as to the infringement of a right which in fact he does not
possess.”?! In Osterman vy. Central Nebraska Public Power and
Irrigation District, parties claiming riparian rights objected to
applications made by an irrigation district for the allowance of
water rights in the North Platte and Platte Rivers. In an appeal

28 Id. at 513, 93 N.W. at 718.

29 Id. at 514-15, 93 N.W. at 718.

© See, Meng v. Coffee, supra note 26; Restatement (Second) of Torts § 850A
(1979); Harnsberger & Thorson, supra note 7.

3 Osterman v, Central Nebraska Public Power and Irrigation District, 131
Neb. 356, 360, 268 N.W. 334, 336 (1936), overruled on other grounds,
Wasserburger v. Coffee, supra note 12, and Little Blue N.R.D. V. Lower
Platte North N.R.D., 206 Neb. 535, 294 N.W.2d 598 (1980).

66 Le

from an administrative decision granting the applications, the
irrigation district argued that the objectors did not in fact possess
riparian rights. We noted evidence that the objectors were rep-
resentatives of titles for lands bordering the Platte River which
were initiated by settlement as early as 1857 and for which
patents had been issued earlier than 1870. We concluded that
the objectors therefore possessed common-law rights of riparian
owners of land.

In Wasserburger v. Coffee,” parties claiming riparian rights
sought to enjoin upstream irrigators who held appropriation
permits, claiming that the irrigation exhausted streamflow nec-
essary to water cattle. The irrigators denied that the plaintiffs
possessed riparian rights. In resolving this issue, we first exam-
ined whether the legislative adoption of the prior appropriation
doctrine abrogated all riparian rights. We concluded that while
the 1895 irrigation act abrogated the common law of riparian
rights in favor of the current system of appropriation, it did
not abolish existing riparian rights with respect to parcels of
land severed from the public domain prior to April 4, 1895, the
effective date of the act. Such rights could be established by
showing that “by common law standards the land was riparian
immediately prior to the effective date” of the act and that it had
not subsequently lost its riparian status as a result of severance.
Thus, riparian rights which had vested prior to the effective date
of the 1895 act were preserved, but no new riparian rights could
be acquired after that date* The 1895 act denied “the common
law doctrine as to all riparian land not privately owned” as of
its effective date.

There is no evidence in this record establishing when Koch’s
property was severed from the public domain or whether any
predecessor in title held vested riparian rights prior to April
4, 1895. Koch argues that such proof is not required under the

* Wasserburger y. Coffee, supra note 12.
38 Id. at 158, 141 N.W.2d at 745.

3 Harnsberger & Thorson, supra note 7; 1 Waters and Water Rights, supra
note 20, § 8.02(c).

3 Doyle, supra note 19 at 7.

| °
reasoning of Brummund v. Vogel.** The plaintiff in that case,
claiming riparian rights, sought to enjoin an upstream appropria-
tor from damming a creek which provided the main source of
water for the plaintiff’s cattle. Our opinion specifically stated
that the plaintiff neither pled nor proved

facts entitling him to vested riparian rights under the com-
mon law which might precede April 4, 1895, the effective
date of the irrigation act of 1895, which is the cut-off date
for the acquisition of riparian rights and the invoking of
the law of priority of application giving the better right
as between those using the water for the same or different
purposes, and preferring domestic use over other uses in
cases of insufficient water.>’
Nevertheless, the opinion goes on to recognize that the right of
the downstream user to “use water” from the stream “for domes-
tic purposes” was “superior” to the upstream appropriator’s
rights.>* However, because the downstream user failed to meet
his burden of proof, injunctive relief was denied. :
Brummund has been criticized as the cause of “a good deal of
uncertainty to the law of riparian-appropriator disputes.” The
commentators note:
If domestic users are protected against all others by virtue
of the preference laws, then the value of an appropriator’s
tight is considerably diminished. The situation becomes
more aggravated if anyone watering livestock (even a
person having no protected interest under any known
Nebraska law) is given a valid claim to water and the right
to enjoin appropriators.

. : : Further, expanding livestock watering rights beyond
riparians, as Brummund may have done, works a substan-
tial change in Nebraska water law, according to many

36 Brummund v. Vogel, 184 Neb. 415, 168 N.W.2d 24 (1969).
37 Id. at 420, 168 N.W.2d at 27.

38 Id. at 421, 168 N.W.2d at 28.

39 Harnsberger & Thorson, supra note 7 at 111.

68 be

authorities. Thus, to the extent that Brummund suggests
such an extension, it is wrong.°

HM We agree. Prior to Brummund, we noted that the “dual
administration of water resources under the doctrines of ripar-
ian rights and of prior appropriation” results in a “hydra of
perplexity” and that the “two methods are incompatible’! Our
case law prior to Brummund characterized surface water rights
as either appropriative or riparian and required proof of any
claimed riparian right. The departure in Brummund from that
course was unwise. To the extent Brummund suggests that ripar-
ian rights can be asserted without proof of their existence, or that
there may be a nonriparian, common-law right to surface water,
it is disapproved.

The record in this case does not establish that either Koch
or the Aupperles held riparian rights. They are simply owners
of adjoining tracts of land through which the tributary flows,
with Koch’s land situated downstream of that of the Aupperles.
Koch, as the party seeking injunctive relief, had the burden to
show that the proposed Aupperle dam would infringe on his
tights. Because he has not even demonstrated the existence of a
common-law riparian right, he clearly is not entitled to injunc-
tive relief. Accordingly, we need not analyze the reasonableness
of the use by each party of the water flowing in the tributary.”
However, we note that the record fully supports the finding of
the district court that both parties intended to use water in the
tributary “primarily for aesthetic and recreational purposes with
grade stabilization, erosion control, and domestic use (watering
cattle) being secondary in nature.”

(ii) Flowthrough Device

The district court enjoined the Aupperles from construct-
ing their dam “until such time as the dam structure contains a

49 Id. at 111-12.

“| Wasserburger y. Coffee, supra note 12, 180 Neb. at 151, 141 N.W.2d at
TAL.

# See, e.g., Wasserburger v. Coffee, supra note 12; Osterman v. Central
Nebraska Public Power and Irrigation District, supra note 31.

See, Meng v. Coffee, supra note 26; Harnsberger & Thorson, supra note 7.

ma °

draw-down or similar device which will allow for the passage
of water through the dam structure.” To the extent that this rea-
soning implies that the Aupperle dam was legally required to
include a flowthrough device, we examine it as a part of our de
novo review of the propriety of injunctive relief.

Section 46-241(1) requires persons intending to construct and
operate a storage reservoir to obtain a permit from the DNR.
Section 46-241(5) requires that such dams be constructed with
a passthrough device. However, § 46-241(2) exempts from the
permit requirement “[aJny person intending to construct an on-
channel reservoir with a water storage impounding capacity of
less than fifteen acre-feet.” The record reflects that the Aupperle
dam was designed to fall within this exemption. According to
the DNR’s regulations, installation of a passthrough device is
required only when the dam structure being built is subject to
the DNR’s review and approval, i.e., when a permit is required
to construct the dam.“ Because the Aupperle dam is, by virtue of
its impoundment capacity, exempt from the permit requirement,
we conclude that there is no statutory or regulatory requirement
that its design must include a passthrough device.

(iii) Conclusion
Based upon our de novo review of the record, we conclude
for the reasons discussed that Koch was not entitled to injunc-
tive relief. Accordingly, we need not address the assignments of
error pertaining to the doctrine of unclean hands or the admis-
sibility of expert testimony.

5. Damaces, Costs, AND ATTORNEY FrEs

LPSNRD and the Aupperles assign error by the district
court in failing “to award attorney’s fees, costs and other dam-
ages to the [LPSNRD] and [the] Aupperles for an improperly
granted injunction.” Obviously, the district court could not
have addressed this issue because it concluded that injunctive
relief was proper and granted such relief. Because we vacate
the permanent injunction herein, we remand the cause to the
district court with directions to determine in the first instance

“4 See 457 Neb. Admin. Code, ch. 13, § 001 (2005).

70 be

whether LPSNRD and the Aupperles are entitled to recover
attorney fees and damages from Koch under the injunction bond
or otherwise.’

V. CONCLUSION
Based upon our de novo review, we conclude that Koch was
not entitled to injunctive relief. We therefore reverse the judg-
ment of the district court and remand the cause with directions
to vacate the injunction, dismiss Koch’s verified complaint, and
determine whether the Aupperles and LPSNRD are entitled to
recover damages or attorney fees as a result of the injunction
issued below.
REVERSED AND REMANDED WITH DIRECTIONS.

4 See Robertson v. School Dist. No. 17, 252 Neb. 103, 560 N.W.2d 469

(1997).

Omanua Potice Unton Locat 101, TUPA, AFL-CIO, APPELLEE
AND CROSS-APPELLANT, V. CITY OF OMAHA, A MUNICIPAL
CORPORATION, AND THE CHIEF OF POLICE, THOMAS
‘WARREN, APPELLANTS AND CROSS-APPELLEES.

736 N.W.24 375

Filed August 3, 2007. No. S-06-403.

ee n

Paul D. Kratz, Omaha City Attorney, and Bernard J. in den
Bosch for appellants.

Thomas F. Dowd, of Dowd, Howard & Corrigan, L.L.C., for
appellee.

72 Es

Wricut, CoNNoLLy, GERRARD, STEPHAN, McCormack, and
Mitter-Lerman, JJ.

Stepuan, J.

This appeal presents the issue of whether a public employer
engages in a prohibited practice under the Industrial Relations
Act (the Act)! by taking disciplinary action against public
employees belonging to a labor organization for statements made
and published by those employees. In this action commenced
by Omaha Police Union Local 101 (Union) against the City of
Omaha and Omaha chief of police Thomas Warren (collectively
the appellants), the Commission of Industrial Relations (CIR)
concluded that disciplinary action taken against a police officer
who authored an article in a Union publication constituted a
prohibited practice. In reaching this conclusion, the CIR used a
legal standard applied in private sector labor relations cases. We
conclude that the CIR should have applied a different standard
utilized by courts and administrative agencies to resolve pro-
tected speech issues in public sector employment cases.

I. BACKGROUND

1. ANDERSEN INVESTIGATION

On December 14, 2004, a Union meeting was held for
the member police officers of the Omaha Police Department
(OPD). During the meeting, OPD Sgt. Timothy Andersen, then
president of the Union, was asked a question concerning how
OPD calculated 911 emergency dispatch service response times.
Andersen opined that the method by which OPD calculated
response times was misleading. In expressing his view, Andersen
provided a hypothetical example on how police officers were
trained by OPD to respond to certain high priority 911 calls that
required response by two officers.

Several days after the meeting, reports of Andersen’s state-
ments were relayed to Warren. On December 20, 2004, Warren
initiated an Internal Affairs (IA) investigation of Andersen in
which he sought to determine exactly what Andersen said at the

1 Neb. Rev. Stat. §§ 48-801 to 48-838 (Reissue 2004).

PC C‘(‘iséa
December 14 meeting and whether Andersen had advised offi-
cers to disregard departmental standard operating procedures.

In June 2005, IA determined that Andersen had not violated
departmental procedures and had not acted unprofessionally.
Warren adopted those findings and took no disciplinary action
against Andersen.

2. Housi INVESTIGATION AND DISCIPLINE

In response to the events involving Andersen, OPD Sgt. Kevin
Housh wrote an article in the February 2005 issue of the Union
newspaper, “The Shield,” which is distributed to members of the
Union as well as to members of the community. Housh’s article
was generally critical of the standard operating procedures for
two-officer 911 calls and the manner in which the city and OPD
calculated response time. Housh characterized city officials as
“fa] bunch of grown men and women, supposedly leaders, act-
ing like petty criminals trying to conceal some kind of crime.”?
He also stated that “[t]hey refuse to do it, they know they’ve
screwed up, and rather than admitting guilt, they (whoever they
are) will make history and try to control what is said/revealed
during union meetings regarding response time.”>

On February 7, 2005, Warren initiated an IA investigation of
Housh based on his article in The Shield. Describing the lan-
guage from the article as derogatory and inflammatory, Warren
alleged that Housh’s conduct constituted gross disrespect and
insubordination and was unbecoming an officer, in violation of
OPD rules of conduct.

After conducting its investigation, IA determined that the
unprofessional conduct allegation against Housh should be sus-
tained. On February 24, 2005, Warren adopted that finding.
However, contrary to other recommendations for discipline,
Warren terminated Housh’s employment. The Union subse-
quently appealed Housh’s termination to the city personnel
board. Thereafter, the city and the Union reached an agreement
whereby Housh was reinstated to OPD but was required to,

? Kevin Housh, This ’n That, The Shield (Omaha Police Union Local 101,
LU.P.A., AFL-CIO), Feb. 2005, at 1.

3 Id.

74 Es

among other things, serve a 20-day suspension without pay and
discontinue working on the emergency response unit.

3. Meerinc WirH WARREN

On August 22, 2005, two Union representatives met privately
with Warren in an attempt to discuss the appropriate methods of
handling future Union speech issues as well as OPD’s handling
of Andersen’s case. The Union claims that it sought assurances
from Warren that he would not interfere with, investigate, or
discipline off-duty officers for their conduct at Union meetings
or in Union publications. Warren refused to discuss Andersen’s
case, as it was still an ongoing controversy. Warren also pur-
portedly stated that he retained the right “to initiate an internal
investigation on off duty union activities if he determines they
involve either insubordination or gross disrespect of himself or
his administration or false comments [or] slander.” But, Warren
also commented that he was not trying to censor anyone and
that he would only initiate an IA investigation of an officer if
he believed there was merit to such investigation.

4, CIR PRocEEDINGS

On September 2, 2005, the Union filed a petition with the
CIR against the appellants. The Union claimed that the appel-
lants’ investigations of Andersen and Housh and termination
of Housh’s employment had “chilled” other Union members’
expression of opinions at Union meetings and in the Union
publication. As a result, the Union alleged that the appellants
had engaged in prohibited labor practices under § 48-824(2)(a)
by interfering with, restraining, and coercing Union members
in their exercise of rights granted under § 48-837. The Union
prayed that the appellants should be restrained from interfer-
ing with Union members’ rights to express their opinions at
Union meetings or in Union publications relating to terms and
conditions of their employment, the city’s administration, and
OPD’s management. The Union also sought attorney fees and
any other appropriate remedy within the CIR’s jurisdiction. The
appellants answered by denying the specific allegations in the
petition and by raising several affirmative defenses, including a
lack of CIR jurisdiction.

ee 78
|

After conducting a trial in which testimony was heard and
evidence was received, the CIR issued a written order granting
a portion of the relief sought by the Union. The CIR found that
numerous employees had indicated that Warren’s actions had
limited their involvement with the Union, including decreased
meeting attendance and fewer articles submitted for publica-
tion. However, the CIR concluded that the IA investigation of
Andersen did not constitute an interference, restraint, or coercion
in the exercise of the right to participate in Union activities.

As to Housh, the CIR reasoned that his article was a pro-
tected union activity if it was “concerted activity” falling under
the protection of § 48-824(2)(a). Looking to federal labor cases
for guidance, the CIR noted that employee speech was a pro-
tected concerted activity if it related to working conditions. It
then determined that Housh’s article pertained to officer safety,
which was-a working condition and a mandatory subject of
bargaining. The CIR also found, based on federal labor case
Jaw, that an employee only loses protection for speech that
is deliberately or recklessly untrue. The CIR concluded that
“Housh’s statements, while certainly constituting intemperate,
abusive and insulting rhetorical hyperbole, fall short of deliber-
ate or reckless untruth. The comments were made in a union
publication in the context of a management/union disagreement,
and they were therefore protected from interference, restraint or
coercion by management.”

As a remedy, the CIR ordered the appellants “not to interfere
in any way” with statements made by employees in the Union
publication which did not violate the standard of deliberate or
reckless untruth. The appellants were also ordered to place a
statement in the Union newsletter indicating that they would
recognize the Union members’ rights to protected activity. The
appellants perfected this timely appeal, which we moved to our
docket pursuant to our statutory authority to regulate the case-
loads of the appellate courts of this state.*

4 See Neb. Rev. Stat. § 24-1106(3) (Reissue 1995).

16 Le

IL. ASSIGNMENTS OF ERROR

The appellants assign, restated, that the CIR erred in find-
ing that (1) the calculation of response times was a mandatory
bargaining issue and (2) all speech by employees in the Union
newspaper is protected unless deliberately or recklessly untrue.

On cross-appeal, the Union assigns, restated, that the CIR
erred in failing to (1) find the appellants’ investigation of
Andersen was a prohibited practice requiring the deletion of all
investigation records, (2) make Housh whole for the losses he
sustained from the appellants’ prohibited practice, and (3) award
the Union reasonable attorney fees.

If. STANDARD OF REVIEW

HM Any order or decision of the CIR may be modified,
reversed, or set aside by the appellate court on one or more of
the following grounds and no other: (1) if the CIR acts without
or in excess of its powers, (2) if the order was procured by fraud
or is contrary to law, (3) if the facts found by the CIR do not
support the order, and (4) if the order is not supported by a pre-
ponderance of the competent evidence on the record considered
as a whole?

Hi In an appeal from a CIR order regarding prohibited prac-
tices stated in § 48-824, an appellate court will affirm a factual
finding of the CIR, if, considering the whole record, a trier of
fact could reasonably conclude that the finding is supported by
a preponderance of the competent evidence.°

Iv. ANALYSIS
1. Crry’s APPEAL
(a) Mandatory Subject of Collective Bargaining

The CIR has jurisdiction over certain “industrial disputes
involving governmental service.”” As used in the Act, the term

5 See Hyannis Ed. Assn. v. Grant Cty. Sch. Dist. No. 38-0011, 269 Neb. 956,
698 N.W.2d 45 (2005).

© Crete Ed. Assn. v. Saline Cty. Sch. Dist. No. 76-0002, 265 Neb. 8, 654
N.W.2d 166 (2002).

7 § 48-810.

PC tC‘
“«ndustrial dispute” includes “any controversy concerning terms,
tenure, or conditions of employment, or concerning the associa-
tion or representation of persons in negotiating, fixing, main-
taining, changing, or seeking to arrange terms or conditions
of employment, or refusal to discuss terms or conditions of
employment.”* Wages, hours, and other terms and conditions of
employment or any question arising thereunder are considered
to be mandatory subjects of bargaining under the Act.?

In their first assignment of error, the appellants assert that the
CIR erred in finding that “[t]he calculation of response times
is a working condition which affects safety and is a mandatory
subject of bargaining.” The appellants contend that the calcula-
tion of response time is not a working condition, but, rather,
a mechanism for measuring departmental effectiveness. They
argue that such calculation is merely a statistical tool that OPD
management uses to evaluate OPD’s ability to respond to 911
emergency calls. The appellants argue that changing the method
of calculation would not affect OPD’s service to the public or
officer safety, but would impair the ability of OPD to compare
future response times with past response times. The appellants
thus contend that as an evaluative tool, the response time calcu-
lation is solely within management’s prerogative.

The Union, on the other hand, argues that calculation of
response time has broader implications which affect depart-
mental staffing. The Union contends that if response time is
calculated in the manner it claims is proper, the calculations
would reveal longer 911 response times, which may indicate
that OPD staffing is deficient. The Union contends that these
staffing issues have an effect on officer safety, a condition of
employment.

HM A ‘matter which is of fundamental, basic, or essential
concern to an employee’s financial and personal concern may
be considered as involving working conditions and is man-
datorily bargainable even though there may be some minor

8 § 48-801(7).

° Crete Ed. Assn. v, Saline Cty. Sch. Dist. No. 76-0002, supra note 6. See
§ 48-816(1).

8 Le

influence on management prerogative.!? Company rules relat-
ing to employee safety and work practices involve conditions
of employment.'' Conversely, management prerogatives include
the right to hire, to maintain order and efficiency, to schedule
work, and to control transfers and assignments.'? Based on our
review of the record, we conclude that the CIR’s finding that the
calculation of response times implicates officer safety is sup-
ported by the evidence. On the surface, both parties are arguing
in terms of the calculation of response times. But the essential
nature of their arguments is whether an OPD response to a two-
officer 911 call is completed when the first officer arrives at
the call location or when the second officer arrives at the call
location. Thus, the real issue can be understood to involve how
officers should respond to two-officer 911 calls, not merely how
OPD calculates their response time. Under this broader read-
ing of the issue, which the CIR deemed appropriate, it can be
fairly said that response time does relate to officer safety and,
thus, the manner in which it is determined affects a condition
of employment.

(b) Protected Union Speech

Section 48-824(2) of the Act states: “It is a prohibited
practice for any employer or the employer’s negotiator to: (a)
Interfere with, restrain, or coerce employees.in the exercise of
tights granted by the Industrial Relations Act.” Section 48-837
provides that “[pJublic employees shall have the right to form,
join, and participate in . . . any employee organization of their
own choosing [and] shall have the right to be represented by
employee organizations to negotiate collectively with their pub-
lic employers in the determination of their terms and conditions

"© See Metro. Tech. Com. Col. Ed. Assn. y. Metro. Tech. Com. Col. Area, 203
Neb, 832, 281 N.W.2d 201 (1979).

"| See Norfolk Educ. Assn. v. School Dist. of Norfolk, 1 CLR. No. 40 (1971)
(citing N. L. R. B. v. Gulf Power Company, 384 F.2d 822 (Sth Cir. 1967)).

” See, Lincoln Firefighters Assn. v. City of Lincoln, 253 Neb. 837, 572 N.W.2d
369 (1998), overruled on other grounds, Hyannis Ed. Assn. v. Grant Cty.
Sch. Dist. No. 38-0011, supra note 5; School Dist. of Seward Education
Assn. v. School Dist. of Seward, 188 Neb. 772, 199 N.W.2d 752 (1972).

a ©

of employment... .” As framed by the parties, the prohibited
practice issue before the CIR was whether the actions taken by
Warren against Andersen and Housh and the comments made
by Warren to Union leadership interfered with, restrained, or
coerced employees from exercising their right to participate in
the Union.

(i) NLRA Speech Standard

The CIR determined that § 48-824(2)(a) is “almost identi-
cal” to § 8(a)(1) of the National Labor Relations Act (NLRA).”
Recognizing that decisions under the NLRA can be helpful in
interpreting the Act, but are not binding,'* the CIR looked to
decisions by the National Labor Relations Board for guidance.

Under the NLRA, employees have the right to engage in
“concerted activities for the purpose of . . . mutual aid or pro-
tection.”"° The National Labor Relations Board construes this
right to extend protection to employee speech which relates
to working conditions.’* While not condoned by the board,
employees may use “‘intemperate, abusive, or insulting lan-
guage without fear of restraint or penalty if the speaker believes
such rhetoric to be an effective means to make a point.’”!” But
protection of speech under the NLRA is not unrestricted; it is
lost when work-related speech constitutes a “deliberate or reck-
less untruth.”!*

Importantly, the scope of NLRA coverage is limited. By its
own terms, the NLRA does not apply to the federal govern-
ment or any state or municipal governments in their capacities

3 See 29 U.S.C. § 151 et seq. (2000).
™4 Crete Ed. Assn. v. Saline Cty. Sch. Dist. No. 76-0002, supra note 6.
15 29 U.S.C. § 157.

6 See Eastex, Inc. v. NLRB, 437 U.S. 556, 98 S. Ct. 2505, 57 L. Ed. 2d 428
(1978).

"’ Phoenix Transit System, 337 NLRB. 510, 514 (2002) (citing Letter
Carriers v. Austin, 418 U.S. 264, 94 S. Ct. 2770, 41 L. Ed. 2d 745
(1974).

8 Id. (citing Linn v. Plant Guard Workers, 383 U.S. 53, 86 S. Ct. 657, 15 L.
Ed. 2d 582 (1966)).

as employers.” Instead, it applies only to private sector
employment.”

(ii) Public Sector Employees

In this case, the CIR applied the NLRA “deliberate and
reckless untruth” standard in determining whether Housh’s
speech exceeded the protections granted under the Act. But,
public sector employees, like OPD police officers, are not
guaranteed the rights and protections of the NLRA. Thus, we
are presented with the legal question of whether the Act guar-
antees similar rights and protections to public sector employees
in Nebraska. While the language of the Act is broad enough
to encompass the rights granted under the NLRA, we are not
persuaded that the “deliberate or reckless untruth” standard is
the appropriate method to analyze the speech of public sector
employees.

The Act has a somewhat different focus than the NLRA.
Although couched in broad Commerce Clause language, the
NLRA attempts to rectify the “inequality of bargaining power
between employees . . . and employers” by providing certain
tights to employees.” The Act, on the other hand, focuses
almost exclusively on protecting the public.

The continuous, uninterrupted and proper functioning and
operation of the governmental service . . . to the people of
Nebraska are hereby declared to be essential to their wel-
fare, health and safety. It is contrary to the public policy
of the state to permit any substantial impairment or sus-
pension of the operation of governmental service . . . by
reason of industrial disputes therein. It is the duty of the
State of Nebraska to exercise all available means and every
power at its command to prevent the same so as to protect

® See 29 U.S.C. § 152(2).

20 See NLRB v. Natural Gas Utility District, 402 U.S. 600, 91 S. Ct. 1746, 29
L. Ed. 2d 206 (1971) (holding political subdivision exemption limited to
entities either (1) created directly by state, so as to constitute departments
or administrative arms of government, or (2) administered by individuals
responsible to public officials or to general electorate).

21 29 U.S.C. § 151.

Src rtC“(‘(‘éa
its citizens from any dangers, perils, calamities, or catas-
trophes which would result therefrom. It is therefor further
declared that governmental service . . . are clothed with
a vital public interest and to protect same it is necessary
that the relations between the employers and employees in
such industries be regulated by the State of Nebraska to the
extent and in the manner hereinafter provided.”

While the Act does provide public employees some of the
same rights granted under the NLRA, it also explicitly removes
other rights utilized by private sector employees, most notably
the right to strike.* Therefore, we view the Act not only as an
attempt to level the employment playing field, but also as a
mechanism designed to protect the citizens of Nebraska from
the effects and consequences of labor strife in public sector
employment. As a result, we believe the NLRA’s “deliberate
and reckless untruth” standard is inappropriate in the context of
public sector employment.

We are also cognizant of the fact that the labor conflict in this
case involves parties serving a special purpose to the public. As
a police department, OPD operates as a paramilitary organiza-
tion charged with maintaining public safety and order.™ Federal
courts have recognized this special purpose, finding that these
employers should be given “more latitude in their decisions
regarding discipline and personnel regulations than an ordinary
government employer.”

For instance, in Tindle v. Caudell,* a police officer was dis-
ciplined for wearing an offensive costume to an off-duty, union-
sponsored Halloween party. In upholding the officer’s discipline,
the court recognized that members of police departments “may
be subject to stringent rules and regulations that could not apply

% § 48-802(1).
% See § 48-802(2) and (3).
4 See Tindle v. Caudell, 56 F.3d 966 (8th Cir. 1995).

25 Id. at 971. Accord Crain v. Board of Police Com’rs, 920 F.2d 1402 (8th Cir.
1990). See Hughes v. Whitmer, 714 F.2d 1407 (8th Cir. 1983).

26 Tindle v. Caudell, supra note 24.

82 be

to other government agencies.””’ Likewise, in Crain v. Board
of Police Com’rs,7* a police officer was discharged for violat-
ing the police department’s sick leave regulations. In analyzing
the regulations, the court noted that “[rJegulations limiting even
those rights guaranteed by the explicit language of the Bill of
Rights are reviewed more deferentially when applied to certain
public employees than when applied to ordinary citizens.”
Moreover, in Hughes v. Whitmer, a state trooper was trans-
ferred in order to resolve a debilitating morale problem created
in part by the trooper’s accusations involving superior officers.
Acknowledging the state patrol’s paramilitary status, the court
found that “[mJore so than the typical government employer,
the Patrol has a significant government interest in regulating
the speech activities of its officers in order ‘to promote effi-
ciency, foster loyalty and obedience to superior officers, main-
tain morale, and instill public confidence in the law enforcement
institution.’”*! We agree with the reasoning of the federal courts
and conclude that the NLRA’s “deliberate or reckless untruth”
standard is inappropriate for determining whether the Housh
article constituted protected speech under the Act. Its utilization
by the CIR was therefore contrary to law.

(iii) Appellants’ Proposed Speech Standard

Hil In their second assignment of error, the appellants argue
that this is actually a First Amendment free speech case and
that the proper standard is the balancing test espoused by the
U.S. Supreme Court in Pickering v. Board of Education.” As
the basis for this argument, the appellants contend that both the
U.S. Constitution and the Nebraska Constitution already provide
protection to public employees for engaging in work-related

7 Jd. at 973.

28 Crain v. Board of Police Com’rs, supra note 25.

9 Id. at 1408.

3° Hughes v. Whitmer, supra note 25.

31 Td. at 1419 (quoting Gasparinetti v. Kerr, 568 F.2d 311 (3d Cir. 1977)).

% Pickering v. Board of Education, 391 U.S. 563, 88 S. Ct. 1731, 20 L. Ed. 2d
811 (1968).

a °

speech. Under the appellants’ theory, the Union members would
be required to assert their First Amendment rights by means
of claims against the appellants pursuant to 42 U.S.C. § 1983
(2000). But, the CIR has no authority to vindicate constitutional
rights. Therefore, the CIR would have no jurisdiction to hear
a case of this nature.

Hl While we agree with the appellants that public employees
do have First Amendment speech rights, we are not persuaded
that the Pickering balancing test is the appropriate method to
determine whether union speech is protected under the Act.
The CIR is not a court and is in fact an administrative body
performing a legislative function.* It has only those powers
delineated by statute, and should exercise that jurisdiction in as
narrow a manner as may be necessary. Allowing the CIR to
decide cases based on constitutional jurisprudence would blur
the jurisdictional boundaries between that administrative body
and the courts of law. Therefore, we reject the appellants’ over-
ture to apply the Pickering balancing test to prohibited practice
cases under the Act.

(iv) Federal Employee Speech Standard
Although by its terms, the NLRA does not apply to public
sector employment,** federal employees are afforded labor pro-
tections under the Federal Service Labor-Management Relations
Act.” In 5 U.S.C. § 7116(a) of those statutes, it provides that
“Gt shall be an unfair labor practice for an agency . . . (1) to
interfere with, restrain, or coerce any employee in the exercise
by the employee of any right” under these statutes. Likewise, 5
U.S.C. § 7102 states:
Each employee shall have the right to form, join, or
assist any labor organization . . . freely and without fear of
penalty or reprisal, and each employee shall be protected

38 Nebraska Pub. Emp. v. Otoe Cty., 257 Neb. 50, 595 N.W.2d 237 (1999).
% Calabro v. City of Omaha, 247 Neb. 955, 531 N.W.2d 541 (1995).

35 Crete Ed. Assn. v. Saline Cty. Sch. Dist. No. 76-0002, supra note 6.

36 See 29 U.S.C. § 152(2).

37 5 U.S.C. § 7101 et seq. (2000 & Supp. IV 2004).

84 Es

in the exercise of such right. Except as otherwise provided
under this chapter, such right includes the right—

(1) to act for a labor organization in the capacity of a
representative and the right, in that capacity, to present the
views of the labor organization to heads of agencies and
other officials of the executive branch of the Government,
the Congress, or other appropriate authorities, and

(2) to engage in collective bargaining with respect to
conditions of employment through representatives chosen
by employees under this chapter.

While these statutes are not identical to the comparable pro-
visions of the Act in Nebraska, the language is substantively
similar. Because of this similarity to the federal act, we find it
helpful to consider Federal Labor Relations Authority (FLRA)
cases interpreting § 7102.

In U.S. Dept. of Veterans Affairs Med. Ctr. Jamaica Plain,
Mass.,** a police officer was suspended for insubordination for
making threatening remarks in a letter to the chief of police.
The FLRA noted that under § 7102, employees had the right
to present labor organization views to management. It further
recognized that “employee action to publicize labor disputes or
issues that have a direct bearing on conditions of employment is
protected activity” and that such protection “extends to the pub-
licizing of such disputes or issues through the media”? However,
it acknowledged that “an agency has the right to discipline an
employee who is engaged in otherwise protected activities for
actions that ‘exceed the boundaries of protected activity such
as flagrant misconduct.’”*? Such flagrant misconduct includes
remarks or actions that are of an “ ‘outrageous and insubordinate
nature’” and which “compromise an agency’s ability to accom-
plish its mission, disrupt discipline or are disloyal.“

38 ULS. Dept. of Veterans Affairs Med. Ctr. Jamaica Plain, Mass., 50 FL.R.A.
583 (1995).

® Id. at 586.
4 Id.
4 Td.

_rrrcrtC“(‘<i‘éC ae
In Department of the Air Force Grissom Air Force Base,
Ind.,” an employee, who was also a union representative, was
suspended for directing offensive language at the employer’s rep-
resentative during collective bargaining negotiations. The FLRA
recognized that employee conduct may “‘“exceed the bound-
aries of protected activity such as flagrant misconduct.”’” In
determining whether an employee has engaged in flagrant mis-
conduct, the FLRA
balances the employee’s right to engage in protected activ-
ity, which “permits leeway for impulsive behavior, . . .
against the employer’s right to maintain order and respect
for its supervisory staff on the jobsite.” . . . Relevant factors
in striking this balance include: (1) the place and subject
matter of the discussion; (2) whether the employee’s out-
burst was impulsive or designed; (3) whether the outburst
was in any way provoked by the employer’s conduct; and
(4) the nature of the intemperate language and conduct.“
In Department of the Navy Naval Facilities Eng. Command
W. Div. San Bruno, Cal.,* an employee, also a union steward,
was reprimanded for using derogatory and insulting language
about other personnel in a letter sent to other union employees.
The FLRA found many of the employee’s remarks to be offen-
sive and did not condone them. However, it recognized that the
employee’s comments in the letter were protected unless they
constituted “ ‘flagrant misconduct.’ ”46
In American Fed. of Govt. Employees Nat. Border Patrol
Council,’ a border patrol agent, also a union representative, was
suspended for disrespectful conduct toward his supervisor. The

® Department of the Air Force Grissom Air Force Base, Ind., 51 RL.R.A. 7
(1995).

8 Td. at 11.
“4 Td. at 11-12.

* Department of the Navy Naval Facilities Eng. Command W. Div. San Bruno,
Cal., 45 FL.R.A. 138 (1992).

46 Id. at 156.

‘7 American Fed. of Govt. Employees Nat. Border Patrol Council, 44 RL.R.A.
1395 (1992).

86 Es

FLRA found that at the time of the comments, the agent was
functioning as a representative of the union. Thus, his comments
were protected activity under § 7102 unless they constituted
“flagrant misconduct.”

HEB We conclude that a similar legal standard should apply
to the determination of whether speech is protected under the
Act. Under this new standard, public employees belonging to a
labor organization have the protected right to engage in conduct
and make remarks, including publishing statements through
the media, concerning wages, hours, or terms and conditions
of employment. However, employees lose the statutory protec-
tion of the Act if the conduct or speech constitutes “flagrant
misconduct.” Flagrant misconduct includes, but is not limited
to, statements or actions that (1) are of an outrageous and insub-
ordinate nature, (2) compromise the public employer’s ability
to accomplish its mission, or (3) disrupt discipline. It would
also include conduct that is clearly outside the bounds of any
protection, including, for example, assault and battery*® or racial
discrimination.” Importantly, the CIR must balance the employ-
ee’s right to engage in protected activity, which permits some
leeway for impulsive behavior, against the employer’s right to
maintain order and respect for its supervisory staff. Factors that
the CIR may consider, but would not necessarily be determina-
tive, include: (1) the place and subject matter of the conduct
or speech, (2) whether the employee’s conduct or speech was
impulsive or designed, (3) whether the conduct or speech was
provoked by the employer’s conduct, and (4) the nature of the
intemperate language or conduct.

(v) Conclusion
Because we have prescribed a new standard for determin-
ing when union speech is protected under the Act, we deem it
appropriate that the CIR should apply the standard in the first
instance to the facts pertaining to the Housh article. Accordingly,

48 See Department of the Air Force v. ELRA., 294 3d 192 (D.C. Cir.
2002).

* See Veterans Admin., Washington D.C., 26 FL.RA. 114 (1987).

 *

we reverse, and remand to the CIR with directions to make that
determination.

2. Unton’s Cross-APPEAL

(a) Andersen’s Prohibited Practice Claim

The Union argues that the CIR erred in finding that the IA
investigation of Andersen did not constitute a prohibited labor
practice. In its order, the CIR found that the evidence did not
show that the IA investigation of Andersen was “improperly
conceived” or “improperly performed” or that the procedure of
conducting IA investigations instead of some lesser means of
investigation had been overused or otherwise used abusively.
The CIR concluded that “[a] pattern or practice of using an
internal affairs investigation based upon ‘anonymous’ phone
calls could well establish interference, restraint or corrosion in
the exercise of the right to participate in union activities, but the
evidence here does not establish such a pattern or practice.”

In an appeal from a CIR order regarding prohibited practices
under § 48-824, the Nebraska Supreme Court will affirm a fac-
tual finding of the CIR if, considering the whole record, a trier
of fact could reasonably conclude that the finding is supported
by a preponderance of the competent evidence.** Based on our
reading of the record, we conclude that the CIR’s finding is sup-
ported by a preponderance of the evidence. Thus, the Union’s
argument has no merit.

(b) Housh’s Remedy

HH Next, the Union argues that the CIR erred in failing
to provide a remedy to Housh after finding the appellants
had engaged in a prohibited labor practice. Because we have
reversed the CIR’s finding that a prohibited practice occurred
with respect to Housh, we need not reach this issue. However,
an appellate court may, at its discretion, discuss issues unnec-
essary to the disposition of an appeal where those issues are
likely to recur during further proceedings.*! Expressing no

5° See Crete Ed. Assn. v. Saline Cty. Sch. Dist. No. 76-0002, supra note 6.

5! Perry Lumber Co. v. Durable Servs., 271 Neb. 303, 710 N.W.2d 854 (2006);
In re Estate of Rosso, 270 Neb. 323, 701 N.W.2d 355 (2005).

88 Le

opinion as to whether the CIR will determine on remand that a
prohibited practice occurred, we briefly address the question of
Housh’s remedy. .

When the CIR finds that a party has violated the Act,
§§ 48-819.01 and 48-825(2) grant the CIR authority to issue
such orders as it may find necessary to provide adequate rem-
edies to the parties to effectuate the public policy enunciated
in § 48-802.” The record fully supports the finding by the CIR
that Housh is not a party to this action and has entered into a
separate settlement agreement regarding his personal claims
against the appellants. We conclude that the CIR did not err in
determining that Housh was not entitled to personal relief in this
proceeding based upon any prohibited practice claim asserted
by the Union.

(c) Attorney Fees

Finally, the Union argues that the CIR erred in not awarding
reasonable attorney fees. Although unnecessary to our disposi-
tion of this appeal, we exercise our discretion to reach this issue
because of the possibility that it will recur on remand.*

Rules of the Nebraska Commission of Industrial Relations
42 (rev. 2005) states: “Attorney’s fees may be awarded as an
appropriate remedy when the Commission finds a pattern of
repetitive, egregious, or willful prohibited conduct by the oppos-
ing party.” In this case, the CIR found that “the evidence does
not establish a willful pattern or practice of violation of the
{Union’s] freedom in conducting union activities, and it does
not establish that the investigations were undertaken in bad faith.
Therefore, payment of attorney fees will not be ordered.”

- Applying the aforementioned standard of review to the whole
record,** we conclude that the CIR’s finding is supported by a
preponderance of the competent evidence. Therefore, this argu-
ment has no merit.

3 Operating Engrs. Local 571 v. City of Plattsmouth, 265 Neb. 817, 660
N.W.2d 480 (2003).

53 See, Perry Lumber Co. v. Durable Servs., supra note 51; In re Estate of
Rosso, supra note 51.

4 See Crete Ed. Assn. v. Saline Cty. Sch. Dist. No. 76-0002, supra note 6.

a °
V. CONCLUSION
For the reasons discussed, we affirm the order of the CIR on
all issues presented in this appeal, except its determination that
the appellants committed a prohibited practice with respect to
Housh. We reverse and vacate that determination because it was
based on an incorrect legal standard and therefore contrary to
Jaw. We remand the cause to the CIR with directions to apply
the legal standard set forth in this opinion to that claim on the
existing record.
AFFIRMED IN PART, AND IN PART REVERSED
AND REMANDED WITH DIRECTIONS.
Heavican, C.J., not participating.

In RE EstTave oF KLAus DUECK, DECEASED.

Paut D. GarneTT, PERSONAL REPRESENTATIVE OF THE ESTATE OF
Kxaus DUECK, DECEASED, APPELLEE, V. GENETIC IMPROVEMENT
Services oF NortH CAROLINA, INC., APPELLANT.

736 N.W.2d 720

Filed August 3, 2007. No. S-06-538.

90 a

Andrew M. Loudon, of Baylor, Evnen, Curtiss, Grimit &
Witt, L.L.P., for appellant.

Adam J. Prochaska, of Harding, Shultz & Downs, for
appellee.

Heavican, C.J., Wricut, CoNNoLLy, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Micer-Lerman, J.

NATURE OF CASE

The county court for Gage County denied the petition for
allowance of claim filed by the appellant, Genetic Improvement
Services of North Carolina, Inc. (GIS), against the estate of
Klaus Dueck. At issue in this case is whether Dueck, when he
was a member of Forward Trend, LLC, personally guaranteed
amounts owed by Forward Trend to GIS.

Following trial, the county court found that Dueck neither
signed a written guaranty nor orally agreed to guarantee Forward
Trend’s debt to GIS. In view of these findings, the county court
rejected the arguments advanced by GIS that the purported writ-
ten guaranty by Dueck be reformed or, in the alternative, that
the purported oral guaranty by Dueck be deemed enforceable
under the “leading object rule,” which is an exception to the
writing requirement found in the statute of frauds, Neb. Rev.
Stat. § 36-202(2) (Reissue 2004). The county court denied GIS’
claim. GIS appeals. We determine that the county court did not
err in denying the claim. We affirm.

STATEMENT OF FACTS

In approximately June 2002, Forward Trend contracted with
GIS to repopulate Forward Trend’s swine operation in accord-
ance with a purchase and security agreement. Although the
record does not contain a signed copy of this agreement, the
parties do not dispute that Forward Trend entered into this agree-
ment with GIS. An additional agreement, entitled “Addendum
to Purchase and Security Agreement,” composed of two parts,
“Payment” and “Unconditional Personal Guaranty,” is at issue
in this case.

a "

Under the purchase and security agreement, GIS agreed to
provide certain replacement gilts. The addendum set forth the
terms of a financing plan between the parties. Under the financ-
ing plan, Forward Trend would pay 50 percent of the invoice
upon delivery, with the balance of the invoice, plus interest, due
6 months from the date of delivery. On June 26, 2002, Dueck
signed the “Payment” portion of the addendum on behalf of
Forward Trend. The guaranty portion of the addendum was
signed by a representative of GIS.

At trial and on appeal, GIS asserts that prior to June 26,
2002, Forward Trend had discussed with Dueck his providing
a personal guaranty for Forward Trend’s financed debt. GIS
further asserts that approximately 2 weeks after June 26, it
discovered that its representative had signed the guaranty. GIS
claims that it sent a new guaranty agreement to Dueck and that
Dueck signed the guaranty. A witness for GIS testified that the
new, executed guaranty agreement was then misplaced and has
never been found. The record on appeal does not contain a copy
of this guaranty agreement allegedly signed by Dueck.

Dueck died on July 18, 2004. At the time of Dueck’s death,
Forward Trend owed GIS certain sums under the financing plan.
On October 12, GIS filed a claim with Dueck’s estate for the
unpaid portion of the financed debt. On December 3, the per-
sonal representative denied the claim. GIS then filed a petition
for allowance with the county court.

On March 2, 2006, a trial was held on GIS’ claim. Several
witnesses testified, and a total of 25 exhibits were received into
evidence. During the trial and again before us on appeal, GIS
argues that the guaranty portion of the addendum was inad-
vertently ‘signed by the GIS representative on June 26, 2002,
and should be reformed to reflect a guaranty by Dueck. In the
alternative, GIS argues in effect that Dueck had orally agreed to
guarantee Forward Trend’s debt and that the claimed oral agree-
ment should be deemed enforceable under the “leading object
tule,” which is an exception to the writing requirement found in
the statute of frauds, § 36-202(2).

On April 12, 2006, the county court entered an order denying
GIS’ claim. GIS appeals.

ASSIGNMENTS OF ERROR

On appeal, GIS assigns two errors. GIS claims, restated, that
the county court erred (1) when it refused to reform the June
26, 2002, personal guaranty portion of the written addendum
to reflect a guaranty by Dueck and (2) when it concluded that
the leading object rule, an exception to the statute of frauds
concerning oral agreements, did not apply.

STANDARDS OF REVIEW

HB Appeals of matters arising under the Nebraska Probate
Code, Neb. Rev. Stat. §§ 30-2201 through 30-2902 (Reissue
1995 & Cum. Supp. 2006), are reviewed for error on the record.
In re Estate of Lamplaugh, 270 Neb. 941, 708 N.W.2d 645
(2006). When reviewing a judgment for errors appearing on the
record, the inquiry is whether the decision conforms to the law,
is supported by competent evidence, and is neither arbitrary,
capricious, nor unreasonable. In re Trust of Rosenberg, 273
Neb. 59, 727 N.W.2d 430 (2007). The probate court’s factual
findings have the effect of a verdict and will not be set aside
unless clearly erroneous. In re Estate of Lamplaugh, supra. An
appellate court, in reviewing a judgment for errors appearing
on the record, will not substitute its factual findings for those
of the trial court when competent evidence supports those find-
ings. See in re Trust of Rosenberg, supra.

ANALYSIS

Given our standard of review, the county court’s factual
findings are central to our analysis on appeal. As we read the
county court’s order, the court found, first, that Dueck did not
execute the June 26, 2002, guaranty agreement, and second,
that Dueck did not orally agree to guarantee Forward Trend’s
debt to GIS. Thus, the county court effectively found that
there was no agreement between GIS and Dueck pursuant to
which Dueck guaranteed Forward Trend’s debt to GIS, and as
a result, the county court denied GIS’ claim against Dueck’s
estate. We have reviewed the record on appeal for clear error
and find none. Accordingly, we find no merit to the arguments
of GIS and determine that the county court did not err in deny-
ing GIS’ claim.

a °

Written Addendum: Reformation
Is Not an Available Remedy.

Hl For its first assignment of error, GIS claims that the
county court erred in refusing to exercise its equitable powers
to reform the June 26, 2002, personal guaranty portion of the
addendum to reflect Dueck’s signature rather than the signature
of the GIS representative. A court may reform an agreement
when there has been either a mutual mistake or a unilateral
mistake caused by fraud or inequitable conduct on the part
of the party against whom reformation is sought. Par 3, Inc.
v. Livingston, 268 Neb. 636, 686 N.W.2d 369 (2004). GIS
argues in effect that the GIS representative mistakenly thought
that Dueck’s June 26 signature on the “Payment” portion of
the addendum, which Dueck signed as a representative of
Forward Trend, also served as Dueck’s personal guaranty on the
“Unconditional Personal Guaranty” portion of the addendum
and that the representative was merely signing as a witness
to Dueck’s signature. GIS refers the court to testimony to the
effect that Dueck later signed the personal guaranty portion of
the addendum, although the latter document could not be pro-
duced for trial.

Hil it is axiomatic that in order to reform a written agree-
ment to correct a mutual mistake, some form of an agreement
in writing must have existed. See, Mandell v. Hamman Oil and
Refining Co., 822. S.W.2d 153, 161 (Tex. App. 1991) (stating that
court was “hard pressed to determine how a nonexistent contract
could be reformed”); McClellan v. Boehmer, 700 S.W.2d 687,
694 (Tex. App. 1985) (stating that “[e]quity may reform the
instrument to reflect [the true] agreement [between the parties]
but cannot create and bring into being an agreement not made
by the parties”), disapproved on other grounds, Williams v.
Glash, 789 S.W.2d 261 (Tex. 1990); Wolfe v. Kalmus, 186 W.
Va. 622, 625, 413 S.E.2d 679, 682 (1991) (stating that “it is an
exercise in futility to attempt to discuss reformation . . . of a
nonexistent contract”).

In its order of April 12, 2006, the county court stated the
evidence presented by GIS “consist[ed] of an improbable series
of events” and found that there was no written guaranty agree-
ment between the parties. In the absence of a written agreement

94 Es

between GIS and Dueck, there was nothing to reform. See,
Mandell v. Hamman Oil and Refining Co., supra; McClellan v.
Boehmer, supra; Wolfe v. Kalmus, supra.

When reviewing a judgment for errors appearing on the
record, the inquiry by an appellate court is whether the decision
conforms to the law, is supported by competent evidence, and is
neither arbitrary, capricious, nor unreasonable. See In re Trust of
Rosenberg, 273 Neb. 59, 727 N.W.2d 430 (2007). The probate
court’s factual findings have the effect of a verdict and will not
be set aside unless clearly erroneous. In re Estate of Lamplaugh,
270 Neb. 941, 708 N.W.2d 645 (2006). We have reviewed the
record in the instant case, and the record supports the county
court’s decision. Given this record, we determine that the county
court did not err in refusing to reform the June 26, 2002, written
addendum to create a personal guaranty by Dueck.

Oral Agreement: Leading Object
Rule Is Inapplicable.

For its second assignment of error, GIS generally claims that
the county court erred when it concluded that the leading object
rule, an exception to the statute of frauds, did not apply. GIS spe-
cifically claims that Dueck orally agreed to guarantee Forward
Trend’s debt and that because Dueck was a member of Forward
Trend, he personally benefited from the financing arrangement
between Forward Trend and GIS. GIS continues that Dueck’s
purported oral promise to guarantee Forward Trend’s debt to
GIS was enforceable under the leading object rule, which is an
exception to the writing requirement of the statute of frauds. We
determine there is no merit to GIS’ second assignment of error.

Nebraska’s statute of frauds provides in pertinent part as fol-
lows: “In the following cases every agreement shall be void,
unless such agreement, or some note or memorandum thereof,
be in writing, and subscribed by the party to be charged there-
with . . . (2) every special promise to answer for the debt,
default, or misdoings of another person.” § 36-202(2). Under the
leading object rule, when .

the principal object of a party promising to pay the debt of
another is to promote his own interests, and not to become
a guarantor or surety, and the promise is made on sufficient

a °
consideration, it will be valid although not in writing. . . .
The consideration to support an oral promise to pay the
debt of another must operate to the advantage of the promi-
sor... and place him under a pecuniary obligation to the
promisee . . independent of the original debt . . . which
obligation is to be discharged by the payment of that debt.
Heese Produce Co. v. Lueders, 233 Neb. 12, 19-20, 443 N.W.2d
278, 283 (1989) (citations omitted). See, also, VSC, Inc. v. Lilja,
203 Neb. 844, 845, 280 N.W.2d 901, 903 (1979) (stating that
when “‘the leading object of a party promising to pay the debt
of another is to promote his own interests, and not to become
guarantor, and the promise is made on sufficient consideration,
it will be valid although not in writing. In such case the promis-
sor assumes the payment of the debt’”) (quoting Fitzgerald v.
Morrissey, 14 Neb. 198, 15 N.W. 233 (1883)).

The leading object rule presumes that there has been an oral
promise or some sort of an oral agreement. See id. See, also,
9 Samuel Williston, A Treatise on the Law of Contracts § 22:20
at 302 (Richard A. Lord ed., 4th ed. 1999) (stating that leading
object exception applies to an oral promise when “[t]he purpose
or object of the promisor is . . . to acquire the consideration for
which the promise is exchanged; that is why he gives his prom-
ise . . . and if he wants the consideration enough, he will give the
kind of promise for it that the promisee desires”).

In the instant case, the county court found that Dueck did not
orally agree to guarantee Forward Trend’s debt to GIS, and it
follows that the leading object rule was inapplicable. We have
reviewed the evidence and conclude that the county court’s
decision is supported by the record. Thus, the county court did
not err in concluding that the leading object rule, an exception
to the statute of frauds, did not apply.

CONCLUSION
The record supports the county court’s finding that there
was no written or oral guaranty agreement between Dueck and
GIS. Therefore the county court did not err in denying GIS’
claim against Dueck’s estate. The decision of the county court
is affirmed.

AFFIRMED.

96 Es

IN RE APPLicaTioNs OF LorEN W. Kocu.
Loren W. Kocr AND DEPARTMENT OF NATURAL RESOURCES,
APPELLEES, V. RONALD E, AUPPERLE AND
Mary ANN AUPPERLE, APPELLANTS.
736 N.W.2d 716

Filed August 3, 2007. No. S-06-736.

eee | |
Donald G. Blankenau, Kevin Griess, and, on brief, Jaron J.

Bromm, of Blackwell, Sanders, Peper & Martin, L.L.P., for
appellants.

Stephen D. Mossman, of Mattson, Ricketts, Davies, Stewart
& Calkins, for appellee Loren W. Koch.

Jon Bruning, Attorney General, and Justin D. Lavene for
appellee Department of Natural Resources.

Heavican, C.J., Wricut, CoNnNoLty, GERRARD, STEPHAN,
McCormack, and MiLLer-LerMan, JJ.

Per CuriAM.
Ronald E. Aupperle and Mary Ann Aupperle appeal from an
order of the director of the Department of Natural Resources

a "
(DNR) determining that they lacked standing to object to two
applications filed by Loren W. Koch. One application sought
approval of Koch’s plans to construct a dam on an unnamed
tributary that runs through properties owned by Koch and the
Aupperles, and the other sought a permit to impound 50.5 acre-
feet of water from the tributary via the dam. We conclude that
the appeal is moot.

BACKGROUND

The Aupperles and Koch own adjoining real property in
Cass County, Nebraska. An unnamed tributary of Weeping
Water Creek runs through the Aupperles’ land in a northerly
direction and enters onto land owned by Koch. The Aupperles
are thus upstream users of the tributary, and Koch is a down-
stream user.

In 1989, Koch constructed a dam on the tributary and
impounded approximately 50.5 acre-feet of water. The dam
was constructed without obtaining the required dam safety
and storage permits from the DNR. In 2005, the Aupperles,
in cooperation with the Lower Platte South Natural Resources
District (LPSNRD), commenced construction of a small, low-
hazard dam to also impound water from the tributary. Because
of its size, the dam was exempt from the DNR permitting
requirements.'

In June 2005, Koch filed an action in the district court for
Cass County seeking to enjoin the Aupperles from construct-
ing their dam, which at the time was approximately 80-percent
complete. The district court subsequently enjoined the Aupperles
from constructing the dam unless it contained a drawdown or
similar device that would allow water to flow through to Koch’s
property. The Aupperles appealed, and we reversed the judg-
ment of the district court in an opinion filed today.”

On September 7, 2005, Koch filed two applications with
the DNR. Application No. A-18333 sought a permit to allow

' See Neb. Rey. Stat. §§ 46-1601 to 46-1670 and 46-241(2) (Cum. Supp.
2006).

? See Koch v. Aupperle, ante p. 52, 737 N.W.2d 869 (2007).

98 a

the impoundment of 50.5 acre-feet of water for livestock
purposes. Application No. P-16637 sought approval of the
design and construction of his existing dam. The Aupperles
and LPSNRD both filed written objections to the applications.
Koch moved to strike the objections, and the director ruled in
Koch’s favor, finding that the Aupperles and LPSNRD lacked
standing to object. In its order, the DNR noted that the process-
ing of the applications would continue because “[s]talling the
Application[s] simply defeats the intent of the Safety of Dams
and Reservoirs Act.” The DNR concluded: “As no objections
remain on the record, the Applications will be processed with
information from the Applications and the [DNR’s] investiga-
tion, without hearing.”

The Aupperles filed this timely appeal, which we moved to
our docket pursuant to our statutory authority to regulate the
caseloads of the appellate courts of this state? LPSNRD is not a
party to the appeal. The DNR is a named party but did not file
a brief after its motion for summary dismissal was overruled
without prejudice.

On the day of oral argument in this court, Koch filed a motion
to dismiss the appeal, accompanied by a copy of an order
entered by the DNR on the previous day which approved both
of Koch’s applications. Oral argument proceeded as scheduled,
but we granted both parties leave to submit additional briefs on
the issue of mootness. In their mootness brief, the Aupperles
concede that the DNR has granted Koch’s applications. They
argue, however, that the appeal is not moot and that even if it is,
it should nevertheless be decided on the merits under the public
interest exception to the mootness doctrine.

ANALYSIS

Is AppEAL Moor?

HBA case becomes moot when the issues initially presented
in the litigation cease to exist, when the litigants lack a legally
cognizable interest in the outcome of litigation, or when the
litigants seek to determine a question which does not rest upon

3 See Neb. Rev, Stat. § 24-1106(3) (Reissue 1995).

a °

existing facts or rights, in which the issues presented are no
longer alive.‘ The issue originally presented in this appeal was
whether the Aupperles had standing to object to Koch’s permit
applications based upon their status as upstream landowners
and the provisions of § 46-241(2), under which an on-channel
reservoir with a water storage impounding capacity of less than
15-acre feet is exempted from DNR permit requirements. We
conclude that this case is moot. Our resolution of the stand-
ing issue would have no impact on the DNR’s consideration of
Koch’s applications, as that administrative proceeding has been
concluded.

HMM The Aupperles argue that “[t}he question on appeal
ultimately concerns the extent of DNR’s regulatory authority
over the owners of certain small ponds.”> But the DNR has not
sought in this action to exercise any regulatory authority over
the Aupperles. Thus, any determination of the respective water
rights of the Aupperles and Koch would constitute nothing more
than an advisory opinion, as there is no case and controversy
regarding such rights. In the absence of an actual case or con-
troversy requiring judicial resolution, it is not the function of
the courts to render a judgment that is merely advisory.° A court
decides real controversies and determines rights actually con-
troverted, and does not address or dispose of abstract questions
or issues that might arise in a hypothetical or fictitious situation
or setting.”

Does Pus ic Inrerest EXcEprion Apply?
I The Aupperies argue that if we determine the appeal
is moot, we should nevertheless decide the issues presented
under the public interest exception to the mootness doctrine.

* Swoboda v. Volkman Plumbing, 269 Neb. 20, 690 N.W.2d 166 (2004); In re
Application No. C-1889, 264 Neb. 167, 647 N.W.2d 45 (2002).

5 Brief for appellant in opposition to motion for summary dismissal at 4.

6 Wilcox v. City of McCook, 262 Neb. 696, 634 N.W.2d 486 (2001); Keller v.
Tavarone, 262 Neb. 2, 628 N.W.2d 222 (2001).

7 Wood v. Wood, 266 Neb. 580, 667 N.W.2d 235 (2003); In re Estate of
Reading, 261 Neb. 897, 626 N.W.2d 595 (2001).

100 Es

An appellate court may choose to review an otherwise moot
case under the public interest exception if it involves a matter
affecting the public interest or when other rights or liabilities
may be affected by its determination.’ This exception requires
a consideration of the public or private nature of the question
presented, the desirability of an authoritative adjudication for
future guidance of public officials, and the likelihood of future
recurrence of the same or a similar problem.”

At its core, this is a dispute between two private landown-
ers regarding potential future rights to store water flowing in a
watercourse which transverses their properties. The facts which
would frame the resolution of this dispute have not yet occurred.
Because we find the necessary considerations to be lacking, we
decline to reach the merits of this moot appeal under the public
interest exception.

CONCLUSION
For the reasons discussed, we conclude that the issue pre-
sented in this appeal is moot, and we decline to reach it under the
public interest exception to the mootness doctrine. Accordingly,
we dismiss the appeal.
APPEAL DISMISSED.

® Davis v. Settle, 266 Neb. 232, 665 N.W.2d 6 (2003); Chambers v.
Lautenbaugh, 263 Neb. 920, 644 N.W.2d 540 (2002).

9 Ia.

Stare oF NEBRASKA EX REL. COUNSEL FOR DISCIPLINE OF THE
NEBRASKA SUPREME COURT, RELATOR, V.
Joun P. Herz, RESPONDENT.
739 N.W.2d 161

Filed August 3, 2007. No. S-07-512.

WricHt, CONNOLLY, GERRARD, STEPHAN, McCormack, and
Muizr-Lerman, JJ.

PeR Curiam.
INTRODUCTION
This case is before the court on the voluntary surrender of
license filed by respondent, John P. Heitz. The court accepts
respondent’s surrender of his license and enters an order of
disbarment.

FACTS

Respondent was admitted to the practice of law in the State
of Nebraska on June 24, 1975. At all times relevant hereto,
respondent was engaged in the private practice of law in
Nebraska.

On May 10, 2007, an application for the temporary sus-
pension of respondent from the practice of law was filed by
the chairperson of the Committee on Inquiry of the Third
Disciplinary District. The application stated, in effect, that
respondent had been appointed to serve as the personal rep-
resentative in a probate estate case and that in that capacity,
respondent had converted in excess of $50,000 of estate funds
for his personal use. The application further stated in effect that
respondent “has engaged in and continues to engage in conduct
that, if allowed to continue until final disposition of disciplin-
ary proceedings, will cause serious damage to the public and to
the members of the Nebraska State Bar Association.” On May
17, this court issued an order to show cause why respondent
should not be temporarily suspended. On May 25, respond-
ent filed his consent to suspension, and on June 6, this court
entered an order suspending respondent from the practice of
law. Respondent was ordered to comply with the terms of Neb.
Ct. R. of Discipline 16 (rev. 2004). The court file in this case
reflects that respondent has returned his bar card.

On June 26, 2007, respondent filed with this court a volun-
tary surrender of license, voluntarily surrendering his license
to practice law in the State of Nebraska. In his voluntary sur-
render of license, respondent stated that, for the purpose of his
voluntary surrender of license, he knowingly does not challenge
or contest the truth of the allegations in the application for
temporary suspension to the effect that while he was serving
as the personal representative of a probate estate, he converted

102 Le

estate funds for his personal use. In addition to surrendering
his license, respondent voluntarily consented to the entry of an
order of disbarment and waived his right to notice, appearance,
and hearing prior to the entry of the order of disbarment.

ANALYSIS
Neb. Ct. R. of Discipline 15 (rev. 2001) provides in perti-
nent part:

(A) Once a Grievance, a Complaint, or a Formal Charge
has been filed, suggested, or indicated against a member,
the member may voluntarily surrender his or her license.

(1) The voluntary surrender of license shall state in
writing that the member knowingly admits or knowingly
does not challenge or contest the truth of the suggested
or indicated Grievance, Complaint, or Formal Charge and
waives all proceedings against him or her in connection
therewith.

Pursuant to rule 15, we find that respondent has voluntarily
surrendered his license to practice law and that, for the purpose
of this voluntary surrender of license, respondent knowingly
does not contest the truth of the allegations made against him
in the application for temporary suspension. Further, respondent
has waived all proceedings against him in connection with his
voluntary surrender. We further find that respondent has con-
sented to the entry of an order of disbarment.

CONCLUSION

Upon due consideration of the court file in this matter, the
court finds that, for the purpose of this voluntary surrender of
license, respondent voluntarily has stated that he knowingly
does not challenge or contest the truth of the allegations in the
application for temporary suspension to the effect that while
he was serving as the personal representative of a probate
estate, he converted estate funds for his personal use. The court
accepts respondent’s surrender of his license to practice law,
finds that respondent should be disbarred, and hereby orders
him disbarred from the practice of law in the State of Nebraska,
effective immediately. Respondent shall forthwith fully comply
with all terms of disciplinary rule 16, and upon failure to do so,

he shall be subject to punishment for contempt of this court.
Accordingly, respondent is directed to pay costs and expenses
in accordance with Neb. Rev. Stat. §§ 7-114 and 7-115 (Reissue
1997) and Neb. Ct. R. of Discipline 10(P) (rev. 2005) and 23
(rev. 2001) within 60 days after an order imposing costs and
expenses, if any, is entered by the court.

JUDGMENT OF DISBARMENT.

Heavican, C.J., not participating.

Hyannis Epucation ASSOCIATION, AN UNINCORPORATED
ASSOCIATION, APPELLEE, V. GRANT CouNTY SCHOOL
District No. 38-0011, ALso KNowN AS HYANNIS
Hic SCHOOL, A POLITICAL SUBDIVISION OF THE
Stare OF NEBRASKA, APPELLANT.

736 N.W.2d 726

Filed August 10, 2007. No. S-06-300.

ea
Rex R. Schultze, of Perry, Guthery, Haase & Gessford, P.C.,
L.L.O., for appellant.

Mark D. McGuire, of McGuire & Norby, for appellee.

Heavican, C.J., Wricut, ConNnoity, GERRARD, STEPHAN,
McCormack, and Micier-Lerman, JJ.

104 Le

Heavican, C.J.
INTRODUCTION

This industrial dispute between the Hyannis Education
Association (Association) and Grant County School District
No. 38-0011 (District) is before us for the second time. The
issue presented by this appeal is whether the Commission of
Industrial Relations (CIR) erred when it eliminated a deviation
clause from the parties’ agreement.

BACKGROUND

Tas Court’s Decision In Hyannis I

The Association and the District were unable to reach a nego-
tiated agreement for the 2002-03 contract year. As a result, the
Association filed a petition with the CIR. This court set forth all
the relevant facts in its decision in Hyannis Ed. Assn. v. Grant
Cty. Sch. Dist. No. 38-0011 (Hyannis J,‘ and such facts will be
repeated here only as necessary.

In its order in Hyannis I, the CIR accepted the Association’s
array of comparable districts and determined that the salary
schedule from the parties’ 2001-02 contract should be utilized
in setting the District’s base salary and salary schedule for the
2002-03 contract year. The CIR also concluded that issues relat-
ing to fringe benefits were moot and, further, that it could not
consider whether it was proper to include a deviation clause in
the agreement unless it was presented with an array of deviation
clauses identical in their terms. Both the Association and the
District appealed.

While this court affirmed the order of the CIR in most
respects,’ we reversed the order with respect to the CIR’s
authority regarding the inclusion of a deviation clause. We con-
cluded that

[a] valid prevalence analysis does not require as a pre-
requisite a complete identity of provisions in the array.
Rather, prevalence involves a general practice, occurrence,
or acceptance, as determined by the CIR. We conclude

1 Hyannis Ed. Assn. v. Grant Cty. Sch. Dist. No. 38-0011, 269 Neb. 956, 698
N.W.2d 45 (2005).

2 Id.

that the portion of the CIR’s order stating that it could
not consider the parties’ dispute over the inclusion of the
deviation clause is contrary to law. Accordingly, given the
facts, we reverse that portion of the CIR’s order declining
to consider the deviation issue and remand the cause to
the CIR for consideration of the deviation issue under a
prevalence analysis.’

CIR ProceEDINGS FoLLOwING REMAND

Upon remand, the issue presented to the CIR was whether the
deviation clause in question was prevalent. The language of that
clause reads as follows: “The Board reserves the right to deviate
from the agreement if it becomes necessary to hire teachers for
a particular position.” This same language had been included as
a negotiated term in the parties’ 2001-02 agreement.

The District contended that because four of the seven schools
in its array allowed deviation from the salary schedule, albeit
under varying circumstances, deviation was prevalent. In essence,
the District suggested that deviation be defined broadly. The
Association, however, argued that deviation should be defined
more narrowly to reflect the distinction between the open-
ended deviation proposed by the District and defined devia-
tion. Because open-ended deviation clauses were not prevalent
in the array selected by the CIR, the Association asserted that
the District’s proposed clause should not be included in the
parties’ contract.

The CIR found for the Association. In so finding, the CIR
defined deviation to include only those clauses that “permit[ed]
a departure from the bargained for and agreed upon contract,
upon defined criteria and/or specific standards, that have been
bargained for and agreed upon by the parties.” In conducting its
prevalency analysis, the CIR was presented with the following
deviation language as quoted from the other schools’ contracts
in the District’s array.

Burwell:

In the event that a new teacher cannot be hired on the
basis of the adopted schedule and it is necessary to raise

3 Id. at 968-69, 698 N.W.2d at 56.

the base, all the teachers in the system shall be placed
on the new schedule and salaries adjusted accordingly.
If a position has not been filled by August 1, however,
the Board reserves the right to exceed the schedule for
the new teacher only if it is necessary to do so to fill
the position.

Garden County:

The salary schedule shall not be construed as being con-

tractual and no teacher employed by the district shall have

claims, demands, or course of action of [sic] reason of the
provisions. Furthermore, the Board reserves the right to
make necessary adjustments in order to meet emergencies
which may arise.
Gordon: No deviation language in contract.
Rock County:

New Graduates may be placed on 1 Step Two if the number

of applicants is one.

Rushville: No deviation language in contract.
Thedford:

Although the Board of Education will endeavor to abide

by the Salary Schedule in every instance in employing and

reemploying teachers, it does reserve the right to depart
from the schedule when it deems the best interest of the
school may be served by doing so.

West Holt:

The district retains the authority to provide extra compen-
sation for special assigned work and requested services.
The CIR found that only Rock County met its definition of
deviation in the context of a school wage case. As only one
of the seven schools in the District’s array allowed deviation
which met the CIR’s definition, the CIR concluded that devia-

tion was not prevalent.

The CIR also noted that the District’s proposed deviation
clause was not “sufficiently similar” to the deviation clauses
included in the negotiated agreements of the other schools in
the array. As such, the CIR ordered the deviation clause elimi-
nated from the 2002-03 contract.

The District now appeals the CIR’s determination.

 *
ASSIGNMENT OF ERROR

The District assigned seven assignments of error, which can

be restated as one: The CIR erred in finding that the deviation

clause in question was not prevalent and eliminating it from the
parties’ 2002-03 agreement.

STANDARD OF REVIEW

Hi In our review of orders and decisions of the CIR involving
an industrial dispute over wages and conditions of employment,
our standard of review is as follows: Any order or decision of
the CIR may be modified, reversed, or set aside by the appellate
court on one or more of the following grounds and no other:
(1) if the CIR acts without or in excess of its powers, (2) if the
order was procured by fraud or is contrary to law, (3) if the facts
found by the CIR do not support the order, and (4) if the order
is not supported by a preponderance of the competent evidence
on the record considered as a whole.*

ANALYSIS

In Hyannis I, we remanded this cause to the CIR “for con-
sideration of the deviation issue under a prevalence analysis.”*
In doing so, we held that contract terms relating to deviation
need not be identical in order to be prevalent, and noted that in
the context of a prevalent wage rate, “when the members of the
array to which comparison is made ‘are sufficiently similar and
have enough like characteristics or qualities[, then] comparison
[is] appropriate.’ ”*

We conclude that under the circumstances presented, the
CIR erred in concluding that deviation was not prevalent. The
record presented to this court contains the deviation clauses in
the negotiated agreements of the other schools in the District’s
array. Although these clauses vary in their construction, each has
a common thread: Each district with such a clause has the ability
to depart, or deviate from, the salary schedule included in the
negotiated agreement.

* Hyannis I, supra note 1.

5 Id, at 969, 698 N.W.2d at 56.
6 Id, at 967, 698 N.W.2d at 55.

Hi This commonality is consistent with the generally under-
stood definition of “deviation.” Webster’s dictionary defines
deviation as the “departure from an established body of prin-
ciples, a‘ system of beliefs, an ideology, or a party line,”
while Black’s dictionary defines deviation as “a change from
a customary or agreed-on course of action.”* We conclude that
“deviation” in a school wage case is the ability to depart from
the salary schedule included in the parties’ contract.

This definition is also consistent with our statement in
Hyannis I that contract terms need not be identical to be con-
sidered in a prevalency analysis, but instead need only be “‘suf-
ficiently similar and have enough like characteristics or quali-
ties.’”® In comparing the deviation language of the other schools
to the language proposed by the District, the CIR found that
none of the clauses presented were sufficiently similar. In doing
so, the CIR rejected the basic similarity of all of the clauses,
that each allowed a departure from the salary schedule.

Given our conclusion that the CIR did not apply the correct
definition of deviation to the record in this case, it would ordi-
narily be necessary for the CIR to make further factual find-
ings regarding the prevalency of deviation clauses in the array.
However, such action is not necessary here. As outlined below,
certain factual findings in the CIR’s order allow this court to
apply the correct definition of deviation to the record in order
to make a determination regarding prevalency.

In table 1 of its order, the CIR noted a distinction between
“Deviation’ clauses with defined terms” and those “without
defined terms.” Implicitly, then, the CIR acknowledged that
both clauses dealt with deviation in its general sense. We con-
clude that the schools categorized by the CIR as having either
type of deviation clause should be considered in a prevalency
analysis. On the record before us, four of the schools in the
District’s array—Burwell, Garden County, Rock County, and
Thedford—allow deviation from the salary schedule. And yet

7 Webster’s Third New International Dictionary, Unabridged 618 (1993).
8 Black’s Law Dictionary 482 (8th ed. 2004).
9 Hyannis I, supra note 1, 269 Neb. at 967, 698 N.W.2d at 55.

Le

another district, West Holt, has language in its agreement that
could arguably be considered deviation language.

In Hyannis I, we reaffirmed that “[t]he standard inherent in
the word ‘prevalent’ is one of general practice, occurrence, or
acceptance . . . .”!° Where at least four of the seven schools in
the District’s array have negotiated agreements which contain
deviation clauses, such a practice is prevalent. Because such
practice is prevalent, the deviation clause should be included in
the parties’ contract for 2002-03. The CIR’s order to eliminate
the clause was contrary to law and was not supported by a pre-,
ponderance of the competent evidence on the record considered
as a whole. We therefore reverse the CIR’s order eliminating the
clause, and remand this cause to the CIR with instructions to
include the clause in the parties’ 2002-03 contract.

The District makes several additional arguments, all relating
to the assertion that the CIR erred in concluding that deviation
was not prevalent. Because we agree with the District that the
CIR erred in eliminating the provision, we need not consider
the District’s remaining arguments.

Mootness

We note that the Association contends this appeal is moot
as a result of the enactment of 2005 Neb. Laws, L.B. 126. The
Association argues that due to L.B. 126, both the District and
the Association ceased to exist as legal entities. Although the
Association acknowledges that legal entities bearing the same
names exist, it contends that those entities are not the same
legal entities which were the original parties to this indus-
trial dispute.

We disagree with the Association. We have reviewed the
record, including those public records of which the parties stipu-
lated we could take judicial notice, and conclude that this appeal
is not moot.

CONCLUSION
‘We conclude the CIR erred in finding that deviation was not
prevalent among the schools in the District’s array. As such, the

10 Hyannis I, supra note 1, 269 Neb. at 968, 698 N.W.2d at 55.

110

CIR erred in eliminating the proposed deviation clause from the
parties’ 2002-03 contract.
REVERSED AND REMANDED WITH DIRECTIONS.

Stare oF NEBRASKA EX REL. L. Tim WAGNER, DiRECTOR OF
INSURANCE OF THE STATE OF NEBRASKA, APPELLEE, V.

“* AMwest SurETY INSURANCE COMPANY, APPELLEE,
AND Strarecic CapiraL Resources, INc.,
CLAIMANT, APPELLANT.

738 N.W.2d 805

Filed August 17, 2007. No. S-05-1267.

Ll ql
a

Steven N. Lippman, of Rothstein, Rosenfeldt & Adler, and
Sean M. Reagan, of Reagan Law Offices, P.C., L-L.O., for
appellant.

John H. Binning, Robert L. Nefsky, and Jane F. Langan, of
Rembolt Ludtke, L.L.P., for appellee L. Tim Wagner.

Heavican, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, and
Mitter-Lerman, JJ.

GERRARD, J.

Saxton, Inc., entered into four lease agreements with Strategic
Capital Resources, Inc. (Strategic), then contracted with Amwest
Surety Insurance Company (Amwest) to issue four correspond-
ing lease bonds under which Amwest agreed to provide pay-
ment to Strategic in the event that Saxton defaulted. Amwest
became subject to an order of liquidation, pursuant to which
Amwest’s lease bonds were canceled and a statutory liquidator
was appointed to manage claims made against Amwest.

Following the termination of the lease bonds, Strategic pro-
vided Amwest with written notice of Saxton’s default. The
liquidator denied all of Strategic’s claims. Strategic appealed.
Because Strategic failed to comply with the express provisions
of the lease bonds before the lease bonds were canceled, we
affirm the denial of Strategic’s claims.

STATEMENT OF FACTS
In 1999, Saxton entered into four lease agreements with
Strategic. As security for Saxton’s performance under the lease
agreements, Saxton contracted with Amwest to issue lease
bonds. Pursuant to each lease bond, Amwest agreed to provide
payment to Strategic, up to a predetermined amount, in the
event that Saxton committed a default under the lease. Amwest
issued four lease bonds, each bond corresponding to one of the
four leases.
Three of the four lease bonds contained the following
provision:
This bond is executed by the Principal [Saxton] and
Surety [Amwest] and accepted by the Obligee [Strategic]
upon the following express conditions:

12 Le

2. In the event of any default of the Principal herein, the
Surety shall be given written notice by the Obligee of such
default within thirty (30) days after such default by certi-
fied mail to the Surety... .

The other lease bond provided:

A default shall be deemed to have occurred on the part of
the Principal [Saxton] if the Principal shall fail to perform
fully its obligations under the lease agreement within
the time set forth therein. Obligee [Strategic] has given
Principal written notice of such default, and Principal has
failed to cure such default within the time period required
by the lease agreement.

On June 7, 2001, Amwest became the subject of an “Order of
Liquidation, Declaration of Insolvency, and Injunction” entered
by the district court for Lancaster County. Pursuant to the liqui-
dation order, L. Tim Wagner, Director of Insurance for the State
of Nebraska, was appointed as statutory liquidator (Liquidator).
The Liquidator appointed Horizon Business Resources, Inc.
(Horizon), as the authorized claims/litigation management, con-
struction consulting, and subrogation agent. As the authorized
claims agent, Horizon was responsible for investigating claims
made on Amwest and evaluating their validity and value. The
order of liquidation also provided that all of Amwest’s bond
obligations were to be canceled 30 days from the date of entry
of the order. Thus, the cancellation date for the lease bonds at
issue in this case was July 6, 2001. -

On June 8, 2001, a document entitled “Notice of Legal
Rights and Obligations” was sent to all bond obligees. This
document, among other things, informed the bond obligees that
an order to liquidaté Amwest had been entered in the district
court and listed the name arid responsibilities of the Liquidator.
This document also stated the relevant cancellation dates of
Amwest’s bond obligations.

On July 9, 2001, Strategic sent Amwest four letters, each
letter referencing one of the four lease bonds. The letters stated
that “Saxton, Inc. has failed to perform its obligations under
the Lease Agreement and therefore is in default.” The letters
demanded full payment under each of the corresponding lease

bonds. The only evidence presented in the record that provides
any detail with regard to Saxton’s alleged default is in the
affidavit of David Miller, Strategic’s chairman. In his affidavit,
Miller testified that Saxton failed to make lease payments on
December 1, 2000, and thereafter.

Horizon apparently treated Strategic’s notice of default letters
as an attempt to serve a claim on Amwest because, on July 30,
2001, Horizon sent Strategic four letters acknowledging receipt -
of each of Strategic’s “notice of claim[s].” Enclosed with the
letters were proof of claim forms. Horizon’s letters explained
that Strategic was to file the proof of claim forms, and support-
ing documentation, no later than June 7, 2002.

On August 1, 2001, Amwest sent four letters to Strategic,
each letter corresponding to one of the four lease bonds. The
Jetter stated that the Liquidator would implement a claims
process and that Strategic would be sent a new proof of claim
form within 90 days, which form Strategic would also need to
complete and file by June 7, 2002. The letter explained that
Horizon “will continue to act as the authorized claims adjust-
ing company on all Amwest claims” and that a “Horizon claims
representative will continue to investigate your claim.”

Miller testified in his affidavit that following receipt of these
letters, Strategic contacted Horizon at the telephone number
listed on each of Amwest’s August 1, 2001, letters, and was told
that it could not file a claim until it received the appropriate
forms. Miller further testified that sometime between June 7 and
June 19, 2002, Strategic received and completed the approved
proof of claim forms. The proof of claim forms were filed on
June 20, 2002, 13 days after the June 7 bar date. On September
5, Amwest sent Strategic four letters acknowledging the receipt
of Strategic’s proof of claim forms and informing Strategic that
because the proof of claim forms were postmarked after the bar
date, the claims would be treated as: late-filed claims.

Liquator’s Decision
On October 31, 2003, the Liquidator denied all Strategic’s
claims. The Liquidator explained that
[bly operation of law, all bonds issued by Amwest
. were cancelled 30 days after the Order of Liquidation.

114 be

Therefore, all bonds were cancelled on July 6, 2001.
Notice of default on [these] bond[s] was issued on July 9,
2001, after cancellation of the bond[s]. Therefore, there is
no coverage for [these] claim[s].
Strategic filed an objection to the Liquidator’s decision. The
Liquidator reviewed Strategic’s objection and chose not to alter
his initial determination.

REFEREE’S DECISION

Pursuant to Neb. Rev. Stat. § 44-4839(2) (Reissue 2004),
whenever objections are filed with a liquidator and the liquidator
does not alter his or her denial of the claim, the disputed claim
may be referred to a court-appointed referee who submits find-
ings of fact and his or her recommendation. In the present case,
the disputed claims were referred to the court-appointed referee.
The district court approved and adopted “procedures” to be used
to govern the referee’s participation in the administration of the

claims against Amwest in accordance with § 44-4839(2).
Because all four of Strategic’s claims involved similar facts,
the referee consolidated the claims and issued a single report
in which he recommended that all of the claims be denied. In
denying the claims, the referee stated that pursuant to Neb. Rev.
Stat. § 44-4835(2) (Reissue 2004), “the inclusion of late filed
claims in the claims adjudication process is wholly within the
discretion of the Liquidator; the Liquidator has exercised his
discretion to accept [Strategic’s] claims as Class 6 (Late Filed
Claims). The [District] Court should not review this action of

the Liquidator.” The referee continued, explaining:

The . . . Liquidator’s determination that no amount should
be allowed for [Strategic’s] claims is supported by the
‘Hearing Record. The Notices of Default are without
any specificity. If Saxton was in default of its perform-
ance obligations under the Lease Agreements, the Lease
Agreements required notice to Saxton and an opportunity
to cure the default. The nature of Saxton’s claimed defaults
is not identified. It is reasonable to conclude that upon
learning of Amwest’s liquidation, [Strategic] sought a com-
plete forfeiture of the Lease Bonds. The obligations [sic]
of Amwest was to assure Saxton’s performance; there is

nothing in the Hearing Record to support a conclusion that
Saxton failed to perform any of its lease obligations while
the Bonds were in-force.
Strategic disagreed with the referee’s report and filed its objec-
tions to the referee’s findings in the district court.

District Courr’s DEcision

The district court found that all of the claims were prop-
erly denied. The court stated that “the Referee’s determination
[was] supported by competent, material and substantive evi-
dence appearing in the record and was made in accordance with
the Procedures.”

The court further explained that “the in-force obligations
of Amwest were cancelled no later than July 6 2001” but that
Strategic sent its written notices on July 9, 2001. The court
stated that “the claim file contains no evidence that the that [sic]
Saxton failed to perform any of its lease obligations while the
bonds were in force.” Finally, the court noted that “the record
makes clear that the Claimant’s claim was received after the
Claims bar date of June 7, 2002.” And “even if any amount was
allowed, the Claim was properly characterized as a Class 6 (late
filed) claim.” Strategic appeals.

ASSIGNMENTS OF ERROR
On appeal, Strategic assigns, restated and renumbered, that
the district court erred in (1) denying its objection to the refer-
ee’s report and (2) concluding that Strategic’s claims were not
timely filed.

STANDARD OF REVIEW
Hl When reviewing questions of law, an appellate court has
an obligation to resolve the questions independently of the con-
clusions reached by the trial court.!
Hl Ax insurer liquidation proceeding lies in equity, and an
appellate court reviews a liquidation court’s determination of
claims disputes de novo on the record.”

1 Didier v. Ash Grove Cement Co., 272 Neb. 28, 718 N.W.2d 484 (2006).

2 State ex rel. Wagner v. Amwest Surety Ins. Co., post p. 121, 738 N.W.2d 813
(2007).

ANALYSIS

Strarecic’s FAILuRE TO Proving Notice

Strategic’s arguments on appeal are primarily concerned with
the conclusion that its claims were late filed. We do not reach
those issues, however, because of a more fundamental problem
with Strategic’s claims. On our de novo review of the record,
we agree with Amwest’s argument that Strategic’s claims were
correctly denied because Strategic failed to comply with the
express conditions set forth in each of the lease bonds before the
lease bonds were canceled.

HMM Nebraska adheres to the rule of strict construction of
guaranty contracts? A guaranty is interpreted using the same
general rules as are used for other contracts. When the meaning
of the contract is ascertained, or its terms are clearly defined,
the liability of the guarantor is controlled absolutely by such
meaning and limited to the precise terms.° We have further
explained that

“[A] surety cannot be held beyond the precise terms of his
contract. Any intention on the part of the surety to assume
a further and continued liability must be found in the
words of the contract made. It is not a matter of inference,
but of express statement. The liability of a surety, there-
fore, is measured by, and will not be extended beyond, the
strict terms of his contract.”6
In short, Amwest’s obligations as a surety are strictly gov-
emed by the express terms of the lease bonds. Accordingly,
for Amwest to be liable under the terms of the lease bonds,
Strategic must comply with all of the necessary preconditions
for payment.

3 Federal Deposit Ins. Corp. v. Heyne, 227 Neb. 291, 417 N.W.2d 162
(1987).

4 Spitiler v, Nicola, 239 Neb. 972, 479 N.W.2d 803 (1992).
5 Federal Deposit Ins, Corp., supra note 3.

° Farmers Union Co-op Assn. v. Mid-States Constr. Co., 212 Neb. 147, 153,
322 N.W.2d 373, 377 (1982).

We addressed a similar issue in Dockendorf v. Orner.’ In
Dockendorf, the United States Fidelity and Guaranty Company
(U.S.R.&G.), as surety, and Donald Moran, as principal,
entered into a surety agreement. For approximately 10 months,
Moran and his agents purchased cattle from Dale Dockendorf.
Approximately 6 months after the final purchase, Dockendorf
sued Moran, his agents, and U.S.R.&G., alleging that Moran
had defaulted on payments owed and that U.S.R.&G., as surety,
was liable for the principal’s default up to the maximum amount
under the bond.

Moran’s surety bond provided in relevant part that “‘[aJny
claim for recovery on this bond must be filed in writing with
either the Surety, or the Trustee -.. . All claims must be filed
within 120 days of the date of the transaction on which claim
is made.’”® The surety bond further provided that the surety
““shall not be liable to pay any claim for recovery on this bond
if it is not filed in writing within 120 days from the date of
the transaction on which the claim is based... ””° The bond
also required that a lawsuit based on the claim be filed no less
than 180 days or more than 18 months after the transaction.!°
Dockendorf had not filed a claim within 120 days, and thus,
Dockendorf’s claim was denied."

In denying the claim, we explained that the bond contained.
two conditions: The first condition required a timely filing of a
claim in writing, and the second condition related to the time-
frame within which litigation must be commenced.’ We con-
cluded that “[i]t is clear that in the present case [Dockendorf]
failed to file a claim in writing within 120 days of the date of
the transaction on which claim is made. Since [Dockendorf]
failed to satisfy the first condition, recovery under the bond will

7 Dockendorf v. Orner, 206 Neb. 456, 293 N.W.2d 395 (1980).
8 Id. at 459, 293 N.W.2d at 397.

9 Id.

© Id.

" Td,

® Dockendorf, supra note 7.

18 Es

not be allowed.”"? In other words, because the conditions to pay-
ment had not been satisfied, the surety’s obligation to pay did
not arise.

Hl Courts in other jurisdictions have similarly concluded
that when a guaranty contract contains express conditions, those
conditions must be strictly complied with before the guarantor
is liable.4 Since the foundation of the creditor’s rights is the
guarantor’s contract, it follows that his rights are restricted by
the terms of the contract and any conditions, express or implied,
affecting them.'* The guarantor may limit his liability by what-
ever conditions he may see fit to impose, and failure to comply
with them will preclude recourse to him.’®

HM Where a guarantor attaches a certain condition or con-
ditions to the agreement, such condition or conditions must be
construed in favor of the guarantor, and the failure of a creditor
to strictly comply with any condition or conditions invalidates
the guaranty.”’ A stipulation for notice of default is a condition
of liability which may always be imposed.'* Where a contract
of guaranty specifically requires notice of default, the failure to
give such notice discharges the guarantor’s obligations.”

In the present case, each of the four lease bonds contained
explicit conditions that must be complied with before Amwest’s
liability under the agreements would arise. As set forth more
fully above, three of the four lease bonds required Strategic to
provide Amwest written notice of Saxton’s default as a condi-
tion precedent to Strategic’s right to payment under the lease
bonds. The undisputed facts, however, reveal that Amwest did

13 Td. at 461, 293 N.W.2d at 398.

™ See, e.g., Lee v. Vaughn, 259 Ark. 424, 534 §.W.2d 221 (1976); Yama v.
Sigman, 114 Colo. 323, 165 P.2d 191 (1945); Electric Storage Battery Co.
v. Black, 27 Wis. 2d 366, 134 N.W.2d 481 (1965).

15 Barati v. M.S.I. Corp. et al., 212 Pa. Super. 536, 243 A.2d 170 (1968).
© Tee, supra note 14.

" Id.

18 Id.; Barati, supra note 15.

19 Lee, supra note 14.

es 119
Le

not receive notice of Saxton’s default until after the lease bonds
were canceled.

The first time Amwest received notice of any alleged default
by Saxton was on July 9, 2001. That was the earliest possible
date Amwest’s liability could have arisen. However, pursuant to
the liquidation order, the lease bonds had been terminated 3 days
earlier. Amwest’s obligation to pay did not arise before the lease
bonds had been terminated. Strategic’s claims for payment under
these three lease bonds were correctly denied.

Strategic also failed to comply with the express terms of the
remaining lease bond. Amwest’s obligation to pay, pursuant to
that bond, did not arise until Strategic had given Saxton written
notice of its default and an opportunity to cure the default. But
our de novo review of the record reveals no evidence to show
that Strategic complied with these conditions by sending writ-
ten notice of the alleged default to Saxton or any evidence that
Saxton was ever given an opportunity to cure the alleged default.
Strategic has failed to prove that it was entitled to any payment
from Amwest under the remaining lease bond.

Strategic claims that notwithstanding the fact that the lease
bonds have now been terminated, the alleged defaults took
place before the lease bonds were canceled and that therefore,
Amwest remains obligated to pay. In support of this argument,
Strategic relies on cases dealing with occurrence-based insur-
ance policies. Strategic contends that under occurrence policies,
if the event insured against—i.e., the occurrence—takes place
within the policy period, regardless of when a claim is made,
the policy provides coverage.

However, Strategic’s reliance on cases relating to occurrence
policies is misplaced. The contracts at issue in this case are
guaranty contracts, not insurance liability policies. As a guaranty
contract, the liability of the guarantor is limited to the precise
terms used in the contract.” Before Amwest’s liability under
the lease bonds arose, certain conditions had to be satisfied.
Strategic did not comply with those provisions while the lease
bonds were in force.

20 See Federal Deposit Ins. Corp., supra note 3.

120 Le

Strategic also argues that. while the lease bonds do require
written notice of default to Amwest, this has never been asserted
as a basis for denying Strategic’s claims and, therefore, cannot
be a basis now. Strategic’s argument is without merit. In denying
Strategic’s claims, the Liquidator explained that

[bly operation of law, all bonds issued by Amwest
. .-. were cancelled 30 days after the Order of Liquidation.
Therefore, all bonds were cancelled on July 6, 2001.
Notice of default on [these] bond[s] was issued on July 9,
2001, after cancellation of the bond[s]. Therefore, there is

no coverage for [these] claim[s].
Strategic’s failure to satisfy the conditions of the lease bonds
was clearly relied upon by the Liquidator, and Strategic has
failed to demonstrate error on this basis for denying its claims.

In sum, on our de novo review, we conclude that Strategic
has failed to comply with the express conditions found in each
of the four lease bonds while the lease bonds were in effect.
Accordingly, the Liquidator, the referee, and the district court
correctly concluded that Strategic was not entitled to payment
under any of the lease bonds. Having determined that Strategic’s
claims were properly denied for failure to comply with the
express conditions of the lease bonds, we need not address
Strategic’s remaining assignments of error.

CONCLUSION
The referee and the district court correctly denied Strategic’s
claims because Strategic failed to satisfy the conditions set forth
in the lease bonds before the lease bonds were canceled. The
judgment of the district court is affirmed.
. AFFIRMED.
McCormack, J., not participating.

121

STATE OF NEBRASKA EX REL. L. Tim WAGNER, DIRECTOR OF
INSURANCE OF THE STATE OF NEBRASKA, APPELLEE, V.
Amwest SuRETY INSURANCE COMPANY, APPELLEE,
AND SUNHOUSE INTERNATIONAL, INC.,

CLAIMANT, APPELLANT.

738 N.W.2d 813,

Filed August 17, 2007. No. S-06-049.

Robert F. Craig, P.C., for appellant.

John H. Binning, Robert L. Nefsky, and Jane F. Langan, of
Rembolt Ludtke, L.L.P., for appellee L. Tim Wagner.

Heavican, C.J., WRriGHT, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

McCormack, J.
NATURE OF CASE
This is an appeal from an insurer liquidation proceed-
ing under the Nebraska Insurers Supervision, Rehabilitation,

122 a

and Liquidation Act (the Act).' Sunhouse International, Inc.
(Sunhouse), appeals the district court’s approval of a down-
grade of Sunhouse’s claim against Amwest Surety Insurance
Company (Amwest) to a class 6 late-filed claim.” Sunhouse did
not receive actual notice of the liquidation proceedings until
after the claim bar date. According to Sunhouse, despite the fact
that the liquidator’s file clearly contained Sunhouse’s corporate
address, the liquidator sent notice of the liquidation proceedings
only to Sunhouse’s former attorneys. Sunhouse asserts that such
notice was insufficient under § 44-4822(1)(d) of the Act, which
states that the liquidator shall give notice of the liquidation by
first-class mail to all “persons known or reasonably expected to
have claims against the insurer . . . at their last-known address
as indicated by the records of the insurer.”

BACKGROUND

Sunhouse’ 's claim against Amwest stems from a 1996 sub-
contract performance bond and subcontract labor and material
bond which Amwest provided for Consolidated Techniques, Inc.
(Consolidated), insuring its work relating to the construction of
an elementary school in Miami, Florida. Sunhouse was a general
contractor for the job and had hired Consolidated to do certain
electrical work. Consolidated left the project before comple-
tion in August 1997, on the ground that it had not been fully
paid. Alleging breach of contract, Sunhouse filed suit against
Consolidated in Florida in April 1998. Sunhouse originally lost
the suit, but the Florida Court of Appeals reversed the judgment
and remanded the cause with directions to enter judgment in
favor of Sunhouse and to determine further damages and costs.?
Judgment in favor of Sunhouse was eventually entered in the
amount of $423,471.16.

The Nebraska district court’s order to liquidate Amwest was
issued on June 7, 2001, during the pendency of the appeal of
Sunhouse’s Florida suit. A claim bar date for the liquidation

1 Neb. Rev. Stat. §§ 44-4801 to 44-4862 (Reissue 1998).
2 See § 44-4842(6).

3 See Sunhouse Const., Inc. v. Amwest Surety Ins., 841 So. 2d 496 (Fla. App.
2003). :

ee 123
|

proceedings was set for June 7, 2002, such that any claim filed
after that date would be considered late filed. Affidavits by the
vice president of Sunhouse and by Sunhouse’s attorney reflect
that Sunhouse did not receive actual notice of the liquidation.

As will be set forth in further detail in our analysis, Amwest’s
records contain Sunhouse’s correct corporate address at 363
Granello Avenue, Coral Gables, Florida. Amwest’s records also
contain the address of attorneys who, according to Sunhouse,
no longer represented Sunhouse at the time of the liquidation
proceedings. The address for these attorneys was found in corre-
spondence dating from the early years of the Florida litigation.

There is no dispute that Horizon Business Resources (Horizon),
on behalf of the liquidator, sent notice to the attorneys shown in
Amwest’s records. The evidence is in dispute, however, as to
whether the liquidator ever sent notice directly to Sunhouse at
its Granello Avenue address.

Sometime in the spring of 2003, an attorney who represented
Amwest and Consolidated in the Florida litigation advised
Sunhouse’s attorneys in Florida that Amwest was in liquidation
in Nebraska. Soon thereafter, Sunhouse filed a proof of claim
against Amwest in the Nebraska liquidation proceedings.

The liquidator informed Sunhouse that the claim would be
considered a class 6 late-filed claim because notice had been
sent to Sunhouse’s attorneys of record. Sunhouse disputed this
determination, and in accordance with § 44-4839, the liquidator
asked the district court for a hearing on the disputed claim. The
district court referred the matter to a court-appointed referee and
set forth procedures specifying that the hearing would consist of
the submission of: the liquidator’s claim file and other supportive
written evidence, along with legal arguments. The referee con-
cluded, “The Hearing Record supports the finding that timely
notices were sent to Sunhouse . . . at its business address shown
in the records of Amwest.” It is unclear from the report to what
“business address” the referee was referring. The referee recom-
mended that the class 6 designation be upheld.

Sunhouse took exception to the referee’s report, and a hearing
was held before the district court, which received into evidence
the claim file and several affidavits that had been considered by
the referee. The court stated it would accept and approve the

124 De

referee’s determination if supported by competent, material, and
substantive evidence appearing in the record. The district court
ultimately found that timely notices were sent to Sunhouse at
the 363 Granello Avenue address. In its conclusion, the district
court stated that even if Sunhouse were correct that notice was
sent only to the attorneys listed in the Amwest file, such notice
was sufficient. The district court approved and adopted the
teferee’s report and upheld the liquidator’s class 6 designation
of Sunhouse’s claim. Sunhouse appeals.

ASSIGNMENT OF ERROR
Sunhouse assigns that the district court erred in approving the
liquidator’s classification.

STANDARD OF REVIEW

Hl Before addressing the merits of the dispute, we must first
determine our standard of review. In this case, whether the liq-
uidation proceedings lie in law or equity is decisive. Although
in many contexts the traditional distinctions between law and
equity have been abolished, whether an action is one in equity
or one at law controls in determining an appellate court’s scope
of review.*

HB Whether a particular action is one at law or in equity
is determined by the essential character of a cause of action
and the remedy or relief it seeks.> We have characterized insur-
ance liquidation proceedings under the prior statutory scheme
as judicial in nature and conducted in a court of equity.6 The
equitable character of such proceedings is reflected in the lan-
guage of the current Act. Its stated purpose is the protection of
the interests of the insureds, claimants, creditors, and the public
through various means, including “[e]quitable apportionment

4 Dillon Tire, Inc. v. Fifer, 256 Neb. 147, 589 N.W.2d 137 (1999).

5 See id.

6 See, Clark v. Lincoln Liberty Life Ins. Co., 139 Neb. 65, 296 N.W. 449
(1941); State, ex rel. Good, v. National Old Line Life Ins. Co., 129 Neb. 473,

261 N.W. 902 (1935); State v. Farmers & Merchants Ins. Co., 90 Neb. 664,
134 N.W. 284 (1912).

of any unavoidable loss.”” A liquidation plan submitted for
court approval “may prefer the claims of certain insureds and
claimants over creditors and interested parties as well as other
insureds and claimants, as the director finds to be fair and equi-
table considering the relative circumstances of such insureds
and claimants.”* The Act further provides for “[e]quitable allo-
cation of disbursements to each of the guaranty associations and
foreign guaranty associations entitled thereto.”® There is no pro-
vision in the current Act limiting the scope of appellate review
of orders entered by the district court. We conclude that this
proceeding under the Act is equitable in nature and, therefore,
reviewable de novo on the record.’

ANALYSIS

Sunhouse’s primary contention is that the liquidator failed to
comply with the Act’s notice provisions. Section 44-4822(1)(d)
states that the liquidator shall give or cause to be given notice
of the liquidation order as soon as possible “[bly first-class
mail to all persons known or reasonably expected to have
claims against the insurer, including all policyholders at their
last-known address as indicated by the records of the insurer.”
(Emphasis supplied.) “If notice is given in accordance with
[§ 44-4822(4)], the distribution of assets of the insurer . . . shall
be conclusive with respect to all claimants whether or not they
receive actual notice.”

Hl We agree with Sunhouse that in a pending liquidation
proceeding, when notice is not properly given in accordance
with § 44-4822, a claimant should not be penalized for failing
to timely file a claim in the liquidation proceeding of which the
claimant was unaware. Section 44-4822(2) states that “[nJotice
to potential claimants under subsection (1) of this section shall
require claimants to file with the liquidator their claims together

7 § 44.4801(4).

8 § 44-4818(6)(a).

> § 44-4834(c),

1 See Dillon Tire, Inc. v. Fifer, supra note 4.

8 44.4822(4).

126 Le

with proper proofs thereof under section 44-4836 on or before a
date the liquidator shall specify in the notice.” Although the Act
does not specifically set forth the consequences of a failure to
provide notice under § 44-4822, it follows that if statutory notice
“shall require claimants to file,” then lack of notice does not
require such filing. This has been the approach taken by other
jurisdictions that have considered the effect of a liquidator’s
failure to comply with the statutory notice requirements of insur-
ance liquidations.”

Hl We also agree that if the liquidator’s file reflects the
potential claimant’s direct address, then mailing a notice to
attorneys listed in correspondence between the claimant and the
insurance company from several years previous does not satisfy
§ 44-4822. The statute specifies that notice must be mailed to
the last known address of “all persons known or reasonably
expected to have claims” and does not provide that notice can be
sent to those persons “or their representatives.” If the liquidator,
through the records of the company in liquidation, has the direct
address of the persons described in § 44-4822, then it is not an
onerous requirement to send notice to that address.

Thus, we now consider the record to determine whether the
liquidator in this case had Sunhouse’s corporate address in
Amwest’s records. The district court stated that “the last known
address of Sunhouse as indicated by the records of Amwest was
‘clo Siegfried, Rivera, Lerner, De La Torre & Sobel.’” This is
the law firm, located at 201 Alhambra Circle, Suite 110, Coral
Gables, Florida, which Sunhouse states no longer represented it
at the time of the notices. Our review of the record shows that
Amwest’s file contains correspondence from 1997 and 1998
showing the address of the Siegfried, Rivera, Lerner, De La
Torre, and Sobel law firm. But, in addition, Amwest’s records
contain numerous letters of correspondence between Sunhouse
and Amwest showing Sunhouse’s correct corporate address at
363 Granello Avenue. In fact, the file contains several letters

1 See, Matter of Transit Cas. Co., 79 N.Y.2d 13, 588 N.E.2d 38, 580 N.Y.S.2d
140 (1992); Middleton v. Imperial Ins. Co., 34 Cal. 3d 134, 666 P.2d 1, 193
Cal. Rptr. 144 (1983); State v. United Physicians Ins. Risk Ret., 958 S.W.2d
348 (Tenn. App. 1997).

Ll 127
be

sent by Amwest to Sunhouse at the Granello Avenue address.
We conclude that Sunhouse’s “last-known address as indicated
by the records of the insurer” was Sunhouse’s corporate address
at 363 Granello Avenue.® The liquidator had an obligation to
send notice to that address.

Whether notice was in fact sent by the liquidator to Sunhouse’s
corporate address is the main point of contention between the
parties. We find it helpful to set forth the relevant evidence on
this issue in its entirety and in chronological order.

The record shows that in an internal e-mail of Horizon, dated
May 5, 2003, a Consolidated employee advised that Sunhouse
was disputing proper notice, but that after reviewing the “master
mailing list,’ it was clear that notice was sent to Sunhouse’s
previous attorney of record. The employee concluded that
Sunhouse’s claim should be classified as late, because Horizon
“did everything we could under the circumstances.” The “master
mailing list” does not appear in the record.

On June 20, 2003, a letter was sent from Horizon to Sunhouse’s
current attorney, in response to Sunhouse’s objection to its late-
filed classification. Horizon again justified the class 6 designa-
tion by explaining that notice was sent to Sunhouse’s attorneys
of record, stating, “If that firm was no longer representing
Sunhouse, and chose not to forward the [proof of claim] to its
(prior) client or the new attorney of record, that fact was unknown
and uncontrollable by Amwest’s Liquidator.” That same date, an
internal note to Horizon’s file states that after “reviewing the
complete file, and checking in Amwest . . . records . . . notice
of liquidation . . . was timely sent to the principal’s counsel on
record in our file.” Correspondence dated May 17, 2004, again
recommends that Sunhouse’s claim be considered late filed
because notice was sent to Sunhouse’s counsel, as reflected by
the records of Amwest.

It was not until July 2005 that evidence was presented indicat-
ing notice for Sunhouse was sent to anyone other than its previ-
ous attorneys of record. That evidence consists entirely of the
affidavit of Marnell Land. We quote that affidavit in full:

13 See § 44-4822(1)(d).

1. 1am an employee of the Special Deputy Liquidator of
Amwest Surety Insurance Company (“Amwest”). I have per-
sonal knowledge of the matters addressed in this Affidavit.
Tam a custodian of the records prepared and maintained in
the ordinary course of Amwest and Amwest’s liquidation
from which the information contained in this Affidavit was
derived. These records were made at or near the time of the
events they record.

2. Part of my duties [is] to investigate the handling
of legally required notices and other communications to
claimants and other interested parties. I have become famil-
iar with the process that the liquidation has employed in
assuring that all Notices of Bond and Policy Cancellation,
Notices of Legal Rights (Notices) and Proofs of Claim
(POCs) were mailed to the parties, including Amwest
policyholders (the “Interested Parties”), who may have an
interest in the liquidation of Amwest.

3. I have investigated the POCs and Notices mailed to
Interested Parties regarding Bond # 030001648 whose prin-
cipal is Consolidated Techniques, Inc. and whose obligee is
Sunhouse International, Inc. (the “Sunhouse Parties”).

4. Between June 21, 2001 and June 28, 2001, a Notice of
Cancellation of Bond and Policy Cancellation and a Notice
of Legal Rights [were] mailed to the following Sunhouse
Parties: Consolidated Techniques, Inc. P.O. Box 823266,
South Florida, FL 33082; Sunhouse International, Inc., 363
Granello Avenue, Coral Gables, FL 33146; Collinsworth,
Alter, Nielson, Fowler & Dowling, Inc., 5979 NW 151st
Street, Suite 105, Miami Lakes, FL 33014. All of said
notices were mailed to the last known addresses of the
addressees as indicated by the records of Amwest.

5. Between October 19, 2001 and October 23, 2001,
POCs were mailed to the following Sunhouse Parties:
Consolidated Techniques, Inc. P.O. Box 823266, South
Florida, FL 33082; Sunhouse International, Inc., 363
Granello Avenue, Coral Gables, FL 33146; Collinsworth,
Alter, Nielson, Fowler & Dowling, Inc. 5979 NW 151st
Street, Suite 105, Miami Lakes, FL 33014; Sunhouse
Construction, c/o Siegfried Rivera Lerner De La Torre &

Sobel, 201 Alhambra Circle, Suite 110, Coral Gables, FL
33134. All of said notices were mailed to the last known
addresses of the addressees as indicated by the records
of Amwest.

No exhibits were attached to the affidavit.

At this juncture, we must consider the burden of proof for
a disputed claim in liquidation proceedings. The Act is silent
on this question. Sunhouse offered affidavits of its vice presi-
dent and of an attorney whose firm represented Sunhouse in
the Florida litigation from January 2002 to January 2005. Both
testified that based on their personal knowledge, notice of
Amwest’s liquidation was not received either by Sunhouse at
its corporate address or through its attorneys during the relevant
time period.

Hl Sunhouse could not do more to prove that the liquidator
failed to send it notice. We have said that even in cases where
the party does not have the general burden of proof, the burden
to produce evidence will rest upon that party when the party
“possesses positive and complete knowledge concerning the
existence of facts which the party having that burden is called
upon to negative, or where for any reason the evidence to prove
a fact is chiefly, if not entirely, within [the party’s] control.”"* We
conclude that under the circumstances of this case, the burden
fell to the liquidator to prove that the notice requirements of
§ 44-4822 had been met.

Land’s 2005 affidavit was the only evidence presented by
the liquidator to suggest that notice was mailed to Sunhouse’s
corporate address. In contrast, several documents from the
liquidator’s file from 2003 and 2004 reflect that after Sunhouse
complained of not receiving notice, Horizon reviewed “the
complete file” and determined that notice was sent to the offices
of Siegfried, Rivera, Lerner, De La Torre and Sobel. If there
was evidence in Amwest’s file that notice had also been sent
directly to Sunhouse at its corporate address, it is curious that
this was not mentioned at that time.

4 Fitzsimmons v. Gilmore, 134 Neb. 200, 206, 278 N.W. 262, 265 (1938). See,
also, Central Nat. Bank v. First Nat. Bank, 115 Neb. 472, 216 N.W. 302
(1927) (applying this principle to bank receiverships).

130 . a

We are called upon, in our de novo review, to judge the credi-
bility of Land’s affidavit. In light of the other evidence presented,
we find the affidavit insufficient proof that, in accordance with
§ 44-4822, notice was sent to Sunhouse’s last known address
as reflected in Amwest’s records. Land asserts that the affidavit
is based on personal knowledge, but she does not explain what
that knowledge is. Land later states that she is the custodian of
the Amwest liquidation records “from which the information
contained in this affidavit was derived.” If Land’s knowledge is
based only upon a review of the records, as opposed to having
personally witnessed the preparation or mailing of the notices,
then the records themselves would be the best evidence of the
facts in issue. We have no explanation as to why the relevant
portions of the records referred to in the affidavit are not in
evidence.

The statement made in Land’s affidavit is simply too lacking
in specificity and foundation, and was made too late in these
proceedings, to contradict Sunhouse’s evidence that it did not
receive the notice required by law.

CONCLUSION
Because the liquidator failed to sustain its burden to prove the
required statutory notice was sent, we reverse the district court’s
decision to uphold the late-filed classification.

Ricuarp T. BELLINO, ALSO KNOWN AS RICH BELLINO, AND
La Vista Keno, INC., APPELLANTS AND CROSS-APPELLEES,
v. McGratu Norra Mutuin & Kratz, PC LLO,

ET AL., APPELLEES AND CROSS-APPELLANTS.

738 N.W.2d 434

REVERSED.

Filed August 17,2007. No. S-06-130.

132

David A. Domina and Claudia L. Stringfield-Johnson, of
Domina Law Group, P.C., L.L.O., for appellants.

John R. Douglas and David A. Blagg, of Cassem, Tierney,
Adams, Gotch & Douglas, for appellees.

Heavican, C.J., WricHT, ConNnoLty, GERRARD, STEPHAN, and
Miter-Lerman, JJ.

Wricut, J. .

I. NATURE OF CASE
Richard T. Bellino sought legal advice concerning the sever-
ance of his business relationship with Robert L. Anderson and
La Vista Lottery, Inc. (Lottery). As a result of Bellino’s actions
in reliance on such advice, Anderson and Lottery sued and
obtained a judgment against Bellino. Based on this judgment,
the court awarded monetary damages and a constructive trust in
favor of Anderson. Bellino brought the present action for profes-
sional negligence against the law firm McGrath North Mullin
& Kratz, PC LLO, and two of its attorneys, James D. Wegner
and William F. Hargens (collectively McGrath North). The jury
returned a $1.6 million verdict in favor of Bellino. The district

court sustained McGrath North’s motion for judgment notwith-
standing the verdict in part and reduced the award to $229,036.40.
Bellino appeals, and McGrath North cross-appeals.

Il. SCOPE OF REVIEW

Hl The point at which a statute of limitations begins to run
must be determined from the facts of each case, and the decision
of the district court on the issue of the statute of limitations nor-
mally will not be set aside by an appellate court unless clearly
wrong. Zion Wheel Baptist Church y. Herzog, 249 Neb. 352, 543
N.W.2d 445 (1996).

Hl Concerning the overruling of a motion for a directed
verdict made at the close of all the evidence, appellate review
is controlled by the rule that a directed verdict is proper only
when reasonable minds can draw but one conclusion from the
evidence, where an issue should be decided as a matter of law.
Fales v. Norine, 263 Neb. 932, 644 N.W.2d 513 (2002).

HM «(On a motion for judgment notwithstanding the ver-
dict, the moving party is deemed to have admitted as true all
the relevant evidence admitted that is favorable to the party
against whom the motion is directed, and, further, the party
against whom the motion is directed is entitled to the benefit
of all proper inferences deducible from the relevant evidence.
Munstermann v. Alegent Health, 271 Neb. 834, 716 N.W.2d 73
(2006). To sustain a motion for judgment notwithstanding the
verdict, the court resolves the controversy as a matter of law and
may do so only when the facts are such. that reasonable minds
can draw but one conclusion. Id.

HBA trial court’s ruling in receiving or excluding an expert’s
testimony which is otherwise relevant will be reversed only
when there has been an abuse of discretion. Epp v. Lauby, 271
Neb. 640, 715 N.W.2d 501 (2006).

If. FACTS

1. UNDERLYING CasE
This action for professional negligence arose out of the legal
representation given to Bellino with regard to the severing of
his business relationship with Anderson and Lottery. Bellino
was the president, a director, and a 50-percent shareholder of

Lottery. Bellino’s actions in severing this relationship resulted in
litigation, the facts of which are reported in Anderson v. Bellino,
265 Neb. 577, 658 N.W.2d 645 (2003). Some of those facts are
recounted here for the sake of providing helpful background.

In 1989, the city of La Vista sought bids for the operation of
a keno-type lottery for the city. Bellino and Anderson submitted
a bid for the La Vista keno contract. In April 1989, Bellino and
Anderson formed Lottery, a Nebraska corporation, for the pur-
pose of operating the keno parlor. Bellino and Anderson each
owned 50 percent of the shares of stock of Lottery, and both
were officers and directors of the corporation.

Lottery entered into a keno operation contract with La Vista
on May 16, 1989. The fixed term of the contract was extended
through July 31, 1998, with a provision that the term would
continue indefinitely beyond that term until one party served 60
days’ written notice of termination upon the other.

Initially, Bellino and Anderson received salaries from Lottery.
In 1993, following the advice of an accountant, they stopped
receiving salaries. There was no express agreement between
Bellino and Anderson as to the amount of time that each would
devote to the lottery business. From 1994 to 1998, Lottery
employed general managers, keno managers, supervisors, and
keno writers.

In December 1997, Bellino and Anderson discussed the fact
that Lottery’s keno contract with La Vista was set to expire on
July 31, 1998. Bellino told Anderson that he would meet with
Anderson after the holidays to discuss Lottery’s course of action.
Shortly thereafter, in early 1998, Bellino sought legal advice
from his attorneys concerning his desire to end the business
arrangement with Anderson yet continue the keno operation.”

In a letter to Anderson dated February ‘26, 1998, Bellino
stated that he felt he was doing more than his share of the work.
Bellino indicated he no longer intended to be associated with
Lottery after the corporation’s keno contract expired on July
31, 1998. In a letter dated April 21, 1998, Anderson’s attorney
informed Bellino that the keno contract with the city of La Vista
was a corporate opportunity. The letter expressed Lottery’s
desire to have Bellino cooperate with Lottery in bidding for the
new contract.

During the first quarter of 1998, Bellino met with La Vista’s
city administrator, Cara L. Pavlicek. After her conversation with
Bellino, Pavlicek reviewed the contract and recommended to
the city council that the keno contract be put up for competi-
tive bid. On April 21, 1998, the La Vista City Council voted to
accept Pavlicek’s recommendation and put the keno contract up
for bids. On May 4, Bellino’s attorney wrote to Anderson and
Lottery, informing them that Bellino had no interest in trying to
resolve matters with Lottery and would not bid for the contract
as part of Lottery.

Based on the advice of his attorney, Bellino formed La Vista
Keno, Inc. (Keno), of which he was the sole shareholder. Bellino
prepared and submitted a bid on behalf of Keno for the keno
contract. The city awarded the new keno contract to Keno on
Taly 24.

On July 29, 1998, Anderson and Lottery sued Bellino and’
Keno, alleging that Bellino had breached a fiduciary duty he
owed to Lottery as an officer, director, and shareholder of
Lottery by forming Keno and bidding on the La Vista keno
contract. Anderson and Lottery sought the imposition of a con-
structive trust on Keno’s business operations for the benefit of
Anderson and Lottery.

Following a trial on May 9, 2000, the district court concluded
that Bellino and Keno had obtained the contract with La Vista
in breach of Bellino’s fiduciary duty to Lottery and that the
appropriate remedy was the imposition of a constructive trust for
the benefit of Anderson and Lottery. The court further ordered
Bellino to pay Anderson and Lottery $644,992.63, represent-
ing various items, including rents, profits, and benefits result-
ing from Bellino and Keno’s receiving the keno contract from
La Vista.

Bellino appealed to this court. On March 28, 2003, we
affirmed the district court’s order imposing a constructive trust
upon Keno for the benefit of Anderson and Lottery, as well as
the monetary judgment entered against Bellino.

2. PRESENT ACTION FOR PROFESSIONAL NEGLIGENCE
Bellino was represented in the above-described proceedings
by attorneys Wegner and Hargens of McGrath North. Bellino

136 Es

relied on the attorneys’ advice when he formed Keno and
submitted a bid for the keno contract with La Vista. These
attorneys continued to represent him throughout the resulting
litigation with Anderson, including at trial, during initial settle-
ment discussions, and on appeal. The attorneys withdrew from
representing Bellino on May 27, 2003. Bellino retained new
counsel and ultimately settled his dispute with Anderson for
$2,427,729.76. The settlement payment was made to acquire
Anderson’s share in Keno that Anderson had acquired through
the constructive trust.

Bellino and Keno (collectively Bellino) commenced this action
for professional negligence against McGrath North, Wegner,
and Hargens on December 3, 2003, in the district court for
Douglas County. Bellino alleged that McGrath North commit-
ted legal malpractice because it failed to fully and fairly advise
him that he could be liable for a breach of fiduciary duty by
forming Keno and bidding for the La Vista keno contract while
still associated with Anderson and Lottery. Bellino alleged that
McGrath North failed to advise him that a court could impose
a constructive trust in favor of Anderson and Lottery on Keno’s
profits from the La Vista keno contract. He requested judgment
against McGrath North for all damages proximately caused by
the attorneys’ professional negligence.

After a trial, the jury awarded Bellino $1.6 million in dam-
ages. McGrath North moved for judgment notwithstanding the
verdict or, in the alternative, for a new trial.

McGrath North asserted 12 grounds for judgment notwith-
standing the verdict that the district court restated into four: (1)
McGrath North’s legal advice to Bellino did not constitute mal-
practice because the attorneys advised him on an unsettled point
of Nebraska law, (2) McGrath North’s legal advice was not the
proximate cause of any damages, (3) Bellino’s claim was barred
by the statute of limitations, and (4) the jury verdict of $1.6 mil-
lion in favor of Bellino was contrary to the law and evidence.

(a) Rejection of Argument Regarding
Unsettled Point of Law
McGrath North claimed that Nebraska case law provided
an “undefined exception” to the fiduciary duty rule prohibiting

corporate officers and directors from competing against the
corporation of which they serve. McGrath North argued that it
attempted to qualify Bellino for this exception by advising him
to take an “above-board” approach when he incorporated Keno
and submitted a bid for the La Vista keno contract in competi-
tion with Lottery. It advised Bellino to cooperate with Anderson
in submitting a bid on behalf of Lottery even while preparing a
bid on behalf of Keno, to continue to allow Lottery to rent space
in a building owned by Bellino if Lottery successfully retained
the keno contract, and to refrain from submitting a competing
bid in the name of Bellino’s wife.

McGrath North asserted that even though it was unsuccess-
ful in qualifying Bellino for the “undefined exception” to the
fiduciary duty rule, the attorneys had not committed malpractice.
The district court found that the evidence, viewed in a light most
favorable to Bellino, did not show that the attorneys informed
Bellino about any “undefined exception” to the rule prohibit-
ing an officer or director from competing against his current
corporation.

(b) Finding of Proximate Cause

McGrath North next argued that its legal advice was not the
proximate cause of any damages to Bellino because there was no
evidence of any legally permissible alternative that could have
been recommended and pursued other than a buyout. McGrath
North argued that the trial evidence showed that the only way
that Bellino could have terminated his business relationship
with Anderson and retained the La Vista keno contract was to
buy out Anderson. According to McGrath North, a buyout was
not successful because Bellino did not want to pay the amount
Anderson had demanded.

During the trial, Jane Friedman, a retired law professor and
one of Bellino’s experts, testified that McGrath North could
have advised Bellino to file an action for judicial dissolu-
tion of Lottery as provided by Nebraska law. McGrath North
argued that judicial dissolution was not a viable alternative. It
claimed there was no evidence of a deadlock between Bellino
and Anderson or in the management of the corporate affairs that
caused or threatened an irreparable injury to Lottery. Construing

138 Es

the evidence in favor of Bellino, the district court found that
reasonable minds could conclude that there was a basis for
judicial dissolution. The evidence showed that Bellino no longer
wanted to be in business with Anderson and sought legal advice
to terminate their relationship.

(c) Finding That Bellino’s Claim Was Timely Filed

Next, McGrath North argued that Bellino’s claim was barred
as a matter of law by the 2-year limitations period applicable to
claims for professional negligence. McGrath North had advised
Bellino concerning Keno between February and July 1998. It
argued that Bellino’s claim was reasonably discoverable on May
9, 2000, when the district court ruled that Bellino had breached
his fiduciary duties as a corporate officer of Lottery. McGrath
North contended that Bellino should have reasonably discov-
ered that its advice had been negligent when the judgment was
entered by the district court and, therefore, that he should have
brought his claim no later than May 9, 2001.

The district court rejected this argument and applied the con-
tinuous representation rule. Under this rule, the statute of limi-
tations for a claim of professional negligence is tolled if there
is a continuity of the relationship and services for the same or
related subject matter after the alleged professional negligence.
The evidence showed that Bellino relied on McGrath North’s
advice when he formed a new corporation and bid for the La
Vista keno contract. The court found that Bellino continued to
rely on McGrath North’s legal advice throughout the ensuing liti-
gation with Anderson. Bellino did not terminate the professional
relationship with McGrath North until after this court issued its
opinion in Anderson v. Bellino, 265 Neb. 577, 658 N.W.2d 645
(2003). Construing the evidence and the inferences therefrom
in Bellino’s favor, the court determined that reasonable minds
could conclude that a continuous relationship existed between
Bellino and McGrath North from 1998 until May 27, 2003, that
prevented him from discovering the legal malpractice until after
the relationship was terminated. The court thus concluded that
McGrath North was not entitled to judgment notwithstanding
the verdict based on the statute of limitations.

(d) Reduction of Damages Award

McGrath North also asserted that the evidence did not sup-
port the $1.6 million jury verdict. It claimed that the only dam-
ages Bellino sustained as a result of the attorneys’ legal advice
were the legal and accounting fees incurred while defending the
lawsuit filed by Anderson and Lottery.

During the trial, the jury heard testimony from two expert
witnesses regarding Bellino’s damages. Leo J. Panzer, a certi-
fied public accountant, testified that Bellino’s damages exceeded
$3.1 million. McGrath North presented testimony from another
certified public accountant, who said that Bellino did not suf-
fer any damages because he bought out Anderson’s interest in
Keno, which interest Anderson acquired through the constructive
trust. McGrath North argued that Bellino suffered no damages
by settling the matter with Anderson because Bellino received a
valuable asset in return for the settlement payment.

In sustaining part of McGrath North’s motion for judg-
ment notwithstanding the verdict, the court found that McGrath
North’s negligent advice resulted in the filing of a lawsuit
against Bellino for breach of fiduciary duty. Because Bellino
was forced to spend a total of $229,036.40 in legal and account-
ing fees to defend the lawsuit, the court held that McGrath North
was liable to Bellino for that amount.

However, the court concluded that the evidence was insuf-
ficient to support the remainder of the $1.6 million awarded by
the jury. Evidence showed that by settling with Anderson for
$2,427,729.76, Bellino had acquired Anderson’s constructive
interest in the keno operation. To achieve Bellino’s goals of
terminating the business relationship with Anderson and retain-
ing the La Vista keno contract, the court concluded that Bellino
had no other option but to buy out Anderson’s share in the keno
operation. Stated another way, the court concluded that a buyout
was inevitable, even if McGrath North had not advised Bellino
in the manner it did. The court thus concluded that the settle-
ment payment was not proximately caused by McGrath North’s
negligence and modified the judgment to $229,036.40, reflect-
ing only the amount Bellino paid in the Anderson litigation for
legal and accounting fees.

140 Le

IV. ASSIGNMENTS OF ERROR

In his appeal, Bellino claims the trial court erred in partially
sustaining McGrath North’s motion for judgment notwithstand-
ing the verdict and reducing the award of damages.

McGrath North asserts 11 assignments of error in its cross-
appeal, which we summarize in the following manner: The trial
court erred (1) in finding that Bellino’s action for professional
negligence was timely filed under the applicable statute of limi-
tations; (2) in failing to hold as a matter of law that the conduct
of McGrath North was not negligent and did not result in loss
to Bellino; (3) in allowing Bellino’s witnesses to discuss and
the jury to decide whether a sufficient basis existed for judicial
dissolution of Lottery, because ‘that determination was a ques-
tion of law for the district court; and (4) in overruling McGrath
North’s motion for new trial.

V. ANALYSIS
1. McGratu Nortu’s Cross-APPEAL

(a) Timeliness of Bellino’s Claim

McGrath North argues that Bellino’s action was barred by
the applicable statutes of limitations. The limitations period on
a claim for professional negligence is 2 years from the date of
the alleged act or omission; however, if the cause of action is
not discovered and could not be reasonably discovered within
such 2-year period, then the action may be commenced within
1 year from the date of discovery. See Neb. Rev. Stat. § 25-222
(Reissue 1995). The trial court applied the continuous represen-
tation rule and found that Bellino timely filed his claim against
McGrath North.

McGrath North asserts that Bellino’s claim for legal malprac-
tice was reasonably discoverable on May 9, 2000, when the trial
court entered judgment in Anderson vy, Bellino, 265 Neb. 577,
658 N.W.2d 645 (2003), that Bellino had violated his fiduciary
duty as a corporate officer of Lottery. McGrath North thus
asserts that Bellino should have filed this action no later than
May 9, 2001. We disagree.

The point at which a statute of limitations begins to run must
be determined from the facts of each case, and the decision of

the district court on the issue of the statute of limitations nor-
mally will not be set aside by an appellate court unless clearly
wrong. Zion Wheel Baptist Church v. Herzog, 249 Neb. 352,
543 N.W.2d 445 (1996).

Il A claim for professional negligence accrues and the
statute of limitations begins to run at the time of the act or
omission which is alleged to be the professional negligence
that is the basis for the claim. See Zion Wheel Baptist Church
v. Herzog, supra. A statute of limitations may begin to run at
some time before the full extent of damages has been sustained.
Id. Bellino’s claim accrued in 1998, when the attorneys advised
him to form Keno and bid for the La Vista keno contract.

Hl If a claim for professional negligence is not to be consid-
ered time barred, the plaintiff must either file within 2 years of
an alleged act or omission or show that its action falls within
the exceptions of § 25-222. See Zion Wheel Baptist Church v.
Herzog, supra. Because Bellino did not file a complaint against
McGrath North until December 3, 2003, his claim would be
barred unless the limitations period was tolled for some reason.
In order for a continuous relationship to toll the statute of limi-
tations regarding a claim for malpractice, there must be a con-
tinuity of the relationship and services for the same or related
subject matter after the alleged professional negligence. Id.

The evidence showed that during the time McGrath North
represented Bellino, he continued to reasonably rely on the
attorneys” legal advice. Bellino relied on the advice of his attor-
neys in forming Keno and bidding on the La Vista keno con-
tract. He relied on the attorneys’ advice when he was sued by
Anderson and Lottery and lost at trial. And he continued to rely
on the attorneys’ advice throughout the appeal process, including
the attorneys’ suggestion that Bellino would do better on appeal
than by accepting a $1.5 million settlement with Anderson.
The professional relationship continued until shortly after this
court issued its opinion on March 28, 2003, in Anderson v.
Bellino, supra. Bellino terminated his professional relationship
with McGrath North on May 27. He filed a complaint against
McGrath North on December 3. We conclude that the continu-
ous representation rule applies and that the trial court did not err
in determining that this action was timely filed.

(b) Professional Negligence

On cross-appeal, several of McGrath North’s arguments con-
cern the district court’s refusal to hold as a matter of law that the
law firm’s conduct did not constitute professional negligence.
Specifically, McGrath North argues that the jury verdict was
contrary to the evidence and the law, and it contests the court’s
overruling of its motions for directed verdict and new trial and
overruling in part its motion for judgment notwithstanding
the verdict. We address McGrath North’s arguments in a gen-
eral manner by considering whether any evidence supported a
finding that McGrath North committed professional negligence
while representing Bellino.

(i) Negligent Conduct

In summary, McGrath North argues that it advised Bellino in
accordance with Nebraska case law that provides an “undefined
exception” to the fiduciary duty rule prohibiting corporate offi-
cers and directors from competing against the corporation they
serve. The law firm asserts that it did not commit legal malprac-
tice even though it was unsuccessful in qualifying Bellino for
this “exception” because it cannot be liable for making an error
in judgment over an unsettled point of law.

The district court determined that the evidence in a light most
favorable to Bellino established that he was never informed
about any exception to the fiduciary duty rule and that when
looking at all the evidence in a light most favorable to Bellino,
reasonable minds could conclude that McGrath North com-
mitted legal malpractice in failing to inform Bellino about an
exception to the rule. We conclude that McGrath North’s argu-
ment concerning the “undefined exception” is without merit.

In Anderson v, Bellino, 265 Neb. 577, 658 N.W.2d 645
(2003), we held that Bellino breached a fiduciary duty owed
to Anderson and Lottery. The contract to operate keno in La
Vista was a corporate opportunity that Bellino, as a direc-
tor, diverted from Lottery by forming a new corporation to
bid against Lottery. See id. The issue in the present case is
whether McGrath North negligently advised Bellino, which
advice resulted in a loss to Bellino.

HB In a civil action for legal malpractice, a plaintiff alleg-
ing attorney negligence must prove three elements: (1) the
attorney’s employment, (2) the attorney’s neglect of a reason-
able duty, and (3) that such negligence resulted in and was the
proximate cause of loss (damages) to the client. Borley Storage
& Transfer Co. v. Whitted, 271 Neb. 84, 710 N.W.2d 71 (2006).
The general rule regarding an attorney’s duty to his or her cli-
ent is that the attorney, by accepting employment to give legal
advice or to render other legal services, impliedly agrees to use
such skill, prudence, and diligence as lawyers of ordinary skill
and capacity commonly possess and exercise in the performance
of the tasks which they undertake. Baker v. Fabian, Thielen &
Thielen, 254 Neb. 697, 578 N.W.2d 446 (1998).

A director or corporate officer cannot acquire an interest
adverse to that of the corporation while acting for the corpora-
tion or when dealing individually with third persons. Anderson
vy. Bellino, supra; Anderson v. Clemens Mobile Homes, 214
Neb. 283, 333 N.W.2d 900 (1983). Our opinion in Anderson v.
Clemens Mobile Homes, 214 Neb. at 288, 333 N.W.2d at 904,
contains dicta stating:

It has been held that although an officer or a director of
a corporation is not necessarily precluded from entering
into a separate business because it is in competition with
the corporation, his fiduciary relationship to the corpo-
ration and its stockholders is such that if he does so he
must prove by a preponderance of the evidence that he
did so in good faith and did not act in such a manner as to
cause or contribute to the injury or damage of the corpo-
ration, or deprive it of business; if he fails in this burden
of proof, there has been a breach of that fiduciary trust or
relationship.
This language does not provide a defense to McGrath North.

Although McGrath North asserts that it relied on this language
and in good faith believed that a situation was possible in which
an officer or director could compete with the corporation and not
breach his or her fiduciary duty, the facts in this case clearly do
not support such an argument. McGrath North claims it believed
Bellino’s best strategy was to be “up front and honest” with
Anderson when bidding against Lottery for the La Vista keno

14 —

contract and to give Lottery an opportunity to also bid on the
contract. See brief for appellees on cross-appeal at 37. None of
these actions could relieve Bellino of his fiduciary duty not to
act adversely to the corporation of which he was the president,
a director, and a 50-percent shareholder. McGrath North asserts
that Bellino’s claim for legal malpractice was based on the attor-
neys’ failure to pursue a particular strategy. And they argue that
under Nebraska law, a dispute over a choice of strategies or an
error of judgment by the attorney on unsettled law is not action-
able. The problem is there was no strategy to pursue.

Anderson v. Clemens Mobile Homes does not set
forth an “undefined exception” to the factual situation presented
in the case at bar. A director or other corporate officer can-
not acquire an interest adverse to that of the corporation while
acting for the corporation or when dealing individually with
third persons. Anderson v. Bellino, 265 Neb. 577, 658 N.W.2d
645 (2003); Anderson v. Clemens Mobile Homes, supra. An
officer or director of a corporation occupies a fiduciary rela-
tion toward the corporation and its stockholders and should
refrain from all acts inconsistent with his or her corporate
duties. Electronic Development Co. v. Robson, 148 Neb. 526, 28
N.W.2d 130 (1947).

HE In) addition, this court has held that shareholders in
a close corporation owe one another the same fiduciary duty
as that owed by one partner to another in a partnership. Russell
y. First York Sav. Co., 218 Neb. 112, 352 N,W.2d 871 (1984),
disapproved on other grounds, Van Pelt v. Greathouse, 219
Neb. 478, 364 N.W.2d 14 (1985). See, also, I. P. Homeowners
v. Radtke,5 Neb. App. 271, 558 N.W.2d 582 (1997) (holding
that stockholders in close corporation owed fiduciary duty to
corporation). Partners must exercise the utmost good faith in all
their dealings with the members of the firm and must always
act for the.common benefit of all. Bode v. Prettyman, 149 Neb.
179, 30 N.W.2d 627 (1948). A partner has a duty to refrain from
competing with the partnership in the conduct of the partner-
ship business before. the dissolution of the partnership. Neb.
Rev. Stat. § 67-424 (Reissue 2003). Accordingly, Bellino, as the
president, a director, and a shareholder in a close corporation,
had a duty to act in the best interests of Lottery. No justification

for his conduct existed in Nebraska law, and McGrath North
negligently advised Bellino to act contrary to such duty.

We reject McGrath North’s argument that its advice to Bellino
was not negligent. The trial court was correct in refusing to find
as a matter of law that McGrath North’s conduct did not consti-
tute professional negligence.

(ii) Proximate Cause

HM McGrath North claims the trial court erred in failing to
hold as a matter of law that the conduct of the attorneys was not
the proximate cause of Bellino’s damages. A proximate cause
is a cause that produces a result in a natural and continuous
sequence and without which the result would not have occurred.
Smith v. Colorado Organ Recovery Sys., 269 Neb. 578, 694
N.W.2d 610 (2005). McGrath North argues that its advice did
not proximately cause Bellino’s damages because there was no
evidence of any legally permissible alternative that could have
been recommended other than a buyout. However, the record
shows that expert witnesses for Bellino testified that, given
Bellino’s goals and the severely strained relationship between
him and Anderson, McGrath North should have considered,
among other alternatives, judicial dissolution.

Friedman, a retired law professor, testified that McGrath
North gave Bellino the wrong advice in telling him to submit the
competing bid. Friedman stated that dissolving the corporation
was an option that should have been considered. Lowell Moore,
an attorney, also testified that an action to dissolve the com-
pany was an option available to Bellino. After being instructed
on proximate cause and that the measure of damages was the
amount of loss actually sustained as a proximate result of the
attorneys’ conduct, the jury found in favor of Bellino.

HI A directed verdict is proper at the close of all the evi-
dence only when reasonable minds cannot differ and can draw
but one conclusion from the evidence, that is to say, when an
issue should be decided as a matter of law. Rod Rehm, PC. v.
Tamarack Amer., 261 Neb. 520, 623 N.W.2d 690 (2001). On
a motion for judgment notwithstanding the verdict, the mov-
ing party is deemed to have admitted as true all the relevant
evidence admitted that is favorable to the party against whom

146 Es

the motion is directed, and, further, the party against whom the
motion is directed is entitled to the benefit of all proper infer-
ences deducible from the relevant evidence. Munstermann v.
Alegent Health, 271 Neb. 834, 716 N.W.2d 73 (2006). To sustain.
a motion for judgment notwithstanding the verdict, the court
resolves the controversy as a matter of law and may do so only
when the facts are such that reasonable minds can draw but one
conclusion. Id. If there is any evidence which will sustain a find-
ing for the party against whom the motion is made, the case may
not be decided as a matter of law. Rod Rehm, PC. v. Tamarack
Amer., supra.

Giving Bellino the benefit of all proper inferences deducible
from the relevant evidence, the district court found that reason-
able minds could conclude that other legal options were avail-
able to Bellino, options which should have been suggested by
his lawyers. We conclude that the trial court did not err in refus-
ing to decide as a matter of law that McGrath North’s negligence
did not proximately cause Bellino’s loss.

(c) Testimony Regarding Action
to Dissolve Corporation

Bellino’s expert witnesses testified that McGrath North should
have considered and advised Bellino of other alternatives, includ-
ing the possibility of a dissolution action. McGrath North asserts
that the district court erroneously delegated its duty to the jury to
decide whether the uncontested facts formed a basis for Bellino
to bring a dissolution action under the dissolution statute, Neb.
Rev. Stat. § 21-20,162 (Cum. Supp. 2006). The record does not
support this assertion. The jury was not instructed to determine
whether a basis existed for dissolution but whether Bellino had
proved by the greater weight of the evidence (1) the existence
of an attorney-client relationship, (2) negligence by McGrath
North, (3) proximate cause, and (4) damages.

McGrath North also claims the district court erred in allowing
Bellino’s witnesses to discuss whether a sufficient basis existed
for judicial dissolution of Lottery, since that determination was
a question of law for the district court. It relies on Sports Courts
of Omaha v. Brower, 248 Neb. 272, 534 N.W.2d 317 (1995),
in which this court held that expert testimony concerning a

question of law is generally not admissible in evidence. In
Sports Courts of Omaha, a law professor opined that the actions
taken by an attorney on behalf of his client with regard to certain
stock constituted a disposition of collateral under the Uniform
Commercial Code. We found that because there was no dispute
as to the actions of the attorney, whether those actions consti-
tuted a disposition of collateral as contemplated in the code
was a matter of statutory interpretation, which was a question
of Jaw.

In the present case, Bellino’s experts did not interpret the
judicial dissolution statute. Friedman explained generally what
it means to dissolve a corporation. She opined that a lawyer
of ordinary skill and prudence would have researched the law,
including the statutes, and she concluded that dissolving the
corporation would have been a viable option for Bellino. Neither
did Moore attempt to interpret Nebraska law. He stated that
when the owners of a small corporation cannot agree, a dis-
solution action is a procedure available to them whereby their
interests could be divided. He opined that a dissolution action
was an option for Bellino.

In Boyle v. Welsh, 256 Neb. 118, 589 N.W.2d 118 (1999), we
held that expert testimony in an action for legal malpractice is
normally required to establish an attorney’s standard of conduct
in a particular circumstance and whether the attorney’s conduct
was in conformity therewith. The required standard of conduct is
that the attorney exercise such skill, diligence, and knowledge as
that commonly possessed by attorneys acting in similar circum-
stances. Id. Although this general standard is established by law,
the question of what an attorney’s specific conduct should be in
a particular case and whether an attorney’s conduct fell below
that specific standard is a question of fact. Id.

To determine how the attorney should have acted in a given
case, the jury will often need expert testimony describing what
law was applicable to the client’s situation. A “‘“jury cannot
rationally apply a general statement of the standard of care

unless it is aware”’ of what the common attorney would have

done in similar circumstances.” Jd. at 124, 589 N.W.2d at 124.
Testimony about the relevant law is often essential to assist the
jury in determining what knowledge is commonly possessed by

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lawyers acting in similar circumstances and whether the attorney
exercised common skill and diligence in ascertaining the legal
options available to his or her client. Attorneys represent their
clients in legal matters; thus, in an action for professional negli-
gence, the law is ingrained in the canvas upon which the picture
of the attorney-client relationship is painted for the jury.

A trial court’s ruling in receiving or excluding an expert’s tes-
timony which is otherwise relevant will be reversed only when
there has been an abuse of discretion. Epp v. Lauby, 271 Neb.
640, 715 N.W.2d 501 (2006). We conclude that the district court
did not abuse its discretion in permitting Bellino’s expert wit-
nesses to testify that a dissolution action was a viable option.

(d) Motion for New Trial

HM To be considered by an appellate court, an alleged error
must be both specifically assigned and specifically argued in the
brief of the party assigning the error. Betterman v. Department
of Motor Vehicles, 273 Neb. 178, 728 N.W.2d 570 (2007).
Although McGrath North assigns as error the overruling of its
motion for new trial, no argument is made in support of this
assignment. Thus, we do not address it.

2. BELLINO’s APPEAL: AWARD OF DAMAGES

The jury found that the negligence of Bellino’s attorneys
caused him $1.6 million in damages. The district court in part
sustained McGrath North’s motion for judgment notwithstand-
ing the verdict, concluded that the evidence did not support
the $1.6 million verdict, and reduced the award of damages to
$229,036.40, the amount Bellino paid for legal and accounting
services in defending the Anderson lawsuit. The court reasoned
that Bellino’s goals were to terminate his business relation-
ship with Anderson and retain the La Vista keno contract. In
order to attain his goals, the court found, Bellino would have
been required to buy out Anderson, even if the advice of the
attorneys had not been negligent. It therefore concluded that
the only loss to Bellino proximately caused by the negligence
of McGrath North was the lawsuit brought against him by
Anderson. Bellino appealed and has assigned the reduction of
damages as error.

In reviewing the district court’s grant of judgment notwith-
standing the jury verdict, we are guided by well-established
principles. To sustain a motion for judgment notwithstanding
the verdict, the court resolves the controversy as a matter of
Jaw and may do so only when the facts are such that reasonable
minds can draw but one conclusion. Munstermann v. Alegent
Health, 271 Neb. 834, 716 N.W.2d 73 (2006). The party against
whom the motion is directed is entitled to the benefit of all
proper inferences deducible from the relevant evidence. Id.

HM The jury was instructed that the general measure of dam-
ages in a legal malpractice action is the amount of loss actually
sustained by the claimant as a proximate result of the attorney’s
conduct. See Eno v. Watkins, 229 Neb. 855, 429 N.W.2d 371
(1988). A proximate cause is a cause that produces a result in
a natural and continuous sequence and without which the result
would not have occurred. Smith v. Colorado Organ Recovery
Sys., 269 Neb. 578, 694 N.W.2d 610 (2005).

In early 1998, Bellino sought to end his business relationship
with Anderson. Each of them was a 50-percent shareholder in
Lottery and an officer and a director. Lottery had a keno con-
tract with La Vista that was set to expire July 31, 1998. Bellino
wanted to continue in the keno business without Anderson. The
evidence, considered in a light most favorable to Bellino, indi-
cated that Bellino was not properly informed of his fiduciary
duties as the president, a director, and a shareholder of Lottery,
a close corporation. Further evidence indicated he was not prop-
erly informed that a constructive trust could result. Erroneous
legal advice that causes the client to breach a fiduciary duty to
such a corporation can be devastating to the client. Bellino was
forced to remain in business with Anderson, via the constructive
trust, under a 10-year keno contract with La Vista.

Bellino presented expert testimony at trial concerning the
damages proximately caused by the negligent advice of McGrath
North. Panzer, a certified public accountant, testified that Bellino
settled with Anderson in July 2004 to end the constructive
trust, separate from Anderson, and maintain the keno operation.
Panzer testified that the monetary loss sustained by Bellino due
to the legal advice given by his attorneys exceeded $3.1 mil-
lion. This sum included: legal and accounting fees incurred in

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the Anderson litigation—$176,373.48 and $52,662.92, respec-
tively; settlement payments to Anderson totaling $2,427,729.76;
interest in the amount of $190,182.60 on personal loans taken
by Bellino for the settlement payments; and the lost economic
benefit, calculated at $325,773.27, of money Bellino was forced
to use to settle with Anderson.

Hl In an action for legal malpractice, the plaintiff must
establish that but for the alleged negligence of the attorney, the
plaintiff would have obtained a more favorable judgment or
settlement. Viner v. Sweet, 30 Cal. 4th 1232, 70 P.3d 1046, 135
Cal. Rptr. 2d 629 (2003). See Bowers v. Dougherty, 260 Neb.
74, 615 N.W.2d 449 (2000). The jury found that Bellino had
sustained damages in the amount of $1.6 million as a proximate
result of McGrath North’s negligent representation. Sufficient
evidence was presented to the jury to support a finding that these
damages included the cost to Bellino as a result of the Anderson
settlement in July 2004.

In its motion for judgment notwithstanding the verdict,
McGrath North argued that the jury’s verdict was based on the
difference between (1) the amount ($1.5 million) for which
Anderson had offered to settle the case after the trial and before
this court’s ruling in Anderson v. Bellino, 265 Neb. 577, 658
N.W.2d 645 (2003), and (2) the expenses Bellino actually spent
to settle the case after the appeal, which amount McGrath North
contended was approximately $3.1 million. McGrath North
argued that the jury’s verdict was improper because it was based
on Bellino’s own decision to reject Anderson’s settlement offer.

The district court determined that at some point, regardless
of McGrath North’s negligent advice, Bellino would have been
required to buy out Anderson in order to terminate their business
relationship and retain the keno contract. Because a buyout was
inevitable, the court found that the payment to Anderson could
not be proximately caused by McGrath North’s negligence.
The court determined that the difference in the settlement price
before and after the litigation was concluded was not proxi-
mately caused by McGrath North because Bellino made the
ultimate decision to reject the first offer. We disagree.

Before the litigation in Anderson v. Bellino, supra, was con-
cluded, Anderson offered to settle for $1.5 million. McGrath

North advised Bellino that he could “do much better” on appeal.
The issue is whether the legal advice given to Bellino increased
the cost of severing his business relationship with Anderson.

McGrath North represented Bellino throughout the litigation
with Anderson. Before trial, Bellino’s attorneys told Bellino he
would win on the points of law. After Bellino lost at trial, he was
assured by counsel that the judge’s ruling was wrong.

There was evidence that in December 2002 (i.e., before this
court affirmed the judgment in Anderson v. Bellino, supra),
Anderson offered to settle the litigation and yield his interest in
the keno operation to Bellino for $1.5 million. Bellino was told
by his legal counsel that his chances for a successful appeal of
the district court’s decision were favorable and that the appeal
would result in a better outcome than a $1.5 million settlement.
Panzer, who participated in discussions concerning a possible
settlement, said that counsel persistently told Bellino that after
the appeal was decided, Bellino and Anderson would “split
the baby,” but there was no suggestion that Bellino would be
required to keep paying Anderson from Keno’s profits for the
entirety of the La Vista contract. Bellino said that he continued
to move forward with his appeal to this court due to his law-
yers’ advice.

That advice concerning the appeal was wrong. The law in
Nebraska is clear that a person who is an officer, director, and
shareholder of a closely held corporation has a fiduciary duty
not to act adversely to that corporation. Given the facts in this
case, it was inevitable that a court would determine Bellino had
breached his fiduciary duty to Lottery.

Although the decision whether to settle the controversy is
ultimately left to the client, see Wood v. McGrath, North, 256
Neb. 109, 589 N.W.2d 103 (1999), evidence showed that Bellino
relied greatly on the ongoing legal advice of McGrath North
that he would prevail on appeal when he chose to forgo settle-
ment and wait for the appeals process to run its course. We have
recognized that

“ ‘litigants rely heavily on the professional advice of coun-
sel when they decide whether to accept or reject offers of
settlement, and we [have] insist{ed] that the lawyers of
our state advise clients with respect to settlements with

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the same skill, knowledge, and diligence with which they
pursue all other legal tasks.’”
McWhirt y. Heavey, 250 Neb. 536, 546, 550 N.W.2d 327, 334
(1996).

In Streber v. Hunter, 221-F.3d 701 (Sth Cir. 2000), attorneys
incorrectly advised their client on how to treat a large sum of
money for tax purposes, and the Internal Revenue Service issued
a notice of deficiency against the client. Evidence indicated that
the Internal Revenue Service would have settled the case but
that the attorneys insisted the client would win at trial. Based
on that advice, the client did not settle. The client lost at the tax
trial, and the judgment against her was substantially more than
the settlement would have been.

The client brought an action for legal malpractice against the
attorneys. Following a trial, the jury returned a verdict in favor
of the client. The largest portion of damages represented the
difference between the amount of money the client would have
paid the Internal Revenue Service had the attorneys advised her
correctly and the amount she eventually had to pay. The attor-
neys appealed.

The U.S. Court of Appeals for the Fifth Circuit considered
whether the evidence supported the jury’s determination that
the lawyers’ overall conduct, particularly their advice that the
client would .win at the tax trial and that therefore, she should
not settle, fell below the standard of care. Expert testimony had
been presented that the attorneys’ tax advice had been wrong
from the start and that the attorneys failed to adequately inform
the client of the apparent outcome of the tax case. The client
testified that she would have settled but did not because the
attorneys told her she would be successful in the tax trial..The
court found that based on the facts and in light of the applicable
tax law, the attorneys performed negligently by failing to advise
the client to settle. The evidence, reviewed in a light favorable to
the client, was sufficient to sustain the jury’s damage award.

In the present case, Bellino’s attorneys advised him to set up
Keno and bid against Lottery for the La Vista contract. Moore,
one of Bellino’s experts, testified that this advice caused Bellino
“to become involved in litigation where there was virtually no
chance of him being successful.” Bellino continued to rely on

his attorneys’ advice throughout the resulting litigation. Moore
testified that McGrath North fell below the standard of care by
not advising Bellino that he was likely to lose the case. The
jury could reasonably have inferred that the failure of counsel to
properly advise Bellino of the apparent outcome of his appeal
was a proximate cause of his decision not to pay the $1.5 million
which Anderson requested to settle the matter.

The district court found that Bellino would inevitably have
to buy out Anderson but did not consider that the price of
such buyout could have been increased as a result of McGrath
North’s negligent representation. The jury could reasonably have
concluded, based on the evidence, that it cost Bellino more to
purchase Anderson’s interest after the litigation and judgment
against Bellino than before such judgment. The jury could rea-
sonably have determined that Anderson’s settlement offer of
$1.5 million established a baseline number for what it would
have cost Bellino to buy out Anderson.

After Bellino did not accept Anderson’s offer, Bellino’s
appeal continued until this court affirmed the judgment in
favor of Anderson. Friedman, one of Bellino’s experts, testified
that Bellino “suffered terribly monetarily after the [Nebraska]
Supreme Court rendered its opinion” in Anderson v. Bellino,
265 Neb. 577, 658 N.W.2d 645 (2003). The constructive trust
was imposed, and Bellino was locked into the existing arrange-
ment for several more years.

The evidence, viewed favorably to Bellino, indicated that fol-
lowing the conclusion of the appeal, it cost Bellino in excess of
$3.1 million to attain his goal of separating from Anderson and
continuing the keno operation. The settlement with Anderson
satisfied all obligations and sums owed to Anderson as a result
of the constructive trust, including all profits currently due
Anderson or to which he would be entitled in the future under
the La Vista keno contract. The jury could reasonably have con-
cluded that but for the negligence of McGrath North, Bellino
would have paid substantially less to attain his stated goals.

On its motion for judgment notwithstanding the verdict,
McGrath North was deemed to have admitted as true all the rel-
evant evidence favorable to Bellino and Bellino was entitled to
the benefit of all proper inferences deducible from the relevant

154 —

evidence. See Munstermann y. Alegent Health, 271 Neb. 834,
716 N.W.2d 73 (2006). The amount of damages awarded by the
jury was supported by the evidence, bore a reasonable relation-
ship to the elements of the damages proved, and was not such
that reasonable minds could draw but one conclusion on the
issue of damages. See Genthon v. Kratville, 270 Neb. 74, 701
N.W.2d 334 (2005).

We conclude that the district court erred in sustaining the
motion for judgment notwithstanding the verdict and in reduc-
ing the damages to $229,036.40.

VI. CONCLUSION
The district court erred in partially sustaining McGrath North’s
motion for judgment notwithstanding the verdict and disturbing
the jury verdict. We reverse the district court’s order reducing
the award of damages. In all other respects, the court’s order and
rulings are affirmed. We remand the cause to the district court
with direction to reinstate the jury verdict and judgment in favor
of Bellino.
AFFIRMED IN PART, AND IN PART REVERSED
AND REMANDED WITH DIRECTION.
McCormack, J., not participating.

OrcHARD Hitt NEIGHBORHOOD ASSOCIATION ET AL., APPELLEES,
v. OrcHARD Hitt MercanTite, L.L.C., APPELLANT, AND
NepRASKA Liquor CONTROL COMMISSION, APPELLEE.

738 N.W.2d 820

Filed August 17, 2007. No. S-06-228.

Michael J. Lehan for appellant.

Steven M. Virgil, and Matthew Andrew, Senior Certified
Law Student, of Community Economic Development Clinic,
Creighton University School of Law, for appellees Orchard Hill
Neighborhood Association et al.

No appearance for appellee Nebraska Liquor Control
Commission.

Heavican, C.J., WRriGHt, CoNNOLLy, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Conno Ly, J.

The Orchard Hill Neighborhood Association and neighbor-
hood residents (collectively the Objectors) appealed the order
of the Nebraska Liquor Control Commission (Commission)
granting a liquor license to Orchard Hill Mercantile, doing
business as Hamilton Outlet Tobacco (Mercantile). On review,
the district court found that under Neb. Rev. Stat. § 53-132(2)
(Reissue 2004), the “public convenience and necessity” did not
require the issuance of the liquor license. The court reversed the
Commission’s decision, and Mercantile appeals. Because compe-
tent evidence supports the district court’s decision, we affirm.

I. BACKGROUND
Mercantile applied for a retail class D liquor license at
4026 Hamilton Street, Omaha, Nebraska. With the license,
Mercantile could sell off-sale package liquor. Under Neb. Rev.
Stat. § 53-133 (Reissue 2004), two neighbors and a pastor of a
nearby church protested.

1. HEARING BEFORE THE COMMISSION
(a) Expert Testimony Against
"Issuing the License
Under Neb. Rev. Stat. § 84-914(1) (Reissue 1999), the
Objectors requested the Commission comply with the rules
of evidence. Two experts testified for the Objectors. The first
expert was Dr. Rebecca K. Murray, who is an assistant profes-
sor of sociology and anthropology at Creighton University. She
received her master’s degree and doctorate from the University
of Nebraska at Omaha. Her research focuses on environmental
criminology—studying how urban structures affect crime within
particular areas. Although she is not familiar with the Hamilton
Street neighborhood (Neighborhood), she has studied how
liquor establishments affect automobile thefts and assaults in
Omaha; she testified that a correlation exists between crime and
liquor establishments. She opined that assaults rise by 1.0959
per year per block when increasing the number of off-sale

liquor-serving establishments from zero to one; assaults rise by
2.0117 when increasing the number of liquor establishments
from one to two. Presently, one liquor store—about one-half
to one block from Mercantile’s proposed location—serves the
Neighborhood. Presently, two to three assaults occur per year in
the Neighborhood. Murray stated her research methodology is
generally accepted in her field.

Relying on her research, training, and education, Murray
opined that issuing a liquor license to Mercantile at the pro-
posed location would not serve the public’s interests. She added
that a liquor establishment would increase crime anywhere in
Omaha, but that the Neighborhood, a residential area, already
has a higher crime rate compared with the city as a whole. She
further stated that her opinion was her “best-guess” based on
her research. -

The second expert was Dr. Russell L. Smith, who teaches
urban studies and public administration at the University of
Nebraska at Omaha. He has a doctorate in political science.
He focuses on public policy, urban revitalization, and com-
munity development. Smith is familiar with the Neighborhood
because he works with programs and projects concerning the
Neighborhood. In addition, he has conducted surveys and focus
groups on issues regarding the Neighborhood. He testified that
the Neighborhood is in an “advanced state of decline,” as evi-
denced by the number of vacant lots, declines in housing val-
ues, and a population decrease. He stated that the deteriorated
commercial strip showed promise for revitalization efforts, but
that putting a liquor store there would be a “disservice” to the
Neighborhood. Smith conducted a survey that found 42 percent
of the respondents have concerns about illegal alcohol use in the
Neighborhood. He opined that Mercantile’s liquor store would
negatively affect the surrounding community.

(b) Other Evidence Regarding the Neighborhood
The record reflects that while graffiti, loitering, and traffic
violations have increased, the Neighborhood is improving. The
Omaha Community Foundation has invested about $250,000 in
private donations for community development, including home
improvement, a community gardening project, and after-school

158 Ee

programs. Also, the city of Omaha is preparing a redevelopment
plan for the area.

(c) Mercantile’s Evidence Supporting the License

The proposed site complies with zoning requirements, and
sanitary and sewer systems are in place. The city recommended
that the Commission grant the license. Also, Mercantile’s own-
ers have invested about $1.5 million, improving several build-
ings in the Neighborhood. Charles Kline, an owner, testified that
more than 400 people would like Mercantile to provide liquor
at the proposed location. He testified that the site would have
adequate parking—15 parking spots and an estimated 200 cus-
tomers per day. Contrary to the expert testimony, Kline testified
that within the last year or two, property values have increased.
Mercantile’s owners believe their liquor store will serve the
public interest.

(d) The Commission’s Decision
At the hearing’s conclusion, the Commission unanimously
voted to approve the license, and on July 5, 2005, the Commission
entered its order.

2. Tue District Courr DEcIsIoN

The Objectors appealed the Commission’s decision to the dis-
trict court. They contended that the Commission’s order issuing
the license was arbitrary and capricious and that the evidence
did not support it.

The district court, reviewing the record of the Commission de
novo,! found that under the Nebraska Liquor Control Act,? the
present or future public convenience and necessity did not require
the liquor license. The court relied on “the slim margin by which
the City Council voted to approve [Mercantile’s] application; the
existence of a strong, proactive citizen protest; and the existence
of another liquor-selling establishment in such close proximity
to the proposed location.” The court further found that issuing
the license would frustrate the positive trend occurring in the

! See Neb. Rev, Stat. § 84-917(5)(a) (Reissue 1999).
2 Neb. Rev. Stat. §§ 53-101 to 53-1,122 (Reissue 2004).

es 5°
Le

Neighborhood. The court balanced these concerns against its
findings that (1) Mercantile’s owners are qualified, (2) the site
complied with zoning and sanitation requirements, and (3) the
site presented no parking concerns.

II. ASSIGNMENTS OF ERROR

Mercantile assigns that the district court erred in (1) revers-
ing the Commission’s decision as arbitrary, unreasonable, and
not supported by competent evidence; (2) considering expert
testimony based on “guess and conjecture” which was not rel-
evant to the issues; (3) considering expert testimony when the
record contains no findings that the trier of fact performed its
role as a gatekeeper; (4) interpreting § 53-132(3); (5) consider-
ing only one element of the factors set forth in § 53-132(3); (6)
relying on City of Lincoln v. Nebraska Liquor Control Comm.>
in determining that a single factor may require reversal of an
order of the Commission; and (7) failing to dismiss Orchard Hill
Neighborhood Association for lack of standing.

Il. STANDARD OF REVIEW

HBA trial court has discretion in deciding whether a witness
is qualified to testify as an expert, and we will not disturb the
trial court’s decision unless it is clearly erroneous.*

HMMM Under the Administrative Procedure Act, we may
reverse, vacate, or modify a district court’s judgment or final
order for errors appearing on the record.© When reviewing a
district court’s order under the Administrative Procedure Act for
errors appearing on the record, we look at whether the decision
conforms to the law, is supported by competent evidence, and is
not arbitrary, capricious, or unreasonable.’

3 City of Lincoln v. Nebraska Liquor Control Comm., 261 Neb. 783, 626
N.W.2d 518 (2001).

* See Carlson v. Okerstrom, 267 Neb. 397, 675 N.W.2d 89 (2004).
5 Neb. Rev. Stat. §§ 84-901 to 84-920 (Reissue 1999 & Cum. Supp. 2006).

6 See Stejskal v. Department of Admin. Servs., 266 Neb. 346, 665 N.W.2d 576
(2003). See, also, § 84-918(3).

7 Stejskal v. Department of Admin. Servs., supra note 6.

160 Le

IV. ANALYSIS

1. Tus Controversy Is Nor Moor .

Before reaching the legal issues presented, we address a
jurisdictional issue raised by the Objectors. The Objectors con-
tend that Mercantile’s appeal is moot. Under Nebraska statute,
a liquor license cannot exceed 1 year. The Objectors argue
that more than 1 year has passed since July 5, 2005, when the
Commission first issued a liquor license to Mercantile. The
record shows that Mercantile attempted to renew its license but
that the Commission denied its request because of the district
court’s decision. The Objectors argue that because Mercantile’s
liquor license has expired and the Commission has not renewed
it, the Commission cannot reinstate it. They argue the case is
moot and that we cannot grant relief on appeal. We disagree.

HM Although not a constitutional prerequisite for jurisdic-
tion, an actual case or controversy is necessary for the exercise
of judicial power.® A case becomes moot when the issues ini-
tially presented in the litigation cease to exist, when the litigants
lack a legally cognizable interest in the outcome of litigation, or
when the litigants seek to determine a question which does not
rest upon existing facts or rights, in which the issues presented
are no longer alive.'°

The Maryland Court of Appeals considered a mootness argu-
ment under analogous facts. In Bethesda Management Serv. v.
Dep’t," the appellants held licenses to operate employment agen-
cies. The Maryland Department of Licensing and Regulation,
Division of Labor and Industry, revoked the appellants’ licenses,
and they appealed. The department argued that the case was
moot because the revoked licenses lasted for 1 year and would
have expired by their own terms by the time the case reached the
appellate court. The appellants had unsuccessfully applied for
new licenses for the next year. The court, however, concluded

8 § 53-149.

° See Johnston v. Nebraska Dept. of Corr. Servs., 270 Neb. 987, 709 N.W.2d
321 (2006).

10 7¢.
1 Bethesda Management Serv. v. Dep’t, 276 Md. 619, 350 A.2d 390 (1976).

161
Es

that the case still presented a live controversy. The court reasoned
that if the revocation stood, the department would not issue a
new license to the appellants. The court stated, “[I]f it should
be ultimately determined that the revocations were unwarranted,
and no other cognizable grounds for denial existed, appellants
would be entitled to new licenses.”” The court held that the
appellants had a real interest in the outcome of the case.

HB Here, although Mercantile’s original liquor license has
expired, the controversy is not moot. Nebraska statutes establish
a renewal privilege, and liquor licensees are entitled to renewal,
absent a change of circumstances indicated on the licensee’s
renewal application.'> We have recognized that a liquor licensee
has a constitutionally protected interest in obtaining renewal of
an existing license.’* That interest would be jeopardized if the
license were wrongfully taken away. Because Mercantile has an
interest in judicial resolution beyond the expiration of its origi-
nal license, the controversy is not moot.

2. THE HEARING OFFICER PROPERLY

ADMITTED THE Expert TESTIMONY
HM Mercantile contends that the testimony of Murray,
Smith, and another witness, Dr. Andrew Jameton, was inadmis-
sible as expert testimony. Under Neb. Evid. R. 702,'5 a witness
can testify concerning scientific, technical, or other specialized
knowledge only if the witness qualifies as an expert. Whether
a witness qualifies as an expert is a preliminary question for
the trial court.'° A trial court is allowed discretion in deciding
whether a witness qualifies to testify as an expert. And unless

12 Td. at 626, 350 A.2d at 394.

'8 Grand Island Latin Club v. Nebraska Lig. Cont. Comm., 251 Neb. 61, 554
N.W.2d 778 (1996); Pump & Pantry, Inc. v. City of Grand Island, 233 Neb.
191, 444 N.W.2d 312 (1989). See, also, §§ 53-135 and 53-135.02.

™ Grand Island Latin Club v. Nebraska Lig. Cont. Comm., supra note 13.
15 Neb. Rev. Stat. § 27-702 (Reissue 1995).
16 Carlson v. Okerstrom, supra note 4.

162 Es

the court’s finding is clearly erroneous, we will not disturb that
decision on appeal.'”

(a) Murray Provided Sufficient
Foundation for Her Opinion

HE Mercantile contends that Murray based her testimony
on a “‘best guess scenario’” and that she lacked knowledge
of the Neighborhood.'* Mercantile’s objection appears to be a
foundational challenge, and that is how we will address it. 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 con-
jecture."° That is, a court should reject an expert’s opinion if the
record does not support a finding that the expert had a sufficient
foundation for his or her opinion.”

We discussed an evidentiary foundation issue in Scurlocke
v. Hansen.” There, the witness testified regarding the cost to
restore trees damaged by a bulldozer. He, however, had no
experience estimating such damages, he estimated the cost to
restore the property to its original condition without having
seen it before the damage, he took no measurements, and his
“methodology” consisted of “walking around the [plaintiff’s]
property and trying to ‘visualize’ where trees had been prior [to
the damage].”” We decided the skeletal foundation could not
support his opinion.

In contrast, Murray fleshed out the foundation for her opinion.
She relied on her research of the city. She examined felonious
assaults and automobile thefts occurring in the city and the num-
ber of liquor-serving establishments. She used census data to
control for other variables, including income, racial composition,

Td,
18 Brief for appellant at 11.

"© See, City of Lincoln v. Realty Trust Group, 210 Neb. 587, 705 N.W.2d 432
(2005); Scurlocke v. Hansen, 268 Neb. 548, 684 N.W.2d 565 (2004).

© See City of Lincoln v. Realty Trust Group, supra note 19.
2 Scurlocke v. Hansen, supra note 19.
2 Id. at 552, 684 N.W.2d at 569.

and land ownership at the block level. She testified that based
on her research of a citywide trend, crime would increase in the
Neighborhood with the establishment of an additional liquor
store. Murray also testified the Neighborhood already averaged
more crime per year than other areas, suggesting that an increase
in crime there could be more detrimental.

Mercantile attempts to characterize Murray’s testimony as
“mere guess or conjecture” under Scurlocke because she tes-
tified that her opinion regarding the effect of a liquor store in
the Neighborhood was her “best-guess.” The record reveals,
however, that Murray clarified that any opinion about future
events has some uncertainty, and repeated that she based her
opinion on her research. We believe this case is distinguishable
from Scurlocke. Murray’s background and research provided
sufficient foundation for her opinion. The hearing officer did not
clearly err in admitting Murray’s testimony.

(b) Mercantile Did Not Raise a Daubert
Challenge at the Commission Hearing
Mercantile also challenges Smith’s and Jameton’s testi-
mony. It argues that they failed to explain their methodology
and whether it was applied in a reliable manner. Mercantile
appears to invoke a challenge under Daubert v. Merrell Dow
Pharmaceuticals, Inc.% and Schafersman v. Agland Coop.% But
the record shows that Mercantile, at the Commission hearing,
did not object because of methodology. Instead, Mercantile
objected to Smith’s testimony on relevance, hearsay, and foun-
dation. And it objected to Jameton’s testimony as hearsay.
Further, Mercantile did not challenge either witness’ methodol-
ogy before the district court.
Hl When an issue is raised for the first time in this court,
we will disregard it because the district court cannot commit
error in resolving an issue never presented and submitted to it

2 Brief for appellant at 11.

4 Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S. Ct.
2786, 125 L, Ed. 2d 469 (1993).

25 Schafersman v. Agland Coop, 262 Neb. 215, 631 N.W.2d 862 (2001). See,
also, City of Lincoln v. Realty Trust Group, supra note 19.

164 Es

for disposition.” Because Mercantile did not object before the
Commission or the district court, we do not address this issue.

3. Taz District Court PRopERLY CONSIDERED
THE CRITERIA IN § 53-132(3)

Mercantile argues that the district court failed to consider all
of the statutory criteria in § 53-132(3) in determining whether
the Commission correctly issued the liquor license. Section
53-132(2) of the Nebraska Liquor Control Act provides the
requirements for issuing a retail liquor license. To issue a retail
liquor license, the Commission must find that the license satis-
fies each condition specified in § 53-132(2)(a) through (d).””
Subsection (d) provides that the issuance of a license must be
“required by the present or future public convenience and neces-
sity.” In deciding whether an application meets these require-
ments, the Commission must consider each factor listed in
§ 53-132(3)(a) through (j).?* When the Commission conducted
the hearing, those factors were:

(a) The recommendation of the local governing body;

(b) The existence of a citizens’ protest made in accor-
dance with section 53-133;

(c) The existing population of the city, village, or county
and its projected growth; .

(d) The nature of the neighborhood or community of the
location of the proposed licensed premises;

(e) The existence or absence of other retail licenses or
craft brewery licenses with similar privileges within the
neighborhood or community of the location of the pro-
posed licensed premises;

(f) The existing motor vehicle and pedestrian traffic flow
in the vicinity of the proposed licensed premises;

(g) The adequacy of existing law enforcement,

(h) Zoning restrictions;

26 See Ways v. Shively, 264 Neb. 250, 646 N.W.2d 621 (2002).
7 City of Lincoln v. Nebraska Liquor Control Comm., supra note 3.
28 Td.

SC (i‘s‘CtésR
(i) The sanitation or sanitary conditions on or about the
proposed licensed premises; and
Gj) Whether the type of business or activity proposed to
be operated in conjunction with the proposed license is and
will be consistent with the public interest.”?

We discussed the above factors in City of Lincoln v. Nebraska
Liquor Control Comm. There, we considered whether the
Commission properly issued a liquor license when the pro-
posed location failed to meet zoning requirements. We stated
that no one factor invariably controls the decision to grant or
deny a liquor license. All of the factors in § 53-132(3) must
be considered in determining whether an applicant meets the
requirements of § 53-132(2). In City of Lincoln, we decided that
because the location did not comply with zoning requirements,
the Commission should have denied the license.

In its order, the district court, citing our decision in City of
Lincoln, stated that “[nJo specific factor ‘controls’ the decision
to grant or deny an application for a liquor license, but in some
cases, a single factor may weigh so heavily that it tips the bal-
ance one way or the other.” Mercantile apparently interprets this
statement to mean that the district court relied solely on whether
the liquor license was in the public interest, the factor listed in
§ 53-132(j). The court’s order, however, shows it considered all
of the statutory factors. In its order, the court listed the factors
in § 53-132(3) that the Commission must consider in deciding
whether to approve or deny a license application. The court spe-
cifically found that several factors weighed against issuing the
license and that others weighed in favor of the license. After bal-
ancing the factors, the court decided that the “present or future
public convenience and necessity” did not require the license
under § 53-132(2)(d). In reaching its decision, the court properly
considered all of the factors listed in § 53-132(3).

29 § 53-132(3).
2 City of Lincoln v, Nebraska Liquor Control Comm., supra note 3.

166 a

4. Comegrent EvipeNce Supports
tue Disrricr Courr’s Drcision

HH Mercantile argues that the district court’s decision was
arbitrary and capricious and lacked competent evidence to
support it. When reviewing a district court’s order under the
Administrative Procedure Act for errors appearing on the record,
we look at whether the decision conforms to the law, is sup-
ported by competent evidence, and is not arbitrary, capricious,
or unreasonable.*! We will not substitute our factual findings for
those of the district court when competent evidence supports
those findings.

The district court’s order contains a detailed summary of the
evidence presented to the Commission. The court examined
evidence on all of the statutory factors. In deciding that the
Commission should have denied the liquor license, the court
wrote:

[T]his Court finds that the slim margin by which the City
Council voted to approve [Mercantile’s] application; the
existence of a strong, proactive citizen protest; and the
existence of another liquor-selling establishment in such
close proximity to the proposed location militate strongly
against issuance of a license to [Mercantile]. This Court
further finds that the nature of the Orchard Hill neigh-
borhood and community, though in a state of decline, is
benefiting from the substantial efforts and contributions of
public and private entities and donors, and that this posi-
tive trend would likely be frustrated by the issuance of a
liquor license to [Mercantile]. While this Court finds that
there are no zoning or sanitation impediments to granting
a license to [Mercantile], that traffic and parking concerns
are minor, and that [Mercantile] is in all respects quali-
fied to operate a stable and relatively secure liquor-selling
establishment, these factors, on balance, are insufficient to
show, as [Mercantile] must, that the issuance of the license

3! Stejskal v. Department of Admin. Servs., supra note 6.
2 See id.

to [Mercantile] “is or will be required by the present or
future public convenience and necessity.”

Adhering to our standard of review for error on the record,
we believe the record supports the district court’s decision.
Expert testimony establishes that a liquor license would nega-
tively affect the Neighborhood and that crime would likely
increase. The record contains a petition signed by more than 400
Neighborhood residents opposing the liquor license. Testimony
established that another liquor establishment is presently located
within one block from Mercantile’s proposed location. Although
some evidence does weigh in favor of issuing the liquor license,
sufficient competent evidence supports the court’s decision. We
recognize that the Commission also considered the evidence
in deciding to issue the liquor license. But under our standard
of review, we cannot say that the district court’s decision to
overturn the Commission’s decision was arbitrary, capricious,
or unreasonable. The district court did not err in ordering the
Commission to deny the license to Mercantile.

V. CONCLUSION
We conclude that Mercantile’s appeal is not moot because
Mercantile has an existing interest in obtaining relief from the
district court’s denial of its liquor license. Because competent
evidence—including properly admitted expert testimony—sup-
ports the court’s decision, we affirm. The remaining issues are
unnecessary to resolve this case, and we need not address them
on appeal.
AFFIRMED.

% See Ferer v. Erickson, Sederstrom, 272 Neb. 113, 718 N.W.2d 501 (2006).

W. Ben SNYDER, APPELLEE, V. DEPARTMENT OF MoroR
VEHICLES, AN ADMINISTRATIVE AGENCY OF THE
Stare or NEBRASKA, APPELLANT.

736 N.W.24 731

Filed August 17, 2007. No, $-06-352.
Jon Bruning, Attorney General, and Edward G. Vierk for
appellant.

S. Gregory Nelson for appellee.

Heavican, C.J., Wricut, Connoity, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

STEPHAN, J.

The sole issue in this case is whether a sworn report list-
ing the reasons for an arrest as “Speeding (20 OVER)/D.U.I.”
is sufficient to confer jurisdiction on the Department of Motor
Vehicles (DMV) in an administrative license revocation (ALR)
proceeding. We agree with the district court for Douglas County
that it is not and, therefore, affirm the judgment of that court
which reversed the administrative revocation.

FACTS
On October 6, 2005, at 1:47 a.m., an Omaha police officer
stopped a motor vehicle driven by W. Ben Snyder after observ-
ing the vehicle speeding. The officer ultimately arrested Snyder
for suspicion of driving under the influence. After transporting

ee 169
be

him to police headquarters, the officer read Snyder a postarrest
chemical test advisement. Snyder then submitted to a chemical
test of his breath via an Intoxilyzer 5000 machine. The chemical
test showed a blood alcohol concentration over the legal limit.

On October 12, 2005, the director of the DMV received a
sworn report completed by the arresting officer. The sworn
report stated, among other things, that Snyder was arrested pur-
suant to Neb. Rev. Stat. § 60-6,197 (Reissue 2004) and listed
the reasons for his arrest as “Speeding (20 OVER)/D.U.I” The
director also received a petition for an administrative hearing
from Snyder, and a hearing on whether Snyder’s license should
be revoked was held on November 1. Snyder’s counsel objected
to the director’s jurisdiction, arguing that the sworn report did
not properly reflect the reasons for the arrest. The hearing offi-
cer took the objection under advisement. The arresting officer
testified at the hearing. The hearing officer subsequently found
that the information in the sworn report was sufficient to con-
fer jurisdiction on the DMV and recommended that Snyder’s
license be revoked for the statutory period of 90 days. The direc-
tor adopted this recommendation on November 8.

Snyder timely appealed to the district court, which reversed
the director’s decision and dismissed the revocation of Snyder’s
license. The district court reasoned that speeding and “D.U.L”
were not sufficient reasons for the arrest and that thus, the
sworn report did not confer jurisdiction upon the DMV to revoke
Snyder’s license. The DMV filed this timely appeal. We moved
the case to our docket pursuant to our statutory authority to
regulate the caseloads of the appellate courts of this state.

ASSIGNMENT OF ERROR
The DMV assigns, restated, that the district court erred in
determining that the reasons for arrest listed in the sworn report
were not sufficient to give the DMV jurisdiction to revoke
Snyder’s license.

' See Neb. Rev. Stat. § 24-1106(3) (Reissue 1995).

170 —

STANDARD OF REVIEW

JA judgment or final order rendered by a district court in
a judicial review pursuant to the Administrative Procedure Act
may be reversed, vacated, or modified by an appellate court for
errors appearing on the record. When reviewing an order of a
district court under the Administrative Procedure Act for errors
appearing on the record, the inquiry is whether the decision
conforms to the law, is supported by competent evidence, and is
neither arbitrary, capricious, nor unreasonable.”

ANALYSIS
Resolution of the issue presented in this appeal requires an
examination of the relevant Nebraska statutes and our decision
in Hahn v. Neth? Nebraska law makes it unlawful
for any person to operate or be in the actual physical con-
trol of any motor vehicle:

(a) While under the influence of alcoholic liquor or of
any drug;

(b) When such person has a concentration of eight-
hundredths of one gram or more by weight of alcohol per
one hundred milliliters of his or her blood; or

(c) When such person has a concentration of eight-
hundredths of one gram or more by weight of alcohol per
two hundred ten liters of his or her breath.*

Any person who operates a motor vehicle in Nebraska is deemed
to have given consent to submit to chemical tests for the purpose
of determining the concentration of alcohol in the blood, breath,
or urine. A police officer may require any person arrested for
committing an offense while driving under the influence of alco-
hol to submit to a chemical test “when the officer has reasonable
grounds to believe that such person was driving or was in the
actual physical control of a motor vehicle . . . while under the

? Chase 3000, Inc. v. Nebraska Pub. Serv. Comm., 273 Neb. 133, 728 N.W.2d
560 (2007); Wilson v. Nebraska Dept. of Health & Human Servs., 272 Neb.
131, 718 N,W.2d 544 (2006).

3 Hahn v. Neth, 270 Neb. 164, 699 N.W.2d 32 (2005).
4 Neb. Rev. Stat. § 60-6,196(1) (Reissue 2004).
> § 60-6,197(1).

influence of alcoholic liquor?’* Any person arrested for suspicion
of driving under the influence of alcohol may be directed by an
officer to submit to a chemical test to determine the concentra-
tion of alcohol in that person’s body.’ If the chemical test shows
a concentration above the legal limit, the driver is subject to
the ALR procedures found in Neb. Rev. Stat. §§ 60-498.01 to
60-498.04 (Reissue 2004).®
Section 60-498.01(3) provides that when a person arrested
under circumstances described in § 60-6,197(2) submits to a
chemical test of blood or breath that discloses an illegal pres-
ence of alcohol and the test results are available to the arresting
officer while the arrested person is still in custody, the arrest-
ing officer
shall within ten days forward to the director a sworn report
stating (a) that the person was arrested as described in
subsection (2) of section 60-6,197 and the reasons for such
arrest, (b) that the person was requested to submit to the
required test, and (c) that the person submitted to a test,
the type of test to which he or she submitted, and that such
test revealed the presence of alcohol in a concentration
specified in section 60-6,196 [over .08].?
If a motorist arrested under these circumstances requests a hear-
ing, the issues under dispute are limited to the following:
(A) Did the peace officer have probable cause to believe
the person was operating or in the actual physical con-
trol of a motor vehicle in violation of section 60-6,196
-.. and
(B) Was the person operating or in the actual physical
control of a motor vehicle while having an alcohol concen-
tration in violation of subsection (1) of section 60-6,196.'°
Resolution of the first issue depends on the officer’s reasons
for arresting a motorist, while resolution of the second depends

5 § 60-6,197(2).
7 § 60-6,197(3).
8 Ia,

2 § 60-498.01(3).

1 § 60-498.01(6)(c)(ii).

172 be

upon the results of the tests conducted after the arrest. Both
issues require a showing of facts.

I The arresting officer’s sworn report triggers the ALR
process by establishing a prima facie basis for revocation."
When such a prima facie case showing is made, unless the
arrested person petitions for a hearing and establishes by a pre-
ponderance of the evidence that grounds for revocation do not
exist, the operator’s license is automatically revoked upon the
expiration of 30 days after the arrest.’? Because of the substan-
tial evidentiary role of the sworn report in an ALR proceeding,
it “must, at a minimum,” contain the information specified in
§ 60-498.01(3) in order to confer jurisdiction upon the director
of the DMV to administratively revoke a license." In this case,
we focus on the reasons for the arrest, which reasons must be
stated in the sworn report pursuant to § 60-498.01(3)(a).

The sworn report includes 2% blank lines on which the
officer is to state the reasons for the arrest. Here, the arresting
officer’s notation that Snyder was speeding explains the initial
traffic stop but does not, standing alone, constitute a reason for
the arrest. Although the record reflects that the officer made
certain observations and conducted field sobriety tests and a
preliminary breath test before the arrest, the observations and
test results are not stated in the sworn report. Instead, the officer
wrote only “D.U.L.,” the common abbreviation for driving under
the influence. While this tells us what the officer suspected
when he made the arrest, it provides no factual reasons upon
which his suspicion was based. As the district court correctly
noted, it is a conclusion, not a reason.

Completion of the 1-page sworn report form is not an oner-
ous task."4 Recently in Betterman v. Department of Motor
Vehicles,'> we held that a notation on the sworn report that the

"| Hahn v. Neth, supra note 3.

12 Id. See § 60-498.01(3).

3 Hahn v. Neth, supra note 3, 270 Neb. at 171, 699 N.W.2d at 38.
“4 See Hahn v. Neth, supra note 3.

5 Betterman v, Department of Motor Vehicles, 273 Neb. 178, 182, 728 N.W.2d
570, 578 (2007).

es 173
Le

motorist “‘displayed signs of alcohol intoxication’” constituted
a reason for the arrest sufficient to confer jurisdiction on the
DMV. While that provided a very general factual statement of
the reasons for the arrest, it was sufficient to meet the require-
ment of § 60-498.01(3). In contrast, the conclusory notation
“D.U.L” provides no factual reason for the officer’s decision
to arrest Snyder on suspicion of driving under the influence
of alcohol instead of merely citing him for speeding. Because
of this jurisdictional deficiency, the DMV could not consider
the officer’s testimony at the hearing regarding his reasons for
arresting Snyder.'®

CONCLUSION

The sworn report failed to state a reason for the officer’s sus-
picion that Snyder was operating a motor vehicle while under
the influence of alcohol, which resulted in his arrest. Because
the sworn report did not include the information required by
§ 60-498.01(3)(a), it did not confer jurisdiction on the DMV
to revoke Snyder’s license. We affirm the order of the district
court reversing the revocation order and directing the DMV to

reinstate Snyder’s driving privileges.
AFFIRMED.

16 See Hahn v. Neth, supra note 3.

Heavican, C.J., dissenting.

I respectfully dissent. In the majority’s view, the failing of
the sworn report in this case is that the officer completing the
report simply stated a conclusion rather than stating his reasons
for arresting W. Ben Snyder. The majority concludes that under
Hahn vy. Neth,’ such a defect requires a finding that the sworn
report did not confer jurisdiction on the Department of Motor
Vehicles (DMV) to revoke Snyder’s license.

While some defects in a sworn report might be jurisdictional,
the technical defects of the sworn report in this case should not
operate to divest the DMV of jurisdiction. The better rule and
better reading of the statutory scheme is that the information

' Hahn v. Neth, 270 Neb. 164, 699 N.W.2d 32 (2005).

174 Ee

missing from the swor report, at least as to the “reasons for
such arrest”? at issue in this case, may be established by other
means, including the testimony of the arresting officer. Indeed,
such was permissible prior to this court’s decision in Hahn.
In Morrissey v. Department of Motor Vehicles, this court held
that “[iJf the sworn report is not proper, the department may,
nevertheless, establish its case by other means, such as by the
testimony of a witness... .”

There is no dispute that the information in the sworn report
in this case was accurate and provided the DMV with a factual
basis with which to commence revocation proceedings. Indeed,
the sworn report, in compliance with § 60-498.01(3), stated that
Snyder was arrested for driving while under the influence, listed
reasons for Snyder’s arrest, and further indicated that upon
request, Snyder submitted to a chemical test which ultimately
showed a blood alcohol concentration over the legal limit.

To the extent that the “reasons” provided in the sworn report
might have initially been insufficient, there is no dispute that
by the conclusion of the hearing, evidence had been adduced
to substantiate all necessary factual findings. In particular, the
officer who arrested Snyder testified to certain observations
he made during the course of the traffic stop. The officer also
testified that prior to Snyder’s arrest, he conducted, and Snyder
failed, field sobriety tests and a preliminary breath test.

The statutory scheme which provides for the revocation of an
operator’s license when an individual has been driving a vehicle
while under the influence of alcohol is contained in § 60-498.01.
The intent behind the revocation process is clear:

Because persons who drive while under the influence of
alcohol present a hazard to the health and safety of all
persons using the highways, a procedure is needed for the
swift and certain revocation of the operator’s license of any

? Neb. Rev. Stat. § 60-498.01(3)(a) (Reissue 2004).

3 See Morrissey v. Department of Motor Vehicles, 264 Neb. 456, 459, 647
N.W.2d 644, 649 (2002), disapproved, Hahn v. Neth, supra note 1.

person who has shown himself or herself to be a health and

safety hazard... .
Given that the Legislature has seen fit to find that “swift and
certain revocation” of an operator’s license is necessary when an
individual drives while under the influence, I respectfully dissent
from the majority’s conclusion that the technical defects in this
sworn report divest the DMV of jurisdiction to revoke Snyder’s
license. I would instead reverse the judgment of the Douglas
County District Court and affirm the revocation order entered
by the DMV.

* § 60-498.01(1).
a

Davip Kare, SPECIAL ADMINISTRATOR OF THE EsTATE OF TINA
KAREL, DECEASED, AND AUSTIN KaREL, A MINOR, BY AND
THROUGH Davip KarEL, HIS GUARDIAN AND NEXT BEST
FRIEND, APPELLANTS, V. NEBRASKA HEALTH SYSTEMS,

A NEBRASKA NONPROFIT CORPORATION, DOING
BUSINESS AS CLARKSON WEST EmMERGICARE,

AND Scotr MENOoLAScINoO, M.D., APPELLEES.

738 N.W.2d 831

Filed August 24, 2007. No. S-05-1311.

Terrence J. Salerno for appellants.

John R. Douglas, of Cassem, Tierney, Adams, Gotch &
Douglas, for appellees.

Heavican, C.J., Wricut, CoNNoLty, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Per CurRIAM.

This is an appeal from a judgment in favor of Nebraska
Health Systems, doing business as Clarkson West EmergiCare
(Clarkson West), and Scott Menolascino, M.D., defendants in a
medical malpractice action brought by the special administrator
of the estate of Tina Karel, deceased. The primary issue presented
is whether the district court erred in excluding evidence of print
and radio advertisements produced by Clarkson West. We con-
clude that it did not, and affirm the judgment.

FACTS
The operative facts in this case occurred on September
27 and 28, 2000. At that time, Clarkson West was an emer-
gency medical facility in Omaha, Nebraska, operated as a
division of Nebraska Health Systems, a Nebraska nonprofit

a "

corporation. Menolascino worked at Clarkson West as an emer-
gency physician. According to Menolascino, Clarkson West
held itself out as a full-service emergency room, open 24 hours
per day and capable of addressing life-threatening conditions.

Menolascino was on duty at Clarkson West when Karel
arrived there at 7:24 p.m. on September 27, 2000. At the time
of Karel’s admission, a nurse recorded that Karel’s chief com-
plaints included difficulty breathing, pain and thickness in her
throat, bilateral arm pain, pain in her teeth, and difficulty swal-
lowing. Menolascino then saw Karel and obtained additional
medical history. He reviewed her symptoms and determined
that her throat pain was of sudden onset and that she was not
experiencing back or chest pain. Menolascino performed a
physical examination and listened to Karel’s heart. After order-
ing and reviewing an electrocardiogram (EKG) and laboratory
tests, Menolascino formed a diagnosis of a severe allergic reac-
tion to medications Karel had taken, accompanied by a high
degree of anxiety. He treated her with medication administered
intravenously, which reduced her symptoms. Menolascino dis-
charged her from the facility at 9:35 p.m., with instructions to
stop taking the medications which he believed had triggered
the allergic reaction and to see her primary physician in 2 to
3 days to have her blood pressure rechecked. Menolascino
advised Karel to return to Clarkson West if she experienced
further symptoms.

Karel returned to Clarkson West a few hours later at approxi-
mately 2:20 a.m. on September 28, 2000, complaining of neck
pain. Menolascino again listened to Karel’s heart and this time
detected a murmur which had not been present at the time of
his earlier examination. This caused him to suspect a potentially
catastrophic condition involving her aorta. Karel was moved to
a higher acuity room and, at 2:45 a.m., given a medication to
reduce her blood pressure and slow down her heart rate. At 2:50
a.m., another EKG was conducted, and at 3 a.m., a chest x ray
was obtained. Menolascino concluded that Karel needed to be
transported to a hospital for additional tests and began mak-
ing arrangements for her transfer. Menolascino testified that it
was Clarkson West’s policy to transfer a patient only after the
patient’s primary care physician was notified and the accepting

178 Le

hospital confirmed that it had a bed available. Clarkson West’s
director at the time of Karel’s admission testified that the trans-
fer policy then in effect required the “prior approval” of the
receiving facility, meaning that the receiving facility must “have
the resources to take care of that patient,” including a bed for
the patient. An expert testified on behalf of Karel, however,
that a patient in an unstable condition such as Karel should be
immediately transferred to a care center of “greater level” and
that such transfer would not violate “EMTALA,” a federal law
designed to protect patients by preventing transfers to hospitals
without resources to treat the patient. He opined that the law
did not require the receiving facility to have a bed if the patient
being transferred was unstable and in need of greater care.

Menolascino testified that it was Clarkson West’s policy not
to call an ambulance squad to transfer a patient until it received
notification from the accepting hospital that a bed was avail-
able. At 3:50 a.m., Clarkson West was notified by the University
of Nebraska Medical Center that it had a bed, and an ambulance
was called. Karel left in the ambulance at 4:25 a.m., with the
records of all her tests and treatments done at Clarkson West
and Menolascino’s orders.

Those orders, written at 4 a.m., provided: “Admit ICU. Dx
suspect Acute aortic regurgitation vs ascending aorta tear[.]
Condition guarded[.] Contact cardiology for consult. Get
emergent echocardiogram.” Karel arrived at the University of
Nebraska Medical Center’s intensive care unit at 4:57 a.m.
Although Menolascino had ordered an “emergent” echocar-
diogram, it was not until 7:10 a.m. that a cardiology consult
and “transthoracic echo” were ordered by the medical center’s
doctors. Karel went into cardiac arrest and died at 8:59 a.m. An
autopsy revealed that she died of an aortic dissection, a tearing
of the inner lining of her aorta.

Karel’s father, the special administrator of her estate, brought
this action on behalf of the estate and Karel’s minor son against
Menolascino and Clarkson West. Menolascino and Clarkson
West filed a pretrial motion in limine to prohibit the special
administrator from presenting evidence related to print and radio
advertisements produced by Clarkson West during the time
period immediately prior to Karel’s death. They alleged that the

advertisements were irrelevant and that even if relevant their
probative value was outweighed by their prejudice. The district
court sustained the motion in limine.

At trial, the special administrator presented the testimony of
Martin Beerman, marketing director for Clarkson West’s parent
entity, as an offer of proof. Beerman testified that in 1999 and
2000, he promoted Clarkson West through an advertising cam-
paign. The goals of the campaign were to inform the public of
what services the facility offered, including that it was open 24
hours a day, 7 days a week, including holidays. The campaign
used print and radio advertisements directed at women between
the ages of 35 to 54 because it was understood that they made
the most health care decisions for their families. The campaign
emphasized the convenience of the location, the 24-hour avail-
ability, and the capability and comprehensiveness of the facility.
The radio advertisements played on more than 100 occasions in
both 1999 and 2000, and the print advertisements appeared in
the Omaha World-Herald newspaper 12 to 16 times during each
of the 2 years.

Beerman testified that the advertisements used words
designed to convey the capability of the facility, the technology
available at the facility, and the facility’s quality of care. He
testified that the advertisements represented that the doctors at
the facility were capable and competent in using the technology
and that if seconds mattered and when life-threatening condi-
tions occurred, people could come to Clarkson West. During
Beerman’s testimony, the special administrator attempted to
offer a compact disc containing the radio advertisement and.
printouts of the newspaper advertisement. The district court
sustained the defendants’ relevancy objections to the exhibits
and the offer of proof.

The jury returned a verdict in favor of the defendants, and the
special administrator filed this timely appeal, which we moved
to our docket based on our statutory authority to regulate the
caseloads of the appellate courts of this state.!

1 See Neb. Rev. Stat. § 24-1106(3) (Reissue 1995).

180 |

ASSIGNMENTS OF ERROR

The special administrator assigns, restated and consolidated,
that the district court erred in (1) ruling that he was not entitled
to present the testimony and exhibits offered by Clarkson West’s
marketing director, (2) failing to instruct the jury that it could
return a verdict against Clarkson West for its independent neg-
ligence, (3) instructing the jury that violations of the federal
Emergency Medical Treatment and Labor Act could result in
civil and criminal penalties, and (4) denying his motion for
new trial.

STANDARD OF REVIEW

HH In proceedings where the Nebraska Evidence Rules
apply, the admissibility of evidence is controlled by such rules;
judicial discretion is involved only when the rules make such
discretion a factor in determining admissibility. A trial court
has the discretion to determine the relevancy and admissibility
of evidence, and such determinations will not be disturbed on
appeal unless they constitute an abuse of that discretion.

Hi Whether a jury instruction given by a trial court is cor-
rect is a question of law.* When reviewing questions of law, an
appellate court has an obligation to resolve the questions inde-
pendently of the conclusion reached by the trial court.*

ANALYSIS
At trial, there was conflicting expert testimony as to whether
Menolascino met the applicable standard of care in his diagno-
sis and treatment of Karel. The jury resolved this factual dispute
in favor of Menolascino. On appeal, the special administrator
does not challenge the jury’s finding in this regard, and we
therefore do not examine this issue. This appeal instead focuses

2 In re Trust of Rosenberg, 273 Neb. 59, 727 N.W.2d 430 (2007); Roth v.
Wiese, 271 Neb. 750, 716 N.W.2d 419 (2006).

3 Green Tree Fin. Servicing v. Sutton, 264 Neb. 533, 650 N,W.2d 228 (2002);
Sharkey v. Board of Regents, 260 Neb. 166, 615 N.W.2d 889 (2000).

4 Worth v. Kolbeck, 273 Neb. 163, 728 N.W.2d 282 (2007); Castillo v. Young,
272 Neb. 240, 720 N.W.2d 40 (2006).

5 Id.

on whether the district court committed error with respect to the
special administrator’s allegations of Clarkson West’s indepen-
dent negligence.

Markerinc Evipence

HM The special administrator asserts that Beerman’s evi-
dence relating to the marketing campaign conducted by Clarkson
West in the years prior to Karel’s death was relevant to a deter-
mination of the applicable standard of care. Relevant evidence
means evidence having any tendency 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 with-
out the evidence.‘ For evidence to be relevant, all that must be
established is a rational, probative connection, however slight,
between the offered evidence and a fact of consequence.”

Hl In a malpractice action involving professional negligence,
the burden of proof is upon the plaintiff to demonstrate the
generally recognized medical standard of care, that there was
a deviation from that standard by the defendant, and that the
deviation was the proximate cause of the plaintiff’s alleged
injuries.* Obviously, the marketing materials do not pertain to
the specific medical care received by Karel at Clarkson West.
However, we understand the special administrator to contend
that the marketing evidence is relevant to the standard of care
to which Clarkson West should be held. We find no indication
in the record that Clarkson West claimed to be anything other
than a full-service emergency room open 24 hours per day and
capable of addressing life-threatening conditions; Menolascino’s
deposition testimony offered in evidence by the special admin-
istrator confirmed this fact. The jury was instructed that “{a]
physician of an emergency room has the duty to possess and

© Neb. Rev. Stat. § 27-401 (Reissue 1995). See, also, V.C. v. Casady, 262 Neb.
714, 634 N.W.2d 798 (2001); Snyder v. Contemporary Obstetrics & Gyn.,
258 Neb. 643, 605 N.W.2d 782 (2000).

7 See, V.C. v. Casady, supra note 6; Snyder v. Contemporary Obstetrics &
Gyn,, supra note 6.

8 Snyder v. Contemporary Obstetrics & Gyn., supra note 6; Doe v. Zedek, 255
Neb. 963, 587 N.W.2d 885 (1999).

182 Le

use the care, skill, and knowledge ordinarily possessed and used
under like circumstances by other emergency room physicians
engaged in a similar practice in the same or similar community.”
The marketing materials would add or subtract nothing with
respect to the nature of the facility for purposes of defining the
applicable standard of care. And, as one court has recently noted
in concluding that a hospital’s marketing materials were not
even discoverable, the standard of care “in a medical malprac-
tice action is measured against local, statewide, or nationwide
standards and the ‘superior knowledge and skill’ that a provider
actually possesses, . . . not against the knowledge and skill that
the provider claims to possess in its advertising.”®

In its petition, the special administrator alleged that the mar-
keting materials “misled . . . Karel . . . to believe that Clarkson
West . . . was staffed by individuals who possessed the requisite
knowledge and skill to identify serious and life-threatening con-
ditions and to properly attend to those conditions in a timely and
expedient manner.” We, like the trial court, read this allegation
as one for negligent misrepresentation. One of the elements of
a cause of action for negligent misrepresentation is justifiable
reliance on the part of the plaintiff.!° Neither the offer of proof
nor any other part of the record affords any basis for conclud-
ing that Karel relied upon or was even aware of the marketing
activities undertaken by Clarkson West when she chose to seek
medical care at the facility. We conclude that the district court
did not abuse its discretion in sustaining the relevancy objec-
tions to the marketing materials.

Jury INstRUCTION on CLARKSON West’s NEGLIGENCE
The special administrator assigns error by the district court in
failing to instruct the jury that it could return a verdict against
Clarkson West for its negligence. The record includes a stipula-
tion that following the instruction conference, the trial court
submitted to counsel jury forms which it proposed to submit, at

° McCullough v. University of Rochester, 17 A.D.3d 1063, 1064, 794 N.Y.8.2d
236, 237 (2005) (citation omitted).

1 Washington Mut. Bank v. Advanced Clearing, Inc., 267 Neb. 951, 679
N.W.2d 207 (2004).

which time counsel for the special administrator objected to the
court’s failure to include a jury form on which the jury could
find solely against Clarkson West for its separate negligence.
The proposed verdict form is not itself in the record. The verdict
forms given to the jury permitted a verdict only for or against
“the Defendants.” On appeal, the special administrator argues
that the failure to give the separate form to the jury was error.

The record does not reflect that the special administrator
requested a specific jury instruction regarding negligence on the
part of Clarkson West independent of that alleged on the part
of Menolascino. In his proposed instruction, which included
the statement of the case, the special administrator asserted his
claim that the “defendants” were negligent in one or more of
eight particulars. The statement of the case instruction given by
the court utilized substantially similar introductory language, but
included only five of the eight particulars. The special adminis-
trator did not make a specific objection to this instruction, but
when asked if he had any proposed corrections or additions,
counsel replied, “Only as were set out in the instructions that
I’ve offered the Court.” On appeal, he does not specifically
argue that the jury instructions given were erroneous.

The special administrator also requested the following
instruction, based upon NJI2d Civ. 6.30, the essential substance
of which was given by the court:

Professional corporation can act only through its
employees or agents. A corporation is bound by the
knowledge possessed by its employees and agents. It is
also bound by the acts and omissions of its employees
performed within the scope of their employment.

At the time of treatment rendered to Tina Karel, Dr.
Scott Menolascino was acting within the scope of his
duties with Clarkson West Emergi[{C]are. That means that
if you find that Dr. Menolascino is liable to the estate of
Tina Karel . . . then you must also find that Clarkson West
EmergiCare and Nebraska Health Systems doing business
as Clarkson West EmergiCare are also liable to the estate
of Tina Karel... .

Thus, the jury was instructed as to the defendants’ alleged
negligence exactly in the manner proposed by the special

184 Le

administrator, except for the deletion of three specifications
of negligence in the statement of the case. The first of these
involved the claim that Clarkson West “held itself out as an
emergency room capable of handling sudden or life threatening
injuries or illness and capable of providing CT scans on site.”
As we have noted above, this allegation does not relate specifi-
cally to the medical care provided to Karel, and to the extent it
is asserted as a negligent misrepresentation claim, it is unsup-
ported by the record.

HM The second of the negligence specifications included in
the proposed statement of the case instruction but deleted from
the instruction given was a claim that defendants were negli-
gent “[iJn failing to properly investigate, monitor and ascertain
that its employees possessed the requisite knowledge, skill and
training to work in an emergency room setting with patients
like Tina Karel who would present with life threatening condi-
tions.” This claim presumes that Clarkson West employees did
not possess such knowledge, skill, and training, and is therefore
subsumed within the specific claims of negligence directed at
Menolascino, the only Clarkson West employee who is specifi-
cally alleged to have been negligent in providing medical care
to Karel. The third specification of negligence requested by the
special administrator but not included in the court’s statement
of the case instruction was an alleged failure “to adequately
staff the facility so that when a determination of hospitalization
was made the transfer could be facilitated in an efficient and
prompt manner.” This is simply a restatement of the claim sub-
mitted to the jury that the defendants were negligent in “failing
to provide timely transfer from Clarkson West EmergiCare” to
the hospital. A court does not err in failing to give an instruc-
tion if the substance of the proposed instruction is contained in
those instructions actually given. In reviewing a claim of prej-
udice from jury instructions given or refused, an appellate court
must read the instructions together, and if, taken as a whole,
they correctly state the law, are not misleading, and adequately
cover the issues supported by the pleadings and evidence, there

"| Worth v. Kolbeck, supra note 4.

is no prejudicial error.” Applying this standard to the record
before us, we conclude that there was no prejudicial error with |

respect to the jury instructions and verdict forms given by the
district court.

EMTALA Instruction

Instruction No. 14 given to the jury advised that the
Emergency Medical Treatment and Labor Act (EMTALA),” a
federal law regarding the transferring of patients between health
care facilities, contained certain provisions. One provision was
that an “appropriate transfer” occurred when the “receiving
facility” “has available space” and “has agreed to accept trans-
fer of the individual.” Instruction No. 14 further provided: “A
violation of [EMTALA] can result in [a] significant monetary
fine. (This is not the verbatim language from this subsection,
but a synopsis.)”

I The special administrator argues on appeal that the court
erred in giving the instruction because it addressed the “civil
and criminal penalties associated with violation of EMTALA”
and confused the jury. In an appeal based on 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.5 We
find nothing in the language of this instruction that could have
prejudiced Karel or confused the jury.

DENIAL OF Morion FoR New TRIAL
The special administrator asserts that the district court erred.
in denying his motion for new trial. All of the grounds he
asserts as error in this appeal were asserted in support of his
motion for new trial. For the reasons discussed herein, the dis-
trict court did not err in denying the motion for new trial.

2 Orduna v. Total Constr. Servs., 271 Neb. 557, 713 N.W.2d 471 (2006).
3 42 U.S.C. § 1395dd (2000 & Supp. IV 2004).
™ Brief for appellants at 16.

3 Orduna v. Total Constr. Servs., supra note 12; Shipler v. General Motors
Corp., 271 Neb. 194, 710 N.W.2d 807 (2006).

186 a

CONCLUSION
The special administrator’s assignments of error are unsup-
ported by the record and the applicable law. The jury verdict
is affirmed.
AFFIRMED.

Kevin M. Jones AND AMERICAN Famity MuTuAL INSURANCE
Company, A WISCONSIN CORPORATION, APPELLANTS, V.
SHELTER Mutua. INsuraNCE COMPANIES, APPELLEE.

738 N.W.2d 840

Filed August 24, 2007. No. $-06-310.

Eugene L. Hillman and Patricia McCormack, of Hillman,
Forman, Nelsen, Childers & McCormack, for appellants.

Susan Kubert Sapp and Laura R. Hegge, of Cline, Williams,
Wright, Johnson & Oldfather, L.L.P., for appellee.

Heavican, C.J., Connoity, GERRARD, STEPHAN, and
Mrer-Lerman, JJ.

Sreeuan, J.

This appeal requires us to determine whether an insurer’s
definition of “use” of a motor vehicle as “operation and mainte-
nance” violates Nebraska public policy applicable to uninsured
motorist insurance. We conclude that it does not.

FACTS

This case was tried to the district court on stipulated facts.
On December 30, 2003, Kevin M. Jones was a front seat pas-
senger in an automobile driven by Amanda Stastny. The auto-
mobile was struck by an uninsured motorist in Omaha, Douglas
County, Nebraska. The uninsured motorist was legally liable for
the accident.

At the time of the accident, Shelter Mutual Insurance
Companies (Shelter) had in effect a policy of automobile insur-
ance issued to Stastny which insured her automobile. The
policy included uninsured motorist coverage. On the same
date, American Family Mutual Insurance Company (American
Family) had in force an automobile liability insurance policy
issued to Jones’ parents, under which Jones was an additional
insured for purposes of uninsured motorist coverage. Both
Stastny and Jones made claims for uninsured motorist benefits
under the Shelter policy, and Jones made a claim for uninsured
motorist benefits under the American Family policy. Shelter
paid $25,000 in benefits to Stastny, but denied benefits to Jones.
American Family paid Jones $60,000 of its $100,000 policy
limit, and he executed a release and assignment of any rights he
had against Shelter in favor of American Family.

Jones and American Family brought this action to recover
uninsured motorist benefits under the Shelter policy. The policy
provided for uninsured motorist benefits in the amount of
$50,000 per person or $100,000 per accident. It contained a pro-
vision limiting uninsured benefits for non-named insureds to the
minimum limits required by law, which in Nebraska is $25,000
per person.' The Shelter policy provided in relevant part:

" See Neb, Rev. Stat. § 44-6408(1)(a) (Reissue 2004).

188

PART I — AUTO LIABILITY
COVERAGE A — BODILY INJURY LIABILITY;
COVERAGE B — PROPERTY DAMAGE LIABILITY

ADDITIONAL DEFINITIONS USED IN PART I

As used in this Part, insured means:

(1) You, with respect to your ownership or use of the
described auto and your use of a non-owned auto;

(2) any relative, with respect to his or her use of the
described auto or a non-owned auto;

(3) any individual who is:

(a) related to you by blood, marriage, or adoption, who
is primarily a resident of, and actually living in, your
household, including your unmarried and unemancipated
child away at school; or

(b) a foster child in your legal custody for more than
ninety consecutive days immediately prior to the acci-
dent; but only with respect to that individual’s use of the
described auto;

(4) any individual listed in the Declarations as an
“additional listed insured,” but only with respect to that
individual’s use of the described auto; and

(5) any individual who has permission or general
consent to use the described auto. However, the limits of
our liability for individuals who become insureds solely
because of this subparagraph, will be the minimum limits
of liability insurance coverage specified by the financial
responsibility law applicable to the accident, regardless
of the limits stated in the Declarations.

PART IV — UNINSURED MOTORISTS
COVERAGE E — UNINSURED MOTORISTS
ADDITIONAL DEFINITIONS USED IN PART IV
As used in this Part:

(2) Insured means:

(a) You;

(b) any relative;

(c) any individual who is:

(i) related to you by blood, marriage, or adoption, who
is primarily a resident of, and actually living in, your
household, including your unmarried and unemancipated
child away at school; or

Gi) a foster child in your legal custody for more than
ninety consecutive days immediately prior to the acci-
dent; but only when that individual is occupying the
described auto;

(d) any individual listed in the Declarations as an
“additional listed insured,” but only when that individual
is occupying the described auto; and

(e) any individual who has permission or general con-
sent to use the described auto but only when that indi-
vidual is using the described auto. However, the limit of
our liability for individuals who become insureds solely
because of this subparagraph, will be the minimum limits
of uninsured motorist insurance coverage specified by the
uninsured motorist law or financial responsibility law
applicable to the accident, regardless of the limit stated in
the Declarations.

The “DEFINITIONS” section of the Shelter policy, applica-
ble to all sections of the policy, defined “Use” to mean “opera-
tion and maintenance,” “Occupy” to mean “being in physical
contact with a vehicle while in it, getting into it, or getting out
of it,” and “Operate” to mean “physically controlling, having
physically controlled, or attempting to physically control, the
movements of a vehicle.” It is undisputed that Jones was not a
relative of Stastny and was not a named insured or an additional
insured on the Shelter policy. Jones also was not the operator of
the automobile at the time of the accident, nor was he perform-
ing maintenance on the vehicle.

American Family and Shelter filed motions for summary
judgment. The district court granted Shelter’s motion, find-
ing that Jones was not an insured under the Shelter policy and
therefore was not entitled to uninsured motorist benefits. The
district court also determined that notwithstanding this fact,
the American Family policy was Jones’ primary source of
uninsured motorist benefits and that he had not exhausted this

190 es

coverage prior to asserting his claim against Shelter. The court
concluded that “the Shelter . . . policy denying uninsured motor-
ist coverage to Jones under the circumstances is not contrary to
Nebraska law.”

Jones and American Family (hereinafter collectively appel-
lants) filed this timely appeal. We granted their petition to
bypass the Court of Appeals.”

ASSIGNMENTS OF ERROR
Appellants assign, restated and consolidated, that the district
court erred in (1) failing to find that language in the Shelter pol-
icy violates Nebraska public policy and the Nebraska uninsured
motorist statutes, (2) failing to find that the Shelter policy pro-
vides uninsured motorist coverage for Jones, and (3) finding that
American Family was the primary uninsured motorist carrier.

STANDARD OF REVIEW

HM The interpretation of an insurance policy is a question
of law, in connection with which an appellate court has an obli-
gation to reach its own conclusions independently of the deter-
saination made by the trial court.> Statutory interpretation is a
question of law, which an appellate court resolves independently
of the trial court.*

HM In reviewing a summary judgment, an appellate court
views the evidence in the light most favorable to the party
against whom the judgment is granted and gives such party
the benefit of all reasonable inferences deducible from the evi-
dence.> When adverse parties have each moved for summary
judgment and the trial court has sustained one of the motions,
the reviewing court obtains jurisdiction over both motions and
may determine the controversy which is the subject of those

? See Neb. Rev. Stat. § 24-1106(2) (Reissue 1995).

3 Lovette v. Stonebridge Life Ins. Co., 272 Neb. 1, 716 N.W.2d 743 (2006);
Dutton-Lainson Co. v. Continental Ins. Co., 271 Neb. 810, 716 N.W.2d
87 (2006).

4 Livengood v. Nebraska State Patrol Ret. Sys., 273 Neb. 247, 729 N.W.2d
55 (2007).

5 Johnson v. Knox Cty. Partnership, 273 Neb. 123, 728 N.W.2d 101 (2007).

motions or make an order specifying the facts which appear
without substantial controversy and direct such further proceed-
ings as the court deems just.°

ANALYSIS
We begin from a point of consensus. The district court deter-
mined that Jones was not an “insured” as defined in the Shelter
policy. Appellants and Shelter agree with that reading of the
policy. The question presented is whether the Shelter policy
provision defining “use” to include only “operation and main-
tenance” of the vehicle is contrary to the public policy embod-
ied in the Uninsured and Underinsured Motorist Insurance
Coverage Act,’ the purpose of which is “to give the same
protection to a person injured by an uninsured or underinsured
motorist as the person would have if he or she had been injured
in an accident caused by an automobile covered by a standard
liability policy.”* The provisions of the act are to be liberally
construed to accomplish such purpose.?
The act requires in relevant part:
No policy insuring against liability imposed by law for
bodily injury . . . suffered by a natural person arising
out of the ownership, operation, maintenance, or use of
a motor vehicle within the United States . . . shall be
delivered, issued for delivery, or renewed with respect to
any motor vehicle principally garaged in this state unless
coverage is provided for the protection of persons insured
who are legally entitled to recover compensatory damages
for bodily injury . . . from (a) the owner or operator of an
uninsured motor vehicle... 1°
Appellants contend that this statute “specifies the circumstances
under which uninsured coverage must be provided” and that

5 Ia.
7 Neb. Rev. Stat. §§ 44-6401 to 44-6414 (Reissue 2004).

8 See Allied Mut. Ins. Co. v. Action Elec. Co., 256 Neb. 691, 697, 593 N.W.2d
275, 279 (1999).

9 Id.

10 § 44-6408(1) (emphasis supplied).

those circumstances include “when bodily injury results from
the ‘ownership, operation, maintenance, or use of a motor
vehicle”! They argue that the statute clearly requires that
“owaership,” “operation,” “maintenance,” and “use” must have
separate definitions and meaning and that Shelter’s policy fails
to carry out this statutory intent because it equates “use” with
“operation and maintenance” in its definitions.’

Our case law recognizes that in the context of motor vehicle
insurance, the term “use” may have a broader meaning than
“operation,” especially when applied to passengers.’* However,
the fact that we have held in past cases that a passenger is
“using” a motor vehicle for purposes of a motor vehicle insur-
ance policy is not determinative here, because there is no indi-
cation in those cases that the policies included the restrictive
definition of “use” found in the Shelter policy.’*

In Allied Mut. Ins. Co.,* we held that the phrase “per-
sons insured” as used in § 44-6408 means “those persons
insured under the liability provisions of a motor vehicle policy.”
Because the liability coverage of the policy at issue in that case
insured persons “using” the vehicle, we held that the insurer
could not limit underinsured motorist coverage “to the smaller
class of persons ‘occupying’ the vehicle.”

Hl Unlike the policy at issue in Allied Mut. Ins. Co., the
Shelter policy before us defines “insured” in substantially the
same way under its liability and uninsured motorist coverages.
Although both provide coverage for persons using the vehicle

1 Brief for appellants at 15.

® See Zach v. Nebraska State Patrol, 273 Neb. 1, 727 N.W.2d 206 (2007)
(holding court must attempt to give effect to all parts of statute, and no
word, clause, or sentence will be rejected as superfluous or meaningless).

13 See, Allied Mut. Ins. Co. v. Action Elec. Co., supra note 8; National Union
Fire Ins. Co. v. Bruecks, 179 Neb. 642, 139 N.W.2d 821 (1966); Metcalf v.
Hartford Acc. & Ind. Co., 176 Neb. 468, 126 N.W.2d 471 (1964).

"4 See id.

15 Allied Mut. Ins. Co. v. Action Elec. Co., supra note 8, 256 Neb. at 699, 593
N.W.2d at 280.

16 Td.

with the permission of the named insured, “use” is narrowly
defined to include only “operation and maintenance.” Thus, a
passenger is not an “insured,” as defined by the policy, under
either its liability or its uninsured motorist insurance provi-
sions. An insurance policy is a contract between an insurance
company and an insured, and as such, the insurance company
has the right to limit its liability by including limitations in the
policy definitions."’ If the definitions in the policy are clearly
stated and unambiguous, the insurance company is entitled to
have such terms enforced.'*

Appellants argue that Shelter’s definition is contrary to the
language of § 44-6408. Clearly, however, § 44-6408 relates
specifically to uninsured and underinsured motorist coverage
and does not dictate who must be insured under the liabil-
ity coverage of a policy. The phrase “ownership, operation,
maintenance, or use” in § 44-6408 simply describes the type
of liability coverage a policy may offer. As we held in Allied
Mut. Ins. Co., the statute then requires that any person or class
of persons insured under that liability coverage must also be
insured under the uninsured motorist coverage. Here, Shelter
has chosen to limit both its liability and uninsured coverage for
a person “using” the vehicle with the consent of the insured to
those circumstances in which the use involves the operation and
maintenance of the vehicle. Such limitation does not violate the
public policy expressed in § 44-6408.

As an alternative basis for its ruling in favor of Shelter, the
district court determined that the American Family policy was
Jones’ “primary source of benefits under the circumstances”
and that Jones’ failure to exhaust such benefits barred any claim
against Shelter.

Section 44-6411 provides:

(1) In the event an insured is entitled to uninsured
or underinsured motorist coverage under more than one
policy of motor vehicle liability insurance, the maximum

" Hillabrand v. American Fam. Mut. Ins. Co., 271 Neb. 585, 713 N.W.2d
494 (2006).

8 id.

amount an insured may recover shall not exceed the high-
est limit of any one such policy.

(2) In the event of bodily injury, sickness, disease,
or death of an insured while occupying a motor vehicle
not owned by the insured, payment shall be made in the
following order of priority, subject to the limitations in
subsection (1) of this section: (a) The uninsured or under-
insured motorist coverage on the occupied motor vehicle
is primary; and (b) if such primary coverage is exhausted,
other uninsured or underinsured motorist coverage avail-
able to the insured is excess.

(3) When multiple policies apply, payment shall be made
in the following order of priority, subject to the limit of
liability for each applicable policy:

(a) A policy covering a motor vehicle occupied by the
injured person at the time of the accident;

(c) A policy covering a motor vehicle not involved in
the accident with respect to which the injured person is
an insured.

(Emphasis supplied.) Jones was not an insured under the Shelter
policy insuring the vehicle in which he was an occupant at the
time of his injury. Accordingly, under § 44-6411, he was not
“entitled” to benefits under more than one policy, nor do “mul-
tiple policies” apply to him. The district court correctly found
that the priority-of-payment provisions in § 44-6411 were not
applicable and that the American Family policy is the primary
policy under the circumstances of this case.

CONCLUSION
For the reasons discussed, Shelter’s definition of “use” to
include only “operation and maintenance” does not violate the
public policy embodied in § 44-6408. Because Jones was not an
insured under the uninsured motorist coverage afforded by the
Shelter policy, the priority-of-payment provisions in § 44-6411
are inapplicable to him. We affirm the judgment of the dis-
trict court.
AFFIRMED.
Wricut and McCormack, JJ., not participating.

Gerrarb, J., concurring.

I agree with the majority opinion that Shelter’s definition of

se” as “operation and maintenance” does not violate existing
Nebraska public policy applicable to uninsured motorist insur-
ance. While Shelter’s definition of use does not expressly violate
the current public policy (such as it is) embodied in Neb. Rev.
Stat. § 44-6408 (Reissue 2004), Shelter’s insurance policy has
exposed a loophole in Nebraska law that, until closed by the
Legislature, will leave many Nebraskans at the mercy of unin-
sured motorists.

The problem is created by Nebraska’s omnibus statute for
motor vehicle insurance, which does not provide the same pro-
tection that is provided to motorists in nearly every other state.
Like most states, Nebraska requires motor vehicles to be cov-
ered by some form of financial security, usually liability insur-
ance.! And like most states, Nebraska has a statute specifying
the coverage necessary to meet that requirement.”

But in most states, the omnibus statute sets minimum stan-
dards for both the amount of coverage and the scope of that
coverage.’ In other words, the policy must provide coverage up
to a monetary limit, must cover a certain range of injuries, and
most pertinent to this case, must include particular people as
“4nsured.”* In nearly every state, an omnibus statute requires a
policy to insure any motor vehicle owned by the insured and any
other person using that vehicle with permission of the insured
against loss from liability for damages “arising out of the owner-
ship, maintenance, or use” of the vehicle.> In a few other states,

| See Neb. Rev. Stat. § 60-387 (Cum. Supp. 2006).
? See Neb. Rev. Stat. § 60-310 (Cum. Supp. 2006).

3 See, generally, 8 Lee R. Russ & Thomas F. Segalla, Couch on Insurance 3d.
§ 111:22 (2004); 1 Irvin E. Schermer and William J. Schermer, Automobile
Liability Insurance § 3:9 (4th ed. 2004).

4 See id.

5 See id. See, e.g., Alaska Stat. § 28.22.101 (2004); Ariz. Rev. Stat. Ann.
§ 28-4009 (2004); Cal. Ins. Code § 11580.1 (West Cum. Supp. 2007); Colo.
Rev. Stat. Ann. § 10-4-620 (West 2006); Conn. Gen. Stat. Ann. § 384-335
(West 2000); Del. Code Ann, tit. 21, § 2118(a) (2005); Fla. Stat. Ann.
§ 627.736(1) (West Cum. Supp. 2007); Haw. Rev. Stat. § 431:10C-301(b)

196 Le

statutes more specifically address whether liability coverage
must extend to passengers and who must be provided with unin-
sured motorist protection.° Florida, for example, has specified in
commendable detail the coverage that compulsory automobile
liability insurance should provide, including coverage for pas-
sengers and permissive users and the particular benefits to which
an insured is minimally entitled.’

By contrast, Nebraska’s omnibus statute, § 60-310, only
establishes monetary limits for a policy. It does not require
a motorist’s liability insurance to cover any particular range
of persons or injuries. Nebraska’s insurance requirement can
be satisfied by evidence of an “automobile liability policy,”
which only requires insurance “protecting other persons from

(2005); Idaho Code Ann. § 49-1212 (Cum. Supp. 2007); Ind. Code Ann.
§ 9-25-2-3 (LexisNexis 2004); Iowa Code Ann. § 321.1(24B) (West Cum.
Supp. 2007); Kan. Stat. Ann. § 40-3107 (2001); Ky. Rev. Stat. Ann.
§ 304.39-020 (LexisNexis 2006); La. Rev. Stat. Ann. § 32:900(B)(2) (Cum.
Supp. 2007); Me. Rev. Stat. Ann. tit. 29-A, § 1605 (1996 & Cum. Supp.
2004); Mass. Gen. Laws Ann. ch. 90, § 34A (West 2001); Mich. Comp.
Laws Ann. § 500.3101 et seq. (West 2002 & Cum. Supp. 2007); Minn. Stat.
Ann. § 65B.49 (West Cum. Supp. 2007); Miss. Code Ann. § 63-15-3())
(Cum. Supp. 2006); Mo. Ann. Stat. § 303.190 (West 2003); Mont. Code
Ann. § 61-6-103 (2005); Nev. Rev. Stat. § 485.3091 (2005); N.H. Rev.
Stat. Ann. § 259:61 (Cum. Supp. 2006); N.J. Stat. Ann. § 39:6B-1 (West
Cum. Supp. 2007); N.M. Stat. § 66-5-205.3 (2006); N.Y. Veh. & Traf.
Law § 311 (McKinney 2005); N.C. Gen. Stat. § 20-279.21 (2005); N.D.
Cent. Code § 39-16.1-11 (Supp. 2007); Ohio Rev. Code Ann. § 4509.01(K)
(LexisNexis 2003); Okla. Stat. Ann. tit. 47, § 7-600 (West 2007); Or. Rev.
Stat. § 806.080 (2005); 75 Pa. Cons. Stat. Ann. § 1702 (West 2006); R.I.
Gen. Laws § 31-47-2 (2002); S.C. Code Ann. § 38-77-140 et seq. (Cum.
Supp. 2006); S.D. Codified Laws § 32-35-70 (2004); Tenn. Code Ann.
§§ 55-12-102 and 55-12-122 (2004); Tex. Transp. Code Ann. § 601.071
et seq. (Vernon 1999); Utah Code Ann. §§ 31A-22-303 and 31A-22-304
(2005); Va. Code Ann. § 46.2-472 (2005); W. Va. Code Ann. § 17D-4-2
(LexisNexis 2004); Wyo. Stat. Ann. § 31-9-405 (2007).

6 See, e.g., Ga. Code Ann. § 33-7-11 (Supp. 2006) (uninsured motorist cover-
age for permissive users); Md. Code Ann. Ins. § 19-505 (LexisNexis Supp.
2006); Md. Code Ann. Transp. § 17-103 (LexisNexis 2006) (specifying
coverage for permissive users); Wis. Stat. Ann. § 632.32 (West 2004) (unin-
sured motorist coverage for permissive users; no passenger exclusions).

7 See Fla. Stat. Ann. § 627.736(1).

damages for liability on account of accidents” in the amount
of $25,000 or $50,000, depending on the injury.® Because
Nebraska’s peculiar omnibus statute does not specify the scope
of insurance coverage Nebraska motorists must carry, Shelter
was left free to define “use” in a way that is inconsistent with
the well-established meaning of the word and in a way that
would not have met the minimum standards required nearly
everywhere else.

Nebraska law does require that policies certified as “proof of
financial responsibility” insure the named insured and permis-
sive users “against loss from the liability imposed by law for
damages arising out of the ownership, maintenance, or use of
such motor vehicle.”® But that statute only extends to policies
intended to provide the “proof of financial responsibility” that
must be filed by persons subject to the Motor Vehicle Safety
Responsibility Act,!° whose licenses have been suspended or
revoked for reasons such as an unsecured accident, an unsatis-
fied judgment, or a criminal conviction. It does not apply to poli-
cies not certified for that purpose,’ and Nebraska’s compulsory
financial responsibility law can be satisfied by either “proof
of financial responsibility” or the lesser showing of “evidence
of insurance” explained above.” When the Legislature passed
1995 Neb. Laws, L.B. 37, enacting the predecessor to § 60-310,
it may have intended to require the same insurance coverage
for all motorists. But the statutes as currently written do not
accomplish that.

It is clear from the record in this case that Shelter’s policy
was intended to comply with Nebraska’s compulsory insur-
ance statutes. If Nebraska had an omnibus statute imposing the

® See § 60-310.

9 See Neb. Rev. Stat, § 60-534 (Reissue 2004). See, also, Neb. Rev. Stat.
§ 60-346 (Cum. Supp. 2006).

10 Neb. Rev. Stat. ch. 60, art. 5 (Reissue 2004 & Cum. Supp. 2006).

4 See, State Farm Mut. Auto. Ins. Co. v. Hildebrand, 243 Neb. 743, 502

N.W.2d 469 (1993); State Farm Mut. Auto. Ins. Co. v. Pierce, 182 Neb. 805,
157 N.W.2d 399 (1968).

2 See § 60-387.

198 —

requirements found to be minimally acceptable in nearly every
other state, Jones, as a passenger, would have been engaged
in permissive “use” of the vehicle within the well-established
meaning of the word and would have been an “insured” for
purposes of uninsured motorist coverage.'* The result in this
case is a direct consequence of that defect in Nebraska’s motor
vehicle liability insurance statutes.

Fourteen years ago, several members of this court character-
ized Nebraska statutes on liability insurance coverage for motor
vehicles as “a series of intermittent skin grafts on an amorphous
body of law with the anatomical deficiency of no backbone,”
concluding that the deficiencies in the statutes “produc[ed] a
public misperception and the mirage of mandatory insurance
coverage.”!* While the situation now is not as unfortunate as
it was then, unless there is further improvement, Nebraska’s
omnibus statute cannot achieve its remedial purpose of protect-
ing the public. And the Uninsured and Underinsured Motorist
Insurance Coverage Act'® will not serve its purpose of protect-
ing the public from negligent, financially irresponsible motor-
ists‘? so long as innocent passengers can be effectively excluded
from its benefits.

It is a fact of life in the insurance industry that consumers
have little if any leverage when purchasing insurance policies"
and that consumers unaware of or unschooled in the vagaries
of insurance contracts may be misled into believing they have
purchased coverage when in reality they have not. It is for

13 See Protective Fire & Cas. Co. v. Cornelius, 176 Neb. 75, 125 N.W.2d
179 (1963).

\ Hildebrand, supra note 11, 243 Neb. at 757, 502 N.W.2d at 477 (Shanahan,
J., concurring; White, Fahmbruch, and Lanphier, JJ., join).

15 See Cornelius, supra note 13.
16 Neb, Rev. Stat. § 44-6401 et seq. (Reissue 2004).

Continental Western Ins. Co. v. Conn, 262 Neb. 147, 629 N.W.2d
494 (2001).

18 See Hildebrand, supra note 11 (Shanahan, J., concurring).

19 See Allied Mut. Ins. Co. v. Action Elec. Co., 256 Neb. 691, 593 N.W.2d
275 (1999).

Pe °
these reasons that the legislatures in nearly every state have
enacted statutory schemes that serve the purpose of providing
compensation for innocent victims of automobile accidents and
protecting named insureds, permittees, and injured persons.” |
Nebraska’s Legislature would be well advised to follow their
example. For the moment, however, I am constrained to concur
in the properly reasoned judgment of the court. f
Heavican, C.J., joins in this concurrence.

2 See 8 Russ & Segalla, supra note 3.

IN RE Trust CREATED BY Henry S. HANSEN, DECEASED.
WELLS Farco Bank, N.A., TRUSTEE OF THE Henry S.
HANSEN TRUST, ET AL., APPELLEES, V. ESTATE OF
RurtH ELAINE MANSFIELD, APPELLANT.

739 N.W.2d 170

Filed August 31, 2007. No. S-06-002.

Michael D. McClellan and William E. Gast, of Gast &
McClellan, for appellant.

MH. Weinberg, of Weinberg & Weinberg, P.C., for appellees
Stephen S. Scholder and Paula Sue Baird Kaminski.

William R. Johnson, of Lamson, Dugan & Murray, L.L.P.,
and Raymond E. Walden, of Walden Law Office, for appellee
Wells Fargo Bank, N.A.

Heavican, C.J., WricHt, CoNNOLLY, GERRARD, STEPHAN, and
McCormack, JJ.

Heavican, C.J.
NATURE OF CASE

The county court determined, without an evidentiary hear-
ing, that after the beneficiary of a discretionary support trust
had died, the trustee could not pay claims for the beneficiary’s
health care expenses because the purpose of the trust had ceased
to exist. We conclude that a decedent beneficiary’s estate can
seek to enforce the beneficiary’s interests in a trust to the same
extent that the beneficiary could have enforced his or her inter-
ests immediately before death. We further conclude that an
evidentiary hearing was required before the county court could

determine whether the trustee abused its discretion or had a duty
to make support payments. Accordingly, we reverse and vacate
the county court’s order and remand the cause with directions to
hold an evidentiary hearing.

BACKGROUND

Trust PROVISIONS

In June 1979, Henry S. Hansen executed this inter vivos trust.
The trust provided for the care, support, and maintenance of
Hansen during his lifetime. Upon Hansen’s death, the residue of
his estate was to be held in trust for the lifetime benefit of his
daughters. Article I provided: “The Trust shall continue for the
duration of the lives of Grantor’s two daughters, MILDRED B.
BONACCI and RUTH E. MANSFIELD, and until the death of
the survivor of them.” Article II provided in part:

The Trustee shall make two divisions of the corpus of
the Trust, one for MILDRED B. BONACCI and one for
RUTH E. MANSFIELD. During the lifetime of each of
said daughters, the Trustee shall pay the net income of the
respective divisions of the Trust to said daughters in install-
ments not less frequently than quarterly. In addition, should
either of said daughters, by reason of accident or illness
require funds in excess of the net income of the Trust, then
the Trustee shall make such payments from such daughter’s
division of the principal as it may deem proper for the bene-
fit of such daughter.

Upon the surviving daughter’s death, article IM instructed the
trustee to pay Hansen’s four grandchildren $5,000 each and to
distribute the remaining funds to two of those grandchildren,
Paula Sue Baird Kaminski and Stephen S. Scholder.

REMAINDER BENEFICIARIES’ FILING AFTER RuTH’s DEATH

Hansen died in October 1979. In May 2005, the trustee, Wells
Fargo Bank, N.A., registered Hansen’s trust with the county
court, with notice to interested parties. On June 6, 2005, the
remainder beneficiaries, Kaminski and Scholder, filed an action
to declare rights with the county court, alleging that Mildred
B. Bonacci had died on June 30, 1986, and that Ruth Elaine
Mansfield (Ruth) had died on January 8, 2005. They alleged that

202 be

on January 19, a person named “Jane Falion” had filed a claim
with the trustee requesting payment for Ruth’s medical expenses
and that the trustee had denied the claim on March 10. The
record does not reflect whether Falion is Ruth’s personal rep-
resentative. Two letters, one from Falion and another from the
trustee, were attached as exhibits, along with invoices for Ruth’s
expenses. In the trustee’s letter, a trust officer stated that the
trustee did not believe it could make a distribution after Ruth’s
death and that “it is our understanding that [Ruth’s] Estate has
sufficient assets to pay those expenses.”

Trustee Seeks Court DirgcTIVE

On June 7, 2005, the trustee filed a petition for a trust admin-
istration proceeding. The same letters were attached as exhibits.
The trustee alleged that it had denied the claim “until such time
as [it] obtained credible information regarding the composi-
tion of [Ruth’s] probate estate” and that the estate had failed to
provide this information upon request. The trustee requested that
the court interpret the trust and direct how it should distribute
the assets.

Rutu’s Estate Sues TRUSTEE

In August, Ruth’s estate filed an action for breach of the trust
and to compel the trustee to comply with its duties. Ruth’s estate
alleged that beginning in 2001, Ruth’s physical and mental
health had deteriorated and that her relatives and representa-
tives “inquired to the Trustee about the terms of the Trust and,
in particular, the sections of the Trust [dealing with payments
to the beneficiaries for illness and distribution of the estate].”
It alleged that the trustee knew or should have known of Ruth’s
medical condition and needs, but did not exercise any diligence
in inquiring about her support or distribute any funds for her
support. The estate did not allege that anyone on Ruth’s behalf
asked the trustee for support payments before Ruth’s death.

The court set an evidentiary hearing on the estate’s action
against the trustee for August 23, 2005. Before the hearing,
Ruth’s estate deposed the trust officer who had written the
trustee’s letter, and the remainder beneficiaries served additional
discovery on the trustee. On August 11, the trustee moved to

Pe ”
consolidate the actions and continue the evidentiary hearing. The

court also set a hearing on those motions for August 23, to be
conducted before the evidentiary hearing.

REMAINDER BENEFICIARIES SEEK Court DirEcTIvVE

In addition to their original action to declare rights, on August
15, 2005, the remainder beneficiaries also moved for a decla-
ration of rights. In their motion, they asked the county court
to decide three issues as a matter of law in order to guide the
parties in resolving their dispute. The remainder beneficiaries
asked, restated: (1) Does the court or trustee determine the pro-
priety of distributions under the trust? (2) Can the trustee deny
payments for billings related to Ruth’s care, accrued before her
death but not submitted until after her death? (3) If billings sub-
mitted after Ruth’s death may be paid, what standards should
the trustee use in determining whether to pay the expenses? The
remainder beneficiaries further stated: “The factual development
of the case can still proceed to an ultimate determination of
rights based upon the Court’s legal guidance . . . .”

County Court HEARINGS

On August 23, 2005, just before the hearing on the trustee’s
motions to continue and to consolidate the actions, the county
court judge had a conversation with counsel for the remainder
beneficiaries. Counsel stated that the trustee and the remainder
beneficiaries would argue that the judge’s powers “were done”
after Ruth’s death and that the evidentiary hearing may not be
necessary. During the hearing, the court stated that it could not
conduct the evidentiary hearing because another case was taking
up the afternoon.

Counsel for the remainder beneficiaries stated that the remain-
der beneficiaries and the trustee were asking for a ruling on
whether postdeath payments could be made if there were no bills
submitted before Ruth’s death and that if the court concluded the
trust was unambiguous, it could decide that issue as a matter of
law. They argued that if the court concluded the payments could
be made, then Ruth’s estate could submit evidence.

Ruth’s estate agreed with the remainder beneficiaries that
the threshold issue was whether the trustee could make the

204 Es

payments, but argued that there was evidence the court must
hear before making that determination. In addition, Ruth’s estate
argued that there would be evidence that the trustee was aware
of Ruth’s circumstances before her death and that there was a
request for support payments prior to her death. The court stated
it would not make a determination or receive evidence that day
and continued the hearing.

Various discovery actions and motions to compel Ruth’s
estate to produce documents were filed during the fall of 2005.
In November, the court sustained the remainder beneficiaries’
motion to compel discovery and gave Ruth’s estate 60 days to
respond. On December 23, however, the court issued a written
order, concluding that an evidentiary hearing was unnecessary
and deciding the dispute.

County Court’s ORDER

The county court specifically found:

Ruth . . . was [a] successful business woman and had
substantial income at her disposal, exclusive of the Trust
income. As she advanced in age, Ruth . . . became ill
and infirm. Medical bills and last illness expenses were
incurred. On January 8, 2005, Ruth . . . died. Thereafter,
on January 19, 2005, for the first time, representatives of
Ruth[’s] estate made a written request to the Trustee for
payment of these expenses from the Trust funds.

The court determined that the Hansen trust was a discretion-
ary support trust because the support payments did not become
mandatory until “the Trustee in [its] discretion determines that
the beneficiary requires funds in excess of the Trust income.”
The court ultimately concluded that the trustee had properly
denied payment of the medical bills because the purpose of the
trust had ended with Ruth’s death and the payments would only
benefit Ruth’s creditors and heirs.

Ruth’s estate timely appealed.

ASSIGNMENTS OF ERROR
Ruth’s estate assigns that the county court erred in (1) ren-
dering a factual and legal decision without the benefit of an
evidentiary hearing, (2) determining that Ruth’s interests in the

trust ended with her death, (3) misapplying the law applicable to
determining the purposes of a trust, (4) finding that the trustee
had satisfied its duties under the trust, and (5) entertaining
communications with counsel for the remainder beneficiaries
outside the presence of the other parties.

STANDARD OF REVIEW

HBA ppeals involving the administration of a trust are equity
matters and are reviewable in an appellate court de novo on the
record.' In the absence of an equity question, an appellate court,
reviewing probate matters, examines for error appearing on
the record made in the county court.? When reviewing a judg-
ment for errors appearing on the record, the inquiry is whether
the decision conforms to the law, is supported by competent
evidence, and is neither arbitrary, capricious, nor unreasonable.?
In instances when an appellate court is required to review cases
for error appearing on the record, questions of law are nonethe-
less reviewed de novo on the record.*

ANALYSIS

Ruth’s estate contends the county court could not determine
the terms of the trust or whether the trustee had complied with
its duties under the trust without first conducting an eviden-
tiary hearing. The remainder beneficiaries argue the court could
decide this issue as a matter of law because a trustee has no
discretion to make support payments after a beneficiary’s death.
They also characterize the court’s order as a default judgment
and their August 15, 2005, motion to declare rights as a motion
for a judgment on the pleadings.

Nature OF REMAINDER BENEFICIARIES’ MOTION
Hl Neb. Ct. R. of Pldg. in Civ. Actions 12(c) (rev. 2003)
provides in part: “After the pleadings are closed but within such
time as not to delay the trial, any party may move for judgment

' In re Trust of Rosenberg, 273 Neb. 59, 727 N.W.2d 430 (2007).
2 Id,
3 Id,
4 Id.

206 Es

on the pleadings.” The remainder beneficiaries’ August 15, 2005,
filing is entitled “Motion of Remaindermen for a Declaration
of Rights and Notice,” not a request for a judgment on the
pleadings. Moreover, a motion for judgment on the pleadings is
properly granted when it appears from the pleadings that only
questions of law are presented.>

The remainder beneficiaries admitted in their motion that
there were issues of fact to be resolved but stated that “[t]he
factual development of the case can still proceed to an ultimate
determination of rights based upon the Court’s legal guidance
in an expeditious manner.” Thus, their characterization of the
motion as a request for a judgment on the pleadings is with-
out merit.

Neither was the August 15, 2005, motion a request for a
default judgment. The remainder beneficiaries did not allege that
Ruth’s estate had failed to file an answer, nor did they ask the
court to determine that the trustee could not pay the billings for
Ruth’s care because of her estate’s alleged default. Rather, they
ask the county court to decide whether the trustee could pay the
billings and, if so, what standards should be applied.

Moreover, we reject the remainder beneficiaries’ argument
that Ruth’s estate “failed to answer [or] vacate the default judg-
ment between August 23, 2005 and the date of the Order of
December 22, 2005.” No judgment in this case was entered
before December 23, 2005, and the county court had authority
to combine the various requests for relief into one proceeding,”
which consolidation the trustee specifically requested. Their
motion is more properly characterized as seeking the court’s
direction in a matter of trust administration.

HMM The act of registering a trust gives the county court
jurisdiction over the interests of all notified beneficiaries to
decide issues related to any matter involving the trust’s admin-
istration, including a request for instructions or an action to

5 Johnson v. State, 270 Neb. 316, 700 N.W.2d 620 (2005).
6 Brief for appellees Kaminski and Scholder at 24.
7 See Neb. Rev. Stat. § 30-3814(d) (Cum. Supp. 2006).

Pe ”
declare rights. In exercising probate jurisdiction, a court may
use equity power and principles to dispose of a matter within
the court’s probate jurisdiction.°

HM Section 30-3812 does not limit to trustees the right to
seek instructions from the court.!° Further, Nebraska’s declara-
tory judgment statutes allow trustees and persons interested in
the administration of a trust to seek a declaration regarding any
question arising in the administration of a trust.!! Thus, without
deciding the propriety of the remainder beneficiaries’ motion
under these circumstances, we construe their motion as a request
for the court to instruct the trustee on its duties and powers.

This reading of § 30-3812 is consistent with a proposed rule
for the Restatement (Third) of Trusts. As of the date of this
opinion, the American Law Institute has tentatively approved the
2005 draft of the Restatement (Third) of Trusts § 71 at 9 (Tent.
Draft No. 4, 2005), which provides: “A trustee or beneficiary
may apply to an appropriate court for instructions regarding the
administration or distribution of the trust if there is reasonable
doubt about the powers or duties of the trusteeship or about
the proper interpretation of the trust provisions.”!? Because a
“beneficiary” includes persons with “a present or future ben-
eficial interest in a trust, vested or contingent,’" the proposed
Restatement rule also allows remainder beneficiaries to request
the court to instruct a trustee on its powers and duties.

8 See Neb. Rev. Stat. §§ 30-3812 and 30-3819 (Cum. Supp. 2006).

° Inre Estate of Stephenson, 243 Neb. 890, 503 N.W.2d 540 (1993). See, also,
Neb. Rev. Stat. § 30-3806 (Cum. Supp. 2006).

© See In re Trust of Rosenberg, 269 Neb. 310, 693 N.W.2d 500 (2005).
1 Neb. Rev. Stat. § 25-21,152 (Reissue 1995).

” See, also, American Law Institute, 82d Annual Meeting: 2005 Proceedings
313 (2005) (tentatively approving draft); George Gleason Bogert & George
Taylor Bogert, The Law of Trusts and Trustees § 559 (rev. 2d ed. 1980).

13 Neb. Rev. Stat. § 30-3803(3)(A) (Cum. Supp. 2006). See, also, Restatement
(Third) of Trusts § 48, comment a. (2003).

208 Es

Type or Trust HANSEN CREATED

Ruth’s estate argues that a trustee’s liability for abusing its
discretion during a beneficiary’s lifetime is not extinguished by
the beneficiary’s death and that the county court could not make
that determination without an evidentiary hearing. The remain-
der beneficiaries argue that “[uJnder a discretionary support
trust, after a life beneficiary’s death, the trustee cannot distribute
assets to or for the beneficiary because the purpose of the trust
related to the life beneficiary has ceased.”

HE Under our de novo on the record review, we determine
that the threshold issue presented by these arguments is what
type of trust the settlor created. The extent of the beneficiary’s
interest in a trust depends upon the discretionary power that the
settlor intended to grant the trustee.'> When the parties do not
claim that the terms are unclear or contrary to the settlor’s actual
intent, the interpretation of a trust’s terms is a question of law.'®
The parties do not claim that the terms of the trust are unclear
or fail to accurately reflect Hansen’s intent. Thus, the type of
trust he created is a question of law, and we conclude that the
county court and both parties are laboring under an incorrect
assumption that Hansen created a discretionary support trust, or
hybrid trust.

We begin with the distinction between a support trust and
discretionary trust, which we recently clarified in Pohlmann v.
Nebraska Dept. of Health & Human Servs.":

“The settlor’s intent determines whether a trust is classified
as a support or a discretionary trust... . A support trust
essentially provides the trustee ‘shall pay or apply only so

\ Brief for appellees Kaminski and Scholder at 29.

15 See, Restatement (Third) of Trusts, supra note 13, § 50(2); Restatement
(Second) of Trusts § 128 (1959).

6 See, § 30-3803(19); In re Trust of Rosenberg, supra note 1; Smith v. Smith,
246 Neb. 193, 517 N.W.2d 394 (1994). See, also, Neb. Rev. Stat. § 30-3841
(Cum. Supp. 2006).

17 Pohlmann v. Nebraska Dept. of Health & Human Servs., 271 Neb. 272, 280,
710 N.W.2d 639, 645 (2006), quoting Eckes v. Richland Cty. Soc. Ser., 621
N.W.2d 851 (N.D. 2001). See, also, Restatement (Second) of Trusts, supra
note 15, comments d. and e.

much of the income and principal or either as is necessary
for the education or support of a beneficiary... . A sup-
port trust allows a beneficiary to compel distributions of
income, principal, or both, for expenses necessary for the
beneficiary’s support... .
“Conversely, a discretionary trust grants the trustee
‘uncontrolled discretion over payment to the beneficiary’
and may reference the ‘general welfare’ of the beneficiary. .
. . [T]he beneficiary of a discretionary trust does not have
the ability to compel distributions from the trust... .”
We further stated in Pohlmann that trust provisions granting
trustees the power to pay trust assets to a beneficiary “‘as it
may, from time to time, deem appropriate for [the beneficiary’s]
health, education, support or maintenance’ . . . do not create a
right of the beneficiary to compel payments from the trust.”!*

Hansen, however, did not grant the trustee the same breadth
of discretion created by the trust in Pohimann. That is, Hansen
did not provide that the trustee “‘may, from time to time,’” make
determinations of his daughter’s needs; rather, he provided that
“‘the Trustee “shall”’” make payments for his daughter’s ben-
efit if she should require funds in excess of the trust’s income
because of an accident or illness.

This provision is the functional equivalent of a term provid-
ing that “‘the trustee “shall pay or apply only so much of the
... principal . . . as is necessary for the [medical care] .. . of a
beneficiary.”’”!® The trustee had discretion to determine whether
and how much additional support Ruth properly required as
the result of an accident or illness, but it did not have discre-
tion to determine whether to support her.” In general, trustees
of support trusts have discretion to determine what is needed
for the beneficiary’s support and to make payments only for

'8 Pohimann, supra note 17, 271 Neb. at 280, 710 N.W.2d at 645 (emphasis
in original), citing Doksansky v. Norwest Bank Neb., 260 Neb. 100, 615
N.W.2d 104 (2000), and Smith, supra note 16.

'9 Pohlmann, supra note 17, 271 Neb. at 280, 710 N.W.2d at 645 (empha-
sis supplied).

20 See, generally, First Nat’l Bk. of Maryland v. Dep’t of Health, 284 Md. 720,
399 A.2d 891 (1979).

210 Ee

that purpose.” But this level of discretion does not preclude a
beneficiary from seeking to show that a trustee has abused its
discretion in failing to make support payments.”

The language of Hansen’s trust indicates that his primary
concern was the care of his daughters in the event of an acci-
dent or illness. We conclude that Hansen authorized the trustee
to exercise the same degree of discretion created by an ordinary
support trust but limited Ruth’s interests in the trust’s principal
to the support she needed upon the happening of a designated
event. Having established which type of trust Hansen intended
to create, we turn to the county court’s determination regarding
the trustee’s postdeath obligations.

Ricur or Ruru’s Estare To Recover Support PAYMENTS

Part of the county court’s order shows it determined, as a
matter of law, that a trustee cannot make payments for the
beneficiary’s last-illness expenses after the beneficiary’s death,
regardless of whether the medical bills were submitted to
the trustee before or after the beneficiary’s death. Relying on
Smith, the court concluded:

[T]he purposes of the Hansen Trust (support of the ben-
eficiary during her life) ended with the death of Ruth . .
. . Payment of the medical bills and last illness expenses
would benefit the creditors and heirs of the estate of Ruth
... instead of Ruth....

It is clear that the Trustee acted properly, and in good
faith, in denying payment of said expenses from the
Trust funds.

If the county court had correctly determined that a benefi-
ciary’s estate could never recover expenses for the beneficiary’s
last illness after the beneficiary has died, then its further deter-
mination that the trustee had not abused its discretion in denying

1 See Bogert & Bogert, supra note 12, § 811.
2 See First Nat’l Bk. of Maryland, supra note 20.

23 See Restatement (Third) of Trusts, supra note 13, § 49, comment f,, and
§ 50, comment d(4). Compare Pyne v. Payne, 152 Neb. 242, 40 N.W.2d
682 (1950).

24 Smith, supra note 16.

such claims would necessarily follow, even without an eviden-
tiary hearing. We conclude, however, that the county court inter-
preted our decision in Smith too broadly.

In Smith, this court stated that “support trusts may be reached
by creditors for support-related debts, but that discretionary
trusts may not be reached by creditors for any reason.”** We
held that the beneficiary’s former wife could not reach two
discretionary support trusts when the purpose of the trusts had
ceased to exist. The trusts were intended to benefit the settlors’
son and his children, in the event their parents were unable
to do so. The son owed more than $90,000 in child support
arrears, and his ex-wife filed two separate actions to garnish
the trust assets for the debt, which actions were consolidated
on appeal. In the first action, this court held that the trust assets
could not be reached for child support arrears after the children
were emancipated:

[T]he payment of the child support arrearage would not
further the purposes of the trusts, since the children are
emancipated. Without a showing that the payment of the
arrearage would contribute to the support of the beneficia-
ties of the trusts, [the trustee] could not be compelled to
distribute trust assets.”

Smith is distinguishable, however, because the person attempt-
ing to reach the trust was the beneficiary’s creditor. In the first
action, she did not show that her claim against the son was
support-related or would support his children if the parents
were unable, because the children were emancipated. Nor were
we dealing with a beneficiary’s request for support payments
in that action. In contrast to creditors, a personal representative
has the same right to enforce a decedent’s rights and claims that
the decedent had immediately prior to death, where the cause of
action survives death.”

The county court’s reasoning that the payment of medical
expenses would benefit Ruth’s heirs instead of Ruth would also

%5 Id, at 197, 517 N.W.2d at 398.
26 Id, at 199, 517 N.W.24 at 399.
7 See Neb. Rev. Stat. § 30-2464 (Cum. Supp. 2006).

212 Es

apply if the trustee had failed to make quarterly payments to
Ruth from her half of the trust’s accrued income. But the gen-
eral common-law rule is that a beneficiary’s estate may recover
income of the trust, which is accrued and payable at the time of
the beneficiary’s death but has not been paid over,” unless the
trustee had uncontrolled discretion whether to make distribu-
tions of income.” We agree and note that this rule is consistent
with our holding that the estate of a life tenant is entitled to
profits accumulated through the life tenant’s use of personalty
in the life estate, in the absence of the testator’s expressed con-
trary intent.*°

Hl Accordingly, we conclude that Smith does not control
here and that Ruth’s estate can seek to enforce Ruth’s interests in
the trust to the extent that Ruth could have enforced her interests
immediately before her death. We adopt the standard for an
estate’s recovery of the beneficiary’s last-illness expenses from
the Restatement (Third) of Trusts § 50 (2003), which concerns
the enforcement of a beneficiary’s interests and specifically
deals with postdeath obligations.

When a beneficiary dies before payment for necessary ser-
vices are rendered, the Restatement provides:

A question may arise, following the death of the ben-
eficiary of a discretionary interest, whether a support or
other standard authorizes or requires the trustee to pay
the beneficiary’s funeral and last-illness expenses and
debts incurred by the beneficiary for support. Ultimately,
the question is one of interpretation when the terms of
the trust are unclear, with the presumption being that the
trustee has discretion to pay these debts and expenses.

%8 See, e.g., In re Trusteeship of Downer, 232 Iowa 152, 5 N.W.2d 147 (1942);
Leverett v. Barnwell, 214 Mass. 105, 101 N.E. 75 (1913); Matter of Will of
Hopkin, 119 Misc. 2d 218, 462 N.Y.S.2d 587 (1983); Restatement (Second)
of Trusts, supra note 15, § 235A; Annot., 141 A.L.R. 1466 (1942).

8 Green v. Gilmore, 331 Mass. 283, 118 N.E.2d 755 (1954); Minot v. Tappan,
127 Mass. 333 (1879).

% See In re Estate of Wecker, 123 Neb. 504, 243 N.W. 642 (1932). See, also,
Uniform Principal and Income Act, specifically Neb. Rev. Stat. § 30-3126(b)
(Cum. Supp. 2006).

A duty to do so is presumed only to the extent that (i)
probate estate, revocable trust, and other assets available
for these purposes are insufficient or (ii) the trustee, dur-
ing the beneficiary’s lifetime, either agreed to make pay-
ment or unreasonably delayed in responding to a claim
by the beneficiary for which the terms of the trust would
have required payment while the beneficiary was alive.
(A deceased beneficiary’s estate may also recover distri-
butions the trustee had a duty to make but did not make
during the beneficiary’s lifetime.)*!

Obviously, recovery under these factors presents factual
issues as to whether the trustee abused its discretion or had a
duty to make support payments, and the parties have not yet
been given an opportunity to try these issues in an evidentiary
hearing. In its order, the county court found that no claims for
medical expenses were submitted to the trustee prior to Ruth’s
death. This finding, however, was contrary to statements made
by counsel for Ruth’s estate that it would show a request for
support payments was made before Ruth’s death. The court also
found that Ruth was a businesswoman with “substantial income
at her disposal,” although no evidence in the record supports
that finding.

HE This court has very recently either reversed or vacated
three separate county court orders for lack of competent evi-
dence when the court failed to hold an evidentiary hearing on
factual issues.** Neither the parties’ arguments nor the court’s
discussions with the parties can substitute for providing the par-
ties an opportunity to support or refute disputed factual issues
raised by the pleadings.* Our adoption of the Restatement’s
postdeath obligation standard requires us to once again vacate

31 Restatement (Third) of Trusts, supra note 13, § 50, comment d(5). at 269.
See, also, If Austin Wakeman Scott & William Franklin Fratcher, The Law
of Trusts § 128.4 (4th ed. 1987).

» In re Estate of Baer, 273 Neb. 969, 735 N.W.2d 394 (2007); In re Trust
of Rosenberg, supra note 10; In re Guardianship & Conservatorship of
Trobough, 267 Neb. 661, 676 N.W.2d 364 (2004).

33 See, In re Trust of Rosenberg, supra note 10; In re Guardianship &
Conservatorship of Trobough, supra note 32.

214 Le

the county court’s order to hold an evidentiary hearing on the
relevant factual issues.

HH An appellate court is not obligated to engage in an analy-
sis that is not necessary to adjudicate the case and controversy
before it. In light of our conclusion that the county court must
conduct an evidentiary hearing to determine whether the trustee
abused its discretion or had a duty to make support payments,
it is unnecessary for us to reach the remaining assignments
of error.

CONCLUSION
We conclude that the county court erred in determining, as
a matter of law, that the trustee of a support trust cannot make
payments for the beneficiary’s last-illness expenses after the
beneficiary’s death without conducting an evidentiary hearing
on factual issues relevant to that determination. We therefore
reverse and vacate the court’s order and remand the cause to the
county court with directions to hold an evidentiary hearing on
the issues outlined in this opinion.
REVERSED AND VACATED, AND CAUSE
REMANDED WITH DIRECTIONS.
Micter-LerMan, J., not participating.

¥ State v. Morrow, 273 Neb. 592, 731 N.W.2d 558 (2007).

PapiLLioN RurAL Fire ProrecTION DISTRICT, APPELLEE, V.
Ciry oF BELLEVUE, A MUNICIPAL CORPORATION, APPELLANT.
739 N.W.2d 162

Filed August 31, 2007. No. S-06-308.

Frank F. Pospishil and Timothy M. Kenny, of Abrahams,
Kaslow & Cassman, L.L.P., for appellant.

Michael N. Schirber, of Schirber & Wagner, L.L.P.,
for appellee.

Heavican, C.J., WricuT, CoNNOoLLy, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

McCormack, J.

NATURE OF CASE

The Papillion Rural Fire Protection District (the District)
brought an action for declaratory judgment to determine the
tights, duties, and obligations of the District and the City of
Bellevue (the City). This suit arose as a result of the City’s
partial annexation of property formerly located within the
District. The district court granted the District’s motion for
summary judgment and entered judgment against the City in an
amount which was to be calculated using a formula set forth in
the court’s order.

The City appealed the district court’s decision to the Nebraska
Court of Appeals, which dismissed the appeal because the judg-
ment for money was not specified with definiteness and cer-
tainty.’ Following its dismissal of the City’s appeal, the Court
of Appeals issued a mandate ordering the district court to enter
judgment in conformity with the Court of Appeals’ opinion.
The district court then entered a new order which specified the

| Papillion Rur. Fire Prot. Dist. v. City of Bellevue, 13 Neb. App. lvi (No.
A-05-116, May 9, 2005).

216 Le

amount of damages to be awarded to the District and included a
new award for prejudgment interest. The City now appeals.

BACKGROUND

The District is a rural fire protection district under the provi-
sions of Neb. Rev. Stat. § 35-501 et seq. (Reissue 2004), which
is located in Sarpy County, Nebraska. In 1998, the District
had issued bonds in the principal sum of $1.5 million. The
stated purposes were to “acquir[e] fire fighting equipment and
emergency equipment and other fire and rescue equipment and
apparatus” and “to pay costs of issuance and underwriting asso-
ciated with issuance” of those bonds. These bonds are a general
obligation of the District payable from the District’s tax levy.
According to the prospectus for the bonds, the bond issue was
the only debt of the District.

Following the issuance of the bonds, the District entered into
an agreement with the Papillion Volunteer Fire Department,
Inc. (the Volunteers). Under this agreement, the District agreed
to purchase fire and rescue apparatus and equipment from
the Volunteers for approximately $956,000 and to lease that
equipment to the Volunteers for $1 for a period of 5 years with
the option to renew the lease term for an additional 5-year
period. In 2001, the District and the city of Papillion entered
into an interlocal cooperation agreement which created an inter-
governmental mutual financing organization to be funded by
the District and the city of Papillion. The interlocal agreement
provided that the city of Papillion would create a fire depart-
ment to provide all fire and rescue services for both the city of
Papillion and the District, using the District’s equipment and
apparatus. The District and the city of Papillion agreed to share
the expenses of the city of Papillion’s fire department. And the
District agreed to excuse the partial annexation agreement pay-
ments due to the District from the city of Papillion. Following
the execution of the interlocal agreement, the District and the
Volunteers mutually terminated their agreement.

In December 1999, the City passed, approved, and adopted a
series of annexation ordinances which annexed portions of the
territory located within the District’s service and taxing area. At
the time of the annexation, the District, including the annexed

territory, remained subject to a levy for the 1998 bonded indebt-
edness. Following the 1999 annexation, representatives of the
City and the District discussed the appropriate division of assets,
liabilities, maintenance, or other obligations of each arising out
of the annexation. The parties, however, were unable to reach
an agreement.

Thereafter, the District instituted the present action in the dis-
trict court. In its operative petition, the District sought a declara-
tory judgment for an adjustment of all matters growing out of
or in any way connected with the annexations by the City, and
a decree fixing the rights, duties, and obligations of the parties.
The District also sought an award of attorney fees, court costs,
and other relief as may be appropriate. Discovery in the matter
ensued. On August 27, 2004, the City filed a motion to compel
the District to fully respond to the City’s first set of interroga-
tories and the City’s first request for production of documents.
The City alleged in its motion to compel that the District failed
to fully respond to its interrogatories. The district court denied
the City’s motion to compel, and the City filed a motion for
reconsideration of the court’s decision, which the district court
also denied.

On August 13, 2004, the District filed a motion for sum-
mary judgment. In its response and supplemental response to
the District’s motion for summary judgment, the City argued in
relevant part that material questions of fact existed as to (1) the
exact nature of the District’s assets; (2) whether the District’s
assets should be divided and distributed to the City, or whether
the City should be allowed a setoff of the amount of such assets
if the court determines the City has any liability to the District;
(3) the division of liabilities, maintenance, and other obligations
under Neb. Rev. Stat. § 31-766 (Reissue 2004); (4) whether
§ 31-766 is contradicted by prorating only debt for each partial
annexation; and (5) the effect the interlocal cooperation agree-
ment entered into between the District and the city of Papillion,
which created a mutual finance organization, has on the alloca-
tion under § 31-766.

On January 3, 2005, the court issued an order granting the
District’s motion for summary judgment. The court stated in part
that the City’s claim that the allocation formula should include a

218 be

valuation of the assets of the District less the bonded debt would
result in an absurd result. This is because the City could annex
all but a small portion of the District and pay none of the debt
associated with the annexation. The court further stated that sub-
sequent to Millard Rur. Fire Prot. Dist. No. 1 v. City of Omaha,
§ 35-508 was amended to allow for a sinking fund to be funded
by tax revenues for the District’s use for those items set out in
the statute. The court found that in dividing the equities, the
value of the sinking fund must be considered and that this value
should be deducted from the bonded debt in determining the
City’s liability. Notwithstanding the fact that the court could not
determine from the evidence whether a sinking fund exists or
its value if it does exist, the court found that it did not give rise
to a material issue of fact. The district court then entered judg-
ment against the City based on the calculation of the following
formula which was set out in the court’s order: “Bonded debt
- (12.4528 % of sinking fund) = (Debt subject to allocation) x
12.4528% = Amount of debt owed by Defendant.”

The City appealed the court’s January 3, 2005, order to the
Court of Appeals. Citing Lenz v. Lenz’ for the proposition that
a judgment must be sufficiently certain in its terms to be able
to be enforced in a manner provided by law and a judgment for
money must specify with definiteness and certainty the amount
for which it is rendered, the Court of Appeals dismissed the
City’s appeal. The Court of Appeals issued its mandate to the
district court ordering it to “without delay, proceed to enter
judgment in conformity with the judgment and opinion of
this court.”

The district court then entered the following journal entry:
“Mandate from the Court of Appeals having been received,
Judgment entered in conformance with Mandate.” The particu-
lars of this judgment, however, are not in the record before us.

The District then filed a motion requesting the district court
to enter an order clarifying, interpreting, and correcting the
court’s January 3, 2005, summary judgment order by specifying

? Millard Rur. Fire Prot. Dist. No. 1 v. City of Omaha, 226 Neb. 50, 409
N.W.2d 574 (1987).

3 Lenz v. Lenz, 222 Neb. 85, 382 N.W.2d 323 (1986).

the amount of money judgment in favor of the District, by
determining prejudgment interest, and for such other and fur-
ther equitable relief as the court deemed just and proper. At
the hearing on the District’s motion, the District requested that
the court take judicial notice of an affidavit of Kevin Edwards,
the administrator for the District, which affidavit was dated
September 22, 2005. Attached to Edwards’ affidavit was a
calculation which showed that the City’s liability to the District
was $84,491.88. The affidavit included notations regarding
the District’s sinking fund, which were not contained in the
affidavit before the court when the original order of summary
judgment was entered. The City objected to the court’s taking
judicial notice of the affidavit. The district court stated that it
was going to reserve ruling on the affidavit, however, the record
does not reflect a specific ruling on the affidavit. The court did,
however, refer to the affidavit in its February 21, 2006, order.
On February 21, 2006, the district court entered an order in
which it awarded the District judgment against the City in the
amount of $84,491.88, with prejudgment interest at 4.038 per-
cent from October 21, 2004. In its order, the court stated that
it viewed the District’s September 30, 2005, motion as “one
to amend [the court’s] judgment and the mandate to make the
same certain.” The court also noted that Edwards’ September
22 affidavit was attached to the District’s motion, along with a
worksheet showing Edwards’ calculation. This calculation indi-
cated that the City owed the District $84,491.88, and attested
that any prior sinking fund moneys were accounted for in his
calculations and were included in that figure. In response to an
argument by the City that the court did not have jurisdiction
over the matter, the court stated that pursuant to Neb. Rev. Stat.
§ 25-2001 (Cum. Supp. 2004), it “has the inherent power to
vacate or modify its judgments or orders . . . after the term at
which they were made.” The court stated that the District filed
its motion during the term and concluded that it clearly has
the power to revisit its own judgment. The court further stated
that once the appeal was dismissed by the Court of Appeals,
jurisdiction was revested in the district court, and that the Court
of Appeals’ mandate and accompanying notation required it to
retake jurisdiction and conform its judgment to the Court of

220 Le

Appeals’ order. Thereafter, the City timely perfected the pres-
ent appeal.

ASSIGNMENTS OF ERROR

The City’s assignments of error, which have been partially
consolidated, are that the district court erred in (1) amending
and modifying its January 3 and June 16, 2005, orders to com-
ply with the mandate of the Court of Appeals by entering an
amended final order on February 21, 2006, and awarding the
District a judgment against the City in the amount of $84,491.88
with prejudgment interest at 4.038 percent from October 21,
2004, which amount was not from a clarification of the court’s
January 3, 2005, order, but from consideration of an affidavit
made subsequent to the mandate; (2) granting the District’s
motion for summary judgment; (3) not applying the provisions of
§ 31-766 to the partial annexation involved in this matter; (4) not
granting the City’s motion to compel discovery and motion for
partial reconsideration of the City’s motion to compel discovery
from the District; (5) not following the Court of Appeals’ May
9, 2005, disposition and June 13 mandate which fully concluded
this litigation; (6) allowing the District prejudgment interest; and
(7) taking judicial notice of the untimely Edwards affidavit and
erroneously using this affidavit to calculate the judgment entered
in favor of the District and against the City.

STANDARD OF REVIEW

HM Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue as
to any material fact or as to the ultimate inferences that may be
drawn from those facts and that the moving party is entitled to
judgment as a matter of law.‘ In reviewing a summary judgment,
an appellate court views the evidence in a light most favorable to
the party against whom the judgment is granted and gives such
party the benefit of all reasonable inferences deducible from
the evidence.>

# Alston v. Hormel Foods Corp., 273 Neb. 422, 730 N.W.2d 376 (2007).
5 Id.

ee «

ANALYSIS

District’s Morion For SUMMARY JUDGMENT

We first address the City’s claim that the district court erred in
granting the District’s motion for summary judgment.

Section 31-766 addresses the division of assets, liabilities,
maintenance, or other obligations of a fire protection district
when the district is partially annexed by a city or village. Section
31-766 provides in part:

The division of assets, liabilities, maintenance, or other
obligations of the district shall be equitable, shall be
proportionate to the valuation of the portion of the dis-
trict annexed and to the valuation of the portion of the
district remaining following annexation, and shall, to the
greatest extent feasible, reflect the actual impact of the
annexation on the ability of the district to perform its
duties and responsibilities within its new boundaries fol-
lowing annexation.
Section 31-766 provides further that if the district and city
or village do not agree on the proper adjustment of all mat-
ters growing out of the partial annexation, the district or the
annexing city or village may apply to the district court for an
adjustment of matters growing out of the annexation. And under
§ 31-766, the district court is authorized to enter an order or
decree fixing the rights, duties, and obligations of the parties.

We last addressed the allocation of assets, liabilities, mainte-
nance, and other obligations under § 31-766 in Millard Rur. Fire
Prot. Dist. No. I v. City of Omaha.’ In that case, the Millard
Fire Protection District (the Millard District) brought a declara-
tory action to determine the rights, duties, and responsibilities
of the Millard District and the City of Omaha with regard to
areas of the Millard District annexed by the City of Omaha.
We affirmed on appeal the district court’s determination that an
equitable method of determining the City of Omaha’s assump-
tion of the Millard District’s indebtedness was to multiply the
Millard District’s net debt by the percentage of the valuation of

6 Millard Rur. Fire Prot. Dist. No. 1 v. City of Omaha, supra note 2.

222 Le

the territory annexed. We did not, however, find that this was
the only equitable method.

On appeal, the Millard District asserted that the district court
incorrectly calculated the division of assets, liabilities, mainte-
nance, and other obligations of the Millard District. The Millard
District argued that in addition to assuming a percentage of
its bond debt, the City of Omaha should have had to assume
a percentage of the Millard District’s ongoing operation and
maintenance expenses relating to the entire Millard District. We
noted that the Millard District ignored the fact that the City of
Omaha assumed full responsibility of the operation and main-
tenance of the annexed areas. We further noted that although
the annexation removed property from the Millard District’s tax
base, the record showed that the actual value of the property in
Douglas County remaining within the Millard District had risen
from $132 million in 1968 to approximately $751 million in
1984. We then concluded that based on the circumstances of that
case, an equitable division resulted from the following method:
a pro rata assumption of net bonded indebtedness, “along with
assumption of responsibility for providing fire and rescue ser-
vices to the annexed areas.””

In its January 3, 2005, order, the district court entered sum-
mary judgment in favor of the District based on the formula set
forth in Millard Rur. Fire Prot. Dist. No. 1, with one modifica-
tion. In determining the debt subject to allocation, the court
subtracted from the bonded indebtedness the percentage of the
annexed. property’s proportion of the sinking fund. The City
argues that the allocation formula in Millard Rur. Fire Prot.
Dist. No. I is not controlling in this case and that the district
court should take into consideration the assets of the District in
order to achieve an equitable adjustment under § 31-766.

In Millard Rur. Fire Prot. Dist. No. 1, we were presented
with the question of whether an equitable adjustment under
§ 31-766 required the assumption by the City of Omaha of a
percentage of the Millard District’s maintenance expenses, in
addition to an assumption of a portion of the Millard District’s
bond debt. As we explained, the City of Omaha did assume a

7 Id. at 58, 409 N.W.2d at 579.

A ~
percentage of the Millard District’s maintenance expenses by
taking control of the annexed land. Thus, under the facts in that
case, we determined that the equitable division was a pro rata
assumption by the City of Omaha of the Millard District’s bond
debt. In Millard Rur. Fire Prot. Dist. No. 1, unlike in the pres-
ent case, the allocation of the Millard District’s assets was not
at issue. We conclude that Millard Rur. Fire Prot. Dist. No. 1
is, therefore, distinguishable.

Section 31-766 specifically includes assets of a fire district
in those items to be equitably divided when a fire district is
partially annexed. Thus, where there is evidence that the par-
tially annexed fire district has assets, those assets should be
considered in determining a proper adjustment of those matters
growing out of the annexation.

The evidence in the record now before us indicates that the
District has significant assets which were not considered by the
district court. We conclude that under the facts presented here,
an equitable division under § 31-766 should take into account
any assets of the District.

Because the district court did not consider the District’s
assets and because questions remain as to the extent of the
District’s assets, we conclude that the district court erred by
entering summary judgment in favor of the District. We there-
fore reverse the order and remand the cause to the district court
for further proceedings.

Limitations on Discovery

HM Although we have concluded that the order of sum-
mary judgment in favor of the District must be reversed and
the cause remanded for further proceedings, we will address
the City’s assignment of error relating to the City’s motion
to compel discovery and motion for partial reconsideration of
the City’s motion to compel discovery from the District. This
issue is likely to recur on remand. An appellate court may,
at its discretion, discuss issues unnecessary to the disposi-
tion of an appeal where those issues are likely to recur during
further proceedings.®

8 Tyma v. Tyma, 263 Neb. 873, 644 N.W.2d 139 (2002).

224 |

In denying the City’s motion to compel discovery, the district
court explained that those issues or items to be discovered must
be relevant to the issues being litigated. The district court fur-
ther explained that in light of Millard Rur. Fire Prot. Dist. No. 1,
the information the City sought to discover was not relevant. We
conclude that to the extent that the information sought to be
discovered by the City relates to assets, liabilities, maintenance,
or other obligations of the District, the City should be permit-
ted full discovery. We reverse the district court’s denials of the
City’s motion to compel and motion for reconsideration to the
extent that the denials conflict with our holding.

REMAINING ASSIGNMENTS OF ERROR
Hl Because we have determined that the district court erred
by entering summary judgment in favor of the District, we
do not address the City’s remaining assignments of error. An
appellate court is not obligated to engage in an analysis which
is not needed to adjudicate the controversy before it.?

CONCLUSION
For the reasons discussed, we conclude that questions of
material fact exist and that the district court erred in entering
summary judgment in favor of the District. We therefore reverse
the order and remand the cause for further proceedings. We
further conclude that the City should be permitted full discov-
ery of the District’s assets, liabilities, maintenance, and other
obligations. We reverse the district court’s denials of the City’s
motion to compel and motion to reconsider to the extent that the
court’s denials conflict with our decision on this issue.
REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.

° Gary’s Implement v. Bridgeport Tractor Parts, 270 Neb. 286, 702 N.W.2d
355 (2005).

ee
IN RE Peririon oF NEBRASKA CoMMUNITY CorRECTIONS COUNCIL
to Aporr VOLUNTARY SENTENCING GUIDELINES

FOR FeLony DRUG OFFENSES.
738 N.W.2d 850

Filed August 31, 2007. No. S-36-070001.

Heavican, C.J., Wricut, Connoity, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Connoxty, J.

The Legislature has mandated by statute that we promulgate
by court rule sentencing guidelines for certain offenses.' Under
the guidelines, courts must consider community correctional
programs and facilities in sentencing offenders. In February
2007, the legislatively created Community Corrections Council
petitioned this court to adopt its proposed guidelines. We invited
the public to comment on the proposed guidelines. Several
members of the judiciary raised concerns related to separation
of powers. We conducted a hearing in April.

‘We agree that the Legislature’s mandate violates the Nebraska
Constitution’s separation of powers clause. We deny the
Community Corrections Council’s petition, because we con-
clude that the Legislature cannot delegate to the judicial branch
its constitutional power to enact the laws of this state.

OVERVIEW OF THE CREATION UNDER L.B. 46
OF COMMUNITY CORRECTIONS COUNCIL
AND SENTENCING GUIDELINES
In 2001, the Governor convened the Community Corrections
Working Group. The group worked within the Nebraska
Commission on Law Enforcement and Criminal Justice. The
group’s goal was to address Nebraska’s rising prison costs by
(1) developing less expensive community-based correctional
options for nonviolent offenders and (2) reducing the State’s

1 Neb. Rev. Stat. § 47-630 (Reissue 2004 & Cum. Supp. 2006).
2 Neb. Const. art. II, § 1.

226 Le

reliance on incarceration for these offenders.? In passing 2003
Neb. Laws, L.B. 46, the Legislature adopted many of the
group’s proposals.*

At the committee hearing, the introducer of L.B. 46 stated
that the goal was “to limit the use of incarceration” and “to pre-
vent Nebraska’s correctional system from bankrupting the state
of Nebraska.”> He explained that the budget for the Department
of Correctional Services had increased 100 percent from fiscal
year 1996-97 to fiscal year 2002-03. He projected that even
with completion of a new correctional facility in 2001, the
prison population would reach 153 percent of design capacity
by 2005.°

In passing L.B. 46, the Legislature enhanced treatment
programs for substance abuse offenders and required partici-
pants in both probation and non-probation-based programs to
pay fees toward the costs of services.’ Also, as part of L.B. 46,
the Legislature enacted the Community Corrections Act.’ The
act establishes community-based correctional alternatives for
some offenders. The Legislature specifically intended to

[p]rovide for the development and establishment of
community-based facilities and programs in Nebraska for
adult offenders and encourage the use of such facilities
and programs by sentencing courts and the Board of
Parole as alternatives to incarceration or reincarceration, in
order to reduce prison overcrowding and enhance offender
supervision in the community.

3 Legislative Research Division, A Review: Ninety-Eighth Legislature, First
Session (2003).

4 See Statement of Intent, Judiciary Committee, 98th Leg., Ist Sess.
(Feb. 13, 2003).

5 Judiciary Committee Hearing, 98th Leg., 1st Sess. 24, 26 (Feb. 13, 2003).
6 Id.

7 See Neb. Rev. Stat. §§ 29-2252(14), 29-2262.06, and 29-2266 (Cum. Supp.
2006). See, also, Neb. Rev. Stat. § 29-2246 (Cum. Supp. 2006).

8 See Neb. Rev. Stat. §§ 47-619 to 47-634 (Reissue 2004).
> § 47-620(1).

To carry out the program, the act created the Community
Corrections Council (hereinafter the Council).!° The Council’s
duties include (1) developing a statewide plan for community
correctional facilities and programs," (2) developing eligibility
standards for probationers and parolees in community facilities
and programs,’? and (3) recommending sentencing guidelines for
adoption by this court."

In addition to mandating that the Council develop sentenc-
ing guidelines, the Legislature also mandated that we adopt
sentencing guidelines: “In order to facilitate the purposes of the
Community Corrections Act, the Supreme Court shall by court
tule adopt guidelines for sentencing of persons convicted of
certain crimes.”"*

Also, § 47-630(4) provides that “[t]he Council shall develop
and periodically review the guidelines and, when appropriate,
recommend amendments to the guidelines.” Obviously, this
means the Council would periodically recommend that we adopt
amendments to the guidelines.

In February 2007, the Council filed a petition with this court
requesting that we adopt and implement by court rule its “vol-
untary sentencing guidelines for felony drug offenses.” The
Council also asked that we develop, in coordination with the
Council, protocols and curriculum for training judges, probation
officers, county attorneys, and defense counsel.

COMPOSITION OF SENTENCING GUIDELINES
As its title shows, the Council’s proposed sentencing guide-
lines apply only to the sentencing of felony drug offenders.
Woven into the guidelines’ fabric is a matrix of sentencing
ranges, in months, which ranges fall within the statutory mini-
mum and maximum sentences for an offense. A sentencing
judge would select a sentencing range by finding the intersection

10 § 47-622.

4 See § 47-624(14).
2 § 47-624(6).

8 9 47-624(4).

™ § 47-630(1).

228 Le

of coordinate points on horizontal and vertical axes. Points on
the horizontal axis of the matrix represent criminal history cat-
egories, and points on the vertical axis represent crime severity
levels. In addition, the matrix is color coded into three recom-
mended types of sentences.

From this mosaic, the Council recommends that a judge
sentence a defendant to a prison term if the defendant’s plotted
sentence falls within the matrix’s yellow, or upper, section. It
recommends that a judge sentence a defendant to probation if
the plotted sentence range falls within the matrix’s light blue,
or lower, section. Finally, defendants whose plotted sentence
ranges fall within the dark blue, or intermediate, section are
eligible for community-based correction alternatives. A judge
may divert these defendants from prison.

HEARING ON THE COUNCIL'S PETITION TO ADOPT
ITS SENTENCING GUIDELINES

In April 2007, we heard argument on the Council’s peti-
tion. The chairman, Kermit Brashear, spoke for the Council.
He stated that in June 2006, the prison population had reached
the emergency level—140 percent of capacity’—and was cur-
rently around 139 percent of capacity. He further stated that if
action were not taken, another prison would have to be built.
Brashear also reported that in a 6-year period, the budget for
the Department of Correctional Services had doubled from
$60 million to $120 million, and that it would double again at a
time when the State was facing declining revenues.

He stated that the Council had targeted nonviolent felony drug
offenders in its initial guidelines because these offenders make
up 27 percent of the maximum-security prison population. The
Council believed many offenders could be diverted into alterna-
tive correction programs.

Finally, Brashear stated that treatment within prisons is the
least effective but most costly way of dealing with drug offend-
ers and reducing their recidivism. He reported that incarceration
costs $30,000 per year for each offender, while substance abuse

15 See Correctional System Overcrowding Emergency Act, Neb. Rev. Stat.
§§ 83-960 to 83-963 (Cum. Supp. 2006).

supervision programs cost about $3,000 per year and are more
effective in reducing recidivism.

OVERVIEW OF THE SEPARATION
OF POWERS CLAUSE

Nebraska’s separation of powers clause'® prohibits the
three governmental branches from exercising the duties and
prerogatives of another branch." It also prohibits a branch from
improperly delegating its own duties and prerogatives—except
as the constitution directs or permits.'* Our constitution, unlike
the federal Constitution and those of several other states, con-
tains an express separation of powers clause. So we have been
less willing to find overlapping responsibilities among the three
branches of government.!

Deciding whether the Nebraska Constitution has committed
a matter to another governmental branch, or whether the branch
has exceeded its authority, is a delicate exercise in constitutional
interpretation.” And it is our responsibility, as the ultimate
interpreter of our constitution, to make that decision.?!

As we know, the line between what is a legislative function
and what is a judicial one has not been drawn with precision;
we make that decision on a case-by-case basis.” In defining that
line, we look at the function’s purpose—not merely its statutory
origin—to decide whether a governmental function is legislative
or judicial.

1 Neb. Const. art. I, § 1.

1” See, Nebraska Coalition for Ed. Equity v. Heineman, 273 Neb. 531, 731
N.W.2d 164 (2007); Polikov v. Neth, 270 Neb. 29, 699 N.W.2d 802 (2005).

18 Polikov v. Neth, supra note 17.
” Id.

2 Nebraska Coalition for Ed. Equity v. Heineman, supra note 17, citing Baker
v, Carr, 369 U.S. 186, 82 S. Ct. 691, 7 L. Ed. 2d 663 (1962).

2 See, State ex rel. Johnson v. Gale, 273 Neb. 889, 734 N.W.2d 290 (2007);
Nebraska Coalition for Ed. Equity v. Heineman, supra vote 17.

2 State v. Stratton, 220 Neb. 854, 374 N.W.2d 31 (1985); Lux v. Mental Health
Board of Polk County, 202 Neb. 106, 274 N.W.2d 141 (1979).

3 See Lux v. Mental Health Board of Polk County, supra note 22.

POWERS OF THE LEGISLATIVE BRANCH
As imprecise as the line between the branches may some~-
times be, logic and case law dictate that it is the Legislature’s
function through the enactment of statutes to declare the law
and public policy and to define crimes and punishments.™ In
defining crimes and punishments, it sets the broad policy goals
of this state’s criminal justice system, including whether, for a
particular type of crime, the corrective goal should be retribu-
tion, deterrence, or rehabilitation.”
In setting out the Legislature’s powers to define crimes and
punishments, we have stated:
[T]he Legislature has the authority to fix the penalty range
which can be imposed for the crimes it has defined. The
Legislature determines the nature of the penalty imposed,
and so long as that determination is consistent with the
Constitution, it will not be disturbed by the courts on
review. In this regard, in State v. Tucker,?® we observed:
“The legislature is clothed with the power of defining
crimes and misdemeanors and fixing their punishment; and
its discretion in this respect, exercised within constitutional
limits, is not subject to review by the courts. ”?71
We have [also] stated: “The range of the penalty for
any offense is a matter for legislative determination. The
court exercises its discretion as to the penalty to be
applied under any particular state of facts within the range
provided by the law.’ Thus, once the Legislature has
defined the crime and the corresponding punishment for
a violation of the crime, the responsibility of the judicial
branch is to apply those punishments according to the
nature and range established by the Legislature.”

%4 Stewart v. Bennett, 273 Neb. 17, 727 N.W.2d 424 (2007).
5 Id,

2% State v. Tucker, 183 Neb. 577, 579, 162 N.W.2d 774, 776 (1968), quoting
State ex rel. Nelson v. Smith, 114 Neb. 653, 209 N.W. 328 (1926).

27 See State v. Tatreau, 176 Neb. 381, 126 N.W.2d 157 (1964).
28 Id, at 392, 126 N.W.2d at 163.
% State v. Divis, 256 Neb. 328, 333-34, 589 N.W.2d 537, 541 (1999).

Dr
|

In short, the Legislature defines crimes and establishes the range
of penalties.

POWERS OF THE JUDICIAL BRANCH

This court’s primary duty is the proper and efficient admin-
istration of justice.%° Although this court’s decisions establish
substantive rules of law, those rules have developed in resolving
parties’ disputes in real cases and controversies. We have often
held that an actual case or controversy must exist before a court
can exercise judicial power.*! We do not have power to enact
substantive laws of general applicability, because that power is
exclusively reserved to the Legislature. In criminal law, substan-
tive laws are those that declare what acts are crimes or prescribe
the corresponding punishment.>?

This court also has inherent judicial power to do whatever
is reasonably necessary for the proper administration of jus-
tice,> and this includes supervisory power over the courts.**
But the Council’s petition does not call on us to exercise our
supervisory powers. For example, it has not asked us to col-
lect statistical data on sentencing to decide whether sentencing
disparity exists.

Finally, under the Nebraska Constitution, we have inde-
pendent procedural rulemaking power.** We believe, however,
that by adopting the guidelines, we would be establishing the
presumptive sentencing ranges that courts must consider. The
proposed guidelines, therefore, are not procedural rules.

30 State v. Joubert, 246 Neb. 287, 518 N.W.2d 887 (1994).

31 See, ¢.g., Johnston v, Nebraska Dept. of Corr. Servs, 270 Neb. 987, 709
N.W.2d 321 (2006).

% See, Barnes v, Scott, 201 F3d 1292 (10th Cir. 2000); Smith v, State, 537 So.
2d 982 (Fla. 1989). See, also, Miller v, Florida, 482 U.S. 423, 107 S. Ct.
2446, 96 L. Ed. 2d 351 (1987); State v. Gales, 265 Neb. 598, 658 N.W.2d
604 (2003).

33 In re Estate of Reed, 267 Neb. 121, 672 N.W.2d 416 (2003); State v.
Joubert, supra note 30.

34 See, In re Interest of Mainor T. & Estela T., 267 Neb. 232, 674 N.W.2d 442
(2004); Wassung v. Wassung, 136 Neb. 440, 286 N.W. 340 (1939).

%5 See Neb. Const. art. V, § 25.

232 be

SENTENCING GUIDELINES
ARE SUBSTANTIVE LAW

The Council’s comments to the guidelines state that sentences
within the matrix are “‘voluntary.’” It is true that the guidelines’
enforcement mechanisms support an argument that the guide-
lines are voluntary: a sentence could not be reversed on appeal
solely because of a judge’s departure from a recommended range.
Nevertheless, the guidelines set forth the preferred sentencing
policy and, in fact, discourage departure. Section 47-630(2) pro-
vides: “The guidelines shall specify appropriate sentences for the
designated offenders in consideration of factors set forth by rule.
The Supreme Court may provide that a sentence in accordance
with the guidelines constitutes a rebuttable presumption.”

We interpret § 47-630(2) to mean that the Legislature intended
this court’s adoption of the guidelines to represent the presump-
tively appropriate sentences. Further, while the guidelines are
not binding, § 47-630(1) compels a judge to consider them: “The
guidelines shall provide that courts are to consider community
correctional programs and facilities in sentencing designated
offenders, with the goal of reducing dependence on incarcera-
tion as a sentencing option for nonviolent offenders.” (Emphasis
supplied.) Finally, the guidelines would require judges to explain
in a written report their reasons for departing from the recom-
mended sentencing guidelines range. In rejecting a similar leg-
islative mandate to adopt sentencing guidelines, the Wisconsin
Supreme Court observed:

The very requirement of explaining “departure” from
the guidelines creates a presumption that a sentence within
the range set forth in the matrix for the particular offense/
offender categories is appropriate, for it places the burden
of showing the appropriateness of a sentence outside the
matrix range on the sentencing judge. This, we believe,
amounts to our prescribing “appropriate” types and lengths
of sentences and constitutes unwarranted intrusion in the
sentencing discretion and authority of the trial judge.**

36 In re Felony Sentencing Guidelines, 113 Wis. 2d 689, 697-98, 335 N.W.2d
868, 872-73 (1983).

ED
Le

We agree. Despite its “voluntary” label, requiring judges to
explain their “departures” gives the guidelines a presumptive
status. We do not believe we should promulgate rules that would
effectively curb and conflict with the sentencing discretion
a court currently has under Neb. Rev. Stat. § 29-2204 (Cum.
Supp. 2006).

The Council, of course, views the matter differently. It
points to the state court rules regarding sentencing guidelines in
Delaware and Kansas. We note, however, that while the Kansas
courts may have participated in developing Kansas’ sentencing
guidelines, the Kansas Legislature has statutorily enacted the
guidelines and their presumptive status.*”

It is true that the Delaware Supreme Court, through an
administrative directive, has adopted presumptive sentencing
guidelines as recommended by the state’s sentencing commis-
sion.** The Delaware sentencing guidelines are found neither in
the court’s rules nor in the state’s statutes or administrative code.
Instead, they are produced by the state’s sentencing commission
in a publication called the “Benchbook.”® Our research, how-
ever, has failed to find any decision by the Delaware Supreme
Court upholding its adoption of presumptive sentencing ranges
against a separation of powers challenge. Because of our consti-
tution’s structure, we decline to follow Delaware’s model.

More on point, we note that in 1983, the Florida Supreme
Court also promulgated sentencing guidelines by court rule in
response to a legislative mandate. But, in 1989, the court deter-
mined that its rules violated the state constitution’s separation
of powers clause.*°

37 See Kan, Stat. Ann, §§ 21-4701 to 21-4728 (1995 & Cum. Supp. 2006).
38 See Siple v. State, 701 A.2d 79 (Del. 1997).

3° Delaware Sentencing Accountability Comm., Benchbook (2006),
http://cjc.delaware.gov/PDF/FinalBB2006.pdf. See, e.g., Teti v. State, No.
500,2005, 2006 WL 1788351 (Del. June 28, 2006) (unpublished disposition
listed in table of “Decisions Without Published Opinions” at 905 A.2d 747
(Del. 2006)).

40 Smith v. State, supra note 32.

234 be

Similarly, the Michigan Supreme Court had promulgated pre-
sumptive sentencing guidelines by administrative order begin-
ning in 1984. But,

[t]he Michigan Supreme Court’s guidelines and legis-
lative system of disciplinary credits [were] criticized for
several reasons, such as excessive leniency, inadequate
punishment, and undue harshness. As a result, a sys-
tematic statutory sentencing structure was developed and
enacted into law to replace the judicially-imposed sentenc-
ing guidelines [in] 1999...

This criticism of judicially imposed sentencing guidelines
emphasizes the difficult position in which a court places itself
when it specifically prescribes sentencing policy outside a pend-
ing case. We would compromise our neutrality, in perception if
not in fact, if we promulgated the very law that could be chal-
lenged. The attraction of delegating potentially controversial
legislation to the judiciary is perhaps understandable. But by
complying with the Legislature’s mandate, we would undermine
the separation of powers doctrine:

The purpose of the doctrine . . . is to preserve the indepen-
dence of each of the three branches of government in their
own respective and proper spheres, thus tending to prevent
the despotism of an oligarchy of the Legislature or judges,
or the dictatorship of the executive, or any cooperative com-
bination of the foregoing. In the words of Justice Brandeis,
“[The purpose was] not to promote efficiency but to preclude
the exercise of arbitrary power. The purpose was not to avoid
friction, but, by means of the inevitable friction incident to
the distribution of the governmental powers among three
departments, to save the people from autocracy’”?

In addressing a separation of powers issue regarding pretrial
diversion, we specifically held that the power to design formal

41 Miriam A. Cavanaugh, Note, If You Do the Crime, You WILL Do the Time: A
Look at the New “Truth in Sentencing” Law in Michigan, 77 U. Det. Mercy
L. Rev. 375, 386 (2000) (citing legislative analysis).

® Prendergast v. Nelson, 199 Neb. 97, 124-25, 256 N.W.2d 657, 673 (1977)
(Clinton, J., concurring in part, and in part dissenting), quoting Myers v.
United States, 272 U.S. 52, 47 S. Ct. 21, 71 L. Ed. 160 (1926).

pretrial diversion programs is a legislative power.*? We reasoned
that the adoption of formal pretrial diversion programs repre-
sents a shift in focus from deterrence and retribution to reha-
bilitation.“* That same reasoning applies to sentencing schemes
that result in many offenders avoiding incarceration.

Even more to the point, the Legislature may not implement
sentencing policy through delegation that is contrary to its cur-
rent policy under § 29-2204. Section 29-2204 broadly sets forth
a policy of indeterminative sentencing with no presumptive
sentencing ranges.

We commend the Legislature’s efforts to enact safe and
effective means of treating substance abuse in the community
and to address the rising costs of state correctional facilities.
To the extent that substance abuse offenders have increased the
prison population, we have cooperated with the Legislature’s
statutory mandate that we promulgate procedural rules for
drug courts after the Legislature created these courts.** But the
Legislature has not asked this court to promulgate procedural
rules to govern court administration of a program enacted by the
Legislature. Instead, it has asked us to promulgate substantive
rules regarding sentencing that would carry out a sea change in
sentencing policy.

Unquestionably, imposing sentencing guidelines presents
challenging issues of public policy. We have repeatedly held
that the Legislature cannot statutorily confer upon the courts the
duties of other branches.‘* These public policy decisions should
be debated in the proper forum—the Legislature. We reject the

* Polikov v. Neth, supra note 17.
“4 Id.

4 See, Neb. Rev. Stat. §§ 24-1301 to 24-1302 (Cum. Supp. 2006); Nebraska
Supreme Court Rule Governing Establishment and Operation of Drug
Courts (adopted June 17, 2007).

“ See, e.g, State v. Bainbridge, 249 Neb. 260, 543 N.W.2d 154 (1996);
State v. Jones, 248 Neb. 117, 532 N.W.2d 293 (1995); Williams v. County
of Buffalo, 181 Neb. 233, 147 N.W.2d 776 (1967); Searle v. Yensen, 118
Neb. 835, 226 N.W. 464 (1929); State v. Neble, 82 Neb. 267, 117 N.W.
723 (1908).

236 a

Council’s petition because the Legislature may not delegate its
lawmaking function to the executive or judicial branches.”
PETITION DENIED.

47 See Clemens v. Harvey, 247 Neb. 77, 525 N.W.2d 185 (1994).
P|

Sari ERICKSON AND GEORGE ERICKSON, APPELLANTS, V.
U-Haut INTERNATIONAL, INC., DOING BUSINESS AS
U-Haut Company, ET AL., APPELLEES.

738 N.W.2d 453

Filed September 7, 2007. No. S-05-1163.

238 Le

P. Shawn McCann and Mary M. Schott, of Sodoro, Daly &
Sodoro, P.C., for appellants.

Ronald F. Krause and Daniel J. Epstein, of Cassem, Tierney,
Adams, Gotch & Douglas, for appellees U-Haul International,
Inc., and U-Haul Center of N.W. Omaha.

Heavican, C.J., Wricut, ConNoutty, GERRARD, STEPHAN,
McCormack, and Micter-Lerman, JJ.

Conno_ty, J.

The appellants, Shari Erickson and her husband, George
Erickson, sued U-Haul International, Inc., and U-Haul Center
of N.W. Omaha (U-Haul Center). The district court granted
U-Haul Center’s motion for summary judgment, finding that it
owed no duty to the Ericksons. The court also sustained U-Haul
International’s special appearance because the company did
not satisfy the minimum contact requirements for the court to
have jurisdiction.

This appeal raises two issues. First, whether, absent any
special relationship between a lessor of a vehicle and a third
party, the lessor has an affirmative duty to protect the third
party from injury. Second, whether U-Haul International had
sufficient minimum contacts with Nebraska to make it fair and
reasonable to exercise general personal jurisdiction over the
company. We conclude that (1) a lessor of a chattel has a duty to
warn third-party users of the dangerous condition of the chattel
and (2) U-Haul International had sufficient contacts to warrant
a Nebraska court’s exercise of general personal jurisdiction

over it. We reverse, and remand for further proceedings on the
Ericksons’ claims.

I. BACKGROUND

1. Tae Carstens’ RENTAL
oF THE U-Haut Truck

Shari’s parents, Dale and Judith Carstens, rented a truck
from U-Haul Center to move from Walnut, Iowa, to Herman,
Nebraska. The truck, known as a 17-foot easy-loading mover,
was licensed in Kentucky.

While operating the truck, Dale attempted to back it up to a
porch, but the loading ramp was a few inches short of the top
step. Shari held the ramp up while Dale attempted to reverse
the truck a few more inches. When the truck was engaged,
however, it first jumped forward, throwing Shari off balance,
and as Dale backed up the truck, it pinned Shari’s foot between
the concrete step and the truck’s ramp.

In deposition testimony, Shari testified that she did not see
any warning labels on the truck instructing that the ramp should
not be extended while the truck was in motion. In Judith’s
deposition, she testified that when she and Dale rented the truck,
they did not receive a user’s guide with any warnings about
using the ramp. After Shari’s injury, Judith inspected the truck
for warning labels and the only label she found was a partial
warning label that was “ragged” and hard to read.

The affidavit of the general manager of U-Haul Center con-
tains a picture that shows a warning sticker below the latch to
the truck’s rear door stating, “DANGER DO NOT extend or
hold ramp while vehicle is in motion. Failure to follow this
warning could result in a serious or fatal injury.” The affidavit
also includes a copy of the “U-Haul Household Moving Van
User Instructions,’ which U-Haul Center alleged that it gives
to everyone to whom it rents a truck. On the first page of
the instructions is a warning to “NEVER put the Household
Moving Van in motion while the loading ramp is extended [or]
being held.”

2. U-Haut INTERNATIONAL’s Contacts Wir NEBRASKA
The assistant corporate secretary of U-Haul International
in an affidavit, averred that U-Haul International, a Nevada

240 Es

corporation, has its principal place of business in Phoenix,
Arizona; that it did not own the vehicle the Carstens rented;
that it was never qualified to do business in Nebraska and did
not employ anyone in the state; and that it does not possess any
real estate in Nebraska or have a registered agent, maintain any
office or bank accounts, conduct any meetings, or perform any
kind of services in Nebraska.

U-Haul International, however, is the parent company and
owns all of the stock of U-Haul Company of Nebraska (U-Haul
Nebraska) and U-Haul Company of Kentucky, which owned the
truck involved in the accident. U-Haul Center is a rental center
of U-Haul Nebraska. U-Haul International owns the trademark
used in Nebraska and displayed on all U-Haul trucks in the
state. Also, U-Haul International operates a toll-free telephone
number and Web site accessible from Nebraska.

Under the contract it had with U-Haul Nebraska, U-Haul
International provided all rental contracts and other forms and
stationery for the operation in Nebraska. It was also under
contract with U-Haul Nebraska to provide accounting, record-
keeping, technical, and advisory services. Finally, it coordinated
the exchange of rental equipment between U-Haul Nebraska
and other rental centers and prepared all federal and state
tax reports.

I. ASSIGNMENTS OF ERROR

The Ericksons assign that the district court erred in (1) find-
ing there was no duty owed by U-Haul Center to the Ericksons
and failing to find a foreseeable risk of injury to rental truck
users, (2) holding that no genuine issue of material fact exists
and granting summary judgment, (3) denying the Ericksons’
motion to amend or alter, (4) granting the special appearance of
U-Haul International, and (5) failing to recognize the existence
of sufficient minimum contacts between the State of Nebraska
and U-Haul International.

Ill. STANDARD OF REVIEW
HE Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue
regarding any material fact or the ultimate inferences that may

Se “
be drawn from those facts and that the moving party is entitled
to judgment as a matter of law.’ In reviewing a summary judg-
ment, we view the evidence in the light most favorable to the
party against whom the judgment is granted and give such
party the benefit of all reasonable inferences deducible from
the evidence.”

Hi When a jurisdictional question does not involve a factual
dispute, the issue presents a matter of law. We review questions
of law independently of the lower court’s conclusion.

IV. ANALYSIS

1. Overview or Duty

The district court granted U-Haul Center’s motion for sum-
mary judgment, finding that U-Haul Center did not owe a duty
to Shari. Shari views the matter differently. She contends U-Haul
Center owed her a duty because her mother, Judith, rented the
truck and her father, Dale, drove it. She argues it was reasonably
foreseeable that friends and family would assist Judith and Dale
in moving, so a special relationship existed. Shari argues U-Haul
Center had a duty to warn of the dangers of using the truck,
which extended not just to Judith, who signed the contract, but
to all those who used the rental truck.

U-Haul Center counters that for a duty to exist, a relationship
must exist between the parties that imposes a legal obligation
on one party to protect another party. It argues that because no
contractual or special relationship existed between Shari and
U-Haul Center, U-Haul Center owed her no duty.

HB The threshold inquiry in any negligence action is whether
the defendant owed the plaintiff a duty.* Actionable negligence
cannot exist if there is no legal duty to protect the plaintiff from

' Glad Tidings v. Nebraska Dist. Council, 273 Neb. 960, 734 N.W.2d 731
(2007).

2 Id,
3 See Rozsnyai v. Svacek, 272 Neb. 567, 723 N.W.2d 329 (2006).
* Claypool v. Hibberd, 261 Neb. 818, 626 N.W.2d 539 (2001).

242 Ee

injury.> Whether a legal duty exists for actionable negligence is a
question of law dependent on the facts in a particular case.®

HH A duty, in negligence cases, may be defined as an
obligation, to which the law will give recognition and effect,
to conform to a particular standard of conduct toward another.”
When determining whether a legal duty exists for actionable
negligence, a court considers (1) the magnitude of the risk, (2)
the relationship of the parties, (3) the nature of the attendant
tisk, (4) the opportunity and ability to exercise care, (5) the
foreseeability of the harm, and (6) the policy interest in the pro-
posed solution.®

HE The duty of reasonable care generally does not extend
to third parties absent other facts establishing a duty.? The com-
mon law has traditionally imposed liability only if the defend-
ant bears some special relationship to the potential victim.'®
Regardless of whether a duty of reasonable care exists, a duty to
warn cannot be imposed absent a special relationship."!

(a) Duty to Warn
HH The Restatement (Second) of Torts addresses the duty of
a supplier of chattels:

One who supplies directly or through a third person a
chattel for another to use is subject to liability to those
whom the supplier should expect to use the chattel with
the consent of the other or to be endangered by its probable
use, for physical harm caused by the use of the chattel in

5 Danler v. Rosen Auto Leasing, 259 Neb. 130, 609 N.W.2d 27 (2000).

6 National Am. Ins. Co. v. Constructors Bonding Co., 272 Neb. 169, 719
N.W.2d 297 (2006).

7 Danler v, Rosen Auto Leasing, supra note 5.

8 Munstermann y. Alegent Health, 271 Neb. 834, 716 N.W.2d 73 (2006).
° See, id.; Merrick v. Thomas, 246 Neb. 658, 522 N.W.2d 402 (1994).

‘© Popple v. Rose, 254 Neb. 1, 573 N.W.2d 765 (1998).

4 Ia,

Pe “
the manner for which and by a person for whose use it is
supplied, if the supplier

(a) knows or has reason to know that the chattel is or
is likely to be dangerous for the use for which it is sup-
plied, and

(b) has no reason to believe that those for whose use
the chattel is supplied will realize its dangerous condi-
tion, and

(c) fails to exercise reasonable care to inform them of its
dangerous condition or of the facts which make it likely to
be dangerous.”

Therefore, under § 388 of the Restatement, a supplier has a
common-law duty to warn expected users that a chattel may be
dangerous. The comments to § 388 show that the term “sup-
plier” includes lessors. And § 407 of the Restatement specifi-
cally extends the duties imposed by § 388 to lessors.”

This court has adopted ‘and applied § 388 in finding liability
against a manufacturer. In Libbey-Owens Ford Glass Co. v.
L & M Paper Co.,' a corporation purchased a forklift, which
overheated and caused a fire. The corporation was unaware that
the forklift’s resistor coil could heat to 1,200 degrees Fahrenheit.
The corporation sued the forklift’s manufacturer for the damage
caused by the fire. We held that the manufacturer acted negli-
gently because it failed to warn the corporation or the distributor
about the forklift’s heating propensity. We cited § 388 to support
our decision.

We have not applied § 388 to a lessor. Other jurisdictions,
however, have found that a lessor of chattels owed a duty to

12 Restatement (Second) of Torts § 388 at 300-01 (1965).
13 Td., § 407, comment a.

¥ See Libbey-Owens Ford Glass Co. v. L & M Paper Co., 189 Neb. 792, 205
N.W.2d 523 (1973). See, also, Driekosen v. Black, Sivalls & Bryson, 158
Neb. 531, 64 N.W.2d 88 (1954).

15 Libbey-Owens Ford Glass Co. v. L & M Paper Co., supra note 14.

244 Ee

warn of a chattel’s dangerous condition.!* For example, in
Barsness v. General Diesel & Equipment Co.,"" a church rented
a crane from a construction equipment leasing company. A
church member with limited construction experience acted as
the general contractor for the project. He attached a manbasket
to the crane to lift men for above-ground work. The basket fell
while the plaintiff was working in it, and he sustained serious
injuries. He sued the leasing company, alleging that the company
negligently failed to warn. The trial court granted the leasing
company’s summary judgment motion.

The North Dakota Supreme Court reversed. It stated that it
had recognized a cause of action for failure to warn in cases
involving manufacturers. In concluding that a duty may also
exist for other suppliers, the court stated: “[W]e see no reason
to limit application of the doctrine to manufacturers only. We
believe that other suppliers of chattels should be held liable for
their negligent failure to warn of dangerous propensities of a
chattel supplied to another, as outlined in Section 388.”!* The
North Dakota Supreme Court remanded for the trial court to
resolve factual issues whether a duty existed.

U-Haul Center contends that Neb. Rev. Stat. § 25-21,239
(Cum. Supp. 2004) has preempted a lessor’s liability for leasing
a chattel. That statute makes owners of leased trucks, truck-
tractors, and trailers liable to persons injured because of the
operation of the leased item. Because U-Haul Center does not
own the truck that the Carstens leased, § 25-21,239 does not

6 See, e.g., Barsness v. General Diesel & Equipment Co., 383 N.W.2d 840
(N.D. 1986); Rinkleff v. Knox, 375 N.W.2d 262 (lowa 1985); Clark v.
Rental Equipment Co. Inc., 300 Minn. 420, 220 N.W.2d 507 (1974); Parra
v, Building Erection Services, 982 S.W.2d 278 (Mo. App. 1998); Gall v.
McDonald Indus., 84 Wash. App. 194, 926 P.2d 934 (1996); Big Three
Welding Equipment Company v. Roberts, 399 S.W.2d 912 (Tex. Civ. App.
1966). See, also, Jordan v. Carlisle Constr. Co., Inc., No. 8:99CV162, 2001
US. Dist. LEXIS 24287 (D. Neb. May 3, 2001) (citing § 388 but finding no
duty because the lessees were knowledgeable users).

1 Barsness v. General Diesel & Equipment Co., supra note 16.
18 Id, at 845.

apply. The lack of a statutory duty, however, does not prevent
us from recognizing a common-law duty of a supplier to pro-
tect foreseeable users of its chattels from dangers known to
the supplier.

(b) Duty to Third Persons

HH Section 388 of the Restatement also makes clear that
the duty extends to third persons, not just to those in privity of
contract with the supplier of the chattel. Comment a. provides
in part:

The words “those whom the supplier should expect to use
the chattel” and the words “a person for whose use it is
supplied” include not only the person to whom the chattel
is turned over by the supplier, but also all those who are
members of a class whom the supplier should expect to use
it or occupy it or share in its use with the consent of such
person, irrespective of whether the supplier has any par-
ticular person in mind. Thus, one who lends an automobile
to a friend and who fails to disclose a defect of which he
himself knows and which he should recognize as making
it unreasonably dangerous for use, is subject to liability
not only to his friend, but also to anyone whom his friend
permits to drive the car or chooses to receive in it as pas-
senger or guest, if it is understood between them that the
car may be so used.”

In Gall v. McDonald Indus.,” the Washington Court of Appeals
applied § 388 to a third person. There, a construction company
leased a dump truck. One of the company’s employees was
driving the truck when its brakes failed and the truck crashed,
injuring the employee. The employee sued the leasing company,
and the trial court entered summary judgment against him. In
reversing the trial court’s decision and remanding the cause, the
Washington court cited the comments to § 388. The court held
that a rational trier of fact could find that the employee was a
foreseeable user of the truck, protected under § 388.

19 Restatement, supra note 12, comment a. at 301.
20 Gall v. McDonald Indus., supra note 16.

246 Le

HM U-Haul Center cites Danler v. Rosen Auto Leasing” in
support of its argument that it owes no common-law duty to
Shari. In Danler, we addressed a vehicle-leasing company’s
duty to a third-party victim. The lessee, while driving the leased
vehicle, damaged a third party’s parked car; the third party then
sued the leasing company.” We determined that “[a] contractual
relationship between two parties, one of which is a tort-feasor,
does not justify the imposition of an affirmative duty upon the
other party to the contract to protect a third-party victim with
whom no such relationship exists.”* That is, without a relation-
ship between the leasing company and the third-party motor-
ist, the leasing company had no affirmative duty to protect the
third party.

We, however, believe that the rule in Danler does not apply
here because a fact finder could determine that Shari was a fore-
seeable user of the leased goods, unlike the third-party victim in
Danler. The duty owed by U-Haul Center is not to protect Shari
from its lessee’s negligence, but to protect her from danger stem-
ming from her own use of the leased truck. She, therefore, could
fall within the class of protected individuals under § 388.

(c) Genuine Issues of Material Fact Exist Regarding

Whether U-Haul Center Had a Duty to Warn Shari
Whether a duty exists under § 388 is a question of law, which
depends on several factual determinations. In a case involving
a lessor of a crane, the North Dakota Supreme Court stated
that a fact finder should resolve the following factual issues in
deciding whether a duty to warn arose: (1) For what use was the
chattel supplied? (2) Was the chattel dangerous or likely to be
dangerous for that use? (3) Did the supplier know or have reason
to know of the danger? and (4) Did the supplier have no reason
to believe that those who would use the chattel would realize its
dangerous condition? The duty also depends on whether Shari

21 Danler v. Rosen Auto Leasing, supra note 5.

2 Id,

% Id, at 136, 609 N.W.2d at 32.

4 See Barsness v. General Diesel & Equipment Co., supra note 16.

was a person whom U-Haul Center should expect to use the
truck or expect to be endangered by using the truck.

Here, there exist general issues of material fact. The record
shows that Shari and the Carstens were using the truck for mov-
ing—its intended use. U-Haul Center has a regular practice of
providing warnings like handbooks and warning labels on the
trucks. This implies that the truck was dangerous for its intended
use and that U-Haul Center knew of the danger. Nothing in the
record suggests that Shari would realize the dangerous condition
absent a warning. Further, U-Haul Center could expect that per-
sons other than the lessee would help in the move, and therefore,
use the truck.

Viewing the record in the light most favorable to the Ericksons,
we conclude that genuine issues of material fact still exist before
the trial court can determine whether, as a matter of law, U-Haul
Center had a duty to warn Shari. The district court erred in sus-
taining U-Haul Center’s motion for summary judgment.

2. Nepraska Has PersONAL JURISDICTION
Over U-Haut INTERNATIONAL
The Ericksons contend the district court erred in not find-
ing that the State of Nebraska has personal jurisdiction over
U-Haul International. They argue that U-Haul International had
sufficient minimum contacts with Nebraska to establish per-
sonal jurisdiction.

(a) Long-Arm Statute

HE Before a court can exercise personal jurisdiction over
a nonresident defendant, the court must detetmine, first, whether
the state’s long-arm statute is satisfied. Second, it must deter-
mine whether minimum contacts exist between, the defendant
and the forum state for personal jurisdiction over the defendant
without offending due process.» Nebraska’s long-arm statute
provides: “A court may exercise personal jurisdiction over a
person . . . (2) Who has any other contact with or maintains
any other relation to this state to afford a basis for the exercise

?5 See Brunkhardt v. Mountain West Farm Bureau Mut. Ins., 269 Neb. 222, 691
N.W.2d 147 (2005). See, also, Kugler Co. v. Growth Products Ltd., 265 Neb.
505, 658 N.W.2d 40 (2003).

248 |

of personal jurisdiction consistent with the Constitution of the
United States.” Nebraska’s long-arm statute, therefore, extends
Nebraska’s jurisdiction over nonresidents having any contact
with or maintaining any relation to this state as far as the U.S.
Constitution permits.”” Therefore, the issue is whether U-Haul
International had sufficient contacts with Nebraska so that the
exercise of personal jurisdiction would not offend federal prin-
ciples of due process.”

(b) Minimum Contacts

HMM If the long-arm statute has been satisfied, a court
must then determine whether minimum contacts exist between
the defendant and the forum state for personal jurisdiction over
the defendant without offending due process.” Therefore, we
consider the kind and quality of U-Haul International’s activi-
ties to decide whether it has the necessary minimum contacts
with Nebraska to satisfy due process. To subject an out-of-state
defendant to personal jurisdiction in a forum court, due process
requires that the defendant have minimum contacts with the
forum state so as not to offend traditional notions of fair play
and substantial justice.>! The benchmark for determining if the
exercise of personal jurisdiction satisfies due process is whether
the defendant’s minimum contacts with the forum state are such
that the defendant should reasonably anticipate being haled
into court there.*? Whether a forum state court has personal
jurisdiction over a nonresident defendant depends on whether

26 Neb. Rev. Stat. § 25-536 (Reissue 1995).

7 Brunkhardt v. Mountain West Farm Bureau Mut. Ins., supra note 25. See,
also, Diversified Telecom Servs. v. Clevinger, 268 Neb. 388, 683 N.W.2d
338 (2004).

28 See Brunkhardt v. Mountain West Farm Bureau Mut. Ins., supra note 25.

Id. See, also, Quality Pork Internat, v. Rupari Food Servs., 267 Neb. 474,
675 N.W.2d 642 (2004).

3° Brunkhardt v. Mountain West Farm Bureau Mut. Ins., supra note 25.
3 Id,
2 Id,

Pe “
the defendant’s actions created substantial connections with the
forum state, resulting in the defendant’s purposeful availment of
the forum state’s benefits and protections.

HE In analyzing personal jurisdiction, we consider the
quality and type of the defendant’s activities in deciding whether
the defendant has the necessary minimum contacts with the
forum state to satisfy due process.* A court exercises two types
of personal jurisdiction depending upon the facts and circum-
stances of the case: general personal jurisdiction or specific
personal jurisdiction. Here, we focus on general personal juris-
diction. To satisfy general personal jurisdiction, the plaintiff’s
claim does not have to arise directly out of the defendant’s
contacts with the forum state if the defendant has engaged in
“‘continuous and systematic general business contacts’” with
the forum state.

In finding sufficient contact in a similar case involving
U-Haul International, the Alabama Supreme Court held that
Alabama had personal jurisdiction over U-Haul International.
In Boyd v. U-Haul Intern., Inc.,>° the plaintiff rented a U-Haul
truck and lost control of the truck while backing it up to the
doorway of his home.”” The truck crushed a child’s foot against
concrete steps, and his foot had to be amputated.** The court
held that U-Haul International had sufficient minimum contacts
with Alabama:

[While U-Haul International does not own the rented
vehicles, it serves as a clearinghouse for U-Haul compa-
nies throughout the country. It continually collects monies
and distributes percentages of those monies to U-Haul

8 Id.
34 Id.

35 Id. See, also, Quality Pork Internat. v. Rupari Food Servs., supra note 29,
267 Neb. at 483, 675 N.W.2d at 650, quoting Helicopteros Nacionales de
Columbia v, Hall, 466 U.S, 408, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984).

36 Boyd v. U-Haul Intern., Inc., 527 So. 24713 (Ala. 1988).
7 Id.

38 Ig,

250 Le

Company of Alabama. It provides accounting and audit-
ing services to U-Haul Company of Alabama; it pro-
vides company forms and stationery; and it maintains
standards for repairing and servicing U-Haul vehicles.
Moreover, U-Haul International sends its representatives
into this State for the express purpose of providing U-Haul
Company of Alabama with auditing and accounting ser-
vices. In light of the foregoing relationship, we conclude
that U-Haul International’s contacts with Alabama were
deliberate rather than fortuitous and, therefore, that it
should have been reasonably foreseen that at some time in
the future it would need the protections, and would invoke
the jurisdiction, of the Alabama courts.

U-Haul International’s relationship with U-Haul Company of
Alabama looks similar to its relationship with U-Haul Nebraska.
U-Haul International contracted with U-Haul Nebraska. The
contract not only granted U-Haul Nebraska the exclusive right
to have U-Haul rental stores in parts of Nebraska, but also
required U-Haul International to provide accounting, record-
keeping, technical, and advisory services. The contract required
U-Haul International to coordinate the exchange of rental equip-
ment between U-Haul Nebraska and other rental centers. U-Haul
International also provided “all rental contracts and other forms
and stationery desirable and necessary” for the operations in
Nebraska, and prepared all federal and state tax reports. In addi-
tion, U-Haul International owns the trademark displayed on all
U-Haul trucks used in Nebraska. Finally, U-Haul International
operates a toll-free telephone number and Web site acces-
sible from Nebraska. These contacts provide sufficient grounds
for a Nebraska court to exercise personal jurisdiction over
U-Haul International.

U-Haul International argues that Boyd is not binding prec-
edent on this court and that we should instead rely on Peterson
y. U-Haul Co.” In Peterson, the Eighth Circuit Court of Appeals
found that Nebraska did not have jurisdiction over U-Haul

% Id. at 714,
4° Peterson v. U-Haul Co., 409 F.2d 1174 (8th Cir. 1969).

Company of North Carolina. Unlike U-Haul Company of
North Carolina, however, U-Haul International is not one sub-
sidiary within the U-Haul rental system, but is instead the parent
corporation. And U-Haul Company of North Carolina’s contacts
with Nebraska—which arose primarily when one of its trucks
was rented to a destination in Nebraska—were less systematic.
In contrast, U-Haul International, as the parent corporation,
purposely reached into the state to establish an interdependent
contractual relationship with U-Haul Nebraska. This relation-
ship resulted in many contacts between U-Haul International and
Nebraska. In Peterson, no such contractual arrangement existed.
between U-Haul Nebraska and U-Haul Company of North
Carolina for continuous, systematic contact with Nebraska.

Here, U-Haul International, a Nevada corporation, reached out
beyond its borders and negotiated with a Nebraska corporation.
This contract established a substantial and continuing relation-
ship between U-Haul International and U-Haul Nebraska and
committed U-Haul International to having continuing contacts
in Nebraska. We are satisfied that the exercise of jurisdiction
over U-Haul International would not offend due process. U-Haul
International reached into the State of Nebraska, established suf-
ficient minimum contacts, and invoked the benefits and protec-
tions of its laws. The district court, therefore, erred in granting
U-Haul International’s special appearance.

V. CONCLUSION

We conclude that genuine issues of material fact exist regard-
ing whether U-Haul Center had a duty to warn Shari. Also,
U-Haul International had sufficient contacts with Nebraska to
warrant a Nebraska court’s exercise of personal jurisdiction over
it. We, therefore, reverse the district court’s decision regard-
ing both U-Haul Center’s motion for summary judgment and
U-Haul International’s special appearance, and we remand the
cause for further proceedings.

REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.

Troy NEIMAN AND CAROL LEWIS, SHAREHOLDERS
IN Tri R Anaus, INC., APPELLEES, v. TRI R
Ancus, INC., ET AL., APPELLANTS.

739 N.W.2d 182

Filed September 7, 2007. No. S-06-118.

David A. Domina, of Domina Law Group, P.C., L.L.O., and
George M. Zeilinger for appellants.

K.C. Engdahl and Karisa D. Johnson, of Ballew, Schneider,
Covalt, Gaines & Engdahl, P.C., L.L.O., for appellees.

Heavican, C.J., Wricut, CoNNoLty, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Mitter-Lerman, J.

NATURE OF CASE

Appellees, Troy Neiman and Carol Lewis, shareholders in
appellant Tri R Angus, Inc. (Tri R), instituted this action in
the district court for Thomas County against Tri R and director
appellants Jon L. Neiman and Frances E. Neiman (the director
appellants), seeking to have the director appellants judicially
removed as directors of Tri R. Appellees brought this action
pursuant to Neb. Rev. Stat. § 21-2086 (Reissue 1997), which
permits the removal of directors by judicial proceeding under
certain circumstances. Appellees moved for summary judgment.
Following an evidentiary hearing, the district court sustained
appellees’ motion, ordered the director appellants removed as
directors of Tri R, and enjoined them from serving as direc-
tors for a period of 2 years. In a subsequent order, the district
court denied appellants’ “Motion for New Trial” and sustained
appellees’ motion for further order. In its further order, the court
directed Tri R to hold a special shareholders’ meeting for the
purpose of electing new directors to replace the director appel-
lants and further ruled that the director appellants were not
eligible to be elected as directors.

Appellants filed an appeal. We conclude that appellees failed
to establish that they were entitled to judgment as a matter of
law, and we therefore reverse the district court’s entry of sum-
mary judgment, vacate the district court’s further order entered
after the grant of summary judgment, and remand the cause for
further proceedings.

STATEMENT OF FACTS
The record reflects that Tri R is a closely held, private corpora-
tion in which the director appellants hold approximately 80 per-
cent of the corporation’s stock, and appellees hold approximately
12 percent of the stock. The director appellants serve as direc-
tors of Tri R. Appellees filed this action with the district court

254 Le

seeking the judicial removal of the director appellants as Tri R
directors pursuant to § 21-2086, which provides as follows:

(1) The district court of the county where a corpora-
tion’s principal office, or, if none in this state, its reg-
istered office, is located, may remove a director of the
corporation from office in a proceeding commenced either
by the corporation or by its shareholders holding at least
ten percent of the outstanding shares of any class if. the
court finds that (a) the director engaged in fraudulent or
dishonest conduct or gross abuse of authority or discretion
with respect to the corporation and (b) removal is in the
best interests of the corporation.

(2) The court that removes a director may bar the direc-
tor from reelection for a period prescribed by the court.

(3) If shareholders commence a proceeding under sub-
section (1) of this section, they shall make the corporation
a party defendant.

In their complaint filed on May 18, 2005, appellees alleged,
inter alia, that the director appellants, as directors of Tri R,
authorized the distribution of assets in violation of state law,
inappropriately mortgaged or pledged corporate assets, inap-
propriately sold or disposed of corporate assets, inappropriately
diverted and utilized corporate earnings, and wasted corporate
assets. Appellants filed an answer generally denying the allega-
tions in the complaint.

On September 8, 2005, appellees filed a motion for sum-
mary judgment. An evidentiary hearing was held, and evidence
was adduced by appellees. The director appellants did not
introduce evidence in opposition to appellees’ motion for sum-
mary judgment.

In an order filed December 5, 2005, the district court sus-
tained appellees’ motion and ordered the removal of the director
appellants. In its order, the district court stated that its

ruling [was] based in part upon the decision entered by
. .. the Lincoln County District Court [in the] case of
Tri R. Angus, Inc. v. Neiman and Neiman Corp. et al. [and
upon] the orders [of the] United States Bankruptcy Court
for the District of Nebraska involving the Chapter 11

Bankruptcy proceedings of [Tri R] as well as [of the direc-
tor appellants].

We note that the ruling from the Lincoln County District
Court upon which the summary judgment in the instant case
was based resolved litigation that had been initiated in 2001,
involving events that had occurred primarily between 1998
and 2001, and that the bankruptcy court orders also relied
on had been entered in 2003 and largely consisted of rulings
dismissing the bankruptcy proceedings for failure to com-
ply with bankruptcy court orders that directed the filing of
amended bankruptcy schedules and operating reports and for
failure to make an adequate protection payment in a timely
manner. In its order filed December 5, 2005, the district court
ordered that the director appellants be removed as directors of
Tri R and further enjoined the director appellants from serving
as Tri R directors for a period of 2 years.

Following the district court’s order sustaining appellees’
motion for summary judgment, appellants filed a “Motion
for New Trial” and appellees filed a motion for further order.
In an order filed January 19, 2006, the district court denied
appellants’ motion and sustained appellees’ motion, setting a
date for a shareholders’ meeting to hold elections to fill the
vacancies and prohibiting the director appellants from seeking
election as directors. Appellants filed this appeal.

ASSIGNMENTS OF ERROR
On appeal, appellants assign various errors. In summary,
appellants claim that the district court for Thomas County (1)
lacked jurisdiction to decide this case because Tri R’s principal
office is located in Cherry County and not in Thomas County,
(2) erred in entering summary judgment in favor of appellees,
and (3) erred in sustaining appellees’ motion for further order.

STANDARDS OF REVIEW
HM Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue as
to any material fact or as to the ultimate inferences that may
be drawn from those facts and that the moving party is entitled
to judgment as a matter of law. Alston v. Hormel Foods Corp.,

256 Le

273 Neb. 422, 730 N.W.2d 376 (2007). In reviewing a summary
judgment, an appellate court views the evidence in a light most
favorable to the party against whom the judgment is granted and
gives such party the benefit of all reasonable inferences deduc-
ible from the evidence. Id.

Hl The interpretation of a statute is a question of law for
which an appellate court has an obligation to reach an indepen-
dent conclusion irrespective of the decision made by the court
below. Reid v. Evans, 273 Neb. 714, 733 N.W.2d 186 (2007).

ANALYSIS

Appellees Filed Their Action in the
Appropriate District Court.

For their first assignment of error, appellants claim that the
district court lacked authority to hear the instant case. In support
of this argument, appellants rely upon § 21-2086(1), which, in
pertinent part, provides that “[t]he district court of the county
where a corporation’s principal office, or, if none in this state,
its registered office, is located, may remove a director of the
corporation from office . . ..” Appellants claim that this statutory
provision is jurisdictional and argue that Tri R’s principal office
is located in Cherry County, not Thomas County, and that there-
fore, the district court for Thomas County lacked jurisdiction to
hear the instant case.

We determine that, without regard to whether § 21-2086(1)
is jurisdictional in nature, the evidence in the record demon-
strates that Tri R’s principal office is located in Thomas County,
where the action was filed, and that thus, the district court for
Thomas County was authorized under the statute to hear the
present action.

The record on appeal contains copies of Tri R’s corporate
bylaws. The bylaws provide that Tri R’s principal office is
located in Thomas County, a fact that counsel for appellants
acknowledged at oral argument. Nothing in the record indicates
that the bylaws have been amended relative to the principal
office. Principal office is defined as “the office, in or out of
this state, so designated in the annual report where the prin-
cipal executive offices of a domestic or foreign corporation
are located.” Neb. Rev. Stat. § 21-2014(15) (Reissue 1997). In

a “
challenging the filing of this action in Thomas County, appel-
lants have not directed this court to any annual reports located
in the record that designated Tri R’s principal office.

The record does not contain meaningful evidence that the
principal office is located in a county other than Thomas County.
Given the record, we conclude that there is no merit to appel-
lants’ first assignment of error.

The District Court Erred in Granting Appellees’ Motion for
Summary Judgment Because Appellees Failed to Establish
That They Were Entitled to Judgment as a Matter of Law.

For their second assignment of error, appellants claim, for a
variety of reasons, that the district court erred in entering sum-
mary judgment in favor of appellees. Taking into consideration
the provisions of § 21-2086(1) and the record in this case, we
conclude that appellees failed to establish that they were entitled
to judgment as a matter of law and that therefore, the district
court erred in sustaining appellees’ motion for summary judg-
ment. We reverse the district court’s entry of summary judgment,
and, as discussed in the last section of this opinion, vacate its
further order of January 19, 2006, and remand the cause for
further proceedings.

Il This case seeking the judicial removal of directors was
brought under § 21-2086(1), which provides as follows:

The district court of the county where a corporation’s prin-
cipal office, or, if none in this state, its registered office,
is located, may remove a director of the corporation from.
office in a proceeding commenced either by the corpora-
tion or by its shareholders holding at least ten percent of
the outstanding shares of any class if the court finds that
(a) the director engaged in fraudulent or dishonest conduct
or gross abuse of authority or discretion with respect to
the corporation and (b) removal is in the best interests of
the corporation.
To succeed in an action brought under § 21-2086(1), the pro-
hibited conduct must be proved, and it must be shown that
removal of a director is in the best interests of the corporation.
More specifically, the district court may remove a director in an
action brought by shareholders holding at least 10 percent of

258 Ee

the outstanding shares if the court, after reviewing the evidence,
finds that the director engaged in fraudulent or dishonest con-
duct or engaged in a gross abuse of authority or discretion with
respect to the corporation and also finds that the removal of the
director is in the corporation’s best interests.

This court has not had occasion to consider the requirements
for judicial removal of corporate directors under the provisions
of § 21-2086, which was enacted in 1995. The Statement of
Intent relative to the bill that introduced § 21-2086 indicates
that the provisions of the bill are based on the Model Business
Corporation Act (MBCA) and that the “intent [of the bill] is
to fine-tune our corporate law to insure [sic] that it is meeting
the needs of Nebraska businesses and creating an attractive
environment in which corporations may be formed.” L.B. 109,
Banking, Commerce and Insurance Committee, 94th Leg., Ist
Sess. (Jan. 23, 1995).

Appellants assert, and appellees do not dispute, that
§ 21-2086 is based upon MBCA § 8.09. See 2 Model Business
Corporation Act Ann. § 8.09 (3d ed. 2002). Other states have
enacted statutes based on MBCA § 8.09 that are comparable
to § 21-2086. See, e.g., Ariz. Rev. Stat. Ann. § 10-809 (2004);
Colo. Rev. Stat. Ann. § 7-108-109 (West 2006); Iowa Code
Ann. § 490.809 (West Cum. Supp. 2007); N.Y. Bus. Corp. Law
§ 706 (McKinney 2003). However, we are not aware of, and the
parties have not directed us to, decisions of courts in other juris-
dictions that have provisions similar to § 21-2086 that are use-
ful in determining how to apply the provisions of the Nebraska
statute in the instant case.

‘We are aware that § 8.09 of the MBCA has been amended, and
although the amendments have not been incorporated into the
Nebraska statutory provision, comments made by the Committee
on Corporate Laws of the Section of Business Law, which from
time to time proposes changes to the MBCA, are instructive as
to the drafters’ intent behind the original provisions that form
the basis of § 21-2086. The committee has observed that

{t]he grounds for removal in the present statute (“the direc-
tor engaged in fraudulent or dishonest conduct, or gross
abuse of authority or discretion, with respect to the corpo-
ration,”) are vague, insufficient to distinguish more from

a .
less serious misbehavior, provide inadequate guidance for
the exercise of the court’s discretion, and may therefore be
susceptible to abuse.

See Committee on Corporate Laws of the Section of Business
Law, Changes in the Model Business Corporation Act—Proposed
Amendments Relating to Directors, 56 Bus. Law. 85-86 (2000).
More particularly, the official comment to the amended section
states that
{s]ection 8.09 is designed to operate in the limited cir-
cumstance where other remedies are inadequate to address
serious misconduct by a director . . . . Misconduct seri-
ous enough to justify the extraordinary remedy of judicial
removal does not involve any matter falling within an indi-
vidual director’s lawful exercise of business judgment, no
matter how unpopular the director’s views may be... .
See Committee on Corporate Law of the Section of Business
Law, supra at 90.

In addition to this comment, commentators in states that have
enacted statutory versions of § 8.09 have similarly discussed
the extreme and limited nature of the remedy with respect
to the conduct and the resultant harm to the corporation that
would justify removal. One commentator has noted that the bar
for removal

is a high standard, requiring gross, intentional, or dishon-
est conduct [and e]ven if that standard is met, the director
still cannot be removed unless the removal is in the best
interests of the corporation. Clearly, the drafters of this
statute wished to make it possible, but difficult, for a court
to remove a director.
See 1 Cathy Stricklin Krendl et al., Methods of Practice § 1.62
(Colo. Prac. Series, 6th ed. 2005) (discussing Colo. Rev. Stat.
Ann. § 7-108-109, Colorado’s statutory version of MBCA
§ 8.09). In addition to noting the “high standard” established by
the statute, legal commentators have discussed the elements the
shareholder must prove in order to obtain judicial removal of a
director, stating that
[iJn an action to remove a director under statutory provi-
sions, the plaintiff has the burden of proving . . . all of
the elements of the cause of action. . . . The most difficult

element in the plaintiff’s case will usually be to establish
the acts of the defendant director being relied upon as a
ground for removal. The plaintiff may call the defendant
and other corporate officers to testify as to the acts or
transactions complained of, but in most cases, the plaintiff
will have to conduct considerable discovery proceedings
and obtain from the corporate records as much evidentiary
matter as possible.

14A N.Y. Jur. 2d Business Relationships § 567 (1996) (discuss-

ing N.Y. Bus. Corp. Law § 706, New York’s statutory version

of MBCA § 8.09).

Hl The interpretation of a statute is a question of law for
which an appellate court has an obligation to reach an indepen-
dent conclusion irrespective of the decision made by the court
below. Reid v. Evans, 273 Neb. 714, 733 N.W.2d 186 (2007).
The language of Nebraska’s version of MBCA § 8.09, § 21-2086,
leads us to conclude, as have others considering MBCA § 8.09,
that judicial removal of a director is an extraordinary remedy. It
is not a remedy to be judicially awarded when there is merely a
difference of opinion between the shareholders and the directors
regarding the operations of the corporation encompassed by the
exercise of business judgment. Instead, it is an unusual remedy
that is to be granted only upon the shareholder’s production of
sufficient evidence demonstrating that the director has engaged
in “fraudulent or dishonest conduct or gross abuse of authority
or discretion with respect to the corporation.” § 21-2086.

I By including “fraudulent” conduct in the list of conduct
that justifies judicial removal of directors, we believe that
§ 21-2086 as a whole evinces a high bar for removal. City
of Gordon v. Ruse, 268 Neb. 686, 690, 687 N.W.2d 182, 185
(2004) (stating that “[t]o determine the legislative intent of a
statute, a court generally considers the subject matter of the
whole act, as well as the particular topic of the statute contain-
ing the questioned language”). The elements for establishing
fraud can commonly include a requirement that the actor whose
conduct is challenged had the requisite knowledge that his or
her conduct was unacceptable or his or her representations were
false. Nielsen v. Adams, 223 Neb. 262, 388 N.W.2d 840 (1986)
(citing W. Page Keeton et al., Prosser & Keeton on the Law of

Torts § 105 (Sth ed. 1984)). In connection with a complaint for
securities fraud, we note that in Tellabs, Inc. v. Makor Issues &
Rights, Ltd., 551 U.S. 308, 127 S. Ct. 2499, 168 L. Ed. 2d 179
(2007), the U.S. Supreme Court recently discussed the height-
ened pleading requirement of facts evidencing scienter required
by the Private Securities Litigation Reform Act of 1995, 15
U.S.C. § 78u-4(b)(2) (2000) (§ 21D(b)(2)). Specifically, under
§ 21D(b)(2), plaintiffs must “state with particularity facts giv-
ing rise to a strong inference that the defendant acted with
the required state of mind.” Consistent with the foregoing, in
discussing fraud, we have previously noted that scienter, as an
aspect of the knowledge requirement of fraud, involves infer-
ences going to the defendant’s state of mind, and we have fur-
ther observed that the defendant’s state of mind is difficult to
prove. Nielsen v. Adams, supra. As a result, not surprisingly, it
has been observed that a claim of fraud is generally inappropri-
ate for disposition at the summary judgment stage. See, Mitchell
v. Calhoun, 229 Ga. 757, 194 S.E.2d 421 (1972); Great So.
Nat. v. McCullough Env. Serv., 595 So. 2d 1282 (Miss. 1992);
Lacy v. Morrison, 906 So. 2d 126 (Miss. App. 2004); Hooks v.
Eckman, 159 N.C. App. 681, 587 S.E.2d 352 (2003).

In Tellabs, Inc., the U.S. Supreme Court noted that the vari-
ous tests applicable to pleadings, summary judgments, and post-
trial judgments are different and that “the test at each stage is
measured against a different backdrop.” 551 U.S. at 325 n.5. We,
of course, agree that the tests differ at different stages of the liti-
gation. In the instant appeal, we are asked to rule on the propri-
ety of a summary judgment entered in favor of appellees based
on a collection of documents that in and of themselves do not
unequivocally demonstrate that the director appellants had the
required state of mind and that the director appellants engaged
in fraudulent conduct. For the present purpose of reviewing a
summary judgment, we must view the evidence in a light most
favorable to the party against whom the judgment is entered and
give such party the benefit of all reasonable inferences deducible
from the evidence. See Alston v. Hormel Foods Corp., 273 Neb.
422, 730 N.W.2d 376 (2007).

Giving the inferences in favor of the director appellants, as
we must, we cannot say at the summary judgment stage that

262 Le

appellees established that the director appellants engaged in
fraudulent or dishonest conduct. See § 21-2086(1). By exten-
sion, and without regard to the knowledge requirement of
fraud, we also believe that, taking the inferences in favor of
the director appellants, the record on summary judgment fails
to establish as a matter of law that the director appellants have
necessarily engaged in gross abuse of authority or discretion
with respect to the corporation. See id. Finally, we also believe
that because judicial removal of directors is a remedy designed,
in part, to prevent future abuse, the acts complained of should
be relatively recent. See Olga N. Sirodoeva-Paxson, Judicial
Removal of Directors: Denial of Directors’ License to Steal or
Shareholders’ Freedom to Vote? 50 Hastings L.J. 97 (1998). As
noted below, we also determine that the tendered evidence does
not satisfy this requirement.

The record in the instant case consists of thousands of pages
of documents. Aside from procedural affidavits from counsel,
which identify the documents tendered into evidence, appel-
lees have provided little guidance to this court with regard to
the significance of these documents or the relationship between
these documents and the requirements of § 21-2086(1). Our
review of the evidence shows that the exhibits consist primar-
ily of copies of pleadings and materials filed in other litigation
involving Tri R, as well as copies of materials filed in Tri R’s
and the director appellants’ chapter 11 bankruptcy proceedings.
The acts reflected in the other cases are invariably several years
old, dating from 2003 or earlier. There is no objective evidence
of current conduct by the director appellants that meets the high
bar to establish the conduct required under the statute. Further,
there is no objective evidence that the older conduct requires
removal or that removal is in the best interests of the corporation.
See Medlock v. Medlock, 263 Neb. 666, 642 N.W.2d 113 (2002)
(commenting on inutility of stale evidence). For completeness,
we note that the record does contain the November 2005 affida-
vit of appellee Troy Neiman relating to his observations relative
to the condition of certain Tri R property, made after an aerial
inspection. This affidavit is insufficient to establish that appel-
lees were entitled to judgment as a matter of law.

HM We have considered the evidence offered by appellees
at the summary judgment hearing in light of the requirements
of § 21-2086(1) discussed above to determine the propriety of
the district court’s ruling granting summary judgment. A party
moving for summary judgment must make a prima facie case
by producing enough evidence to demonstrate that the mov-
ant is entitled to judgment if the evidence were uncontroverted
at trial. Pogge v. American Fam. Mut. Ins. Co., 272 Neb. 554,
723 Neb. 334 (2006). If the moving party fails to make a prima
facie case, the movant is not entitled to judgment as a matter of
law. See New Tek Mfg. v. Beehner, 270 Neb. 264, 702 N.W.2d
336 (2005). In reviewing a summary judgment, an appellate
court views the evidence in the light most favorable to the party
against whom the judgment is granted and gives such party
the benefit of all reasonable inferences deducible from the evi-
dence. Alston v. Hormel Foods Corp., 273 Neb. 422, 730 Neb.
376 (2007).

Applying the foregoing principles, appellees were not entitled
to judgment as a matter of law, and the district court erred in
granting appellees’ motion for summary judgment. We reverse
the district court’s order granting summary judgment in favor of
appellees and remand the cause for further proceedings.

The District Court’s Order Entered on Appellees’
Motion for Further Order Must Be Vacated.

Appellants’ final assignment of error challenges the propri-
ety of the district court’s order of January 19, 2006, granting
appellees’ motion for further order, in which the district court
set a date for a shareholders’ meeting to hold elections to fill
the director vacancies and prohibited the director appellants
from seeking election as directors. In view of our reversal of the
summary judgment entered in favor of appellees, it necessarily
follows that this subsequent relief afforded by the district court
granting appellees’ motion for further relief was error and must
be vacated.

CONCLUSION
In this action seeking judicial removal of directors under
§ 21-2086, appellees failed to establish that they were entitled

264 es

to judgment as a matter of law, and therefore, the district court
erred when it granted appellees’ motion for summary judgment
and ordered the removal of the director appellants as direc-
tors. The district court’s judgment entered in favor of appellees

on their motion for summary judgment is reversed. The dis- °

trict court’s further order directing a shareholders’ meeting is

vacated. The cause is remanded for further proceedings.
REVERSED AND VACATED, AND CAUSE REMANDED
FOR FURTHER PROCEEDINGS.

Stare OF NEBRASKA EX REL. COUNSEL FOR DisciPLINE
OF THE NEBRASKA SUPREME CourT, RELATOR, V.
Jay Ropert GARROUTTE, RESPONDENT.

739 N.W.2d 191

Filed September 21, 2007. No. S-07-639.

Heavican, C.J., Wricut, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitver-Lerman, JJ.

Per Curiam.
INTRODUCTION
This case is before the court on the voluntary surrender of
license filed by respondent, Jay Robert Garroutte. The court
accepts respondent’s surrender of his license and enters an order
of disbarment.

FACTS

Respondent was admitted to the practice of law in the State
of Nebraska on September 25, 1991. On June 12, 2007, an
application for the temporary suspension of respondent from the
practice of law was filed by the chairperson of the Committee on
Inquiry of the First Disciplinary District. The application stated
that on March 27, 2007, in the district court for Polk County,
Iowa, respondent pled guilty to felony criminal charges of manu-
facturing a controlled substance, in violation of Iowa Code Ann.
§ 124.401(1)(d) (West 2007), and failure to possess a tax stamp,

in violation of Iowa Code Ann. § 453B.12 (West 2006). The

application further stated that on May 15, the district court found

respondent guilty of the charges, sentenced him to prison for 5

years, and imposed a fine. The application further stated that
respondent has engaged in . . . criminal [behavior] that
reflects adversely on his honesty, trustworthiness or fit-
ness as a lawyer in other respects and that if he [is]
allowed to continue to practice law until final disposition
of the . . . disciplinary proceedings, it would cause serious
damage to the reputation of the legal profession and could
cause damage to the public.

On June 20, 2007, this court entered an order directing
respondent to show cause why his license should not be
temporarily suspended. A copy of the show cause order was
served on respondent. On August 29, this court determined that
respondent had failed to show cause why his license should not
be temporarily suspended and ordered respondent’s license to
practice law in the State of Nebraska temporarily suspended
until further order of the court.

Respondent has filed with this court a voluntary surrender .
of license, voluntarily surrendering his license to practice law
in the State of Nebraska. In his voluntary surrender of license,
respondent effectively does not challenge or contest the truth
of the allegations in the application for temporary suspension
to the effect that he pled guilty to felony criminal charges of
manufacturing a controlled substance and failure to possess a
tax stamp and, further, that the district court found respondent
guilty of the charges, sentenced him to prison for 5 years, and
imposed a fine. In addition to surrendering his license, respond-
ent effectively consented to the entry of an order of disbarment
and waived his right to notice, appearance, and hearing prior to
the entry of the order of disbarment.

ANALYSIS
Neb. Ct. R. of Discipline 15 (rev. 2001) provides in perti-
nent part:
(A) Once a Grievance, a Complaint, or a Formal Charge
has been filed, suggested, or indicated against a member,
the member may voluntarily surrender his or her license.

266 a

(1) The voluntary surrender of license shall state in
writing that the member knowingly admits or knowingly
does not challenge or contest the truth of the suggested
or indicated Grievance, Complaint, or Formal Charge and
waives all proceedings against him or her in connec-
tion therewith.

Pursuant to rule 15, we find that respondent has voluntarily
surrendered his license to practice law and knowingly does not
challenge or contest the truth of the allegations made against
him in the application for temporary suspension. Further,
respondent has waived all proceedings against him in connec-
tion therewith. We further find that respondent has consented to
the entry of an order of disbarment.

CONCLUSION

Upon due consideration of the court file in this matter, the
court finds that respondent voluntarily has stated that he know-
ingly does not challenge or contest the truth of the allegations
in the application for temporary suspension to the effect that
he pled guilty to felony criminal charges of manufacturing a
controlled substance and failure to possess a tax stamp and that
the district court found respondent guilty of the charges, sen-
tencing him to prison and imposing a fine. The court accepts
respondent’s surrender of his license to practice law, finds that
respondent should be disbarred, and hereby orders him disbarred
from the practice of law in the State of Nebraska, effective
immediately. Respondent shall forthwith comply with all terms
of Neb. Ct. R. of Discipline 16 (rev. 2004), and upon failure
to do so, he shall be subject to punishment for contempt of
this court. Accordingly, respondent is directed to pay costs and
expenses in accordance with Neb. Rev. Stat. §§ 7-114 and 7-115
(Reissue 1997) and Neb. Ct. R. of Discipline 10(P) (rev. 2005)
and 23 (rev. 2001) within 60 days after an order imposing costs

and expenses, if any, is entered by the court.
JUDGMENT OF DISBARMENT.

Gall FICKLE, BOTH INDIVIDUALLY AND AS PARENT AND GUARDIAN OF
Jacos WAGNER, APPELLEE AND CROSS-APPELLANT, V. STATE OF
NEBRASKA, APPELLANT AND CROSS-APPELLEE.

759 N.W.2d 113

Filed September 28, 2007. No. S-04-1250.

Jon Bruning, Attorney General, Michele M. Lewon, and
Matthew F. Gaffey for appellant.

Douglas J. Peterson and Joel Bacon, of Keating, O’Gara,
Nedved & Peter, P.C., L.L.O., for appellee.

Heavican, C.J., Wricut, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Per CuriAM.

Case No. S-04-1250 is before us on the motion for rehearing
filed by the State of Nebraska, appellant, regarding our opin-
ion reported at Fickle v. State, 273 Neb. 990, 735 N.W.2d 754
(2007). We overrule the motion, but for purposes of clarifica-
tion, modify the opinion as follows:

That portion of the opinion designated “(a) Future Economic
Damages,” id. at 1008-11, 735 N.W.2d at 771-73, is withdrawn,
and the following language is substituted in its place:

(a) Future Economic Damages

Fickle asserts that the amount of future economic dam-
ages awarded was inadequate. At the time of trial, Wagner
was 20 years old. George Wolcott, a neurologist, testified
that Wagner could expect to live “into his 60’s.” The evi-
dence established that Wagner’s life expectancy from the
time of trial was approximately 40 years. Fickle claims that
Wagner’s future medical care and loss of wages require a
much greater award than was given by the district court.

(i) Future Medical Care

The evidence established that Wagner’s future medical
expenses (including the cost of residential care at Village
Northwest Unlimited) would be between $193,610 and
$198,355 per year. This range did not reflect inflation
or future increases in cost. These amounts were shown
in a “Life Care Plan” compiled by Robin Welch-Shaver.
Welch-Shaver has a bachelor of science degree in nursing
and is a certified life care planner. The plan was formu-
lated using information from Fickle, Wagner, the providers
at Village Northwest Unlimited, and Drs. Wolcott, Lester
Sach, Sarah Zoelle, and Lyal Leibrock.

The life care plan considered that Wagner would remain
a resident of Village Northwest Unlimited, which provided
appropriate treatment, including 24-hour nursing care,
physical and occupational therapy, cognitive-skills train-
ing, and other services. The plan also was based upon the
fact that Wagner would always need a residential setting
in which he would receive services similar to those he
was receiving from Village Northwest Unlimited. The
cost associated with Wagner’s need for this residential
setting was $462 per day, which equated to an annual cost
of $168,630.

Evidence at trial suggested that Wagner had been
receiving Medicaid payments and that Village Northwest
Unlimited was charging him at the Medicaid rate, which
was lower than the rate paid by private parties. The State
argues that the lower Medicaid rate should have been con-
sidered in calculating damages instead of the private-party
rate. This argument has no merit.

HE The private-party rate, not the Medicaid rate, is
the proper rate to use in calculating Wagner’s future medi-
cal expenses. Under the collateral source rule, the fact that
the party seeking recovery has been wholly or partially
indemnified for a loss by insurance or otherwise cannot
be set up by the wrongdoer in mitigation of damages.
Mahoney v. Nebraska Methodist Hosp., 251 Neb. 841, 560
N.W.2d 451 (1997). Social legislation benefits, including
payments by Medicare and Medicaid, are excluded by the

collateral source rule. See, Bynum v. Magno, 106 Haw. 81,
101 P.3d 1149 (2004) (holding that collateral source rule
prohibited reducing patient’s damages award to reflect dis-
counted Medicare and Medicaid payments); Restatement
(Second) of Torts § 920A, comment c. (1979). Moreover,
once Fickle receives the judgment awarded in this case,
Wagner may no longer be eligible for Medicaid (or Village
Northwest Unlimited’s Medicaid rate), because eligibility
standards take into account the resources available to a
Medicaid applicant or recipient. See Wilson v. Nebraska
Dept. of Health & Human Servs., 272 Neb. 131, 718
N.W.2d 544 (2006).

The State also claims that certain medical expenses
should not be included because they were controverted at
trial. For instance, the State points out that Wagner was
not required to take the following medications and supple-
ments as a result of the accident: “Aterol,” multivitamins,
and calcium supplements. It further argues that the cost
of future neurologic and urologic treatment should not
have been included in the Life Care Plan because there
was insufficient medical evidence that such care would
be necessary. The State also asserts that the cost of a
motorized wheelchair should not be included as a future
medical expense because one of his physicians testified
that he should continue to use a manual wheelchair. The
State further claims that the projected cost of a custom-
ized minivan to accommodate Wagner’s special needs
should not have included the base cost of the vehicle
before customization. Excluding all of the items of future
medical expense which the State contests, there remains
essentially uncontroverted evidence that Wagner’s future
medical expenses without adjustment for inflation will be
between $7,398,320 and $7,493,120.

(ii) Lost Earning Capacity
Evidence showed that Wagner was unable to earn a
living in the labor market due to his injuries. At trial,
the State contested whether Wagner would have been a
skilled laborer. At the time of the accident, Wagner was

270

a high school student who had difficulties in school and
whose academic performance was not stellar. He planned
to obtain a diploma through GED and pursue training
through Job Corps to acquire a skill. Fickle argues that the
evidence presented indicated that even if Wagner did not
complete vocational training or obtain a diploma through
GED, he could have expected to make at least $8 per
hour as an unskilled laborer. A laborer working at this
rate would earn a minimum of $16,000 per year. Over a
period of 40 years, Wagner’s earnings would amount to at
least $640,000.

The State argues that Wagner’s potential earnings should
have been based upon the minimum wage. But the State
fails to direct us to evidence in the record indicating that
minimum wage was all that Wagner could have expected
to earn. The record does not support a reasonable inference
that Wagner’s future earning capacity over his 40-year life
expectancy was less than $640,000.

(iii) Total Future Economic Damages

There is competent and essentially uncontroverted evi-
dence that future medical expenses for Wagner would be
between $7,398,320 and $7,493,120 over a 40-year life
expectancy and that he sustained a loss of future earning
capacity of at least $640,000. Thus, without consideration
for inflation, the evidence presented at trial established
Wagner’s future economic damages would be between
$8,038,320 and $8,133,120.

(iv) Reduction to Present Value

The general rule in Nebraska is that an award

for future damages must be reduced to its present value.

Cassio v. Creighton University, 233 Neb. 160, 446 N.W.2d

704 (1989). Present value is the current worth of a certain

sum of money due on a specified future date after taking

interest into consideration. Thiltges v. Thiltges, 247 Neb.
371, 527 N.W.2d 853 (1995).

Present value must be determined because the money

awarded can be invested and earn interest. A present

award should also consider the fact that inflation will
increase the expenses incurred by the plaintiff. Although
the plaintiff can earn interest, the value of the dollar will
decline because of inflation. See, generally, G. Michael
Fenner, About Present Cash Value, 18 Creighton L. Rev.
305 (1985) (discussing various approaches for determining
present value). These factors are left to the judgment of the
trial court but should, nevertheless, be considered in the
amount of the award.

(v) Conclusion Regarding Future Economic Damages
Giving the State the benefit of reasonably disputed
items, we conclude that future economic damages proved
at trial are far in excess of the amount awarded by the dis-
trict court. Therefore, the award for economic damages did
not bear a reasonable relationship to the damages proved
at trial.
The remainder of the opinion shall remain unmodified.
FORMER OPINION MODIFIED.
MOTION FOR REHEARING OVERRULED.

STATE OF NEBRASKA, APPELLEE, V.
Dame LEE JONES, APPELLANT.
739 N.W.2d 193,

Filed September 28, 2007. No. S-06-798.

eee

Mark A. Weber and Kylie A. Wolf, of Walentine, O’Toole,
McQuillan & Gordon, for appellant.

Jon Bruning, Attorney General, and James D. Smith
for appellee.

Heavican, C.J., WricuT, CoNnNoLty, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Heavican, C.J.
INTRODUCTION

Daniel Lee Jones pled no contest to first degree murder in
the stabbing death of Scott Catenacci and was sentenced to life
imprisonment. After obtaining a new direct appeal through a
postconviction action, Jones appeals his conviction. The pri-
mary issue presented by this appeal is whether the district court
abused its discretion by not transferring Jones’ case to juve-
nile court. We are additionally presented with the question of
whether Jones’ trial counsel was ineffective for recommending
that Jones plead no contest to first degree murder.

FACTUAL BACKGROUND

Jones was charged by information with first degree mut-
der and use of a weapon to commit a felony in the death of
Catenacci. The information alleged that Catenacci was mur-
dered on or about September 29, 1998. Jones, whose date of
birth is November 7, 1981, was nearly 17 years of age at the
time of Catenacci’s death. Jones filed several pretrial motions,
including one requesting a transfer to juvenile court. His trans-
fer motion was denied by the district court.

On March 29, 1999, as part of a plea agreement, Jones pled
no contest to first degree murder in return for the dismissal of
the use of a weapon charge. On June 28, Jones was sentenced
to life imprisonment. Jones’ first appeal was dismissed for
failure to pay the statutory docket fee.’ Jones obtained a new
direct appeal through a postconviction action and now appeals
his conviction and sentence.

At Jones’ plea hearing, the State provided the following fac-
tual basis for the plea:

On or about the 29th day of September, 1998, at or near
2300 River Road, in Sarpy County, Nebraska — which is
kind of a shrub and timber area adjacent to Haworth Park
in Bellevue — the defendant . . . Jones, in concert with
other defendants[,] attacked and stabbed to death Scott
Catenacci. And the State would at the time of trial prove
that this was a premeditated and deliberate and malicious
attack, and that it had been discussed several days before-
hand, and that . . . Jones stabbed . . . Catenacci several
times, and that he died as a result of those stab wounds.
At this hearing, Jones acknowledged he “had knowledge enough
of the plan that there was to be an attack on Scott Catenacci
with knives.” Jones did, however, dispute the contention that he
was involved in the planning of the attack.

ASSIGNMENTS OF ERROR.

On appeal, Jones assigns that (1) he received ineffective
assistance of counsel when counsel advised him to plead no
contest to first degree murder and (2) the district court erred in
not transferring the case to juvenile court.

STANDARD OF REVIEW
IB A trial court’s denial of a motion to transfer a pending
criminal proceeding to the juvenile court is reviewed for an
abuse of discretion.”

' State v. Jones, 258 Neb. xxii (No. S-99-957, Nov. 10, 1999).

? State v. McCracken, 260 Neb. 234, 615 N.W.2d 902 (2000), abrogated on
other grounds, State v. Thomas, 262 Neb. 985, 637 N.W.2d 632 (2002).

274 be

ANALYSIS

Ineffective Assistance of Counsel.

In his first assignment of error, Jones argues that his counsel
was ineffective for recommending that Jones plead no contest to
first degree murder when there was evidence that his actions did
not rise to the level of first degree murder. In response, the State
asserts that the record is not adequate to review Jones’ ineffec-
tive assistance claim.

HM To prevail on a claim of ineffective assistance of coun-
sel under Strickland v. Washington, the defendant must show
that counsel’s performance was deficient and that this deficient
performance actually prejudiced his or her defense.‘ Claims
of ineffective assistance of counsel raised for the first time on
direct appeal do not require dismissal ipso facto; the determining
factor is whether the record is sufficient to adequately review
the question. When the issue has not been raised or ruled on
at the trial court level and the matter necessitates an eviden-
tiary hearing, an appellate court will not address the matter on
direct appeal.>

We concur with the State that this record is not sufficient
to address Jones’ claim of ineffective assistance of counsel.
We therefore do not further address Jones’ first assignment
of error.

Motion to Transfer to Juvenile Court.

Hl In his second assignment of error, Jones argues that the
district court erred in not transferring his case to juvenile court.
A trial court’s denial of a motion to transfer a pending criminal
proceeding to the juvenile court is reviewed for an abuse of dis-
cretion.® In determining whether a case should be transferred, a
court should consider those factors set forth in Neb. Rev. Stat.

3 Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d
674 (1984).

* State v. Moyer, 271 Neb. 776, 715 N.W.2d 565 (2006).
5 State v. York, 273 Neb. 660, 731 N.W.2d 597 (2007).
© State v. McCracken, supra note 2.

§ 43-276 (Reissue 1998).’ In order to retain the proceedings,
the court does not need to resolve every factor against the juve-
nile; moreover, there are no weighted factors and no prescribed
method by which more or less weight is assigned to each spe-
cific factor. It is a balancing test by which public protection and
societal security are weighed against the practical and nonprob-
lJematical rehabilitation of the juvenile.®
Section 43-276 requires consideration of the follow-
ing factors:
(1) The type of treatment such juvenile would most likely
be amenable to; (2) whether there is evidence that the
alleged offense included violence or was committed in
an aggressive and premeditated manner; (3) the motiva-
tion for the commission of the offense; (4) the age of the
juvenile and the ages and circumstances of any others
involved in the offense; (5) the previous history of the
juvenile, including whether he or she had been convicted
of any previous offenses or adjudicated in juvenile court,
and, if so, whether such offenses were crimes against the
person or relating to property, and other previous history
of antisocial behavior, if any, including any patterns of
physical violence; (6) the sophistication and maturity of
the juvenile as determined by consideration of his or her
home, school activities, emotional attitude and desire to
be treated as an adult, pattern of living, and whether he or
she has had previous contact with law enforcement agen-
cies and courts and the nature thereof; (7) whether there
are facilities particularly available to the juvenile court for
treatment and rehabilitation of the juvenile; (8) whether
the best interests of the juvenile and the security of the
public may require that the juvenile continue in custody or
under supervision for a period extending beyond his or her
minority and, if so, the available alternatives best suited to
this purpose; (9) whether the victim agrees to participate
in mediation; and (10) such other matters as the county
attorney deems relevant to his or her decision.

7 See State v. Doyle, 237 Neb. 944, 468 N.W.2d 594 (1991).
8 See State v. McCracken, supra note 2.

276 Es

This section has been revised several times since 1998; the
above language was in effect at the time of the district court
hearing and decision in this case.

In denying Jones’ motion, the district court reasoned that
while Jones was not as culpable as his accomplices, he was
involved in the planning and commission of the crime charged,
and that there was no indication he was coerced or forced into
participating. The district court noted Jones’ age at the time of
the commission of the crime and highlighted the fact that Jones
would be subject to juvenile court jurisdiction for approxi-
mately 18 months, despite the fact that he stood accused of first
degree murder. The court also noted that the victim in this case
died after being stabbed 69 times and that it was questionable,
given the severity of the crime, whether there were appropriate
juvenile services available to Jones. It is clear from the district
court’s order that all of the factors set forth in § 43-276 were
considered by the court.

On appeal, Jones first contends that the district court failed
to “adequately consider [his] lack of . . . participation in the
planning of the death of the victim.” Contrary to this assertion,
however, the district court made several references to Jones’
involvement in the planning of the crime. For example, the
district court noted that “[a]lthough the defendant’s part in the
homicide may be less culpable than others, reports received into
evidence indicate participation in both the planning and carry-
ing out of the offenses charged.” The court further noted that
“there is no evidence that shows any force or undue influence
on the defendant by other participants such that the defendant’s
actions might be characterized as involuntary. In fact, as previ-
ously mentioned, the defendant actually took part in the plan-
ning of the offense.” Finally, the court found that “[aJlthough
other participants had a more active role in the offenses than
did the defendant, nevertheless, the defendant took part in both
the planning and premeditation as well as the actual commis-
sion of the offenses.” These various references indicate that the
district court considered but rejected Jones’ assertion that his

9 Brief for appellant at 10.

po

| ”
more limited involvement in planning the victim’s attack sup-
ported a transfer to juvenile court.

Jones also argues that his lack of sophistication and matu-
tity, as well as the fact that he read at just a fourth grade level,
suggests that transfer to juvenile court was appropriate. But, as
with Jones’ planning of the crime, it is clear from a review of
the district court’s order that these points were considered and
rejected by the district court. Moreover, Jones fails to address
how his lack of maturity and sophistication would outweigh the
other findings of the district court which seem to clearly support
the denial of the motion to transfer.

Section 43-276 requires the district court to balance its vari-
ous findings in determining whether transfer to juvenile court is
appropriate. Jones was charged with first degree murder for a
crime in which the victim was stabbed 69 times. Jones was 17
years of age at the time of sentencing; the juvenile court would
have jurisdiction over him until he was 19 years of age, or for
approximately 2 years. At that point, the juvenile court would
cease to have jurisdiction and Jones would be released. And
while Jones may have been less involved with the planning of
this crime in comparison to the other perpetrators, the record
indicates that he had at least some involvement in planning the
crime. Moreover, evidence was presented at the hearing on Jones’
motion suggesting that the juvenile system was not equipped to
provide services to juveniles accused of first degree murder.

Given a balancing of these factors, we cannot conclude that
the district court abused its discretion when it denied Jones’
motion to transfer the case to juvenile court. Jones’ second
assignment of error is without merit.

CONCLUSION

The record presented to this court is insufficient to allow us
to address whether Jones’ counsel was ineffective by recom-
mending that Jones plead no contest to first degree murder. As
such, we do not further address that argument. In addition, we
conclude that the district court did not abuse its discretion in
denying Jones’ motion to transfer his case to juvenile court. The

judgment of the district court is affirmed.
AFFIRMED.

8
3

Cimzens oF DECATUR FOR EQUAL EDUCATION ET AL., APPELLANTS,
v. Lyons-Decatur ScHOOL DistRICT ET AL., APPELLEES.
739 N.W.2d 742

Filed October 5, 2007. No. S-06-159.

280 |

Se

David V. Drew and Gregory P. Drew, of Drew Law Firm,
for appellants.

Karen A. Haase and John Selzer, of Harding, Shultz &
Downs, for appellees.

Heavican, C.J., Wricut, CoNNOLLy, GERRARD, STEPHAN,
McCormack, and Miver-Lerman, JJ.

Connoxty, J.

In 1984, the former Decatur and Lyons, Nebraska, school
boards petitioned to dissolve the Decatur School District and
add its territory to the Lyons School District. In 2005, the
appellants, a coalition of parents and taxpayers in Decatur
(Coalition), sued the reorganized Lyons-Decatur School District
and the school board members (collectively the school district).

' See Neb. Rev. Stat. § 79-402.03 (Reissue 1981). See, also, Nicholson v.
Red Willow Cty. Sch. Dist. No. 0170, 270 Neb. 140, 699 N.W.2d 25 (2005)
(explaining petition procedures by voters and school boards).

ll
PC

The Coalition sought to enjoin the school district from moving
grades four through six from Decatur to Lyons. The Coalition
alleged that the reduction in classes at the Decatur school
breached the previously adopted merger petition because the
school district failed to follow the required voting protocol set
out in the merger petition. It also alleged that the school district
violated the Coalition members’ substantive due process and
equal protection rights because the school district was operating
the Decatur school without equal grades, teachers, facilities, and
educational opportunities. The district court granted the school
district’s summary judgment motion on all the Coalition’s claims
and dismissed the Coalition’s complaint with prejudice.

We will set out our reasoning with specificity in the fol-
lowing pages, but, briefly stated, we hold that (1) the voting
requirements in the merger petition that the Coalition relies
on are unenforceable and (2) the free instruction clause of the
Nebraska Constitution does not confer a fundamental right to
equal and adequate funding of schools. Applying the rational
basis analysis, we conclude the school district’s action advanced
a legitimate educational goal. Accordingly, we affirm.

I. BACKGROUND

1. REORGANIZATION PETITION

In 1984, the school boards of the Lyons School District, a
Class II district, and the Decatur School District, a Class IL
district,” filed a reorganization petition.> The petition sought to
enlarge the boundaries of the Lyons School District to include
the territory of the Decatur School District. Paragraph IV(A) of

the reorganization petition provided:
An attendance center for elementary students (kindergarten
through sixth grade) shall be maintained in the existing
Decatur School District facility until such time as the legal
voters and electors of the former Decatur School District
... and the Board of education vote by majority vote to
discontinue the attendance center or until such time as all
of the members of the board of education of the enlarged

? See Neb. Rev. Stat. § 79-102 (Reissue 1981).
3 See Neb. Rev. Stat. § 79-402 (Reissue 1981).

282 Le

Lyons School District vote unanimously to discontinue the
attendance center.

2. ScHoot Boarp Moves Grapes Four TsroucH Six
to Lyons, AND CoaLirion RESPONDS

In April 2004, the school district’s superintendent, FJ.
Forsberg, mailed an informational letter to patrons explaining
the district’s financial problems. Forsberg stated that the school
district had lost significant state aid over the previous 4 years.
He projected more losses for the upcoming school year because
of changes in the school aid formula, declining enrollment, and
an economic downturn. He further projected that the school
district would continue to lose state aid through 2007 because
of declining enrollment. He explained that the district had
attempted to meet the deficits by several cost-saving measures:
(1) reducing building maintenance, (2) not hiring for certain
teaching positions, (3) combining grades at the Decatur school
where student enrollment had dropped, (4) cutting building and
instructional supplies, and (5) reducing the budget reserve. The
district proposed similar cuts for the 2004-05 school year. He
included a list of cost-saving measures the school board was
considering, including moving part, or all, of the Decatur school
to Lyons. .

In January 2005, the school board rejected a motion to close
the Decatur school. It voted 6 to 3, however, to operate it only
for kindergarten through grade three and to move grades four
through six to Lyons. In April, the Coalition filed this action.

The Coalition sought a temporary and permanent injunction
to stop the school district from moving grades four through six
to Lyons without obtaining the required votes. It also sought
a declaration that the school district’s action (1) was void
because it violated the merger petition, (2) denied its members
procedural due process, and (3) violated its members’ substan-
tive due process and equal protection rights by operating the
Decatur school without “individual teachers for each grade,
equal facilities, and equal educational opportunities.”

3. Temporary INJUNCTION HEARING
At the temporary injunction hearing, Forsberg testified that
the school district had lost about $580,000 in state aid since

1999, He also stated that the Decatur school had experienced a
larger drop in enrollment than the Lyons school. He stated that
3 or 4 years before, the board began eliminating some positions
and hours at Lyons. It also began combining some grades at
Decatur. Having few cost-saving options left, the board decided
to move Decatur’s grades four through six to Lyons. He stated
that the Coalition’s members were present at school board
meetings when the board discussed cutting costs and that the
Coalition’s attorney addressed the board on these topics.

At the hearing, Forsberg presented a summary from school
census reports which showed the Decatur school had consider-
ably fewer students than Lyons. In Decatur, 36 students were
then enrolled in grades kindergarten through six, and he pro-
jected Decatur would have 17 students in grades kindergarten
through three the next year. In contrast, Lyons had 111 students
enrolled in grades kindergarten through six, and he projected
Lyons would have 52 students in grades kindergarten through
three the next year. Forsberg testified that moving grades four
through six from Decatur to Lyons would save the school district
more than $200,000.

Forsberg stated that beginning with the 2004-05 school year,
the school district bussed all students under grade seven in spe-
cial education from Decatur to Lyons. Lyons and Decatur are 15
miles apart, and the commute time for students by bus is 25 to
30 minutes. After the hearing, the district court determined that
the Coalition had failed to establish a clear right to relief and
denied its request for a temporary injunction.

4. Summary JupcmMent HEARING ON COALITION’s

VIOLATION OF MERGER PETITION AND

ProcepuRaL DuE Process CLAIMS
The Coalition moved for summary judgment on its first and
second causes of action: breach of the merger petition and viola-
tion of its members’ procedural due process rights. In July 2005,
the court heard the summary judgment motion. The school dis-
trict argued that the merger petition conflicted with what is now
Neb. Rev. Stat. § 79-419(2) (Reissue 2003 & Cum. Supp. 2006).
It argued that paragraph IV(A) exceeded the former Lyons and

Decatur school boards’ authority in two ways.

First, the school district argued that the merger statute allowed
the merging school boards to require a vote by electors in the
reorganized district who are served by a school. But it did
not authorize a vote by electors in a former school district, as
required by paragraph IV(A). Second, it argued that the merger
statute allowed the former school boards to require a majority
vote by electors before closing a school, but it did not authorize
a majority vote before discontinuing any grades at a school.

The school district also argued it had provided due process. It
argued that due process required only notice and an opportunity
to be heard at the meeting when the school district discussed
cost-saving measures.

The court denied the Coalition’s partial summary judgment
motion regarding its first and second causes of action. In addi-
tion, relying on In re Freeholders Petition,’ the court granted
summary judgment to the school district on those causes of
action. The Coalition appealed, but the Nebraska Court of
Appeals dismissed the appeal for lack of jurisdiction.

5. SUMMARY JUDGMENT HEARING ON COoALITION’s EQUAL.
PROTECTION AND SUBSTANTIVE Dus Process CLaIMs

On remand, the Coalition moved for a final judgment order
under Neb. Rev. Stat. § 25-1315(1) (Cum. Supp. 2006), and the
school district moved for summary judgment on the Coalition’s
third and fourth causes of action: violation of its members’
equal protection and substantive due process rights. At the
hearing, the Coalition submitted affidavits stating that (1) the
school district had made financial cuts to the Decatur school,
while providing improvements and benefits for the Lyons
school, and (2) this funding deprivation had caused a decline in
enrollment at Decatur as the facilities became inferior to those
in Lyons. A former teacher stated in an affidavit that parents
of children in the Decatur school had been opting to send their
children to Lyons. She stated that the parents did not believe
the children were receiving an equal education.

4 In re Freeholders Petition, 210 Neb. 583, 316 N.W.2d 294 (1982).

5 Citizens of Decatur v. Lyons-Decatur Sch. Dist., 14 Neb. App. xlv (No.
A-05-1127, Oct. 13, 2005).

The Coalition argued that the school district’s unequal funding
of the Lyons and Decatur schools violated its members’ equal
protection and substantive due process rights. To support those
constitutional claims, the Coalition argued that Nebraska’s free
instruction clause® provided a fundamental right to an education
equally or proportionally funded compared with other schools
in the same district. It further argued that the school district’s
underfunding of the Decatur school had deprived those students
of their substantive due process rights.

The school district countered that the free instruction clause
did not provide a fundamental right to have schools in the same
district equally or proportionately funded. It further argued the
Coalition did not have a fundamental right to identical facilities
or offerings as other schools or to choose where a child attends
school. Finally, it pointed out that the Coalition did not allege
the school district had failed to educate Decatur children or
that it had charged them tuition. Absent a fundamental right,
the school district argued that the school district had offered a
rational basis for moving the grades to Lyons.

In February 2006, the court granted the school district’s
motion for summary judgment on the Coalition’s equal pro-
tection and substantive due process claims. It denied the
Coalition’s motion for final judgment as moot and dismissed
the Coalition’s complaint with prejudice.

Il. ASSIGNMENTS OF ERROR

The Coalition generally assigns that the district court erred in
granting summary judgment for the school district on all four of
its causes of action. More specifically, it assigns, restated and
renumbered, that the court erred in failing to (1) determine that
the merger petition was legally enforceable and required the
school board to maintain the Decatur school with grades kinder-
garten through six unless a majority of the voters in the former
Decatur School District or every member of the school board
voted for discontinuance of the school; (2) find that the school
board breached the merger petition and that the Coalition’s
members would suffer irreparable harm if the school district

© Neb. Const. art. VIE, § 1.

286 Ee

were not enjoined from moving Decatur’s grades four through
six to Lyons; (3) determine that under the merger petition, the
Coalition members had a property and liberty interest in main-
taining grades kindergarten through six at Decatur; (4) deter-
mine that due process required a vote in accordance with the
merger petition before Decatur’s grades four through six could
be moved to Lyons; (5) determine that Decatur students have an
equal protection right to obtain the free instruction “guaranteed
by the Nebraska Constitution, statutes and regulations”; (6)
find genuine issues of material fact whether the school district
had underfunded the Decatur school to its detriment and in
comparison to other schools in the district, and whether this
underfunding had resulted in “inadequate quality of education”
for Decatur students; and (7) find genuine issues of material fact
whether the school district had violated the Decatur students’
substantive due process rights by interfering with their right to
obtain free instruction.

UI. STANDARD OF REVIEW

HM Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue as
to any material fact or as to the ultimate inferences that may be
drawn from those facts and that the moving party is entitled to
judgment as a matter of law.’ Concerning questions of law and
statutory interpretation, we resolve the issues independently of
the lower court’s conclusion.*

IV. ANALYSIS

1. ENroRCEABILITY OF MERGER AGREEMENT
The parties do not dispute the terms of the merger agreement.
They agree paragraph IV(A) provides that the school district
maintain a school in Decatur for grades kindergarten through
six unless one of two voting requirements were satisfied. Either
the school board could vote unanimously to discontinue the
school or a majority of the school board and voters from the

1 Nebraska Coalition for Ed. Equity v. Heineman, 273 Neb. 531, 731 N.W.2d
164 (2007).

8 Japp v. Papio-Missouri River NRD, 273 Neb. 779, 733 N.W.2d 551 (2007).

former Decatur School District could vote to discontinue it.
The parties also do not dispute that the school board’s action
was taken without obtaining a unanimous vote of the school
board or a majority vote of the electors from the former Decatur
School District. The Coalition argues that the court incorrectly
determined that paragraph IV(A) was unenforceable. It claims
merger petitions have the effect of law and school districts
are bound by their terms. But the school district argues that
the merger petition conflicts with Neb. Rev. Stat. § 79-402.07
(Reissue 1981), which authorized school districts to require
only a vote by a majority of all legal voters served by a school
in the reorganized district and only when a school board seeks
to discontinue a school.

The court did not state its reasons for granting summary
judgment to the school district on the Coalition’s claim that
the school district had breached the merger petition. We con-
clude, however, that the court could have properly granted sum-
mary judgment for the school district only if paragraph IV(A)
is unenforceable.

HMM “We have long acknowledged that school boards are
creatures of statute, and their powers are limited.”? Any action
taken by a school board must be through either an express or an
implied power conferred by legislative grant.’° School boards
can bind a school district only within the limits fixed by the
Legislature.!' A school board’s actions exceeding an express
or implied legislative grant of power are void.” And whether a
school board acted within the power conferred upon it by the
Legislature presents a question of law.®

® Busch v. Omaha Pub. Sch. Dist 261 Neb. 484, 488, 623 N.W.2d 672,
676 (2001).

0 Yd,
" Spencer v. Omaha Pub. Sch. Dist., 252 Neb. 750, 566 N.W.2d 757 (1997).

” See, State ex rel. Fick v. Miller, 255 Neb. 387, 584 N.W.2d 809 (1998),
citing Spencer v. Omaha Pub, Sch. Dist., supra note 11; School Dist. of
Waterloo v. Hutchinson, 244 Neb. 665, 508 N.W.2d 832 (1993).

13 See Spencer v. Omaha Pub. Sch. Dist., supra note 11.

288 Ee

Hi The Coalition argues that State ex rel. Fick v. Miller,“ sup-
ports its claim that paragraph IV(A) was enforceable. In State
ex rel. Fick, we held that reorganization petitions have the effect
of law and create duties owed to the public. We compared the
petition to statutes, city charters, city ordinances, regulations,
code of ethics rules, and public franchise contracts.!* Because
they have the force of law, ministerial acts required under the
petition can be enforced through a writ of mandamus if the
provision is valid. Specifically, we held that an affiliated high
school had an enforceable ministerial duty to provide transpor-
tation to rural students because two conditions were satisfied.
This provision was included in the affiliation petition, and the
school board was statutorily authorized to bind the district to
such terms. In State ex rel. Fick, we explicitly stated:

Section 79-611(4) grants affiliated school districts the
authority to provide free transportation [to students resid-
ing in an affiliated Class I district], but neither creates any
ministerial legal duty nor provides for the enforcement of
any duty. This provision is necessary to provide school
boards with the authority to bind their districts to terms like
the . . . affiliation petition’s [transportation provision].'®

So when the Legislature has delegated authority to school
boards to exercise their discretion, a school board’s promise to
do so in a reorganization petition can bind the school district.
Thus, we look to whether the school board had statutory author-
ity to impose the voting restriction in paragraph IV(A).

We first note that school boards are under no statutory duty
to maintain a school in their district.

The school board of any district maintaining more than
one school may close any school or schools within such
district and may make provision for the education of chil-
dren either in another school of the district, in the school
of any other district, or by correspondence instruction
for such children as may be physically incapacitated for

“ State ex rel. Fick v. Miller, supra note 12.
1S Td.
' Id, at 397, 584 N.W.2d at 817.

traveling to or attending other schools, with the permission
of the parent.”

Further, the Legislature has given school boards the discre-
tion to establish and classify grades, with the consent and advice
of the State Department of Education."*

Hi When the school boards petitioned for reorganization in
1984, § 79-402.07, in relevant part, provided:

The [reorganization] petition may contain provisions for
the holding of school within existing buildings in the newly
reorganized district and that a school constituted under
the provisions of this section shall be maintained from the
date of reorganization unless the legal voters served by
the school vote by a majority vote for discontinuance of
the school.!®
(Emphasis supplied.) Statutes covering substantive matters in
effect at the time of a transaction govern.” This language, how-
ever, is nearly identical to that used in the current codification
at § 79-419(2).

HE [n interpreting § 79-402.07, we are guided by famil-
iar canons of statutory construction. Statutory interpretation
presents a question of law.”! Absent anything to the contrary, we
will give statutory language its plain and ordinary meaning.”
‘We will not read a meaning into a statute that the language
does not warrant; neither will we read anything plain, direct, or
unambiguous out of a statute.?>

Section 79-402.07 unambiguously allowed school districts
to require a majority vote by all the legal voters served by a

1” Neb, Rev. Stat. § 79-1094 (Reissue 2003).

'8 Neb. Rev. Stat. § 79-526 (Reissue 2003). Compare State ex rel. Shineman v.
Board of Education, 152 Neb. 644, 42 N.W.2d 168 (1950).

1 See, also, Neb. Rev. Stat. § 79-402.06 (Reissue 1981) (providing that peti-
tions by voters and school boards are subject to same requirements for
contents).

2 See Bowers v. Dougherty, 260 Neb. 74, 615 N.W.2d 449 (2000).
21 Rohde v. City of Ogallala, 273 Neb. 689, 731 N.W.2d 898 (2007).

® See City of Elkhorn v. City of Omaha, 272 Neb. 867, 725 N.W.2d
792 (2007).

23 See McCray v. Nebraska State Patrol, 271 Neb. 1, 710 N.W.2d 300 (2006).

290 Ee

school because that is the only restriction on “legal voters.”
It did not, however, explicitly state whether the “legal voters”
must be part of the reorganized district or could be part of the
former district.

HEE When confronted with a statutory interpretation issue,
we resolve the issue independently and irrespective of the trial
court’s conclusion.% Our role, to the extent possible, is to give
effect to the statute’s entire language, and to reconcile different
provisions of the statute so they are consistent, harmonious,
and sensible. When possible, we will try to avoid a statutory
construction that would lead to an absurd result. Here, several
factors weigh against interpreting § 79-402.07 to support the
voting restrictions placed in the reorganization petition.

First, interpreting § 79-402.07 as allowing merging school
boards to require a majority vote in a former school district
would lead to an absurd result. We would have to conclude that
the Legislature intended the surviving school board’s decision
to discontinue a school to be conditioned upon approval from a
school district that has ceased to exist.”’

Second, the statutory provision at issue consists of a single
sentence. The Legislature unambiguously referred to “the hold-
ing of school within existing buildings in the newly reorganized
district?”* Tt would be inconsistent to interpret a reference to
“Jegal voters served by the school” in the same sentence to mean
voters from the former school district.

Third, we do not read § 79-402.07 as authorizing merging
school boards to impose any voting restrictions on the surviving
school district’s discretion. We acknowledge that the disputed
sentence provides that “[t]he petition may contain provisions
for the holding of school within existing buildings in the newly

4 See Sjuts v. Granville Cemetery Assn., 272 Neb. 103, 719 N.W.2d
236 (2006).

?5 In re Interest of Tamantha S., 267 Neb. 78, 672 N.W.2d 24 (2003).

2% See, Livengood v. Nebraska State Patrol Ret. Sys., 273 Neb. 247, 729
N.W.2d 55 (2007); City of Elkhorn v. City of Omaha, supra note 22.

7 See School Dist. of Bellevue v. Strawn, 185 Neb. 392, 176 N.W.2d
42 (1970).

28 § 79-402.07 (emphasis supplied).

reorganized district . . . .” But if the Legislature had intended
to permit merging school boards to impose any voting restric-
tions on the surviving school board’s discretion, it would not
have specified the type of voting restriction that could be
imposed. That is, the disputed sentence specifically authorizes
a majority vote by the legal voters served by a school for the
discontinuance of the school. Reading § 79-402.07 to authorize
any voting restrictions renders the Legislature’s stated restric-
tion meaningless.

Unlike the school transportation statute at issue in State ex
rel. Fick, § 79-402.07 neither expressly nor impliedly autho-
tized the Decatur and Lyons school boards to require a majority
vote by legal voters in the former Decatur School District. Nor
did it authorize a unanimous vote by the surviving school board
as a condition for discontinuing the Decatur school. Further,
§ 79-402.07 affirmatively described the circumstance in which
a school board could exercise its power to require a vote: the
“discontinuance of the school.”

The plain and ordinary meaning of “discontinuance” is ces-
sation or closure.*° As the school district points out, other
courts have specifically held that moving particular grades from
one school to another is not the discontinuance or closing of
a school.*

In sum, § 79-402.07 authorized the former school boards to
require a vote only if the surviving school board for the reor-
ganized district intended to close a school. It did not authorize
the voting restrictions placed in paragraph IV(A). Because the
school boards did not have authority to impose the voting
requirements in paragraph IV(A), they were void and unenforce-
able. The Coalition does not allege, nor does the record reflect,
that the school board acted in bad faith to circumvent the vot-
ing requirement. Instead, it reflects that the school board, faced

2 State ex rel. Fick v. Miller; supra note 12.

3 See Webster’s Third New International Dictionary Unabridged 646 (1993).

3! See, Lang v. Board of Trustees of Joint School Dist. No. 251, 93 Idaho
79, 455 P.2d 856 (1969); Western Area Business, etc. v. Duluth, etc., 324
N.W.2d 361 (Minn, 1982); Choal, et al. v. Lyman Sch. Dist. Bd. of Ed., 87
S.D. 682, 214 N.W.2d 3 (1974).

292 |

with budget deficits, acted to maintain the Decatur school to the
extent the district had resources to do so. The district court did
not err in determining that paragraph IV(A) of the reorganiza-
tion petition was unenforceable.

2. PROCEDURAL DuE Process
The Coalition argues the school district denied it due pro-
cess. It claims that due process required the school board to
comply with paragraph IV(A) of the merger petition before
moving grades four through six from Decatur to Lyons. Having
concluded that those voting restrictions were void, we need not
address this argument.

3. SUBSTANTIVE DUE Process

The Coalition argues that the district court erred in find-
ing that its members did not have a substantive due process
right to obtain the free instruction guaranteed by Nebraska’s
Constitution, statutes, and regulations. The Coalition’s substan-
tive due process argument hinges on Nebraska’s free instruction
clause. The free instruction clause, in relevant part, provides:
“The Legislature shall provide for the free instruction in the
common schools of the state of all persons between the ages of
five and twenty-one years.”

The Coalition does not claim that the school district denied
students an education or charged tuition. Instead, it argues—for
both its substantive due process and equal protection claims—
that the school district has not provided equal facilities or
funding to both schools. Thus, consistent with its complaint
and arguments to the trial court, we construe the Coalition’s
argument to be that the free instruction clause guarantees a fun-
damental right to equal and adequate funding of schools within
the same school district.

HI The Coalition contends that the free instruction clause
provides a fundamental right to an equal opportunity to obtain
a free education “in the context of school funding.” Thus, it
argues any government action affecting free instruction is subject

32 Neb. Const. art. VII, § 1.
% Brief for appellants at 39.

to strict scrutiny. Under strict scrutiny review, the law must be
justified by a compelling governmental interest and must be
narrowly tailored to advance that interest.** The Coalition claims
the school district’s actions were not narrowly tailored to meet-
ing budget deficits because it did not take similar cost-saving
measures at both schools.

The school district, however, argues that this court has never
found free instruction to be a fundamental right under the state
Constitution. It argues that applying strict scrutiny to school
board decisions is contrary to the broad discretion granted to
school boards by both this court and the Legislature. We begin
by explaining the limits of substantive due process protections.

HMM The due process clause provides that “[nJo person shall
be deprived of life, liberty, or property, without due process of
law . . . 5 This language is similar to the Due Process Clause
of the federal Constitution,*° which provides both procedural and
substantive protections.” In privacy and parental right claims,
we have recognized that besides guaranteeing fair process, the
Nebraska due process clause “‘“provides heightened protection
against government interference with certain fundamental rights
and liberty interests.”’”*

We have recognized that the Due Process Clauses of
both the federal and the state Constitutions forbid the govern-
ment from infringing upon a fundamental liberty interest, no
matter what process is provided, unless the infringement is nar-
rowly tailored to serve a compelling state interest.® In both equal
protection and due process challenges—when a fundamental

34 Hamit v. Hamit, 271 Neb. 659, 715 N.W.2d 512 (2006).

35 Neb. Const. art. I, § 3.

36 See U.S. Const. amend. XIV, § 1.

¥ See, e.g., Harrah Independent School Dist. v. Martin, 440 U.S. 194, 99 S.
Ct. 1062, 59 L. Ed, 2d 248 (1979).

38 Hamit v. Hamit, supra note 34, 271 Neb. at 665, 715 N.W.2d at 520, quoting
Troxel v. Granville, 530 U.S. 57, 120 S. Ct. 2054, 147 L. Ed. 2d 49 (2000).
Accord State v. Senters, 270 Neb. 19, 699 N.W.2d 810 (2005).

® See In re Adoption of Baby Girl H., 262 Neb. 775, 635 N.W.2d 256 (2001),
citing Washington v. Glucksberg, 521 U.S. 702, 117 S. Ct. 2258, 138 L. Ed.
2d 772 (1997).

294 |

right or suspect classification is not involved—a government act
is a valid exercise of police power if it is rationally related to a
legitimate governmental purpose.”

HM The federal Constitution does not provide a fundamental
tight to education.’ Nevertheless, the Coalition argues that the
free instruction clause of the Nebraska Constitution provides a
fundamental right to equal educational funding. Its argument
is twofold. First, it contends that our decision in Kolesnick
y. Omaha Pub. Sch. Dist.,” “stands for the proposition that
education is a fundamental right in Nebraska with regard to
school financing.”

(a) We Did Not Recognize a Fundamental Right
to Education Funding in Kolesnick

In Kolesnick, we held that in student discipline cases, “no
fundamental right to education exists in Nebraska,” “which
would trigger strict scrutiny analysis whenever a student’s
misconduct results in expulsion for the interest of safety.” We
concluded that the free instruction clause did not provide such
a right and distinguished other cases involving the free instruc-
tion clause. But the Coalition plucks the following language
from Kolesnick*:

We have not construed [the free instruction clause] lan-
guage in the context of student discipline to mean that
a fundamental right to education exists in this state . .
. . Rather, we have construed the term “free instruction”
in right to education cases as pertinent to the issue of

40 See, Le v. Lautrup, 271 Neb. 931, 716 N.W.2d 713 (2006); State v.
Champoux, 252 Neb. 769, 566 N.W.2d 763 (1997). Compare Washington
v. Glucksberg, supra note 39, with Vacco v. Quill, 521 U.S. 793, 117 S. Ct.
2293, 138 L. Ed. 2d 834 (1997).

41 San Antonio School District v. Rodriguez, 411 U.S. 1, 93 S. Ct. 1278, 36 L.
Ed. 2d 16 (1973).

” Kolesnick v. Omaha Pub. Sch. Dist, 251 Neb. 575, 558 N.W.2d
807 (1997).

“3 Brief for appellants at 38.

“4 Kolesnick v. Omaha Pub. Sch. Dist., supra note 42, 251 Neb. at 581-82, 558
N.W.2d at 813.

45 Id. at 581, 558 N.W.2d at 813.

the constitutionality of school financing, including col-
lection of fees, tuition, and taxes. See, Banks v. Board
of Education of Chase County, Tagge v. Gulzow",
State, ex rel. Baldwin, v. Dorsey*®); Martins v. School
District), See, also, Doe v. Superintendent of Sch{ools]
of Worcester,

The Coalition’s reliance on our statement that the free
instruction clause is “pertinent to the issue of the constitutional-
ity of school financing” is misplaced. We clearly did not state
that students have a fundamental right to equal educational
funding in Kolesnick, and none of the cases cited in Kolesnick
support that position.

HM Recently, we cited three of the cases relied on in
Kolesnick: Tagge v. Gulzow,>*! State, ex rel. Baldwin, v. Dorsey,”
and Martins v. School District.* Those cases illustrate that the
only qualitative, constitutional standards for public schools
we could enforce under the free instruction clause are that
“education in public schools must be free and available to all
children.” In Banks v. Board of Education of Chase County,
we held that a school district’s statutory power to levy taxes
was not an unlawful delegation of legislative authority. We
reasoned that the purpose of school districts is “‘to fulfill the
Legislature’s duty “to encourage schools and the means of

46 Banks v. Board of Education of Chase County, 202 Neb. 717, 277 N.W.2d
76 (1979).

*" Tagge v. Gulzow, 132 Neb. 276, 271 N.W. 803 (1937).
8 State, ex rel. Baldwin, v. Dorsey, 108 Neb. 134, 187 N.W. 879 (1922).
“ Martins v. School District, 101 Neb. 258, 162 N-W. 631 (1917).

5° Doe v. Superintendent of Schools of Worcester, 421 Mass. 117, 653 NE.2d
1088 (1995).

5! Tagge v. Gulzow, supra note 47.
2 State, ex rel. Baldwin, v. Dorsey, supra note 48.
%3 Martins v. School District, supra note 49.

54 Nebraska Coalition for Ed. Equity v. Heineman, supra note 7, 273 Neb. at
550, 731 N.W.2d at 179.

55 Banks v. Board of Education of Chase County, supra note 46.

296 Le

instruction”... ””°° Like this court in Kolesnick, in Doe v.
Superintendent of Schools of Worcester,*’ the Massachusetts
Supreme Court was dealing with a student disciplinary case.
There, the court explicitly stated that it had never held stu-
dents have a fundamental right to education. We conclude that
Kolesnick is not controlling.

(b) Rodriguez Test Is Inapplicable
to Nebraska’s Constitution

The crux of the Coalition’s alternative argument is that the
free instruction clause explicitly states the Legislature shall
provide a free public education to persons between the ages of
5 and 21. Thus, it argues the Nebraska Constitution provides a
fundamental right to educational funding.

Hl Fundamental rights have been defined as those that are
“‘mplicit in the concept of ordered liberty,’ such that ‘neither
liberty nor justice would exist if they were sacrificed.’”°* The
U.S. Supreme Court has stated that

in addition to the specific freedoms protected by the Bill
of Rights, the “liberty” specially protected by the Due
Process Clause includes the rights to marry, . . . to have
children, . . . to direct the education and upbringing of
one’s children, . . . to marital privacy, . . . to use contracep-
tion, . . . to bodily integrity, . . . and to abortion . . . .”

The Coalition relies on the U.S. Supreme Court’s state-
ment in San Antonio School District v. Rodriguez. There, the
Court stated that the key to discovering whether education is
fundamental “lies in assessing whether there is a right to educa-
tion explicitly or implicitly guaranteed by the Constitution.”
Yet many state courts have rejected the Rodriguez test for

56 Jd, at 721, 277 N.W.2d at 79, quoting Campbell v, Area Vocational Technical
School No. 2, 183 Neb. 318, 159 N.W.2d 817 (1968).

57 See Doe v. Superintendent of Schools of Worcester, supra note 50.

58 Washington v. Glucksberg, supra note 39, 521 U.S. at 721, quoting Palko v.
Connecticut, 302 U.S. 319, 58 S. Ct. 149, 82 L. Ed. 288 (1937).

9 Id., 521 U.S. at 720 (citations omitted).
® See San Antonio School District v. Rodriguez, supra note 41.
§ Id. 411 US, at 33.

determining whether education is a fundamental right under
their state constitution. These courts have reasoned that “state
constitutions, unlike the federal constitution, are not of limited
or delegated powers and are not restricted to provisions of fun-
damental import; consequently, whether a right is fundamental
should not be predicated on its explicit or implicit inclusion in
a state constitution.”

Unlike the federal Constitution, state constitutions are not
an enumerated list of the government’s limited powers. States
have all powers not delegated to the federal government nor
prohibited to them by the U.S. Constitution. State constitutions
include provisions related to providing government services at
the local level. Many state provisions for government services
“could as well have been left to statutory articulation” under the
Legislature’s plenary power and are not considered implicit to
our concept of ordered liberty.®

HB Accordingly, an express legislative power or duty to pro-
vide services in a state constitution pales in comparison to con-
stitutional provisions prohibiting the government’s interference
with personal rights. As the Rodriguez Court recognized, there is
a significant difference between a claim that government action
has infringed upon the exercise of a personal right or liberty and
a claim that authorized government action fails to go far enough.
In the latter case, there would be no logical limitation on the

® See, e.g., Hornbeck v. Somerset Co. Bd. of Educ., 295 Md. 597, 458 A.2d
758 (1983) (citing cases).

% Id. at 647, 458 A.2d at 785. Accord, Lujan v. Colorado State Bd. of Educ.,
649 P.2d 1005 (Colo. 1982); McDaniel v. Thomas, 248 Ga. 632, 285 S.E.2d
156 (1981); Idaho Schools for Equal Educ. v. Evans, 123 Idaho 573, 850
P.2d 724 (1993); Levittown USFD v Nyquist, 57 N.¥.2d 27, 439 N.E.2d
359, 453 N.Y.S.2d 643 (1982); Bd. of Edn. v. Walter, 58 Ohio St. 2d 368,
390 N.E.2d 813 (1979); Olsen v. State ex rel Johnson, 276 Or. 9, 554 P.2d
139 (1976). See, also, Lewis E. v. Spagnolo, 186 Ill. 2d 198, 710 N.E.2d
798, 238 Ill. Dec. 1 (1999); City of Pawtucket v. Sundlun, 662 A.2d 40
(RL. 1995).

“4 See U.S. Const. amend. X.

® See Levittown USFD v Nyquist, supra note 63, 57 N.Y.2d at 44 n.5, 439
N.E.2d at 366 n.5, 453 N.Y.S.2d at 650 n.5. See, also, Bd. of Edn. v. Walter,
supra note 63.

298 —

State’s duties to provide services if a court were to conclude that
such duties conferred personal liberty interests and apply strict
scrutiny analysis.

Hl Moreover, a state constitutional provision is not elevated
to a fundamental right solely because it mandates legislative
action.” For example, the Nebraska Constitution also requires
the Legislature to provide for the organization of townships*
and corporations.” Yet these provisions do not create funda-
mental rights.”

Other courts have pointed out the vulnerability of the
Rodriguez test in considering property rights.” Although the
tight to acquire and hold property is an interest protected by
the federal and state Constitutions, “‘“that right is not a likely
candidate for such preferred treatment.”’”””

We also agree that no distinction exists upon which to elevate
the funding of education to a fundamental interest over the fund-
ing of other vital state services: services that are also provided
through the state’s political subdivisions created under constitu-
tional provisions. Considering the potential reach of Rodriguez,
courts have concluded that other state services “could, within
the Rodriguez formulation of fundamental rights, be deemed
implicitly guaranteed in most state constitutions.””? Even more
illuminating, the Rodriguez court recognized the potential fallout
of applying strict scrutiny to school funding decisions. “In such
a complex arena in which no perfect alternatives exist, the Court
does well not to impose too rigorous a standard of scrutiny lest
all local fiscal schemes become subjects of criticism under the

© Compare San Antonio School District v. Rodriguez, supra note 41.
& See Lujan v. Colorado State Bd. of Educ., supra note 63.

See Neb. Const. art. IX, § 5.

® See Neb. Const. art. XII, § 1.

™ See Dwyer v. Omaha-Douglas Public Building Commission, 188 Neb. 30,
195 N,W.2d 236 (1972).

1 See, e.g., Lujan v. Colorado State Ba. of Educ., supra note 63.

® Yd. at 1017 n.12. See, also, Nelsen v. Tilley, 137 Neb. 327, 289 N.W.
388 (1939).

® See, e.g., Hornbeck v. Somerset Co. Bd. of Educ., supra note 62, 295 Md. at
649, 458 A.2d at 785.

Equal Protection Clause.” Because the Nebraska Constitution
is not an enumeration of limited powers,” we conclude that it
would be inappropriate to apply the U.S. Supreme Court’s test
in Rodriguez to our constitution.

(c) Nebraska’s Constitution Does Not Confer a Fundamental
Right to Equal and Adequate Funding of Schools

HH No court questions the vital importance of public educa-
tion in a democratic society. But “[a] heartfelt recognition and
endorsement of the importance of an education does not elevate
a public education to a fundamental interest warranting strict
scrutiny.””° No doubt Nebraska’s children are entitled to a free
education. Nevertheless, we recently concluded that pruden-
tial and practical considerations require that we not intervene
in fiscal policy decisions regarding education.” In Nebraska
Coalition for Ed. Equity v. Heineman (Nebraska Coalition),” we
specifically stated that the framers of the Nebraska Constitution
rejected language that required uniformity between schools. We
concluded that the Nebraska Constitution committed the deter-
mination of adequate school funding solely to the Legislature.
We further reasoned that the relationship between school fund-
ing and educational quality involved policy determinations that
were inappropriate for judicial resolution.” We therefore held
in Nebraska Coalition that adequate funding of public schools
is not a judicially enforceable right under the free instruc-
tion clause.

The Coalition cites decisions in which state courts have
held their state constitutions provide a fundamental right to
equal educational funding. We conclude, however, that these
decisions are unpersuasive. Two of these states have education

™ San Antonio School District v. Rodriguez, supra note 41, 411 U.S. at 41.

% See, e.g., Pony Lake Sch. Dist. v. State Committee for Reorg., 271 Neb. 173,
710 N.W.2d 609 (2006).

% Lujan v. Colorado State Bd. of Educ., supra note 63, 649 P.2d at 1018.
7” Nebraska Coalition for Ed. Equity v. Heineman, supra note 7.

78 Id,

% Accord San Antonio School District v. Rodriguez, supra note 41.

articles that are more comprehensive® than the “paucity of
standards” contained in Nebraska’s free instruction clause.*!
Another state constitution contained provisions that the court
construed to require equal distribution of school funds,” which
are similar to provisions the people of Nebraska omitted or
deleted from our constitution.** The Coalition also cites a deci-
sion by the Alabama Supreme Court. But we have noted that
the Alabama Supreme Court changed course in 2002, holding
that a constitutional challenge to school funding presented a
nonjusticiable issue and dismissing the action.®

It is true that the California and North Dakota Supreme
Courts have determined their state constitutions provide a fun-
damental right to equal educational funding despite education
articles that required only a free public school system.* These
decisions, however, are contrary to the greater weight of author-
ity®’ and, more important, they are contrary to our decision in
Nebraska Coalition.

Hl ln Nebraska Coalition, we implicitly concluded that
the free instruction clause does not confer a fundamental right
to adequate funding of schools, or we would have decided the

* See, Pauley v. Kelly, 162 W. Va. 672, 255 S.E.2d 859 (1979); Washakie Co.
Sch. Dist. No. One v. Herschler, 606 P.2d 310 (Wyo. 1980).

8! See Nebraska Coalition for Ed. Equity v. Heineman, supra note 7, 273 Neb.
at 552, 731 N.W.2d at 180.

®2 Horton v. Meskill, 172 Conn. 615, 376 A.2d 359 (1977).

%3 See Nebraska Coalition for Ed. Equity v. Heineman, supra note 7.

* Opinion of the Justices, 624 So. 2d 107 (Ala. 1993).

85 Nebraska Coalition for Ed. Equity v. Heineman, supra note 7, citing Ex
Parte James, 836 So. 2d 813 (Ala. 2002).

86 Serrano v. Priest, 5 Cal. 3d 584, 487 P.2d 1241, 96 Cal. Rptr. 601 (1971).
See, also, Serrano v. Priest, 18 Cal. 3d 728, 557 P.2d 929, 135 Cal. Rptr.
345 (1976); Bismarck Public School Dist. I v. State, 511 N.W.2d 247
(N.D. 1994).

87 See, Lujan v. Colorado State Bd. of Educ., supra note 63; McDaniel v.
Thomas, supra note 63; Idaho Schools for Equal Educ. v. Evans, supra note
63; Lewis E. v. Spagnolo, supra note 63; Hornbeck v. Somerset Co. Bd. of
Educ., supra note 62; Levittown USFD v Nyquist, supra note 63; Bd. of Edn.
v. Walter, supra note 63; Olsen v. State ex rel Johnson, supra note 63; City
of Pawtucket v. Sundlun, supra note 63.

issue. We also noted that the U.S. Supreme Court had held open
the possibility that some 14th Amendment claims would be
nonjusticiable because they are too enmeshed with one of the
political question tests. That is the case here. The free instruc-
tion clause does not mandate equal funding of schools. As noted,
there is no uniformity clause in the Nebraska Constitution, and
there is no other provision specifying the manner or amount
of school funding that must be provided for schools. Instead,
the Nebraska Constitution commits funding decisions to the
Legislature.** The Legislature, in turn, has entrusted local bud-
get decisions to the school boards. Holding that the Nebraska
Constitution provides a fundamental right to equal school fund-
ing of schools would affect discretionary legislative decisions
at both local and state levels. So, the same prudential consid-
erations that weighed against interfering with the Legislature’s
determinations of adequate school funding are implicated by
the Coalition’s equal funding claim. We conclude that the free
instruction clause does not provide a fundamental right to equal
and adequate funding of schools.

HE As noted, the Legislature has statutorily delegated to
school boards the duty to determine which schools to operate.
School boards also have authority to determine, with the consent
and advice of the State Department of Education, which grades
to offer at schools.®! In constitutional challenges to school fund-
ing decisions, we conclude that the appropriate level of scrutiny
is whether the challenged school funding decisions are rationally
related to a legitimate government purpose.

(d) The School Board’s Actions Were Rationally
Related to a Legitimate Government Purpose
The Coalition does not contest whether the school board’s
actions were rationally related to a legitimate government inter-
est. The thrust of its argument is that the Nebraska Constitution

88 See Nebraska Coalition for Ed. Equity v. Heineman, supra note 7.

® See Werth v. Buffalo County Board of Equalization, 187 Neb. 119, 188
N.W.2d 442 (1971).

%° § 79-1094,
91 § 79-526.

302 Le

provides a fundamental right to equal and adequate educational
funding, an argument which we reject. The school district con-
tends that its actions to reduce costs, including adjusting its
classes so that small classes could be combined, were rationally
related to its goal of providing an education for its students.
We agree.

At the temporary injunction hearing, Forsberg, the super-
intendent, was asked during cross-examination why the board
had not chosen to save money by transporting the students from
Lyons to Decatur. He responded that the board had considered
that possibility. But because the secondary school was at Lyons,
the Lyons facility had to be heated and operated anyway. He
stated that because there were more students at Lyons than
at Decatur, two busses, instead of one, would be required to
transport students from Lyons to Decatur. He also said that the
remaining students at Decatur in grades kindergarten through
three would be taught in one “K-3 center,” allowing the district
to reduce staff costs and reduce heating and maintenance costs,
for a total savings of about $200,000. Because the school board
was confronted with increasing budget deficits, we conclude
that its actions were rationally related to its legitimate goal of
providing an education to all children in the district. Because
the Coalition has failed to show that a heightened level of
scrutiny applies to the school district’s decisions or that those
decisions were not rationally related to a legitimate government
purpose, its substantive due process claim must fail.

4, EQUAL PROTECTION
The Nebraska Constitution and the U.S. Constitution
have identical requirements for equal protection challenges.”
And we have specifically held that the action of a school
board may implicate the Equal Protection Clause.*? The Equal
Protection Clause requires the government to treat similarly

% Kenley v. Neth, 271 Neb. 402, 712 N.W.2d 251 (2006).

%3 Maack v. School Dist. of Lincoln, 241 Neb. 847, 491 N.W.2d 341 (1992),
citing Columbus Board of Education v. Penick, 443 U.S. 449, 99 S. Ct.
2941, 61 L. Ed. 2d 666 (1979).

PC
situated people alike.™ It does not forbid classifications; it
simply keeps governmental decisionmakers from treating dif-
ferently persons who are in all relevant respects alike.

HE [f a iegislative classification involves either a suspect
class or a fundamental right, courts will analyze the classifica-
tion with strict scrutiny.°° A suspect class is one that has been
““saddled with such disabilities, or subjected to such a history
of purposeful unequal treatment . . . as to command extraordi-
nary protection from the majoritarian political process.’”®*” The
Coalition does not allege that the school district discriminated
against a “suspect class.” And we have already determined that
the Nebraska Constitution does not provide a fundamental right
to equal and adequate funding of schools.

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. Under the rational basis test,
whether an equal protection claim challenges a statute or some
other government act or decision, the burden is upon the chal-
lenging party to eliminate any reasonably conceivable state of
facts that could provide a rational basis for the classification.

“(T]he Equal Protection Clause does not require
absolute equality or precisely equal advantages.” Social and
economic measures violate the Equal Protection Clause only
when the varying treatment of different groups or persons is

% Id., citing Nordlinger v. Hahn, 505 U.S. 1, 112 S. Ct. 2326, 120 L. Ed. 2d
1 (1992).

°5 Gourley v. Nebraska Methodist Health Sys., 265 Neb. 918, 663 N.W.2d
43 (2003).

°6 Id. See State v. Senters, supra note 38.

57 State v. Michalski, 221 Neb. 380, 386, 377 N.W.2d 510, 515 4985), quoting
San Antonio School District v. Rodriguez, supra note 41.

98 See, Maack v. School Dist. of Lincoln, supra note 93, citing Nordlinger v.
Hahn, supra note 94,

°° Smith v. City of Chicago, 457 F.3d 643 (7th Cir. 2006). Compare State v.
Senters, supra note 38.

100 san Antonio School District v. Rodriguez, supra note 41, 411 U.S. at 24.

304 Le

so unrelated to the achievement of any legitimate purposes
that a court can only conclude that the Legislature’s actions
were irrational.!

As we did in our substantive due process analysis, we con-
clude that the school board has shown a rational basis for its
actions. Therefore, the Coalition’s equal protection claim must
similarly fail.

V. CONCLUSION

‘We conclude that the district court did not err in determining
that the voting restrictions placed in the reorganization petition
were unenforceable under Neb. Rev. Stat. § 79-402 (Reissue
1981). The school board of the reorganized district, therefore,
did not breach the reorganization petition by failing to obtain
the specified votes before moving grades four through six from
the Decatur school to the Lyons school.

We further conclude that the school board’s actions did not
violate the Coalition members’ substantive due process or equal
protection rights. The free instruction clause of the Nebraska
Constitution does not confer a fundamental right to equal and
adequate funding for schools. The Coalition has not claimed
that the school board’s actions discriminated against a suspect
class. Thus, under the rational basis test, the school district,
confronted with increasing budget deficits, has shown that its
actions were rationally related to its legitimate goal of providing
an education to all children in the district.

AFFIRMED.

10! Gourley v. Nebraska Methodist Health Sys., supra note 95; State v. Atkins,
250 Neb, 315, 549 N.W.2d 159 (1996).

STATE OF NEBRASKA, APPELLEE, V. ROBERT J. NELSON, APPELLANT.
739 N.W.2d 199

Filed October 5, 2007. No. S-06-449.

Daniel W. Ryberg for appellant.

306 be

Jon Bruning, Attorney General, James D. Smith, and, on
brief, Susan J. Gustafson for appellee.

Heavican, C.J., WRIGHT, GERRARD, STEPHAN, McCormack, and
Mitter-Lerman, JJ.

GERRARD, J.
. NATURE OF CASE

Robert J. Nelson was convicted of making terroristic threats
in violation of Neb. Rev. Stat. § 28-311.01 (Reissue 1995). On
appeal, Nelson argued that his trial counsel was ineffective for
failing to challenge the constitutionality of § 28-311.01. The
Nebraska Court of Appeals determined that it did not have juris-
diction to decide whether Nelson’s trial counsel was ineffective
because in order to do so, it would be required to determine the
constitutional validity of the statute, and the Nebraska Supreme
Court has exclusive jurisdiction to decide cases involving the -
constitutionality of a statute.’ The issue presented in this appeal
is whether the Court of Appeals had jurisdiction to decide
Nelson’s ineffective assistance of counsel claim.

STATEMENT OF FACTS

Nelson had been in a relationship with his girlfriend for
approximately 4 years. Nelson’s girlfriend testified that in June
2005, she and Nelson were living together, but had agreed, at
her urging, to end their relationship. On the morning of June 11,
Nelson woke his girlfriend up and began talking about how he
did not want the relationship to end. His girlfriend testified that
she got up to get dressed so she could leave the apartment, but
Nelson began grabbing at her clothes in an attempt to stop her
from getting dressed and leaving. Nelson’s girlfriend explained
that she tried to use the desk telephone to call the 911 emer-
gency dispatch service, but Nelson disabled the desk telephone
and later smashed her cellular telephone against the wall.

Nelson’s girlfriend testified that she was able to get dressed,
but as she did so, Nelson returned to the room with a steak
knife in his hand. She testified that Nelson “jammf[ed] the knife
into the TV” and told her that this was “the date that [she] was

' See, Neb. Const. art. V, § 2; Neb. Rev. Stat. § 24-1106(1) Reissue 1995).

going to die, and the only way [she] was going to leave this
apartment was in a body bag.” Nelson’s girlfriend testified that
she thought Nelson was going to kill her. Eventually, she was
able to leave and contact the police.

Nelson was eventually charged with, and convicted of, mak-
ing terroristic threats in violation of § 28-311.01 and use
of a deadly weapon to commit a felony in violation of Neb.
Rev. Stat. § 28-1205 (Reissue 1995). Nelson, represented by
different counsel, appealed his convictions to the Court of
Appeals. Nelson argued that his trial counsel provided inef-
fective assistance of counsel for failing to object to the consti-
tutionality of § 28-311.01(1). Specifically, Nelson contended
that § 28-311.01(1) is unconstitutional in that it fails to define
the term “terror.” Nelson also argued that his trial counsel was
ineffective for failing to object to certain definitions given in
the jury instructions.

Upon filing his direct appeal brief, Nelson also filed a rule
9F? notice claiming that this case involved the constitutional-
ity of § 28-311.01. This court did not remove the case to its
docket, and the appeal was submitted to the Court of Appeals.
In a memorandum opinion filed on February 7, 2007, the
Court of Appeals affirmed Nelson’s convictions and sentences,
but did not address Nelson’s argument that his trial counsel
was ineffective for failing to object to the constitutionality of
§ 28-311.01. The Court of Appeals explained that it could not
“determine whether Nelson’s trial counsel was ineffective in
failing to raise the constitutionality of § 28-311.01(1) because
doing so would require [the Court of Appeals] to determine the
constitutionality of a statute; which [it] cannot do.”

Nelson petitioned for further review, which we granted. We
limited our review to the issue of whether the Court of Appeals
erred in concluding that it did not have jurisdiction to address
Nelson’s claim that his trial counsel was ineffective for failing to
challenge the constitutionality of § 28-311.01(1).

2 Neb. Ct. R. of Prac, 9B (rev. 2006).

308 |

ASSIGNMENT OF ERROR
Nelson assigns, restated, that the Court of Appeals erred
in declining to address his allegation that his trial counsel
was ineffective for failing to object to the constitutionality of
§ 28-311.01(1).

STANDARD OF REVIEW

HBA jurisdictional question which does not involve a factual
dispute is determined by an appellate court as a matter of law.?

Hl Appellate review of a claim of ineffective assistance of
counsel is a mixed question of law and fact. When review-
ing a claim of ineffective assistance of counsel, an appellate
court reviews the factual findings of the lower court for clear
error. With regard to the questions of counsel’s performance
or prejudice to the defendant as part of the two-pronged test
articulated in Strickland v. Washington,’ an appellate court
reviews such legal determinations independently of the lower
court’s decision.>

Hl The constitutionality of a statute is a question of law,
regarding which the Nebraska Supreme Court is obligated to
reach a conclusion independent of the determination reached by
the trial court.®

ANALYSIS

JuRISDICTION OF CouRT OF APPEALS

Pursuant to § 24-1106(1), cases “involving the constitution-
ality of a statute” bypass the Court of Appeals and are taken
directly to the Nebraska Supreme Court.’ The issue presented
in this appeal is whether the Court of Appeals has jurisdiction
to decide an ineffective assistance of counsel claim where the
allegation is based on trial counsel’s failure to challenge the
constitutionality of a statute. Stated another way, the question

3 State v. Merrill, 273 Neb. 583, 731 N.W.2d 570 (2007).

* Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d
674 (1984).

> State v. Sims, 272 Neb. 811, 725 N.W.2d 175 (2006).

6 State v. Marrs, 272 Neb. 573, 723 N.W.2d 499 (2006).

7 See, also, Neb. Const. art. V, § 2.

presented is whether, under limited circumstances, an appellate
challenge to the constitutionality of a statute may be within the
jurisdiction of the Court of Appeals.

Under the Nebraska Constitution, an act of the Legislature
cannot be declared unconstitutional, except by the concurrence
of five judges of the Nebraska Supreme Court. The obvious
intent of § 24-1106(1) was to bring such constitutional issues to
the Supreme Court. But we do not read § 24-1106(1) to require
that all constitutional arguments, no matter how insubstantial,
bypass review by the Court of Appeals.

[HMM Instead, we conclude that the mere assertion that a
statute may be unconstitutional does not automatically deprive
the Court of Appeals of jurisdiction over the case. To conclude
otherwise would amount to ceding the regulation of our docket,
and that of the Court of Appeals, to the unsupported allegations
of litigants. We find that for the constitutionality of a statute
to be genuinely “involved” in an appeal, “‘[t]he constitutional
issue must be real and substantial; not merely colorable.’”® For
a constitutional claim to be “real and substantial,” the conten-
tion must disclose a contested matter of right, which presents
a legitimate question involving some fair doubt and reasonable
room for disagreement.!?

Hil If a preliminary inquiry reveals that the contention is so
obviously unsubstantial or insufficient, either in fact or in law,
as to be plainly without merit, the claim is merely colorable.
For example, where a law has been held to be constitutional
by this court, as against the same attack being made, the case
merely requires an application of unquestioned and unambigu-
ous constitutional provisions, and jurisdiction of the appeal lies
in the Court of Appeals.’ To the extent that Metro Renovation v.

8 a.

° Wright v. Missouri Dept. of Social Services, 25 8.W.3d 525, 528 (Mo. App.
2000). See, also, Schumann v. Mo. Highway & Transp. Com’n, 912 8.W.2d
548 (Mo. App. 1995).

1 See Wright v. Missouri Dept. of Social Services, supra note 9.

1 See Zepp v. Mayor &c. City of Athens, 255 Ga. 449, 339 $.E.2d 576 (1986).
See, also, Brooks v. Meriwether Memorial Hosp. Auth., 246 Ga. App. 14,
539 S.E.2d 518 (2000).

310 Le

State! suggests otherwise, it is disapproved. A litigant present-
ing a real and substantial challenge to the constitutionality of
a statute is still required, by rule 9E, to provide notice of that
constitutional issue so that a preliminary inquiry into the claim
may be conducted, and so this court can exercise its authority to
tegulate the dockets of the appellate courts of this state.

We conclude that the Court of Appeals had the authority, in
this case, to consider Nelson’s constitutional claim. As explained
below, Nelson’s claim is foreclosed by this court’s precedent
and is plainly without merit. The Court of Appeals erred in
declining to address his argument. But because this is the first
instance in which we have held that the Court of Appeals has
jurisdiction to determine, in limited circumstances, whether the
constitutionality of a statute is implicated and because Nelson’s
argument is meritless, the court’s error was harmless.

Merits OF NELSON’S INEFFECTIVE
ASSISTANCE OF COUNSEL CLAIM
HH While the Court of Appeals could have decided the

merits of Nelson’s ineffective assistance of counsel claim, it
did not, and for the sake of judicial economy, we choose to do
so here.’° Nelson argues that his trial counsel was ineffective
for failing to challenge the constitutionality of § 28-311.01. To
prevail on a claim of ineffective assistance of counsel under
Strickland v. Washington,“ the defendant must first show that
counsel’s performance was deficient and second, that this defi-
cient performance actually prejudiced his or her defense.’ To
demonstrate that his or her counsel’s performance was deficient,
a defendant must show that counsel did not perform at least as
well as a criminal lawyer with ordinary training and skill in
the area.!°

® Metro Renovation v. State, 249 Neb. 337, 543 N.W.2d 715 (1996).

'3 See, Hosack v. Hosack, 267 Neb. 934, 678 N.W.2d 746 (2004); DeBose v.
State, 267 Neb. 116, 672 N.W.2d 426 (2003).

4 Strickland v. Washington, supra note 4.
5 See State v. Moyer, 271 Neb. 776, 715 N.W.2d 565 (2006).
See id,

Hl To prove prejudice, the defendant must show there is
a reasonable probability that but for counsel’s unprofessional
errors, the result of the proceeding would have been different.
A reasonable probability is a probability sufficient to undermine
confidence in the outcome.”

Nelson contends that § 28-311.01 is unconstitutional because
it fails to define the term “terror.” As we read Nelson’s argu-
ment, it appears he is challenging both subsections (1)(a) and
(c) of the statute, as those are the only subsections that include
a form-of the word “terror.” Section 28-311.01 provides in rel-
evant part:

(1) A person commits terroristic threats if he or she
threatens to commit any crime of violence:
(a) With the intent to terrorize another; [or]

(c) In reckless disregard of the risk of causing
such terror[.]

Both subsections (1)(a) and (c) have been subject to con-
stitutional attacks in the past and have been upheld by this
court as constitutional. In State v. Schmailzl,® § 28-311.01
was challenged as unconstitutionally vague and overbroad in
that it failed to define what conduct constituted a threat. We
rejected this argument and held that “the terroristic threats stat-
ute, § 28-311.01(1)(a) . . . is constitutional.”®

Similarly, in State v. Bourke,” we held that § 28-311.01(1)(c)
was constitutional. We concluded that “{s]ubsection (1)(c) of
§ 28-311.01 defines the crime with enough certainty [and]
““with sufficient definiteness and . . . ascertainable standards
of guilt to inform those subject thereto as to what conduct will
render them liable to punishment thereunder. . . .”’”?! And again,
in State v. Mayo,” we held that “as used in § 28-311.01(1)(c),

* State v. Rieger, 270 Neb. 904, 708 N.W.2d 630 (2006).

8 State v. Schmailzl, 243 Neb. 734, 502 N.W.2d 463 (1993).

9 Jd. at 742, 502 N.W.2d at 468.

2 State v. Bourke, 237 Neb. 121, 464 N.W.2d 805 (1991).

2 Jd, at 125, 464 N.W.2d at 808.

2 State v. Mayo, 237 Neb. 128, 129, 464 N.W.2d 798, 799 (1991).

the phrase ‘reckless disregard of the risk of causing such terror
or evacuation’ is not unconstitutionally vague.”

Also relevant to our analysis, although involving a different
statute, is State v. Holtan.* In Holtan, we addressed a claim
that the phrase “‘serious assaultive or terrorizing criminal activ-
ity’” is unconstitutionally vague and indefinite.* We concluded,
among other things, that the word “terrorizing” was a word
in common usage with a meaning well fixed and generally
clearly understood.”

We conclude, as dictated by our precedent, that “terror” and
“terrorize” are words of common usage and meaning capable
of being readily understood by an individual of common intel-
ligence. Accordingly, we reaffirm our holding that § 28-311.01
is not unconstitutionally vague. The statute was sufficiently clear
to make Nelson aware that his conduct, as described above, was
unlawful. Nelson’s counsel was not ineffective for failing to
raise an argument that has no merit, nor was Nelson prejudiced
by his counsel’s failure to raise a meritless argument.

CONCLUSION
Although the Court of Appeals erred in not reaching the mer-
its of Nelson’s ineffective assistance of counsel claim, Nelson’s
claim is without merit and the Court of Appeals correctly
affirmed Nelson’s convictions and sentences. Although our
reasoning differs from that of the Court of Appeals, the court’s
ultimate decision was correct, and accordingly, we affirm.”
: AFFIRMED.
Connolly, J., participating on briefs.

3 State v. Holtan, 197 Neb. 544, 250 N.W.2d 876 (1977), disapproved on
other grounds, State v. Palmer, 224 Neb. 282, 399 N.W.2d 706 (1986).

4 Td. at 546, 250 N.W.2d at 879.

%5 Id. See, also, Masson v. Slaton, 320 F. Supp. 669 (N.D. Ga. 1970); State
v. Gunzelman, 210 Kan. 481, 502 P.2d 705 (1972); Com. v. Green, 287 Pa.
Super. 220, 429 A.2d 1180 (1981).

26 See State v. Marshall, 269 Neb. 56, 690 N.W.2d 593 (2005).

ee 31
Le

by

DIANE C. SWEEM, APPELLANT, v. AMERICAN Fipevitry Lire
ASSURANCE COMPANY, A CORPORATION, APPELLEE.
739 N.W.24 442

Filed October 5, 2007. No. S-06-870.

Richard J. Schicker for appellant.

William M. Lamson, Jr., and Craig F. Martin, of Lamson,
Dugan & Murray, L.L-P., for appellee.

Heavican, C.J., Wricut, Connotty, GERRARD, STEPHAN,
McCormack, and MILter-LerMan, JJ.

Sreeuan, J.

American Fidelity Life Assurance Company (American
Fidelity) discontinued benefits it had been paying to Diane C.
Sweem under a group disability income policy, based upon its
determination that Sweem was employable in some capacity

and therefore no longer totally disabled under the terms of the
policy. Sweem, contending that she is still totally disabled and
unable to work, brought this action for benefits under the policy
and other relief based on multiple claims designated as separate
“causes of action.” The district court for Douglas County entered
summary judgment in favor of American Fidelity, and Sweem
perfected this appeal. We conclude that there are genuine issues
of material fact which preclude summary judgment on Sweem’s
breach of contract claim, and therefore reverse, and remand for
further proceedings. We affirm the judgment of the district court
with respect to Sweem’s remaining claims.

BACKGROUND
While employed as a teacher for the Fort Calhoun Public
School District, Sweem enrolled in a group long-term disability
income insurance policy offered through the school district and
underwritten by American Fidelity. The policy included the fol-
lowing provisions:

1.09 “Total Disability” (or Totally Disabled) for the first
twelve (12) months of disability means that the Insured is
‘disabled and completely unable to do each and every duty
of his employment. After that, “Total Disability” means the
Insured is disabled and completely unable to engage in any
occupation for wage or profit for which he is reasonably

qualified by training, education, or experience.

3.01 Monthly Disability Benefits will be paid if an
Insured is Totally Disabled as defined in Paragraph 1.09.
. .. Benefits will be paid for each month Total Disability
continues beyond the Elimination Period. No such benefits
will be paid beyond the Maximum Disability Period stated
in the Schedule [of Benefits].

The “twelve (12) months of disability” referred to in paragraph
1.09 was subsequently amended to “sixty (60) months.” The
maximum disability period is defined in the policy as “To age
65 or 5 years, whichever is greater, but not beyond age 70.”

Sweem was born on May 23, 1957.
In 1990, Sweem was injured in an accident unrelated to her
work. She sought treatment from several health care providers,

ee 315
Le

including Dr. Michael McDermott, an oral and maxillofacial
surgeon. McDermott examined Sweem and determined that
she suffered from muscle spasms and a displaced disk in the
temporomandibular joint of her jaw. McDermott initially rec-
ommended a course of conservative treatment and outpatient
arthroscopic surgery. When this failed to provide satisfactory
relief, McDermott performed open joint surgery. Sweem subse-
quently underwent additional surgical procedures.

In May 1992, Sweem filed a claim for disability benefits
under the American Fidelity policy. On the initial claim form,
Sweem identified only McDermott as her treating physician.
McDermott completed the attending physician’s portion of the
claim form. Responding to the question of whether Sweem was
“continuously totally disabled,” McDermott indicated that she
was unable to work from April 3, 1992, until “further notice.”
In July, American Fidelity approved Sweem’s claim and began
paying disability income benefits as of April 8.

Also in July 1992, Sweem completed a continuing disabil-
ity benefits claim form provided by American Fidelity. In the
attending physician’s portion of that form, McDermott indicated
that Sweem was not “totally disabled.” However, he underlined
the word “totally” on the form and below it wrote “partial yes.”
In August, McDermott completed another attending physician’s
statement form at the request of American Fidelity. In respond-
ing to the question of whether Sweem was “totally disabled,”
McDermott marked “Yes” but wrote “partially.”

As a condition of receiving benefits, Sweem continued to
complete continuing disability benefits forms as submitted to
her by American Fidelity. McDermott periodically submitted an
attending physician’s statement on a form supplied by American
Fidelity. On a form dated December 21, 1992, McDermott gave
an affirmative response to the question whether Sweem was
totally disabled for her regular occupation, but indicated that
she was not totally disabled “for any occupation.” McDermott
responded similarly to these questions on subsequent continuing
disability claim forms.

In 2001, American Fidelity began to question Sweem’s
eligibility for disability benefits. In October 2001, American
Fidelity asked McDermott to complete a physical capacities

316 Ee

evaluation of Sweem on a form which it provided. On that
form, McDermott indicated that in “an 8 hour workday,”
Sweem could sit for 7 hours, stand for 6 hours, and walk for 5
hours. McDermott also noted that Sweem could lift and carry
some amount of weight and was, generally, not significantly
restricted from other physical activities. In July 2002, an
American Fidelity case manager wrote a letter to McDermott,
asking, “[D]o you agree that . . . Sweem can return to work in
another occupation?” McDermott gave an affirmative response,
subject to the limitation that she was not to lift more than 25
pounds overhead.

In August 2002, American Fidelity commissioned a vocational
evaluation and skills assessment of Sweem. The vocational con-
sultant concluded that based on Sweem’s education and experi-
ence and McDermott’s evaluation, she had the “physical ability
to resume employment in a position less physically demand-
ing than her previous job.” In September, the same consultant
compiled a labor market survey in which she determined that
there were nonteaching employment opportunities for Sweem
within the Omaha, Nebraska, area. American Fidelity terminated
Sweem’s disability benefits on November 13, 2002.

Sweem commenced this action. In her operative amended
complaint, she sought recovery based upon theories of breach
of contract, bad faith, and intentional and negligent infliction
of emotional distress. American Fidelity answered, denying
Sweem’s allegations with respect to liability and asserting sev-
eral affirmative defenses.

American Fidelity then moved for summary judgment. The
district court conducted a hearing at which it received evidence,
including McDermott’s deposition and affidavits of ari American
Fidelity employee and attached portions of American Fidelity’s
claim file pertaining to Sweem. In opposition to the motion,
Sweem offered her own affidavit and deposition, another depo-
sition given by McDermott, and the deposition of the American
Fidelity employee. This evidence was received without objec-
tion. Sweem also offered the affidavit of Jane Yaffe-Rowell, to
which was attached Yaffe-Rowell’s employability assessment
report pertaining to Sweem dated March 21, 2006, signed by
her and Karen Stricklett, president of Stricklett & Associates,

Inc. American Fidelity asserted foundational and hearsay objec-
tions to this evidence. The court overruled the objections and
received the evidence, but indicated that it would not consider
any hearsay contained therein. In her report, Yaffe-Rowell, a
rehabilitation consultant associated with Stricklett & Associates,
stated that based upon the employability assessment which she
performed in March, it was her opinion “with a reasonable
degree of vocational certainty” that from November 13, 2002,
to the present, Sweem was physically unable to perform the
requirements of her previous work “or any other work that exists
in the local or national economy.”

In an order granting American Fidelity’s motion for sum-
mary judgment and dismissing Sweem’s complaint, the district
court concluded:

At the time the benefits were terminated by [American
Fidelity], the only reasonable evidence available to [it]
was the evidence previously considered on the initial
Motion for Summary Judgment, but this did not include
the March 21, 2006 Employability Assessment done by
[Sweem’s rehabilitation consultants]. However, that assess-
ment is irrelevant to the issues raised by [Sweem] in the
Second Amended Complaint as it only became available
to [American Fidelity] three [and] one-half years after the
original benefits were terminated. Therefore, [that evi-
dence] cannot constitute a basis for a determination that
[American Fidelity] on November 13, 2002, breached the
contract with [Sweem] or that the termination was done in
bad faith or in such a way as it negligently or intentionally
inflicted emotional distress upon . . . Sweem. The evidence
upon which the termination of benefits was based left no
reasonable issue as to whether or not [American Fidelity]
should have terminated them.

Sweem perfected this appeal, which we moved to our docket on
our own motion pursuant to our authority to regulate the case-
loads of the appellate courts."

' See Neb. Rev. Stat. § 24-1106(3) (Reissue 1995).

318 |

ASSIGNMENTS OF ERROR

Sweem assigns, restated and reordered, that the district court
erred (1) in failing to consider the report prepared by Sweem’s
rehabilitation consultants, (2) in finding that the insurance pol-
icy limited the time in which Sweem could submit evidence
of her continued disability to American Fidelity after it denied
benefits, and (3) in finding that no genuine issue of material fact
existed on whether Sweem was totally disabled.

STANDARD OF REVIEW

HM Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose that there is no gen-
uine issue as to any material fact or as to the ultimate inferences
that may be drawn from those facts and that the moving party is
entitled to judgment as a matter of law.” In reviewing a summary
judgment, an appellate court views the evidence in a light most
favorable to the party against whom judgment is granted and
gives such party the benefit of all reasonable inferences deduc-
ible from the evidence.>

ANALYSIS

BREACH OF ContRAcT CLAIM

HB An insurance policy is a contract, and its terms pro-
vide the scope of the policy’s coverage.* Sweem’s claim that
American Fidelity breached its contract by discontinuing pay-
ment of disability benefits due under the policy rests upon a
single question of fact: whether she was “totally disabled” as
defined by the policy when American Fidelity stopped paying
her disability benefits in November 2002. Because more than
60 months had elapsed from the commencement of disability,
Sweem would be considered totally disabled under the policy
if she were “completely unable to engage in any occupation for
wage or profit for which [sJhe is reasonably qualified by train-
ing, education, or experience.”

? Stevenson v. Wright, 273 Neb. 789, 733 N.W.2d 559 (2007).
3 Id.

4 Sayah v. Metropolitan Prop. & Cas. Ins. Co., 273 Neb. 744, 733 N.W.2d
192 (2007).

HM We have often noted that summary judgment pro-
ceedings do not resolve factual issues, but instead determine
whether there is a material issue of fact in dispute.> Where the
facts are undisputed or are such that reasonable minds can draw
but one conclusion therefrom, it is the duty of the trial court to
decide the question as a matter of law rather than submit it to
the jury for determination.® But where reasonable minds differ
as to whether an inference supporting the ultimate conclusion
can be drawn, summary judgment should not be granted.”

As the party moving for summary judgment, American
Fidelity was required to produce enough evidence to dem-
onstrate that it was entitled to judgment if the evidence were
uncontroverted at trial.* This required a showing that Sweem
was able “to engage in any occupation for wage or profit for
which [s]he is reasonably qualified by training, education, or
experience,” and therefore not “totally disabled” as defined by
the policy. American Fidelity met this prima facie burden by
offering McDermott’s statements, indicating that Sweem was
not totally disabled “for any occupation,” and the vocational
evaluation and labor market survey, indicating that Sweem was
physically able to work in various available positions which
were less physically demanding than her former position.

The burden then shifted to Sweem to produce evidence show-
ing the existence of a genuine issue of material fact that would
prevent judgment as a matter of law.® She offered her own affida-
vit in which she stated that she suffered from degenerative bone
and joint disease, that she was unable to have a conversation for
more than one-half hour without her jaw’s locking and severe

5 Strong v. Omaha Constr. Indus. Pension Plan, 270 Neb. 1, 701 N.W.2d
320 (2005). .

© Bates v. Design of the Times, Inc., 261 Neb. 332, 622 N.W.2d 684 (2001);
Fraternal Order of Police v. County of Douglas, 259 Neb. 822, 612 N.W.2d
483 (2000).

7 Riesen v. Irwin Indus. Tool Co., 272 Neb. 41, 717 N.W.2d 907 (2006);
Sherrets, Smith v. MJ Optical, Inc., 259 Neb. 424, 610 N.W.2d 413 (2000).

8 Marksmeier v. McGregor Corp., 272 Neb. 401, 722 N.W.2d 65 (2006);
NEBCO, Inc. v. Adams, 270 Neb. 484, 704 N.W.2d 777 (2005).

9 Id.

320 Le

pain in her jaw, and that she was unable to leave her home for
more than 1 hour at a time. She stated that she was “not able
to work at any employment.” In her deposition, Sweem testified
that she continues to have muscle spasms and “lock ups” in her
jaw and is unable to blink one eye. She testified that she was
always in some pain and can write or type for only short periods
of time. She further testified that she sleeps only 3 to 4 hours at
night and usually takes naps during the day to make up for lost
sleep. She testified that she had never considered applying for a
sedentary job because no physician had specifically told her that
she could perform such work.

Sweem also offered a deposition of McDermott in which he
described the injury to Sweem’s temporomandibular joint as
“one of the more severe types of injuries that I’ve seen in almost
30 years.” He testified that while he had completed the attend-
ing physician’s statements submitted to American Fidelity to the
best of his ability, he had not determined whether Sweem could
perform any particular job and did not feel qualified to make
such determinations.

Sweem also offered the affidavit of rehabilitation consultant
Yaffe-Rowell and the attached employability assessment dated
March 21, 2006, signed by Yaffe-Rowell and Stricklett. As
noted, Yaffe-Rowell concluded “with a reasonable degree of
vocational certainty” that Sweem “continues to be incapable
of performing any of her previous work or any other work that
exists in the local or national economy.” Although it received
this exhibit over foundational and hearsay objections, the district
court subsequently disregarded it as “irrelevant” because it was
not available to American Fidelity at the time it discontinued
Sweem’s disability benefits. We agree with Sweem that this was
error. While the fact that American Fidelity did not have this
document when it discontinued Sweem’s benefits may weigh
against Sweem’s claims that it acted negligently or in bad faith
in doing so, it is clearly relevant to the dispositive factual issue
in Sweem’s breach of contract claim, i.e., whether she remained
totally disabled, as defined in the policy, at the time of discon-
tinuation of her benefits.

In urging that the district court properly disregarded this
evidence, American Fidelity argues that Sweem “closed the

administrative record when she chose to file suit.” It argues
that although this is not a case arising under the Employee
Retirement Income Security Act of 1974 (ERISA),!! ERISA
principles limiting or prohibiting consideration of evidence
which was not considered by a plan administrator are “logically
applicable.”"? American Fidelity further argues that Sweem’s
counsel was invited to submit additional evidence after disabil-
ity benefits were discontinued, but chose not to do so and filed
suit instead.

We find no merit in these arguments. We discern no good
reason to apply ERISA principles to this common-law action
to recover benefits claimed due under an insurance policy, and
American Fidelity directs us to no other state court decision
which has done so. There is no claim that Sweem failed to com-
ply with the notice of claim or proof of loss provisions of the
policy. Indeed, based upon the information Sweem and her phy-
sicians provided, American Fidelity paid disability benefits for
more than 10 years. It then discontinued such benefits, based in
part upon the opinion of a vocational rehabilitation expert whom
it retained. Sweem did not accept this determination, filed this
action, and retained an expert whose opinion differed from that
of American Fidelity’s expert. We find nothing in the insurance
policy or the applicable law which precluded her from doing
so. The Yaffe-Rowell affidavit and report should have been
considered by the trial court with respect to Sweem’s breach
of contract claim. That report, together with Sweem’s affidavit
and deposition testimony, established the existence of a genuine
issue of material fact as to whether Sweem was totally disabled
as defined by the policy when American Fidelity discontinued its
payment of benefits. In circumstances such as these, where there
is conflicting evidence on the question of whether an insured is
“disabled” within the meaning of an insurance policy, we have
held that neither party is entitled to summary judgment."? The

1 Brief for appellee at 9.
1 See 29 U.S.C. §§ 1001 to 1461 (2000 & Supp. IV 2004).
2 Brief for appellee at 9.

8 Knudsen v. Mutual of Omaha Ins. Co., 257 Neb. 912, 601 N.W.2d
725 (1999).

322 Es

district court erred in entering summary judgment for American
Fidelity on this claim.

OtHer CLaims
The entry of summary judgment also resulted in dismissal of
Sweem’s claims based upon alleged bad faith, as well as neg-
ligent and intentional infliction of emotional distress. Sweem
did not assign or argue error with respect to the dismissal of
these claims. Accordingly, we find no error in the dismissal of
these claims.

CONCLUSION
Because Sweem does not raise any issue on appeal with
respect to the dismissal of her claims based upon bad faith,
negligent infliction of emotional distress, and intentional inflic-
tion of emotional distress, we affirm the entry of summary
judgment as to those claims. However, for the reasons dis-
cussed, we conclude that the district court erred in entering
summary judgment in favor of American Fidelity with respect
to Sweem’s breach of contract claim. We therefore remand that
cause to the district court for further proceedings consistent
with this opinion.
AFFIRMED IN PART, AND IN PART REVERSED AND
REMANDED FOR FURTHER PROCEEDINGS.

Berry L. THORSON, APPELLANT, V. NEBRASKA DEPARTMENT
oF HEALTH AND Human Services, NANCY MontTANEz,
DIRECTOR, APPELLEE.

740 N.W.2d 27

Filed October 19, 2007. No. S-06-223.

Steven E. Gunderson, of Gunderson Law Offices, P.C., L.L.O.,
for appellant.

Jon Bruning, Attorney General, John L. Jelkin, and Douglas
D. Dexter for appellee.

Heavican, C.J., Wricut, CoNNoLty, GERRARD, STEPHAN,
McCormack, and MiLLer-Lerman, JJ.

McCormack, J.
NATURE OF CASE

Betty L. Thorson applied with the Nebraska Department of
Health and Human Services (DHHS) for medical assistance
benefits known as Aid to the Aged, Blind, and Disabled (AABD)
and Medicaid. DHHS determined that based on the value of
Thorson’s irrevocable trust for which Thorson is the beneficiary,
Thorson was ineligible for AABD and Medicaid benefits.

BACKGROUND

On December 2, 1989, Thorson executed the “Irrevocable
Betty Lou Thorson Trust” (the Trust). Thorson is the grantor
and beneficiary of the corpus of the Trust, and her son is the
trustee. The Trust was established as an irrevocable instrument.
It authorizes the trustee, in his sole and absolute discretion, to
pay to or apply for the benefit of Thorson such amounts from
the principal or income of the Trust as he deems necessary or
advisable for the satisfaction of Thorson’s special needs. Special
needs are referred to in the Trust as “the requisites for main-
taining [Thorson’s] good health, safety and welfare when, in
the sole and absolute discretion of the Trustee, such requisites
are not being adequately provided by any public agency, office
or department of any State, or of the United States.” The Trust
further provides that the express purpose of the Trust is that “the

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income and principal hereof be used only to supplement other
benefits received by or available to [Thorson].”

On December 19, 2003, Thorson applied for AABD and
Medicaid benefits with DHHS. Thorson had previously been
denied assistance benefits on four prior occasions, the last occa-
sion because her resources exceeded the program standard.
Attached to Thorson’s application for assistance was an account-
ing of the Trust’s assets, which totaled $69,740.68.

After an administrative hearing on the matter, the director of
DHHS affirmed DHHS’ denial of Thorson’s application for bene-
fits. The director of DHHS specifically found that the finding
that Thorson was ineligible for AABD and Medicaid benefits
due to resources in the Trust was correct.

Thorson filed a petition for review of the DHHS decision
pursuant to the Administrative Procedure Act (APA). Thorson
alleged that the determination that her resources exceed the pro-
gram’s standard is unsupported by the evidence and is contrary
to law. The district court affirmed the ruling of the director, con-
cluding that it was proper for DHHS to consider the Trust as an
available asset for purposes of determining Thorson’s assistance
eligibility. Thorson filed this timely appeal.

ASSIGNMENT OF ERROR
Thorson asserts that the district court erred in determining
that assets held in the Trust were available resources in deter-
mining Thorson’s eligibility to receive AABD and Medicaid
benefits.

STANDARD OF REVIEW
HH A judgment or final order rendered by a district court in
a judicial review pursuant to the APA may be reversed, vacated,
or modified by an appellate court for errors appearing on the
record.' When reviewing an order of a district court under the
APA for errors appearing on the record, the inquiry is whether
the decision conforms to the law, is supported by competent

' Pohlmann v. Nebraska Dept. of Health & Human Servs., 271 Neb. 272, 710
N.W.2d 639 (2006).

a
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evidence, and is not arbitrary, capricious, or unreasonable.”
Whether a decision conforms to law is by definition a question
of law, in connection with which an appellate court reaches a
conclusion independent of that reached by the lower court.

ANALYSIS

We are presented in this appeal with the question of whether
the corpus of an irrevocable, discretionary trust established.
in 1989 is a resource available to the beneficiary for pur-
poses of determining the beneficiary’s eligibility for AABD and
Medicaid benefits.

In 1965, Congress enacted the Medicaid program as a coop-
erative federal-state program to provide health care to needy
individuals.‘ Although participation in the Medicaid program
is optional, once a state has voluntarily elected to participate,
it must comply with standards and requirements imposed by
federal statutes and regulations.> By enacting Neb. Rev. Stat.
§ 68-1018 et seq. (Reissue 2003, Cum. Supp. 2004 & Supp.
2005), Nebraska has elected to participate in the Medicaid pro-
gram and has assigned to DHHS the responsibility of adminis-
tering the program.®

Under federal law, a state participating in the Medicaid pro-
gram must establish resource standards for the determination of
eligibility.’ These standards must take into account “‘only such
income and resources as are, as determined in accordance with
standards prescribed by the Secretary [of the U.S. Department
of Health and Human Services], available to the applicant
or recipient’ ”*

? Id.

3 Id.

+ Matter of Kindt, 542 N.W.2d 391 (Minn. App. 1996). See, also, Pohlmann
v. Nebraska Dept. of Health & Human Servs., supra note 1.

> Pohlmann v. Nebraska Dept. of Health & Human Servs., supra note 1.

6 id.

7 Id.; 42 U.S.C. § 1396a(a)(17)(B) (2000).

8 Pohlmann v. Nebraska Dept. of Health & Human Servs., supra note 1, 271
Neb. at 276, 710 N.W.2d at 643 (quoting § 1396a(a)(17)(B)).

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Prior to 1986, an irrevocable trust was not considered an asset
in determining whether an applicant was sufficiently needy to
qualify for Medicaid benefits.? This created a situation whereby
many individuals created trusts in order to shield their assets.
And, as a result, many individuals were receiving Medicaid
benefits when they had irrevocable trusts containing assets
which would otherwise have made them ineligible for pub-
lic assistance.'®

“In 1986, Congress attempted to close the ‘loophole’ in
the Medicaid act so that assets in certain trusts would be
counted in determining whether a Medicaid applicant satisfied
the maximum asset requirement.” The trusts set forth in the
1986 amendment were called Medicaid qualifying trusts. The
amendment established circumstances under which the assets of
Medicaid qualifying trusts would be counted in determining the
beneficiary’s Medicaid eligibility. The amendment was codi-
fied at § 1396a(k) and provided:

(1) In the case of a medicaid qualifying trust . . . the
amounts from the trust deemed available to a grantor . . . is
the maximum amount of payments that may be permitted
under the terms of the trust to be distributed to the grantor,
assuming the full exercise of discretion by the trustee or
trustees for the distribution of the maximum amount to
the grantor. For purposes of the previous sentence, the
term “grantor” means the individual referred to in para-
graph (2).

(2) For purposes of this subsection, a “medicaid quali-
fying trust” is a trust, or similar legal device, established
(other than by will) by an individual (or an individual’s
spouse) under which the individual may be the benefi-
ciary of all or part of the payments from the trust and the

° Boruch v. Nebraska Dept. of Health & Human Servs., 11 Neb. App. 713,
659 N.W.2d 848 (2003).

© Yd,
"Td, at 717, 659 N.W.2d at 852.

2 See § 1396a(k) (1988).

8 Boruch v. Nebraska Dept. of Health & Human Servs., supra note 9.

LL
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distribution of such payments is determined by one or
more trustees who are permitted to exercise any discre-
tion....

(3) This subsection shall apply without regard to—

(A) whether or not the medicaid qualifying trust is irre-
vocable or is established for purposes other than to enable
a grantor to qualify for medical assistance under this sub-
chapter; or

(B) whether or not the discretion described in paragraph
(2) is actually exercised.

(4) The State may waive the application of this subsec-
tion . . . where the State determines that such application
would work an undue hardship.

In 1993, Congress repealed § 1396a(k) and adopted tighter
restrictions under § 1396p(d). This amendment expanded the
types of trusts which are counted in determining an applicant’s
Medicaid eligibility.* Under the plain language of § 1396p(d),
if a person establishes an irrevocable trust with his or her assets
and the individual is able, under any circumstances, to benefit
from the corpus of the trust or income derived from the trust,
the individual is considered to have formed a trust which is
counted in the determination of Medicaid eligibility. The corpus
of the trust is considered a resource available to the individual.’
Although § 1396p(d) supersedes the Medicaid qualifying trust
provisions set forth in § 1396a(k), § 1396p(d) does not apply to
trusts created on or before August 10, 1993.'® Thus, because the
Trust in the present case was created in 1989, the 1993 amend-
ment does not apply and we are governed by § 1396a(k). As
explained by the Connecticut Supreme Court:

Because the medicaid act specifically provides that states
may base eligibility determinations only on income and
resources that are “available” to the applicant within the
meaning of the act; see 42 U.S.C. § 1396a (a)(17)(B); and

4 Id.
3 Id.

‘6 See Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-66,
§ 13611(e)(2)(C), 109 Stat. 627 (1993). See, also, Ahern v. Thomas, 248
Conn. 708, 733 A.2d 756 (1999).

328 Le

because § 1396p (d) does not apply to the trust at issue
in the present case, the regulations and guidelines that
implement § 1396p (d) also are not applicable to the trust
at issue in the present case. Thus, we are not required to
determine whether there are “any circumstances” under
which the trust instrument provides the trustees with dis-
cretion to make payments of trust principal “for the benefit
of” or “on behalf of” the plaintiff. Instead, all that we must
determine is whether the trust instrument provides the
trustees with discretion to distribute trust principal “to the
grantor” within the meaning of § 1396a (k)(1).!”

Under § 1396a(k)(2), an irrevocable trust established by an
individual or his or her spouse is considered a Medicaid quali-
fying trust if the trustee could exercise any discretion in order
to make payments from trust principal or income to the benefi-
ciary.'® In the present case, Thorson and DHHS agree that the
Trust is a Medicaid qualifying trust.

Under § 1396a(k)(1), the amount of a Medicaid qualify-
ing trust considered available to an applicant for purposes of
determining eligibility for Medicaid benefits “‘is the maximum
amount of payments that may be permitted under the terms
of the trust to be distributed to the grantor, assuming the full
exercise of discretion by the trustee or trustees for the distribu-
tion of the maximum amount to the grantor’”!° The Nebraska
Administrative Code similarly provides that for irrevocable
trusts established before August 11, 1993, the maximum amount
that could have been distributed from either the income or the
principal is considered an available resource. *

Thus, in order to determine whether the Trust’s assets are an
available resource, we must determine the maximum amount of

7 Ahern v. Thomas, supra note 16, 248 Conn. at 721-22, 733 A.2d at 766
(emphasis in original).

8 See, Ramey v. Rizzuto, 72 F. Supp. 2d 1202 (D. Colo. 1999); Cohen v.
Commissioner of the Division of Medical Assistance, 423 Mass. 399, 668
N.E.2d 769 (1996).

19 Ahern v. Thomas, supra note 16, 248 Conn, at 717, 733 A.2d at 763 (empha-
sis omitted).

20 469 Neb. Admin. Code, ch. 2, § 009.07A5f(1) (2005).

Dr
|

the Trust’s assets the trustee could distribute under the terms of
the Trust. DHHS argues that under the terms of the Trust, the
trustee has the discretion to apply the trust income and corpus
for the health, comfort, and support of Thorson where her needs
are not being met by public assistance, which is the case here.
Thorson, on the other hand, argues that the trustee does not have
authority to do so. Thorson claims that the language of the Trust
indicates the clear intent that the trust income and corpus be
used only to supplement, not replace, other benefits received by
or available to Thorson.

When the parties do not claim that the terms of a trust are
unclear or contrary to the settlor’s actual intent, the interpreta-
tion of a trust’s terms is a question of law.”! Regarding questions
of law, an appellate court has an obligation to reach conclusions
independent of those reached by the lower court.” Where the
language of the trust is not clear, the rules of construction for
interpreting a trust are applied; however, if the language clearly
expresses the settlor’s intent, the rules do not apply. The pri-
mary rule of construction for trusts is that a court must, if pos-
sible, ascertain the intention of the testator or creator.

The terms of the Trust are clear. It provides in relevant part:

(A) Except as otherwise limited herein, during the life-
time of the Grantor, the Trustee shall pay to or apply for
the benefit of the Grantor such amounts from the principal
or income of the Trust, up to the whole thereof, as the
Trustee, in his sole and absolute discretion, may from time
to time deem necessary or advisable for the satisfaction of
the Grantor’s special needs. . . .

As used in this Trust Agreement, “special needs” refers
to the requisites for maintaining the Grantor’s good health,
safety and welfare when, in the sole and absolute discre-
tion of the Trustee, such requisites are not being adequately
provided by any public agency, office or department of

1 In re Trust Created by Hansen, ante p. 199, 739 N.W.2d 170 (2007).
2 See Zahl v. Zahl, 273 Neb. 1043, 736 N.W.2d 365 (2007).

33 In re Wendland-Reiner Trust, 267 Neb. 696, 677 N.W.2d 117 (2004).
4 Id.

330 a

any State, or of the United States. “Special needs” shall
include, but not be limited to, the costs of shelter, medical
and dental expenses (and/or insurance therefore), clothing
costs, travel and entertainment charges, expenses incurred
in connection with programs of training, education and
treatment and charges for essential dietary needs.

(B) This Trust is created expressly to provide for the
Grantor’s extra and supplemental care, maintenance and
support, in addition to and over and above that provided
through benefits she otherwise receives or may receive
from any local, State or federal government, or from
any private agency. It is the express purpose of this
Trust that the income and principal hereof be used only
to supplement other benefits received by or available to
the grantor.

At the time the Trust was created, both federal and state
statutory schemes allowed Medicaid claimants to become eli-
gible for public assistance by entering into trust agreements
making their assets legally unavailable to them. We conclude,
however, that the Trust in question does not satisfy those fed-
eral and state statutes. Under the terms of the Trust, the trustee
is authorized to pay to or apply for the benefit of Thorson the
entirety of the Trust’s assets in order to supplement any benefits
Thorson may receive from any local, state, or federal govern-
ment. As explained by other courts, the statutory definition of
a Medicaid qualifying trust in § 1396a(k) “‘does not require
that a trustee have unbridled discretion, but indicates that any
discretion to distribute assets is sufficient.’”> We cannot say
that a distribution of the Trust’s assets to Thorson if she were
to receive any governmental assistance would be an abuse of
the trustee’s discretion. Accordingly, we cannot say that DHHS
was wrong in determining that the assets of the Trust were an
available resource.

Hl Thorson also argues that DHHS may not deny her benefits
until it has exhausted its judicial remedies to determine whether

25 See Allen v. Wessman, 542 N.W.2d 748, 752 (N.D. 1996) (emphasis in origi-
nal) (quoting Gulick v. Dept. of Health & Rehab. Serv., 615 So. 2d 192 (Fla.
App. 1993)).

the trustee has abused his discretion by refusing to distribute
assets from the Trust to Thorson. The district court did not
address this argument. Because an appellate court will not con-
sider an issue on appeal that was not passed upon by the trial
court, we do not address Thorson’s argument.”

CONCLUSION
For the reasons discussed above, we affirm the decisions of
the district court and DHHS.
AFFIRMED.

?6 In re Estate of Nemetz, 273 Neb. 918, 735 N.W.2d 363 (2007).

IN RE INTEREST OF XAVIER H., A CHILD UNDER 18 YEARS OF AGE.
StATE OF NEBRASKA, APPELLEE AND CROSS-APPELLANT, V.
KATIANNE S., APPELLANT AND CROSS-APPELLEE.

740 N.W2d 13

Filed October 19, 2007. No. S-06-841.

332 Le

Richard Register and Christina C. Boydston, of Register Law
Office, for appellant.

Jeri L. Grachek, Deputy Dodge County Attorney, for
appellee.

Heavican, C.J., WrichT, GERRARD, STEPHAN, McCormack, and
Mitver-Lerman, JJ.

McCormack, J.
NATURE OF CASE

Katianne S. is the mother of Alita, born March 14, 2001;
Kalila, born April 6, 2003; and Xavier, born May 12, 2004.
Katianne’s fitness as a mother to Alita and Kalila is not in ques-
tion, and they remain with her in the family home in Fremont,
Nebraska. Katianne’s petition for further review asks that we
evaluate the Nebraska Court of Appeals’ decision to affirm the
juvenile court’s termination, under Neb. Rev. Stat. § 43-292(7)
(Reissue 2004), of Katianne’s parental rights to Xavier. The
broader issue presented in this appeal is the extent to which the
State must respect a parent’s fundamental constitutional rights
when terminating parental rights under § 43-292(7).

FACTS

BACKGROUND OF XAVIER’S ADJUDICATION
After Xavier’s birth, Katianne immediately suspected that
Xavier might have a milk allergy because he kept spitting up
breast milk. Katianne’s daughter, Kalila, had been born with
reflux and allergies to soy and milk proteins and had shown sim-
ilar symptoms. Katianne and Xavier were discharged from the
hospital within 2 days, but Katianne continued to seek medical

care for Xavier’s feeding problem, taking Xavier to his pediatri-
cian several times a week.

Xavier was eventually diagnosed with a milk and soy protein
intolerance and gastroesophageal reflux. From May 12 to July
23, 2004, Xavier was put on several different hypoallergenic
formulas, but he continued to spit up frequently. He was gaining
weight poorly and was very irritable. Katianne explained that
Xavier’s allergies and reflux problem were much more severe
than her daughter Kalila’s had been.

On July 23, 2004, Xavier was placed on a nasogastric feeding
tube which would drip formula into his stomach at a slow rate
to allow him to absorb the formula without spitting it up. The
feeding tube was to be in place at all times. Xavier had to wear
special mittens to keep from pulling it out. He would have to go
to the hospital to have the tube reinserted if he pulled it out. The
pump would “alarm every once in a while,” and there was a list
of procedures to determine the reason for the alarm. The bags of
formula needed to be refilled as soon as they were empty, and
periodic tubing changes were also required.

When Xavier was 2 weeks old, Katianne had gone back to
work part time at a gas station. She explained that she soon
began to suffer from postpartum depression, which was get-
ting progressively worse. She did not seek professional help.
Katianne had a history of depression as a teenager and of drug
and alcohol abuse as a young adult. However, Katianne was an
active member of Alcoholics Anonymous and had not had a
drinking or drug abuse problem since at least 2000.

Xavier was cared for by his father or a sitter while Katianne
was at work. Katianne became concerned over whether they
could properly care for Xavier’s special needs. According to
Katianne, the pediatrician suggested temporary out-of-home
care as a solution. Katianne testified that she contacted social
services for assistance. Crystal Hestekind, a protection and
safety worker for the Department of Health and Human Services
(the Department), helped Katianne get some assistance through
some community service agencies, but the Department initially
refused out-of-home voluntary temporary placement.

On July 28, 2004, someone filed a report with the Department
expressing concerns about Xavier’s health and well-being. After

334 Es

an investigation, the report was deemed to be unfounded. In
discussions with Katianne about the report, Katianne again
expressed to the Department her concern over Xavier’s care
while she was at work. Hestekind had Home Health Care
increase its visitation to Katianne’s home to three to four times
per week to assist with weight checks and the pump. Hestekind
explained that they were also encouraging Katianne to seek
assistance for her postpartum depression, but, at that time,
Katianne was reticent to take medication.

Hestekind explained that Katianne was not very successful in
keeping in communication with Hestekind, and Xavier still was
not gaining any weight. Hestekind testified that she had offered
to set up commercial daycare with staff properly trained for
Xavier’s medical needs, but that Katianne had refused because
of concerns about Xavier’s becoming sick by being around
other children. Hestekind later admitted that the daycare she had
arranged for Katianne was closed during the evening hours that
Katianne worked.

Because the situation was deteriorating, on August 9, 2004,
Katianne and the Department agreed to a voluntary 1-month
placement of Xavier outside the home. Xavier’s condition
improved in the foster home. On August 23, Katianne suffered
what she described as a relapse. She drank half a bottle of whis-
key, took “a bunch of pills,” and was hospitalized for several
days as a result.

Because Xavier still needed special care to be weaned from
the feeding tube to the bottle, the Department asked Katianne
and Xavier’s father to sign a voluntary extension of the out-of-
home placement. When Xavier’s father refused to agree to the
extension, Xavier was adjudicated, in accordance with Neb. Rev.
Stat. § 43-247(3)(a) (Reissue 2004), to be under the jurisdiction
of the juvenile court due to the parents’ failure to provide proper
care. The petition for adjudication alleged that Xavier’s parents
did not feel they were capable of caring for Xavier while he had
the feeding tube.

CompLiaNce With Case PLAN
Xavier was weaned from the feeding tube to the bottle, and his
special needs largely resolved. However, his adjudication began

a process in which a case plan for reunification was developed
by the Department for Katianne. According to the Department,
Katianne was not to be reunited with Xavier until the goals of
that plan were met. The goals of the case plan included main-
taining steady employment, attending therapy, submitting to ran-
dom urinalysis testing, attending parenting classes, presenting a
budget and receipts for the timely payment of her bills, enhanc-
ing her time management skills, maintaining a healthy lifestyle,
maintaining her home in a condition suitable for visits, engaging
in positive family activities, maintaining communication with
service providers, and cooperating with a family support worker
to set up visitation with Xavier.

The initial visitation plan under the voluntary placement had.
been four 2-hour visits per week. As of September 9, 2004,
when the Department asked Katianne and Xavier’s father to sign
a voluntary extension of that agreement, Katianne had not seen
Xavier for 3 weeks. She had canceled her visits with Xavier for
various reasons, including illnesses of her other children, and
also, presumably, for reasons relating to her August 23 hospi-
talization. By November, after the adjudication, visitation was
reduced to twice a week. Because of further missed visits, the
frequency and number of which are not reflected in the record,
Katianne’s visits were reduced to once a week in January 2005.

The only visitation records submitted into evidence by the
Department show that between June 1 and December 2, 2005,
48 out of 59 scheduled visits between Katianne and Xavier took
place. Each visit lasted approximately 2 hours. Approximately
10 visits were missed, although several canceled visits were due
to family members’ being ill.

In accordance with the case plan, Katianne immediately
began working with Lutheran Family Services to address sub-
stance abuse and mental health issues. After an initial evaluation,
Lutheran Family Services recommended a 12-week individual
and group outpatient therapy program for substance abuse.
Katianne had successfully completed the program by the end of
December 2004. Katianne also saw a psychiatrist at Lutheran
Family Services, who prescribed antidepressants. Ongoing ther-
apy to address general mental health issues was recommended
in conjunction with her medication.

Debra Hallstrom was Katianne’s therapist through Lutheran
Family Services. Hallstrom testified that Katianne was fairly
regular in her appointments with her. Still, by the end of
December 2004, Katianne had three “late cancels” with the
supervising psychiatrist who prescribed her antidepressants. In
accordance with Lutheran Family Services’ official policy, the
three late cancels mandated that Katianne be discharged for all
services provided by the program, including her therapy visits
with Hallstrom. During her discharge, Katianne sought therapy
outside of Lutheran Family Services.

In April 2005, Katianne was allowed back into the program
at Lutheran Family Services. Katianne continued her therapy
at Lutheran Family Services until October or November 2005,
when she was again discharged for three late cancels with her
supervising physician. Hallstrom testified that at the time of her
discharge, Katianne had partially completed her therapy goals,
such as “boundary issues” and “setting goals.” Katianne was
still working on issues relating to job stability, daycare, and
her dependence on Social Security income. Katianne did not
have the money to pay for daycare, and she could not rely on
Xavier’s father to take care of the children. Hallstrom explained
that Katianne was not able to get to work when a child was sick,
and because of unreliable childcare, this was causing problems
with her employment. Although Katianne missed visits to her
supervising physician, she did continue taking her antidepres-
sant medication.

Katianne also worked with Raegen Yount, a family sup-
port worker, to try to reach the goals of her case plan. Yount
instructed Katianne in a parenting course called “nurturing par-
enting.” Katianne successfully completed the course in approxi-
mately 11 months. Yount described that 11 months was “on the
high end” for completion of the course, but that Katianne was
generally engaged and was good about completing her home-
work for the course.

Yount testified that she had less success in teaching Katianne
to properly budget her finances. According to Yount, budgeting
was just something Katianne was “not able to grasp.” Yount
opined that Katianne and Xavier’s father were spending money
on unnecessary items they could not afford. She pointed out that

they rented-to-own a dishwasher, washer and dryer, bunk beds
for the girls, and a “fancy stereo,” which stereo was apparently
later returned at Yount’s urging. Yount testified that Katianne
paid her bills late and that family members had often been
called upon to help Katianne with her rent or utility bills. Yount
also noted the fact that a used van Katianne bought had been
repossessed. While Katianne had not owned another vehicle,
‘Yount considered this purchase unnecessary.

Yount supervised Katianne’s visits with Xavier. She stated
her general observation that Katianne’s house was not orga-
nized. The master bedroom door would often be closed because
of the disarray inside. There was clothing that had been thrown
down the steps of the unfinished basement where the laun-
dry room was located. The girls had colored on the walls of
their bedroom.

Yount testified that some of Katianne’s visits with Xavier
went very well, and some went very badly. Yount testified that
the recent second-year birthday party for Xavier at Katianne’s
home was “very, very nice.” There was cake and pizza; they
sang “Happy Birthday”; and there “wasn’t a whole lot of chaos,
a whole lot of screaming going on or anything.”

Yount explained that, in contrast, in the last few months, there
had been other times where the environment had been more
noisy because of the girls’ behavior and Katianne’s trying to dis-
cipline them. Yount recounted an incident during a May 4, 2006,
visit, when Katianne tried to discipline Kalila for refusing to put
her clothes back on after Kalila had stripped and decided she
wanted to take a bath. Yount stated that Katianne had redirected
Kalila many times to the timeout chair, but, when describing
Katianne’s discipline skills, Yount stated:

And that has always been a thing with Katifanne] and
[Xavier’s father] is that they will say go to time out, but
whether the time out is utilized at all, or even utilized cor-
rectly, is a challenge for them. They’ll get parts of a time
out right, but other parts they won’t. . . . It was time after
time. And I directed [Katianne] to just take [Kalila] to the
room. And Kalila was just left there. No direction as to
why she was going to her room and no direction as to why
she should get out of her room.

338 be

Yount also testified as to an incident when Katianne was
changing Xavier’s diaper and Alita and Kalila were “in his face”
and Kalila said something about Xavier’s genital area. This,
according to Yount, upset Xavier. Yount testified that the girls’
crowding Xavier during diaper changes was a recurring prob-
lem. She did note, however, that during the last visit, Katianne
did “prompt the girls to back up . . . without any guidance or
anything.” But she noted that, unfortunately, the girls did not
back up and that Katianne simply finished changing Xavier
without disciplining the girls.

Yount stated that on most visits, Katianne was attentive to
Xavier and the girls. At times, Katianne would have had a bad
day and would want to talk. On such occasions, Yount stated that
Katianne would be sitting on the floor and would observe the
children while she talked about herself. Yount testified that other
than going to the park, Katianne did not plan structured activi-
ties such as doing a craft project or going to the library. Yount
indicated that Katianne had kept in good contact with Xavier’s
physician to discuss his health, when that was an issue.

‘Yount noted that Katianne had missed visits with Xavier
for various reasons. Sometimes the other children were sick.
Sometimes Katianne had to work early. Yount explained that she
and Katianne’s case manager had refused Katianne’s request on
one occasion to have an extended visit with Xavier at an Omaha
zoo when the Head Start program was offering free admission
for the children. Yount explained that Katianne had given her
only 1 day’s notice of the request. Moreover, gas to drive to the
zoo would cost money, Katianne still had to pay admission for
herself, and Katianne had mentioned renting a stroller. Yount
stated, “I had the concern about money because prior to that I
know relatives had helped her pay bills. And so, I had a question
as to why are we making these type [sic] of judgments.” The
girls eventually went to the zoo with someone else, and Katianne
stayed home in order to be able to visit with Xavier.

Ann Paulson, a court-appointed special advocate, likewise
observed many of Xavier’s visits in Katianne’s home. Paulson
testified that Xavier would generally interact with his two sisters
while at Katianne’s home, play with toys, and have a snack.

Paulson described Kalila’s temper tantrum during the May
4, 2006, visit that Yount had mentioned. Paulson explained
that 3-year-old Kalila threw a tantrum when Katianne tried to
keep Kalila from taking off all her clothes and her “pull-up.”
Paulson stated that Katianne repeatedly placed Kalila in a time-
out chair when Kalila left the chair without Katianne’s permis-
sion. Katianne did get Kalila’s dress back on, but not the pull-up.
Still, Paulson explained, “it went on for quite a lengthy time, and
[Katianne] got very frustrated with the situation and kinda [sic]
just gave up on not knowing what to do and how to handle her.”
Yount eventually called Kalila over to her, put on her “pull-up,”
and advised Katianne to put Kalila in her room, which she did.

Paulson noted that there was a flea infestation of Katianne’s
home in the fall of 2005. She also noted that on one visit
in January 2006, she had not received a late message that
Katianne was canceling visitation. Upon arrival to Katianne’s
home, Paulson could clearly see inside the house that it was in
“complete turmoil, and there were clothes, boxes, and toys, and
all kinds of possessions of all sorts laying all over the home.”
On three visits, she found that the girls’ beds did not have any
bedding on them, although she could not say whether that was
because the bedding was being washed. With these exceptions,
Paulson described Katianne’s home as generally clean and ready
for them to visit.

Michelle Barnett, the caseworker for the Department who
prepared Katianne’s case plan, testified that it was her opinion
that Katianne had generally not followed through with the plan
the Department had set for her. Barnett testified that Katianne
had been “very good” in the area of remaining drug free. Nor
had she had any problem taking her psychotropic medication
“in quite some time.” Barnett believed that Katianne had, with
the exception of the flea incident, maintained the conditions of
her home up to the Department’s standards, and she did not find
any reports that the home was “supposedly in disarray” to be
of any concern. Katianne had remained in the same residence
with her two other children during the entire time Barnett was
on the case. Barnett recognized that Katianne had completed
the psychological and parenting assessment and had “partially”
completed the recommendations of her assessments.

340 Le

Barnett described the case plan goal of positive family activi-
ties as “kinda [sic] like a half complete,” explaining, “she
attempts to go to the park and . . . she would put a swimming
pool outside and try to get them out there in that way. However,
some of the visitations are very chaotic . . . .” While Katianne
had requested increased visitation, “with the chaos in the home,”
Barnett did not allow it. Visitation had been cut back to once a
week because of “a consistent amount of visitations being can-
celled, and to provide Xavier with the structure that he needs
in the foster home and at the daycare setting.” Barnett had told
Katianne once that if she could provide consistent visitation that
month, Barnett would increase it, “[aJnd [Katianne] was close,
but not quite.”

Barnett did not think that Katianne had successfully followed
the budget developed with Yount’s assistance. Moreover, she
noted that although Katianne had been continuously employed,
she had been employed at approximately 14 different jobs. Like
Yount, Barnett disapproved of the “luxury” items Katianne
had rented or purchased. Barnett also stated that Katianne’s
bank account was constantly overdrawn; that she could not
“do a savings account”; that Katianne’s family “is picking
up the slack, paying bills”; that the telephone had been shut
off and there was no cellular telephone; and that the van had
been repossessed.

As to the case plan’s goal of communication with the
Department, Barnett stated that Katianne was inconsistent. In
the beginning, Barnett explained, contact was “very good.”
Katianne had even told Barnett when would be good times to
do random urinalysis testing on the father because Katianne
was trying to help him stay sober. Contact had recently dimin-
ished, however.

Finally, Barnett testified that Katianne had not achieved the
goal of time management. Nor did she believe that Katianne
had completed the task of keeping people out of her home who
would be a risk to her children. Barnett explained that Katianne
still had some contact with Xavier’s father. Barnett admitted
that the only evidence of the father’s danger to the children was
Katianne’s report that he had on previous occasions punched and
kicked walls and that he had once threatened to kick Alita.

EvIDENCE OF XAVIER’S Best INTERESTS

Barnett admitted that she had told Katianne that it would be
difficult to terminate her parental rights because Katianne had
completed parts of her plan. As Barnett explained: “She is sober
and she is parenting two other kids in her home.” Still, Barnett
stated her opinion that termination of Katianne’s parental rights
was in Xavier’s best interests because:

We've already heard that Xavier can be fussy. [The foster
mother] has called me numerous times where he has been
screaming for hours at a time just because he is very smart,
he is very strong willed, and he wants to get what he wants.
And, I mean, I don’t know that anybody can handle that,
so there’s things in that regard. He’s difficult. [Katianne’s]
life is stressful. Things are not consistent in her home. The
other two children are not well managed at this point. They
need consistency and Kati[anne’s] time and I don’t feel that
she can handle three children with their needs.

Barnett explained that Xavier’s foster parents were unable to
adopt Xavier because of their ages. There were four prospective
adoptive placements for Xavier, one being an aunt and uncle on
the father’s side who lived in California with their three young
children. Xavier had met the aunt and uncle during one week-
end visit, and Barnett claimed that Xavier had bonded to them
because “he talks to them twice a month on the phone, points
to [the aunt] and calls her mommy, and can point to her in a
booklet as his mother, and get excited and talk to her on the
phone.” Xavier had not bonded with any of the other prospective
adoptive families. Barnett explained that after adoption, whether
Xavier had any contact with his biological siblings would be “up
to Katianne and whoever adopts him.”

Xavier’s foster mother testified Xavier was now a happy,
healthy 2-year-old with age-appropriate development. The foster
mother seemed to agree that he was “somewhat high mainte-
nance,” explaining:

You know, I guess if I had more small children, you know,
Xavier can be clingy, and when he is it’s really hard to get
him settled down, and if I had more little kids that I was
having to — you know, get everybody to bed and baths
on time and stuff, I think I would have a hard time getting

everybody’s needs met and keeping him calm. He wants to

be picked up. He wants attention.
The foster mother testified that Xavier usually behaved “just
fine” after his visits with Katianne, although on three occasions
in August and September 2005, Xavier acted out by hitting or
throwing toys after his visits. These episodes seem to correspond
to a period where Xavier was generally experiencing more tem-
per tantrums. The foster mother explained that the frequency
of Xavier’s temper tantrums had generally diminished since
that time.

Katianne testified that she had ended her relationship with
Xavier’s father and that he no longer lived in her home. She
still had some contact with him because of his relationship with
his children. Katianne stated that she wished to move back to
New Jersey, where her family and friends were, because she
would have a network of support there. She testified that she
was currently employed full time as a security guard and was
trying to complete some online college courses. Katianne stated
that although she had had séveral different jobs in the recent
past, she had lost many of them when they conflicted with her
children’s needs. In the last couple of months, she had worked
out an arrangement with another mother in her neighborhood
to take turns babysitting while the other was at work. Katianne
said that this arrangement was working out well and that she
trusted the other mother with her children.

Katianne described the routine she had established for her
girls, indicating that establishing a routine was something she
had learned as a result of the parenting course and counseling.
Katianne thought that the routine helped with the children’s
behavior. The routine included set mealtimes, snacks, naptime,
playtime while Katianne did household chores, and a bath and
bedtime routine which included television or stories.

Katianne explained that she believed it was in Xavier’s best
interests that her parental rights not be terminated:

I believe my son should be with his mother. . . . He still
recognizes me as mom. He still calls me mom. We walk
up and down the street in front of the house and he points
and says it’s mom’s house. Not just for the best interests
‘of him, but for the other children also. For anyone whose

[sic] ever had more than one child, and had to go to their

own child or take their children to another child’s funeral,

that’s how it will feel to my children. Not just me, but to

my other two daughters, because it’s not like they don’t

know them. It’s not like they don’t play together.
Katianne stated she is a single mother with no support system in
Fremont and that although she was not wealthy, she had always
met her children’s needs. They had a home to live in, beds and
bedding, food, and clothing. Katianne testified that she had
made mistakes in the past but that she was working to fix those
mistakes. Katianne noted that the uncle and aunt in California
never acknowledged their niece, Xavier’s sister, Kalila, on any
occasion, including birthdays or Christmas. She doubted they
would work to maintain a relationship between Xavier and the
girls. Katianne stated that there was a possibility that in transi-
tioning back to her home, she would take Xavier to a therapist,
explaining, “I think therapy is a positive thing.”

CLINICAL PARENTING EVALUATION

Pursuant to the case plan, Dr. Stephen Skulsky, a clinical
psychologist, conducted a psychological evaluation of Katianne
to determine her capacity to parent and conducted a parent
bonding assessment with Kalila and Xavier. Skulsky’s assess-
ment showed that Katianne enjoyed family interactions. She was
extroverted, had a strong interest in interpersonal relationships,
and had a good knowledge of socially expected and conven-
tional behaviors. She had good underlying empathic capacities.
Katianne was also assessed as having a broad range of intel-
lectual interests, “good reality testing,” and “a good capacity to
break situations apart and put them back together into a global
or overall picture of what is occurring.”

Skulsky concluded that Katianne was likely to be strongly
bonded to her children. Also, she was able to talk about appro-
priate discipline for the different ages of her children and
appropriate ways to show them affection, and was able to list
some favorite foods, favorite activities, and developmental lev-
els for all three of her children.

Skulsky’s diagnostic impression of Katianne was “of an
adjustment disorder with a mixture of upset feelings,’ which

344 Es

was connected to Xavier’s being taken from the home. Skulsky
described Katianne’s biggest fear as not getting Xavier back.
Katianne had told Skulsky that her happiest times in her life was
when all three children were together. Skulsky concluded that
“Tujnder most circumstances, when not too strongly emotion-
ally upset, [Katianne] is likely to be able to put her children’s
needs first... . When strongly emotionally stressed, she may be
briefly unable to make appropriate judgments in handling her
children. This constitutes a mild difficulty in [her] capacity to
adequately parent.”

In the bonding assessment, Skulsky stated that he observed
that Katianne talked and played with the children in an age-
appropriate manner, that she set appropriate verbal and behav-
ioral limits for the children, and that she demonstrated a good
capacity to be warm and engaging with the children. The chil-
dren warmed up to Katianne as well.

Skulsky summarized in his report that Katianne could take
care of and relate to her children in an appropriate manner.
Because of limitations in her ability to set firm and consistent
limits and make good judgments when too strongly stressed,
Skulsky recommended ongoing courses of psychotherapy
to further limit any concerns about difficulties in appropri-
ate parenting.

Skulsky’s testimony at the termination hearing clarified that
Katianne’s deficiencies could be adequately addressed by 6 to
18 months of therapy. He stated that they were “not the kind
of more severe pervasive problems that some parents would
have, where it would be years and years of therapy.” Because
by the time of the hearing Skulsky had not seen Katianne for
approximately a year, Skulsky could not opine on whether she
had adequately worked on her personality issues and underlying
emotional struggles since his assessment.

Skulsky could opine that Katianne was bonded to Xavier.
He could not opine on whether Xavier was deeply bonded
to Katianne because such an evaluation could be made only
through frequent observational visits, which he had not made.
Skulsky stated that if Xavier had not bonded to Katianne, but
had bonded to his foster family, then it would be difficult, after
18 months, to return to Katianne. It would, however, be equally

difficult for Xavier to leave his foster parents for an adoptive
family to whom he was not yet bonded.

KKATIANNE’S ONGOING COUNSELING

After being discharged from Lutheran Family Services,
Katianne sought the help of Cynthia Jane Cusick, a mental
health counselor and therapist. Cusick testified that she had been
counseling Katianne once a week for the past 6 months. Cusick
described Katianne’s primary issue as major chronic depression
with “financial family stressors and economic stressors.” Cusick
explained that Katianne had made all but two of her scheduled
appointments with her. One appointment was missed due to
work, and the other one had been scheduled the night before
the hearing, and had only been tentatively scheduled in case it
was needed.

Cusick described that Katianne was doing well with her
sobriety and that it was not a major issue. As to issues relating
to her depression, Cusick testified that Katianne was making
steady improvement in “baby steps.” It would require lifetime
intervention and treatment. Cusick believed that Katianne had
been doing well raising Xavier’s siblings. Cusick testified that
having an intimate relationship with Xavier’s father and letting
him live in her house were “greater stressor[s] than all of the
children put together.” However, Katianne had ended her rela-
tionship with Xavier’s father.

‘TERMINATION OF PARENTAL RIGHTS

After Xavier had been in foster care for 15 months, the
Department abandoned its reunification plan and sought termi-
nation of Katianne’s parental rights under § 43-292(6) and (7).
Subsection (6) allows for termination if such termination is in
the best interests of the child and reasonable efforts to preserve
and reunify the family have failed to correct the conditions lead-
ing to the determination that the juvenile was as described by
§ 43-247(3)(a). Subsection (7) provides for termination if it is in
the best interests of the child and the child has been in out-of-
home placement for 15 or more of the most recent 22 months.
Xavier’s father voluntarily relinquished his parental rights at the
beginning of the proceedings.

346 a

The State and the guardian ad litem argued for termination of
Katianne’s parental rights because Xavier deserved permanency
and Katianne had failed to sufficiently follow her case plan. Both
pointed out that Katianne could not budget her finances and had
trouble keeping the same job. Both pointed out that Katianne’s
visits with Xavier were only once a week and that they had been
reduced to once a week because she had missed visits.

The juvenile court specifically found that the Department
had failed to prove that, after reasonable efforts to preserve and
reunify the family, Katianne had failed to correct the conditions
leading to the § 43-247(3)(a) adjudication. Thus, it refused
to terminate under § 43-292(6). Instead, the court terminated
Katianne’s parental rights under § 43-292(7). The court’s order
did not specify the basis for its determination that termination
was in Xavier’s best interests.

APPEAL TO CouRT OF APPEALS

In a memorandum opinion filed on February 5, 2007, the
Court of Appeals affirmed the termination of Katianne’s parental
rights. The court stated that it was undisputed that Xavier had
been in out-of-home placement for 15 or more of the most recent
22 months and that children should not have to wait indefinitely
for indefinite parental maturity. The Court of Appeals concluded
that termination under § 43-292(7) was in Xavier’s best interests,
pointing out Katianne’s deficiencies in meeting her case plan’s
goal of budgeting and stability in employment. Apparently in
teference to Katianne’s being discharged for late cancels from
Lutheran Family Services, the Court of Appeals also noted that
Katianne had not been consistent in attending therapy for her
mental health needs. The Court of Appeals stated that Katianne
had been inconsistent with visitation and had difficulty man-
aging her household with the two other children. Finally, the
Court of Appeals stated that Xavier’s father was still present in
Katianne’s life and that he was a negative influence.

We granted Katianne’s petition for further review.

ASSIGNMENTS OF ERROR
Katianne asserts that the juvenile court erred in (1) determin-
ing that her parental rights should be terminated pursuant to
§ 43-292(7), (2) determining that it would be in Xavier’s best

interests to terminate Katianne’s parental rights, (3) refusing to
declare § 43-292(7) unconstitutional as violative of Katianne’s
fundamental substantive due process rights under the 14th
Amendment, (4) not requiring the Department to prove noncom-
pliance with a reasonably related rehabilitation plan prior to ter-
mination, and (5) not determining that the Department failed to
prove by clear and convincing evidence the grounds for termi-
nation. The State cross-appeals, asserting that the juvenile court
erred in failing to find that the State had proved that Katianne’s
parental rights should be terminated under § 43-292(6).

STANDARD OF REVIEW
Hl Juvenile cases are reviewed de novo on the record, and an
appellate court is required to reach a conclusion independent of
the juvenile court’s findings.'

ANALYSIS

Hl Under § 43-292, in order to terminate parental rights, the
State must prove, by clear and convincing evidence, that one or
more of the statutory grounds listed in this section have been
satisfied and that the termination is in the child’s best interests.”
Katianne’s parental rights were terminated under § 43-292(7).
This court upheld the constitutionality of § 43-292(7) in In re
Interest of Ty M. & Devon M.,3 and we do not revisit that hold-
ing here. However, we do find that the juvenile court erred in
finding termination to be in Xavier’s best interests. Accordingly,
we reverse.

The proper starting point for legal analysis when the State
involves itself in family relations is always the fundamental con-
stitutional rights of a parent.* The interest of parents in the care,
custody, and control of their children is perhaps the oldest of the
fundamental liberty interests recognized by the U.S. Supreme

1 In re Interest of Jagger L., 270 Neb. 828, 708 N.W.2d 802 (2006).

2 See id.

3 In re Interest of Ty M. & Devon M., 265 Neb. 150, 655 N.W.2d 672
(2003).

4 See In re Adoption of Victor A., 157 Md. App. 412, 852 A.2d 976 (2004).

348 a

Court.> “When the State initiates a parental rights termination
proceeding, it seeks not merely to infringe that fundamental
liberty interest, but to end it. ‘If the State prevails, it will have
worked a unique kind of deprivation.’ ”¢

I That being so, the U.S. Supreme Court has been clear
that the Due Process Clause of the U.S. Constitution would be
offended “‘[iJf a State were to attempt to force the breakup of
a natural family, over the objections of the parents and their
children, without some showing of unfitness . . . .’”” “{U]ntil the
State proves parental unfitness, the child and his parents share a
vital interest in preventing erroneous termination of their natural
relationship.’

We have likewise said repeatedly that “[a] court may not
properly deprive a parent of the custody of a minor child unless
it is affirmatively shown that such parent is unfit to perform the
duties imposed by the relationship, or has forfeited that right”?
“<TN]ature demands that the right [to custody of the child] shall
be in the parent, unless the parent be affirmatively unfit.”

HMM The fact that a child has been placed outside the home
for 15 or more of the most recent 22 months does not dem-
onstrate parental unfitness. Instead, as we explained in In re
Interest of Ty M. & Devon M.," the placement of a child outside
the home for 15 or more of the most recent 22 months under
§ 43-292(7) “merely provides a guideline” for what would be a

5 Troxel v. Granville, 530 U.S. 57, 120 8. Ct. 2054, 147 L. Ed. 2d 49
(2000).

6 Santosky v. Kramer, 455 U.S. 745, 759, 102 S. Ct. 1388, 71 L. Bd. 2d 599
(1982).

7 Quilloin v. Walcott, 434 U.S. 246, 255, 98 S. Ct. 549, 54 L. Ed. 2d 511
(1978).

8 Santosky v. Kramer, supra note 6, 455 U.S. at 760.

° Gomez v. Savage, 254 Neb. 836, 848, 580 N.W.2d 523, 533 (1998). See,
also, e.g., In re Guardianship of D.J., 268 Neb. 239, 682 N.W.2d 238
(2004); In re Interest of Amber G. et al., 250 Neb. 973, 554 N.W.2d 142
(1996).

© In re Guardianship of D.J., supra note 9, 268 Neb. at 247, 682 N.W.2d at
245.

" In re Interest of Ty M. & Devon M., supra note 3.

Se .
reasonable time for parents to rehabilitate themselves to a mini-
mum level of fitness.!* As stated by the Supreme Judicial Court
of Massachusetts,'* regardless of whether the child has been in
foster care for 15 out of the last 22 months, the State “always
bears the burden of proving, by clear and convincing evidence,
that a child is still in need of care and protection.” This bur-
den, the court explained, “necessarily involves showing that the
parent is still unfit and the child’s best interests are served by
remaining removed from parental custody.”

HM Section 43-292 nowhere expressly uses the term “unfit-
ness,” but that concept is encompassed by the fault and neglect
described in subsections (1) through (6), where applicable, and,
for all subsections, by a determination of the child’s best inter-
ests. Although the name of the “‘best interest of the child’”
standard may invite a different “‘intuitive’” understanding,
“[t]he standard does not require simply that a determination
be made that one environment or set of circumstances is supe-
tior to another.”!6 Rather, as we have explained, “the ‘“best
interests” standard is subject to the overriding recognition that
the “relationship between parent and child is constitutionally
protected.”’”!” There is a “rebuttable presumption that the best
interests of a child are served by reuniting the child with his or
her parent.”!8 Based on the idea that “fit parents act in the best
interests of their children,” this presumption is overcome only
when the parent has been proved unfit.

In this case, it is clear that the State has failed to consider
Katianne’s commanding interests and has failed to rebut the

12 Id, at 174-75, 655 N.W.2d at 692.

3 In re Erin, 443 Mass. 567, 823 N.B.2d 356 (2005).

M Id. at 568, 823 NE.2d at 359.

15 Iq, at 572, 823 N.E.2d at 361.

'S In re Yve S., 373 Md. 551, 565, 819 A.2d 1030, 1038 (2003).

" In re Guardianship of D.J., supra note 9, 268 Neb. at 246-47, 682 N.W.2d
at 245.

8 Id, at 244, 682 N.W.2d at 243.

19 Tyoxel v. Granville, supra note 5, 530 U.S. at 68. See, also, Parham v. J. R.,
442 U.S. 584, 99 S, Ct. 2493, 61 L. Ed. 2d 101 (1979).

350 Es

presumption that it is in Xavier’s best interests to reunite with
Katianne. The State admits Katianne is an adequate parent to
her other two children. It has failed to show any reason why
Katianne would not be an adequate parent to Xavier as well.

Xavier’s special medical needs, which were the sole basis of
his adjudication, are no longer present. The record shows that
Katianne completed a parenting course and has improved in her
parenting skills. She is employed. She has continued her medi-
cation and has stayed sober. She has diminished her contact with
Xavier’s father, who apparently had a negative influence on her
life. She has attempted to maintain a bond with Xavier, attend-
ing most of her scheduled visitations.

Skulsky’s parenting evaluation determined that Katianne was
a capable parent so long as ongoing therapy addressed some of
her mental health issues. Katianne is attending ongoing therapy
and making progress in her therapy goals. There is no evidence
that Katianne could not or would not provide for Xavier’s basic
needs. There is no evidence that Xavier would be subjected to
abuse or neglect.

The fact that Katianne is deficient in her time management,
budgeting, organization, and implementation of the “timeout”
technique does not make her an unfit parent. “‘{T]he law does
not require perfection of a parent.’””° Rather,

so long as a parent adequately cares for his or her chil-
dren (i. e., is fit), there will normally be no reason for
the State to inject itself into the private realm of the fam-
ily to further question the ability of that parent to make
the best decisions concerning the rearing of that parent’s
children.”!
We are most troubled by the Department’s argument that
Katianne can handle two, but not three children, inviting the
arbitrary removal of one. Nor does the fact that the State con-
siders certain prospective adoptive parents “better” overcome
the constitutionally required presumption that reuniting with
Katianne is best. ““The court has never deprived a parent of the

2 In re Interest of Aaron D., 269 Neb. 249, 265, 691 N.W.2d 164, 176
(2005).

2 Troxel v. Granville, supra note 5, 530 U.S. at 68-69.

custody of a child merely because on financial or other grounds
a stranger might better provide.’ ””

Much concern has been expressed over Xavier’s need for
permanency and his extended stay in foster care. The record
suggests that Xavier can find permanency with his natural
mother, to whom he should have been returned as soon as it was
safe to do so. There is little question that the alleged deficien-
cies in Katianne’s parenting would not have justified Xavier’s
removal from the family home had they been the basis upon
which the Department had sought adjudication in the first place.
They should not have served to keep him out of the home once
the reasons for his removal had been resolved; neither should
a child be held hostage to compel a parent’s compliance with
a case plan when reunification with the parent will no longer
endanger the child.

Because termination of Katianne’s parental rights was not
proved to be in Xavier’s best interests, her parental rights could
not be terminated under either § 43-292(6) or (7). Therefore, we
need not consider the State’s cross-appeal.

CONCLUSION
Termination of parental rights is permissible only in the
absence of any reasonable alternative and as the last resort to
dispose of an action brought pursuant to the Nebraska Juvenile
Code.* The State has failed to prove that termination is in
Xavier’s best interests because it has failed to prove that Katianne
is unfit. We, therefore, reverse the judgment of the Court of
Appeals, and remand the cause to that court with directions to

reverse the judgment of the juvenile court.

REVERSED AND REMANDED WITH DIRECTIONS.

Connoiy, J., participating on briefs.

” In re Guardianship of D.J., supra note 9, 268 Neb. at 247, 682 N.W.2d at
245.

%3 See, id.; In re Interest of Kantril P. & Chenelle P., 257 Neb. 450, 598
N.W.2d 729 (1999); In re Interest of Crystal C., 12 Neb. App. 458, 676
N.W.2d 378 (2004).

RicHarD A. WADKINS, APPELLANT, V. FERNANDO Lecuona III,
COMMISSIONER OF LABOR, STATE OF NEBRASKA, APPELLEE.
740 N.W.2d 34

Filed October 19, 2007. No. S-06-1008.

Richard H. Hoch, of Hoch, Funke & Partsch, for appellant.

John H. Albin, Thomas A. Ukinski, and W. Russell Barger, of
Nebraska Workforce Development, Department of Labor, Office
of Legal Counsel and Administrative Affairs, for appellee.

Heavican, C.J., Wricut, GERRARD, STEPHAN, McCormack, and
Mitter-Lerman, JJ.

GERRARD, J.

Richard A. Wadkins appeals from an order of the district
court, affirming a determination of the Nebraska Appeal Tribunal
that Wadkins had received unemployment insurance benefits to
which he was not entitled. Wadkins had been laid off and was
not performing services for his employer while he was receiving
unemployment insurance benefits. But Wadkins was receiving
money from his employer for compensatory time (comp time)
Wadkins had accrued and for commissions on sales Wadkins
had made before he had been laid off. The question presented in
this appeal is whether the payments Wadkins received from his
employer disqualified him from receiving unemployment insur-
ance benefits under Nebraska’s Employment Security Law.! We
conclude they did not, and reverse the decision of the district
court affirming the appeal tribunal’s decision ordering Wadkins
to repay the benefits he had received.

BACKGROUND

Wadkins was employed by Americana Shopping Carts, Inc.
(Americana), a company that, by its own description, “main-
tains a nationwide fleet of mobile maintenance units that pro-
vide cleaning and repair of shopping carts” and other retail
sales equipment. Wadkins was a maintenance supervisor, whose
duties involved traveling to Americana’s customers to repair
their shopping carts. While Wadkins was visiting those custom-
ers, he also sold them carts and cart-related products such as

' Neb. Rev, Stat. §§ 48-601 to 48-671 (Reissue 2004).

354 a

spare parts and seatbelts. Wadkins earned a 5-percent commis-
sion on such sales.

The “Job Description and Requirements” for Wadkins’ posi-
tion explained that his salary was based on a 260-day work year
and that comp time was awarded on a one-to-one basis for each
day an employee worked over 260 days. Wadkins’ regular pay,
not including commissions, was $480.77 per week.

Wadkins was laid off because of a “temporary work slow
down,” effective December 11, 2004. Wadkins filed a claim for
unemployment insurance benefits. During the time period at
issue, between January 22 and March 5, 2005, Wadkins was paid
unemployment insurance benefits of $288 per week. Wadkins
was also being paid by Americana during that period. Americana
paid Wadkins $480.77 per week except for the weeks of January
22, during which Wadkins was paid $508.55; January 29, dur-
ing which Wadkins was paid $537.21; and February 12, during
which Wadkins was paid $288.48. Wadkins was apparently
recalled to work for Americana on March 8.

Wadkins testified that the money he was paid by Americana
after he was laid off was money earned before he was laid
off, by working Saturdays and Sundays during the prior year.
Wadkins described that time as comp time, and explained that
when he was off work, the company paid him for his comp time
on a weekly basis. Wadkins asserted that he had not worked or
earned wages while he was receiving unemployment insurance
benefits. Wadkins also explained that commissions on sales
orders were not paid immediately, but were paid when the sales
orders were shipped. Wadkins said that Americana’s payments
for the weeks ending January 22 and January 29, 2005, included
some of his sales commissions.

Following a wage audit, the Department of Labor (the
Department) concluded that Wadkins’ payments from Americana
were unreported earnings and that Wadkins had been overpaid
$2,016 in unemployment insurance benefits. Wadkins appealed,
and the Nebraska Appeal Tribunal affirmed the judgment. The
appeal tribunal accepted Wadkins’ explanation of the pay-
ments, but determined that “[t]he amounts were at the time
[Wadkins] received them ‘determinable’ and{/Jor vacation pay,”

and therefore disqualifying compensation that exceeded his
weekly benefit amount.”

Wadkins appealed the appeal tribunal’s determination, pur-
suant to the Administrative Procedure Act The district court
concluded that comp time payments were considered “earn-
ings” when they became “payable” and found that Wadkins’
comp time only became “payable” on a day-to-day basis dur-
ing his layoff. The district court affirmed the decision of the
appeal tribunal.

ASSIGNMENT OF ERROR
Wadkins assigns that the district court erred in finding that
the compensation he received from Americana disqualified him
from receiving unemployment insurance benefits.

STANDARD OF REVIEW

Hl A judgment or final order rendered by a district court in
a judicial review pursuant to the Administrative Procedure Act
may be reversed, vacated, or modified by an appellate court for
errors appearing on the record. When reviewing an order of a
district court under the Administrative Procedure Act for errors
appearing on the record, the inquiry is whether the decision
conforms to the law, is supported by competent evidence, and is
neither arbitrary, capricious, nor unreasonable.*

Hf Statutory interpretation presents a question of law, in con-
nection with which an appellate court has an obligation to reach
an independent conclusion irrespective of the decision made by
the court below.

ANALYSIS
The issue in this case is whether Wadkins was, despite
receiving compensation from Americana after being laid off,

? See § 48-602(27).

3 Neb. Rev. Stat. §§ 84-901 to 84-920 (Reissue 1999 & Cum. Supp. 2006).
See § 48-640.

* Chase 3000, Inc. v. Nebraska Pub. Serv. Comm., 273 Neb. 133, 728 N.W.2d
560 (2007).

5 Ottaco Acceptance, Inc. v. Larkin, 273 Neb. 765, 733 N.W.2d 539 (2007).

356 be

“unemployed” within the meaning of the Employment Security
Law. The Employment Security Law defines “unemployed” as
an individual during any week in which the individual per-
forms no service and with respect to which no wages are
payable to the individual or any week of less than full-time
work if the wages payable with respect to such week are
less than the individual’s weekly benefit amount, but shall
not include any individual on a leave of absence or on paid
vacation leave.®
“Paid vacation leave” is a period of time while employed or
following separation from employment in which the individual
renders no services to the employer but is entitled to receive
vacation pay equal to or exceeding his or her base weekly wage.’
And where a collective bargaining agreement does not allocate
vacation pay to a specified period of time during a “period
of temporary layoff or plant shutdown,” the payment by the
employer “will be deemed to be wages . . . in the week or weeks
the vacation is actually taken.”*

Hl We have explained that based upon the plain and ordinary
meaning of the first definition contained in § 48-602(27), two
elements must be satisfied to demonstrate unemployment: First,
the individual must not perform any services for the relevant
time period; and second, no wages may be payable with respect
to that time period.’ There is no dispute in this case that Wadkins
performed no services for Americana after he was laid off.
Our inquiry here focuses on whether Wadkins received wages
payable with respect to the time after the layoff and whether
Wadkins was on “paid vacation leave” within the meaning of the
Employment Security Law.

HM On appeal, the parties do not dispute the underlying
facts. Given those facts, as a matter of law, Wadkins’ comp time
payments were not “payable with respect” to the weeks in which

6 § 48-602(27).

7 § 48-602(18).

8 See § 48-602(27).

9 Lecuona v. McCord, 270 Neb. 213, 699 N.W.2d 403 (2005); Vlasic Foods

International v. Lecuona, 260 Neb. 397, 618 N.W.2d 403 (2000); Board of
Regents v. Pinzon, 254 Neb. 145, 575 N.W.2d 365 (1998).

the payments were made. In Board of Regents v. Pinzon, we
explained that in making such determinations, the test is not in
what week the remuneration is received but in what week it is
earned or to which it may reasonably be considered to apply.
Thus, in Pinzon, we concluded that a university professor whose
contract had not been renewed was entitled to unemployment
compensation at the conclusion of the 9-month academic term,
even though his salary for the year was paid on a 12-month
basis." Generally speaking, wages are tied to the week of
work and not to the week in which they are paid.’? In Pinzon,
the claimant’s remaining 3 months of salary were, essentially,
deferred wages “payable” when they were earned during the
academic year, not when they were received.

The same principles apply here. It is not disputed that Wadkins
actually worked the days for which, after the layoff, he was paid.
The payments he received are properly allocated to the weeks
in which they were earned, before the layoff, not when the pay-
ments were received.

The Department contends that Pinzon is distinguishable in a
number of ways. Most pertinently, the Department argues that
Wadkins’ comp time payments are the equivalent of “paid vaca-
tion leave” within the meaning of the specific statutory exclu-
sion of paid vacation leave from “unemployment.”"*

What little authority there is on the subject of comp time is
divided. In Transportation Dept. v. LIRC," the Court of Appeals
of Wisconsin found that compensatory time off was “similar
to a paid vacation” and was included within the definition of
the term “wages.” That disqualified the claimants from receiv-
ing unemployment insurance benefits, according to the court,

1© Pinzon, supra note 9.

" See id.

? Id.

8 See id.

 § 48-602(27).

'S Transportation Dept. v. LIRC, 122 Wis. 2d 358, 360, 361 N.W.2d 722, 723-
24 (Wis. App. 1984).

358 be

because if the claimants received “wages” while they were not
working, they were not unemployed under Wisconsin law.'*

The Supreme Court of New York, Appellate Division, reached
a contrary conclusion in Matter of Giandomenico,” in which
unemployment insurance benefits had been extended to a driver
of an ice cream truck who was laid off based on “traded time.”
Under the employment agreement, a driver would not be paid
overtime when it was earned. Instead, the employer would credit
the overtime hours to the driver. When business was slack, the
least senior drivers would be laid off, but compensated from the
fund created by the banked overtime.'®

The New York appellate court concluded that the driver was
unemployed under New York law and entitled to benefits. The
court explained:

The record conclusively demonstrates that the claimant
was laid off . . . . His employer concededly had no work
for him for a period of seven weeks. Of critical importance
is the fact that the money he received from the employer
was not wages or remuneration or vacation pay but was his
own previously earned money which had been held by the
employer for an extended period of time. In short, he had
no employment for seven weeks and no remuneration from
his employer, and the extension of certain fringe benefits
did not change his situation.”

We find the New York court’s understanding of comp time
to be more persuasive, and more consistent with principles of
Nebraska law. The Wisconsin court’s analysis was focused on
whether the claimant’s comp time earnings were “wages” under
Wisconsin law, and not the time period to which the wages
should be applied. As previously explained, the issue under
Nebraska law is not whether the payments Wadkins received
were “wages”—they were—but with respect to what week those
payments are considered “payable.” And under Nebraska law,

6 See id.

1” Matter of Giandomenico, 77 A.D.2d 294, 295, 433 N.Y.S.2d 267, 268
(1980).

18 See id.

19 Jd. at 295-96, 433 N.Y.S.2d at 268.

for the same reasons articulated by the New York court, the
payments Wadkins received were for services rendered before
he was laid off and were earned and “payable” when Wadkins
was working.

HB We specifically reject the Department’s assertion that
comp time, at least under the facts of this case, is “vacation pay”
under the Employment Security Law.” Vacation pay is gener-
ally regarded, not as a gratuity or gift, but as additional wages
for services performed.”! It is not in the nature of compensation
for the calendar days it covers—it is more like a contracted-
for bonus for a whole year’s work.” By contrast, in this case,
Wadkins was being separately and specifically paid for days he
had already worked. A “vacation” is also understood to be a
respite from active duty, during which activity or work is sus-
pended, purposed for rest, relaxation, and personal pursuits.”
While Wadkins was not working after he was laid off, the days
for which he was being paid—the Saturdays and Sundays he
had worked—were not “vacation” days within any reasonable
understanding of the term.

HN «We have held that the Employment Security Law
is to be liberally construed to accomplish its beneficent pur-
pose of paying benefits to involuntarily unemployed workers.”
And the legislative history of the vacation pay exclusion indi-
cates that the Legislature was concerned with circumstances in
which unemployment insurance benefits were being awarded
to employees who were on vacation and receiving vacation
pay benefits in the regular course of business and who were

» See § 48-602(18).

2! See, In re Wil-Low Cafeterias, 111 F2d 429 (2d Cir. 1940); Suastez v.
Plastic Dress-Up Co., 31 Cal. 3d 774, 647 P.2d 122, 183 Cal. Rptr. 846
(1982).

Mathewson v. Westinghouse Elec. Corp., 394 Pa. 518, 147 A.2d 409
(1959).

% See, City of Dallas v. Massingill, 737 S.W.2d 334 (Tex. App. 1987); Mtr: of
Walker (Reader’s Digest), 28 A.D.2d 256, 284 N.Y.S.2d 584 (1967).

2% See Dillard Dept. Stores v. Polinsky, 247 Neb. 821, 530 N.W.2d 637
(1995).

360 —

expected to return to work at the end of their vacation leaves.
In that context, we are not inclined to construe “vacation pay”
to include circumstances in which an individual is admittedly
being paid for time he actually worked. Instead, like Pinzon, the
payments in this case are more akin to deferred compensation,
generally understood to be payable with respect to the time it is
earned, not the time it is paid.”

The Department also suggests that Pinzon is distinguishable
because that case has been limited to circumstances in which the
claimant’s employment relationship has been severed.” Here,
the Department asserts that Wadkins “was still employed by
Americana, and still considered to be an employee, although
there had been a ‘temporary work slow down.’””8

HE “We recognize that some courts have distinguished,
for various purposes, between a “layoff” and a “discharge” as
the terms are commonly understood. The term “layoff” can,
depending on the circumstances, denote either a permanent
or a temporary termination of employment, although it often
implies a temporary cessation of employment with the possibil-
ity of recall.” But there is little question that a “layoff” involves
termination of employment at the employer’s will®° It differs
from a complete termination only in degree.3! While Wadkins’
layoff was temporary, and he was recalled to Americana after 3
months, there is no indication in the record that he voluntarily
ceased work. In the absence of a specific statutory provision,”

25 See, e.g., Introducer’s Statement of Intent, L.B. 608, Business and Labor
Committee, 96th Leg., Ist Sess. (Feb. 1, 1999).

26 See, Pinzon, supra note 9. See, also, Buse v. Mississippi Emp. Sec. Com’n,
377 So. 2d 600 (Miss. 1979); Erie Ins. Gr. v. Unemployment Comp. Bd., 654
A.2d 105 (Pa. Commw. 1995).

27 See Vlasic Foods International, supra note 9.

28 Brief for appellee at 4.

2° See Mcllravy v. Kerr-McGee Coal Corp., 204 F.3d 1031 (10th Cir. 2000).
3° Sanders v. Donovan, 786 F.2d 920 (9th Cir. 1986).

3! See State ex rel. Ausburn v. Seattle, 190 Wash. 222, 67 P.2d 913 (1937).

% See, e.g., § 48-628(8) (generally disqualifying employees of educational
institutions who have “reasonable assurance” of reemployment in subse-
quent academic terms); § 48-628(9) (disqualifying professional athletes

the possibility of recall to work is not pertinent, so long as no
services are performed for, nor wages payable with respect to,
the relevant time period.* A “layoff,” despite the possibility of
recall, is considered to be involuntary “unemployment” within
the meaning of unemployment insurance benefit laws.**

The Department also asserts that under the Social Security
Act, the “period” during which wages are paid refers to the
financial quarter or calendar year during which the employer
should report the wages,** and notes that Americana reported
Wadkins’ comp time wages when they were paid, after Wadkins
was laid off. But when wages are reportable for Social Security
purposes does not define the period with respect to which they
are “payable” within the meaning of Nebraska’s Employment
Security Law.” That, as we have already explained, is estab-
lished by when the wages were earned, not when they were actu-
ally paid or reported by the employer for tax purposes.*

Finally, we note that our decision is based solely on the
appropriate attribution of Wadkins’ comp time payments, and we
do not consider the money Wadkins received for sales commis-
sions. Commissions are included in the definition of “wages,”?
but regardless of when the commissions were “payable,” the
amount did not exceed one-half of Wadkins’ weekly benefit
amount, and would not have affected Wadkins’ eligibility for
his full weekly benefit amount.” Therefore, our conclusion with
respect to Wadkins’ comp time is dispositive of this appeal, and
we need not consider his commissions.

during off-season who have “reasonable assurance” of reemployment in
following season).

3 See § 48-602(27).

34 See GMC v Erves, 399 Mich. 241, 249 N.W.2d 41 (1976). Cf. Goodyear
Tire & Rubber Co. v. Employment Security Board of Review, 205 Kan. 279,
469 P.2d 263 (1970).

% 42 U.S.C. § 301 et seq. (2000 & Supp. IV 2004).
36 § 405(€)(1)).

37 See § 48-602(27).

38 See Pinzon, supra note 9.

% See § 48-602(29).

# See § 48-625(1). See, also, McCord, supra note 9.

362 Le

CONCLUSION

The payments Wadkins received after being laid off were
wages for comp time Wadkins had earned by working extra days
before he was laid off, and were “payable” within the meaning
of the Employment Security Law with respect to the weeks they
were earned, not the weeks during which they were paid. The
payments for Wadkins’ comp time were deferred compensation
for time Wadkins had actually worked and were not “vacation
pay” within the meaning of the Employment Security Law.

The district court erred in concluding that Wadkins had been
overpaid. The judgment of the district court is reversed, and the
cause is remanded to the district court with directions to reverse
the determination of the appeals tribunal affirming the decision
of the Department.

REVERSED AND REMANDED WITH DIRECTIONS.

Connolly, J., participating on briefs.

Joun Davis, APPELLEE AND CROSS-APPELLANT, V. CRETE CARRIER
CorPORATION AND TRANSPORTATION CLAIMS, INC., ITS WORKERS’
COMPENSATION INSURER, APPELLANTS AND CROSS-APPELLEES.
740 N.W.2d 598

Filed October 26, 2007. No. S-05-1328.

Jill Gradwohl Schroeder, of Baylor, Evnen, Curtiss, Grimit &
Witt, L.L.P., for appellant.

Raymond P. Atwood, Jr., of Atwood, Holsten & Brown, P.C.,
L.L.O., for appellees.

Wricut, CoNNoLLy, GERRARD, STEPHAN, McCormack, and
Miier-Lerman, JJ.

McCormack, J.
NATURE OF CASE

John Davis filed a motion in the Nebraska Workers’
Compensation Court against Crete Carrier Corporation and
its workers’ compensation insurer, Transportation Claims, Inc.
(collectively Crete Carrier). Davis sought to assess waiting-
time penalties, interest, and attorney fees pursuant to Neb.
Rev. Stat. § 48-125 (Reissue 2004). Davis alleged that Crete
Carrier unilaterally stopped paying temporary total disability
benefits awarded under a February 2, 1993, award on rehearing.
Davis asserted entitlement to ongoing temporary total disability
benefits from the time his temporary total disability benefits
were stopped until the hearing on the motion, or at least when
he filed the motion. The single judge denied Davis’ motion.
Davis appealed and Crete Carrier cross-appealed to the com-
pensation court three-judge review panel, which reversed. The
review panel held, citing /TT Hartford v. Rodriguez,' Starks v.
Cornhusker Packing Co., and Hagelstein v. Swift-Eckrich, that
there must be a hearing to terminate benefits and that benefits
may not be summarily terminated, as was done in this case.

' ITT Hartford v. Rodriguez, 249 Neb. 445, 543 N.W.2d 740 (1996).
2 Starks v. Cornhusker Packing Co., 254 Neb. 30, 573 N.W.2d 757 (1998).
3 Hagelstein v. Swift-Eckrich, 261 Neb. 305, 622 N.W.2d 663 (2001).

364 Le

Crete Carrier appealed to the Nebraska Court of Appeals, which
affirmed in part, and in part reversed. The Court of Appeals
held that the November 1993 order, based upon the stipulation
of the parties, modified the duration of the prior award and that,
therefore, no specific application was necessary because the
award was modified by agreement of the parties as set forth in
Neb. Rev. Stat. § 48-141 (Reissue 2004). Davis now seeks fur-
ther review from this court.

BACKGROUND

Davis sustained a compensable back injury on March 26, 1989,
while employed by Crete Carrier Corporation. On February 2,
1993, after other proceedings not relevant to the present appeal,
the review panel entered an award on rehearing. With regard to
disability, the review panel determined in paragraph II of the
award as follows:

As a result of said accident and injury [Davis] incurred
medical and hospital expense [sic] and was temporarily
totally disabled from and including March 31, 1989 to and
including April 5, 1991, a period of 105-1/7 weeks, and
thereafter sustained a 35 percent permanent partial dis-
ability to the body as a whole from and including April 6,
1991 to and including June 14, 1991, a period of 10 weeks
and thereafter was again temporarily totally disabled from
and including June 15, 1991 to the date of this rehearing
on September 28, 1992, is still temporarily totally disabled
and will remain temporarily totally disabled for an indefi-
nite future period of time.

In paragraph III of the award, the review panel stated
in pertinent part, “When [Davis’] total disability ceases, he
shall be entitled to the statutory amounts of compensation for
any residual permanent partial disability due to this accident
and injury.”

In paragraph IX of the award, the review panel stated, “[Davis]
is still entitled to vocational rehabilitation services at such time
as he is able to participate in said services. If the parties are
unable to eventually agree on the nature and/or extent of said

* Davis v. Crete Carrier Corp., 15 Neb. App. 241, 725 N.W.2d 562 (2006).

vocational rehabilitation services, either party may request a
hearing on this issue.” And in paragraph XII of the award, the
review panel stated, “When [Davis’] total disability ceases if
thereafter the parties cannot agree on the extent of [Davis’] dis-
ability, if any, then a further hearing may be had herein on the
application of either party.”

On November 23, 1993, one of Davis’ treating physicians
opined that Davis had reached maximum medical improvement
and had a 25-percent medical impairment rating of the body
as a whole. On approximately the same date, the single judge
entered an order stating that “[p]ursuant to the stipulation of
[Davis] and [Crete Carrier], received November 18, 1993, [Crete
Carrier] is hereby ordered to pay to [Davis] temporary disability
compensation while [Davis] is undergoing vocational rehabilita-
tion and maintaining satisfactory progress in the plan of which
the stipulation is a part.” The parties’ actual stipulation is not
contained in the record before this court.

The record shows that Davis participated in a training pro-
gram at a motorcycle mechanics’ institute in Phoenix, Arizona,
from December 13, 1993, through October 28, 1994. On
October 29, Crete Carrier began paying Davis permanent par-
tial disability benefits. On December 29, 1994, after paying 300
weeks of benefits, Crete Carrier stopped all disability payments
to Davis. This cessation of benefits was done without a hear-
ing before the compensation court. Neither Crete Carrier nor
Davis filed a petition to modify the February 2, 1993, award
on rehearing.

On October 2, 2003, 9 years after payments ceased, Davis
filed a motion seeking an order to assess waiting-time penalties,
interest, and attorney fees pursuant to § 48-125. Davis alleged
that on February 2, 1993, he received a running award of tem-
porary total disability benefits, and that in 1994, Crete Carrier
unilaterally stopped paying such benefits to him. Davis alleged
that Crete Carrier was in arrears and liable to him for such
delinquent benefits from the date of termination of payment to
the date of the hearing on his motion. Davis further alleged that
there was no reasonable controversy regarding Crete Carrier’s
liability to him and that Crete Carrier was, therefore, also liable
to him for waiting-time penalties, interest, and attorney fees

366 Es

for all delinquent payments due. Davis asked the single judge
to sustain his motion, determine the delinquencies of Crete
Carrier, and order Crete Carrier to pay waiting-time penalties,
interest, and attorney fees.

On May 5, 2005, the single judge entered an order overrul-
ing Davis’ motion. In its order, the single judge stated that it is
significant that the February 1993 award on rehearing provided
that Davis was temporarily totally disabled “‘to the date of this
rehearing on September 28, 1992, is still temporarily totally dis-
abled and will remain temporarily totally disabled for an indefi-
nite future period of time.’” The single judge found that when
Davis reached maximum medical improvement as established
by a treating physician on November 23, 1993, Davis was no
longer temporarily totally disabled. At that point, he became per-
manently disabled, and the extent and nature of that permanent
disability would be an issue to be decided by the compensation
court, if necessary. The single judge found that the November 18
order entered pursuant to a stipulation by the parties did nothing
to change the analysis set forth above except for continuing tem-
porary disability payments until Davis finished the agreed-upon
and court-ordered vocational retraining.

Davis argued to the single judge that under Sheldon-
Zimbelman v. Bryan Memorial Hosp.* and Starks,° it is required
that Crete Carrier file an application to modify the award on
rehearing before terminating benefits. The single judge found,
however, that those cases dealt with awards of permanent dis-
ability, not temporary disability, and did not apply. The single
judge stated:

Such a result would leave this Court subjected to hun-
dreds, if not thousands, of potential modification actions
which would need to be filed before various plaintiffs
attained maximum medical improvement in order to
change the benefit amounts on the date of maximum medi-
cal improvement. Such an interpretation is simply not a
feasible interpretation of Sheldon-[Z]imbelman and Starks,

5 Sheldon-Zimbelman v. Bryan Memorial Hosp., 258 Neb. 568, 604 N.W.2d
396 (2000).
5 Starks v, Cornhusker Packing Co., supra note 2.

supra[,] and has never been applied by this Court for run-
ning awards of temporary total disability.
The single judge concluded that when a running award of
temporary total disability is entered, a hearing is not necessary
unless the parties disagree about the extent and nature of the
permanent partial disability.

The single judge also found that under Neb. Rev. Stat.
§ 48-121(2) (Reissue 2004), unless an injured employee is
permanently and totally disabled, the employee’s entitlement to
benefits for partial disability is limited to a total of 300 weeks,
less any weeks of total disability indemnification received.
The single judge found that Crete Carrier fulfilled its statutory
obligation under the language of the award on rehearing. The
single judge stated that when Davis attained maximum medical
improvement on November 23, 1993, he was not permanently
and totally disabled. The judge noted that Davis was able to
successfully complete his vocational rehabilitation program and
that he is not entitled to any additional benefits. As to Davis’
claim for waiting-time penalties, the single judge found that a
reasonable controversy existed as to Crete Carrier’s obligation
to pay additional indemnification benefits to Davis after 300
weeks of payments were made.

Davis filed an application for review with the three-judge
review panel of the compensation court. The review panel
reversed the single judge’s decision and remanded the matter.
The review panel found that Nebraska case law requires a hear-
ing to terminate benefits and that benefits may not be summarily
terminated, as was done in this case. The review panel further
found that Sheldon-Zimbelman and Starks set forth the correct
statement of the law requiring a modification application to ter-
minate payment of benefits under an award.

Crete Carrier appealed the review panel’s decision to the
Court of Appeals, which reversed. Without directly addressing
the applicability of Sheldon-Zimbelman and Starks, the Court
of Appeals held that the November 1993 order was an agreed-
upon modification which satisfied the requirements of § 48-141.
After noting that the meaning of the November order was a
matter of law, the Court of Appeals concluded that the language
in the order specifying temporary total disability compensation

368 Ee

would be paid “‘while . . . undergoing the vocational rehabilita-
tion plan’” changed the duration of Davis’ temporary total dis-
ability.” Davis now seeks further review from this court.

ASSIGNMENTS OF ERROR

Davis assigns that the Court of Appeals erred in (1) find-
ing that Crete Carrier properly preserved the issue of whether
the single judge’s November 1993 order modified the review
panel’s February 1993 award on rehearing and failing to find
that this issue was waived and res judicata; (2) holding that the
stipulation of the parties and the November order constituted
a § 48-141 judicially approved agreement that modified the
duration of Davis’ running temporary total disability under the
February award on rehearing and that specific § 48-141 applica-
tion was not required to terminate Davis’ temporary total dis-
ability benefits; (3) reversing the review panel’s remand to the
single judge to determine and enforce the benefits due under the
February award; (4) failing to award Davis waiting-time penal-
ties, interest, and attorney fees; and (5) failing to award Davis
attorney fees in all lower levels of this proceeding.

STANDARD OF REVIEW

Hl Pursuant to Neb. Rev. Stat. § 48-185 (Reissue 2004), an
appellate court may modify, reverse, or set aside a Workers’
Compensation Court decision only when (1) the compensation
court acted without or in excess of its powers; (2) the judgment,
order, or award was procured by fraud; (3) there is no sufficient
competent evidence in the record to warrant the making of the
order, judgment, or award; or (4) the findings of fact by the
compensation court do not support the order or award.®

HM Upon appellate review, the findings of fact made by
the trial judge of the compensation court have the effect of a
jury verdict and will not be disturbed unless clearly wrong.’ An

7 Davis v. Crete Carrier Corp., supra note 4, 15 Neb. App. at 255, 725
N.W.2d at 574 (emphasis omitted).

8 Hagelstein v. Swift-Eckrich, supra note 3.
° Id,

appellate court is obligated in workers’ compensation cases to
make its own determinations as to questions of law.'°

ANALYSIS

PRESERVATION OF IssuE

Davis first contends that the Court of Appeals erred in finding
that Crete Carrier’s assignments of error were sufficiently defi-
nite and certain to preserve for appellate review the question of
whether the November 1993 order and the vocational rehabilita-
tion stipulation modified the February 1993 award on rehearing.
Davis argues that on September 30, 2005, the review panel held.
that the stipulation of the parties and the November 1993 order
did not act “‘as an “agreement of the parties” to terminate bene-
fits for a running award pursuant to Neb. Rev. Stat. §48-1417”"!
Davis argues that Crete Carrier did not assign this finding as an
error on appeal to the Court of Appeals as required by Neb. Ct.
R. of Prac. 9D(1)(e) (rev. 2006) and Neb. Rev. Stat. § 25-1919
(Reissue 1995).

I The general rule is that an appellate court will consider
only those errors specifically assigned in a lower court and again
assigned as error on appeal to the appellate court.!? In Dietz v.
Yellow Freight Sys.,"° we stated that this rule is also applicable
in workers’ compensation cases. Thus, in reviewing decisions
of the compensation court, an appellate court will consider only
those errors specifically assigned to the review panel and then
reassigned on appeal.'*

On appeal to the review panel, Davis assigned, consolidated
and restated, that the single judge erred in failing to enforce
the February 1993 award on rehearing and in failing to order
Crete Carrier to pay continuing disability benefits and the req-
uisite penalties under § 48-125. In reversing the single judge’s
decision, the review panel found that the stipulation between

1 Sheldon-Zimbelman v. Bryan Memorial Hosp., supra note 5.

41 Supplemental brief on petition for further review for appellee at 17.

2 See Dietz v. Yellow Freight Sys., 269 Neb. 990, 697 N.W.2d 693 (2005).
3 Id,

™ See id.

the parties and the compensation court’s November 1993 order
did not act as an agreement of the parties to terminate benefits.
The review panel found instead that the stipulation and order
allowed Davis to receive indemnity benefits while undergoing
vocational rehabilitation. The review panel further found, based
on Nebraska case law,'> that a hearing must be held to terminate
benefits and that benefits may not be summarily terminated.
The review panel then found that the single judge misstated
the law in Nebraska to be that an application to modify is not
required when terminating temporary total disability benefits.
The review panel concluded that regardless of whether a party
is terminating temporary total disability benefits or permanent
total disability benefits, a modification application to terminate
benefits under such an award is needed.

To the Court of Appeals, Crete Carrier broadly assigned as
error the review panel’s ruling that Crete Carrier had not prop-
erly paid benefits to Davis based on the February 1993 award
on rehearing and the November order. As noted by the Court
of Appeals, encompassed within this broad assignment of error
was the question of whether the review panel incorrectly found
that an application to modify the February award on rehearing
was necessary to terminate Davis’ temporary total disability
benefits. Accordingly, we conclude that this assignment of error
is without merit.

Mon iFIcaTIon REQUIREMENT

In Davis’ second and third assignments of error, he contends
that the Court of Appeals erred in determining that the stipula-
tion and November 1993 order constituted a § 48-141 judicially
approved agreement which modified the February 1993 award
on rehearing and Davis’ temporary total disability award. Davis
further contends that the Court of Appeals erred in concluding
that a § 48-141 application is not required to terminate Davis’
benefits. Davis claims error in the Court of Appeals’ reversing
the review panel’s remand of the matter to the single judge
to determine and enforce the benefits due under the February

5 See, Hagelstein v. Swift-Eckrich, supra note 3; Starks v. Cornhusker Packing
Co., supra note 2; ITT Hartford v. Rodriguez, supra note 1.

award on rehearing. The broad question presented by these
assignments of error is whether Crete Carrier complied with
the proper procedures when terminating Davis’ temporary total
disability benefits.

Hl Our case law has established that as a general rule, an
employer may not unilaterally terminate a workers’ compen-
sation award of indefinite temporary total disability benefits
absent a modification of the award of benefits. For example,
in Starks,!° we held that an employer was required to pay an
employee permanent disability benefits until an application to
modify the original award was filed. In Starks, the single judge
determined that the employee was permanently and totally
disabled. Approximately 2 years later, the employer unilater-
ally terminated the employee’s benefits. The employee filed a
motion with the compensation court requesting an order requir-
ing the employer to resume making total disability payments.
The employer then filed an application for modification, claim-
ing the employee’s disability ceased the day after payments
were terminated.

We stated on appeal, “[A] workers’ compensation award is
in full force and effect, as originally entered, until the award is
modified pursuant to the procedure set forth in § 48-141... .
[E]mployers are prohibited from unilaterally modifying work-
ers’ compensation awards.”!” We concluded that the employer
in Starks had unilaterally terminated the employee’s benefit
payments. We further concluded that the employer owed the
employee total and permanent disability payments from the time
it unilaterally terminated benefit payments until the date the
employer filed an application for modification.

Similarly, we held in Hagelstein’* that an employer had an
obligation to pay an injured employee the originally ordered
workers’ compensation benefits until an application to modify
the award of benefits was filed. In Hagelstein, the single judge
found that the employee was totally disabled and was entitled to

16 Starks v. Cornhusker Packing Co., supra note 2.
17 Jd, at 38, 573 N.W.2d at 763-64 (citation omitted).
18 Hagelstein v. Swift-Eckrich, supra note 3.

benefits for an indefinite period. Thereafter, the employee filed a
petition with the compensation court alleging that his employer
had ceased paying total disability and had begun paying perma-
nent partial disability on June 19, 1995. The single judge found
that the employee had reached maximum medical improvement
on April 24 and ordered the employer to pay reduced benefits
as of that date. The review panel reversed the portion of the
trial court’s order requiring payment of permanent partial dis-
ability beginning in April and ordered payments to commence
on March 6, 1996, the day on which the employee’s petition
was filed.

On appeal, we treated the employer as the applicant for
modification and the date the employer filed its answer as the
“application” date. We explained that it was in its answer that
the employer set out its claim requesting a modification of the
award of temporary total disability benefits. And we reiterated
our statements from Starks,” that an employer is prohibited
from unilaterally modifying a workers’ compensation award
and that an employer’s unilateral cessation of benefits is not the
basis for the modification of an award of benefits.

We believe the present case presents a factually distinct case
from Starks and Hagelstein. Paragraph UI of the February 1993
award on rehearing provided in pertinent part, “When [Davis’]
total disability ceases, he shall be entitled to the statutory
amounts of compensation for any residual permanent partial
disability due to this accident and injury.” Paragraph XII further
provided, “When [Davis’] total disability ceases if thereafter the
parties cannot agree on the extent of [Davis’] disability, if any,
then a further hearing may be had herein on the application of
either party.”

The terms of the February 1993 award on rehearing are
clear. Davis, like the employees in Starks and Hagelstein, was
awarded temporary total disability benefits for an indefinite
period of time. Davis’ award on rehearing further provided,
however, that when Davis’ total disability ceased, he was enti-
tled to any statutory amounts of permanent partial disability
benefits due. Under the terms of this award, if Davis and Crete

® Starks v. Cornhusker Packing Co., supra note 2.

Carrier could not agree on the extent of Davis’ permanent par-
tial disability benefits, either party could request a hearing on
the matter. Thereafter, as previously noted in this opinion, an
order file stamped November 18, 1993, was entered directing
Crete Carrier to pay Davis temporary total disability benefits
while Davis was undergoing vocational rehabilitation and mak-
ing satisfactory progress. This order was based upon a stipula-
tion between the parties. On November 23, a treating physician
opined that Davis had reached maximum medical improvement.
Then, on October 29, 1994, following Davis’ completion of his
vocational rehabilitation program, Crete Carrier ceased paying
Davis temporary total disability payments. At that point, there
were only approximately 8%% weeks left of the 300 weeks of
permanent partial disability benefits due to Davis, for which he
was paid.

Based upon the facts of this case, we conclude that no appli-
cation to modify the award was needed to terminate Davis’
temporary total disability benefits and to begin payment of
his permanent partial disability benefits. Under the terms of
the award, had Davis wished to dispute the termination of his
temporary total disability benefits, he could have requested a
hearing with the compensation court.

Warrinc-Time PENnactis, INTEREST, AND ATTORNEY FFES

In Davis’ final assignments of error, he contends that the
Court of Appeals erred in failing to award him waiting-time
penalties, interest, and attorney fees. Section 48-125 authorizes
a 50-percent penalty payment of compensation and an attor-
ney fee where there is no reasonable controversy regarding an
employee’s claim for workers’ compensation benefits. Having
determined that Crete Carrier properly terminated Davis’ tem-
porary total disability benefits, we conclude that the Court of
Appeals correctly determined that a reasonable controversy
existed with respect to Crete Carrier’s obligation to pay addi-
tional indemnity benefits.

CONCLUSION
For the reasons discussed above, we affirm the judgment of
the Court of Appeals. Although our reasoning differs in part

from that employed by the Court of Appeals, this court will not
reverse a judgment which it deems to be correct.”
AFFIRMED.
Heavican, C.J., not participating.

2 See Mumin v. Dees, 266 Neb. 201, 663 N.W.2d 125 (2003).

Jerry ALSOBROOK, APPELLANT, V. JIM EARP
CHRYSLER-PLymouTH, Lrp., A NEBRASKA
CORPORATION, APPELLEE.

740 N.W.2d 785

Filed October 26, 2007. No. S-06-383.

Pamela Epp Olsen, of Cline, Williams, Wright, Johnson &
Oldfather, P.C., for appellant.

Joseph F. Gross, Jr., of Timmermier, Gross & Prentiss, for
appellee.

HEAvICAN, C.J., CONNOLLY, GERRARD, STEPHAN, McCorMack,
and Miter-Lerman, JJ.

GERRARD, J.

Jerry Alsobrook alleges that Jim Earp Chrysler-Plymouth,
Ltd. (Earp), negligently repaired his vehicle, which caused
Alsobrook to lose control of his car and collide with construc-
tion barrels. Alsobrook’s insurer paid the damages and now,
through Alsobrook, brings a subrogation claim against Earp.
While this action was pending, Earp’s insurer became insol-
vent. The primary issue presented in this appeal is whether
Alsobrook’s claim against Earp is barred by the application
of the Nebraska Property and Liability Insurance Guaranty
Association Act.'

STATEMENT OF FACTS

On July 15, 1999, Alsobrook filed a petition against Earp.
In his petition, Alsobrook alleged as follows: In April and
May 1998, Earp performed repairs on Alsobrook’s vehicle that
required Earp to disconnect the retaining nut and threaded con-
necting post so that the suspension could be dropped down to
allow the transmission to be removed from the engine. After
making the repairs to Alsobrook’s vehicle, Earp did not prop-
erly secure the retaining nut to the connecting post and failed
to replace the parts necessary to adequately secure the front
passenger side wheel to the steering assembly. Alsobrook fur-
ther alleged that on July 30, 1998, while driving his vehicle,
a retaining nut disconnected from the connecting post, which
caused him to lose his ability to steer the car. The vehicle ran
off the road and collided with construction barrels lining the side
of the road.

1 Neb. Rev. Stat. § 44-2401 et seq. (Reissue 1998).

Following the accident, Alsobrook filed a claim with his own
insurer, Shelter Mutual Insurance Company (Shelter). Shelter
paid the claim, less a $1,000 policy deductible. Sometime after
Shelter had paid Alsobrook’s claim, Alsobrook filed the present
lawsuit against Earp seeking $10,190.08 in damages, composed
of his $1,000 deductible plus the balance of the damages repre-
senting Shelter’s subrogation interest.

On November 7, 2001, Earp filed a motion for stay and notice
of hearing because its insurer, Reliance Insurance Company
(Reliance), had gone into liquidation based on an order entered in
the Commonwealth Court of Pennsylvania. On March 22, 2002,
Alsobrook’s counsel filed a claim with the Nebraska Property
and Liability Insurance Guaranty Association (the Association)
which, pursuant to the Nebraska Property and Liability Insurance
Guaranty Association Act (the Act), provides for the payment
of certain claims against insolvent insurance companies. The
Association denied Alsobrook’s claim, explaining in a letter to
Alsobrook that “[i]t appears that the claim is a subrogation claim
by Shelter” and that under the Act, the Association is “unable to
pay subrogation claims or policy deductibles.”?

In May 2002, Earp filed a motion for summary judgment
which was later converted to a motion for partial summary judg-
ment. The district court granted Earp’s motion for partial sum-
mary judgment, concluding that the claim filed by Alsobrook’s
attorney with the Association, and the Association’s denial of
that claim, constituted “an unconditional general release of all
liability of . . . Earp in connection with the Alsobrook claim
pursuant to § 44-2406(4)” of the Act. The court further found
that, even though Shelter had a subrogation right for what it
had paid to Alsobrook, neither Shelter nor Alsobrook could
pursue Earp for recovery of any such subrogation interest
because of the effect of the Act. Finally, the court determined
that Alsobrook does have a cause of action against Earp for the
$1,000 deductible not paid by Shelter.

Alsobrook filed a motion for reconsideration, alleging that
the Act did not apply to the case. The court denied Alsobrook’s
motion to reconsider and ordered that “[p]ursuant to [Earp’s]

2 See § 44-2403(4)(b).

stipulation,” judgment was to be entered in favor of Alsobrook
for the $1,000 deductible. Alsobrook appealed to the Nebraska
Court of Appeals.

The Court of Appeals reversed the district court’s decision
and remanded the cause because there was “both a pleading and
a proof deficiency.” The court explained that “the evidence [did]
not show, nor [was] it admitted in the pleadings, that Shelter
paid Alsobrook any portion of his property damages.”* The court
further noted that a “second problem [was] that Shelter’s alleged
subrogation and the resulting effect of the Act [were] not pled as
an affirmative defense by Earp to Alsobrook’s suit.>

On remand, Earp filed an amended answer asserting the
application of the Act as an affirmative defense and submitted
evidence establishing that Shelter had paid Alsobrook’s claim,
less the $1,000 policy deductible. Earp also offered into evi-
dence the affidavit of Victor Kovar, a claims manager for the
Association. Generally, Kovar opined that the Reliance policy
covered Alsobrook’s claim against Earp but that Shelter’s subro-
gation claim was barred by the Act.

Alsobrook objected, arguing that the affidavit contained
legal conclusions as to the proper interpretation of the Act
and Reliance’s insurance policy. The district court overruled
this objection. Earp again filed a motion for partial sum-
mary judgment, which was granted. The court explained that
because Earp had made an offer to confess judgment in favor
of Alsobrook with respect to the deductible amount, judgment
was entered for Alsobrook and against Earp in the amount of
$1,000. Alsobrook appealed.

ASSIGNMENT OF ERROR
Alsobrook assigns, consolidated, restated, and renumbered,
that the district court erred in (1) applying the Act to limit his
recovery to $1,000 and (2) receiving into evidence the legal con-
clusions contained in Kovar’s affidavit.

3 Alsobrook v. Jim Earp Chrysler Plymouth, No. A-02-1065, 2004 WL 726810
at *5 (Neb. App. Apr. 6, 2004) (not designated for permanent publication).
4 Id. at *2

3 Id.

378 Es

STANDARD OF REVIEW

HM Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue as
to any material fact or as to the ultimate inferences that may be
drawn from those facts and that the moving party is entitled to
judgment as a matter of law.° In reviewing a summary judgment,
an appellate court views the evidence in the light most favorable
to the party against whom the judgment is granted and gives
such party the benefit of all reasonable inferences deducible
from the evidence.” .

ANALYSIS

At issue in this case is whether Alsobrook’s claim against
Earp is barred by the application of the Act. Earp argues that
pursuant to the provisions of the Act, Alsobrook—or, more to
the point, Shelter—is precluded from bringing a subrogation
claim against an insured of an insolvent insurer, such as Earp.
Alsobrook contends, however, that the Act does not apply in this
case because his claim is not a “covered claim” as that term is
defined in the Act.

APPLICATION OF GUARANTY ASSOCIATION ACT
Before addressing the legal issues presented in this appeal,
it is necessary to set forth the relevant provisions of the Act.
The Act applies “to all kinds of direct insurance”® and its pur-
pose is
to provide a method for the payment of certain claims
against insolvent insurance companies . . . to avoid unnec-
essary delay in payment of such claims, to avoid financial
loss to claimants or-to policyholders, to assist in the detec-
tion and prevention of insurer insolvencies, and to provide
an association of insurers against which the cost of such
protection may be assessed in an equitable manner.?

6 Alston v. Hormel Foods Corp., 273 Neb. 422, 730 N.W.2d 376 (2007).
7 Geddes v. York County, 273 Neb. 271, 729 N.W.2d 661 (2007).

8 § 44-2402.

9 § 44-2401.

The Act further states that “[t]he association shall be obligated.
only to the extent of the covered claims existing prior to the
date a member company becomes an insolvent insurer... ”"°

A “covered claim” is defined in § 44-2403(4)(a) of the
Act as

an unpaid claim which has been timely filed with the liqui-
dator as provided for in the Nebraska Insurers Supervision,
Rehabilitation, and Liquidation Act and which arises out of
and is within the coverage of an insurance policy to which
[this Act] applies issued by a member insurer that becomes
insolvent ....
Section 44-2403(4)(b) explains that a “[cJovered claim shall
not include any amount due any . . . insurer . . . as subrogation
recoveries or otherwise . . . 2” Section 44-2403(4)(b) further
provides that
this section shall not prevent a person from presenting the
excluded claim to the insolvent insurer or its liquidator, but
the claim shall not be asserted against any other person,
including the person to whom benefits were paid or the
insured of the insolvent insurer, except to the extent that
the claim is outside the coverage or is in excess of the lim-
its of the policy issued by the insolvent insurer[.]

Given these provisions and the undisputed evidence that
Alsobrook did not file his claim with the liquidator, it is
clear that Alsobrook’s claim is not a “covered claim” as that
term is defined in the Act. Alsobrook argues that because his
claim is not a “covered claim,” the entire Act is inapplicable.
Specifically, Alsobrook contends that § 44-2403(4)(b) cannot
be used by Earp as a defense to Alsobrook’s subrogation claim.
We disagree.

The plain language of the Act reveals that the Legislature
intended the Act to protect not only the claimants making
claims on the Association, but also the insureds of an insolvent
insurance company. One of the stated purposes of the Act is
to avoid financial loss to policyholders."' And one of the ways
in which the Legislature has accomplished this purpose is by

10 § 44-2406.
11 § 44-2401.

380 Ee

prohibiting excluded claims from being asserted against the
insured, except to the extent that a claim is outside the policy
coverage or is in excess of the policy limits.”

Hi in construing a statute, a court must look to the statutory
objective to be accomplished, the evils and mischiefs sought to
be remedied, and the purpose to be served, and then must place
a sensible construction upon the statute to effectuate the object
of the legislation, rather than a construction that defeats the
purpose of the statute.'? To conclude that the claim must first be
a “covered claim” before an insured is entitled to the defense
granted in § 44-2403(4)(b), as urged by Alsobrook, would pro-
vide an insured the protection guaranteed by the Act only when
the claimant has filed his or her claim with the liquidator.

Alsobrook’s interpretation of the Act would give claimants
the authority to determine if and when an insured is entitled to
the protection of the Act. Alsobrook’s interpretation is not dic-
tated by the plain language of the Act and would circumvent one
of the Act’s express purposes, which is to protect policyholders
of insolvent insurers. Accordingly, we conclude that a claim
need not be a “covered claim” as defined by § 44-2403(4)(a)
to be barred by § 44-2403(4)(b). Here, Alsobrook’s claim
against Earp is a subrogation claim and, therefore, pursuant to
§ 44-2403(4)(b), cannot be asserted against Earp, except to the
extent that Alsobrook’s claim is outside of or in excess of the
insurance policy issued by Earp’s insolvent insurer.’*

Coverace UNDER Earp’s PoLicy
Having determined that § 44-2403(4)(b) is applicable in the
present case, we now apply its provisions. Section 44-2403(4)(b)
bars Alsobrook’s claim except to the extent the claim is outside
the scope of Earp’s insurance policy.

1 § 44-2403(4)(b).

33 See, Foster v. BryanLGH Med. Ctr. East, 272 Neb. 918, 725 N.W.2d 839
(2007); Chase 3000, Inc. v. Nebraska Pub. Serv. Comm., 273 Neb. 133, 728
N.W.2d 560 (2007).

See, e.g., Horton v. State Farm Ins. Co., 641 So. 2d 993 (La. App. 1994);
Window Coverings, Inc. v. Campbell, 91 Ore. App. 335, 755 P.2d 719
(1988).

HM The meaning of an insurance policy is a question of
Jaw, in connection with which an appellate court has an obliga-
tion to reach its own conclusions independently of the determi-
nation made by the lower court.'* In construing insurance policy
provisions, a court must determine from the clear language of
the policy whether the insurer in fact insured against the risk
involved.'* In appellate review of an insurance policy, the court
construes the policy as any other contract to give effect to the
parties’ intentions at the time the writing was made. Where the
terms of a contract are clear, they are to be accorded their plain
and ordinary meaning.”

Generally, the purpose of a garage policy is to protect auto-
mobile dealers, garage keepers, and owners of automobile ser-
vice stations against loss by reason of injury to other property
or persons by the use of their automobiles. Such policies are
designed to care for the specialized needs of the particular oper-
ation.'* As relevant here, the liability section of Earp’s garage
liability policy provides:

SECTION I — LIABILITY COVERAGE
A. COVERAGE

We will pay all sums an “insured” legally must pay as
damages because of . . . “property damage” to which this
insurance applies, caused by an “accident” and resulting
from “garage operations” involving the ownership, mainte-
nance or use of covered “autos.”

B. EXCLUSIONS
This insurance does not apply to any of the following:

13. WORK YOU PERFORMED

5 Olson v. Le Mars Mut. Ins. Co., 269 Neb. 800, 696 N.W.2d 453 (2005).

16 Auto-Owners Ins. Co. v. Home Pride Cos., 268 Neb. 528, 684 N.W.2d 571
(2004),
17 Olson v. Le Mars Mut. Ins. Co., supra note 15.

18 State Farm Mut. Auto. Ins. Co. v. Royal Ins. Co., 222 Neb. 13, 382 N.W.2d
2 (1986).

“Property damage” to “work you performed” if the
“property damage” results from any part of the work itself
or from the parts, materials or equipment used in connec-
tion with the work.

Earp’s garage liability policy also included a section dealing
specifically with “garagekeepers coverage.” This section states
in relevant part:

SECTION III - GARAGEKEEPERS COVERAGE

A. COVERAGE

1. We will pay all sums the “insured” legally must
pay as damages for “loss” to a covered “auto” or “auto”
equipment left in the “insured’s” care while the “insured”
is attending, servicing, repairing, parking or storing it in
your “garage operations”... .

B. EXCLUSIONS
1. This insurance does not apply to any of the
following:

d. Faulty Work.
Faulty “work you performed.”

Given this policy language, Alsobrook argues that his
claim against Earp does not fall within the policy’s cover-
age. Alsobrook contends that because his claim is based on
Earp’s alleged negligent repair of Alsobrook’s car, his claim is
excluded under the “work you performed” and “faulty work”
exclusions of the insurance policy, and can be brought directly
against Earp. Earp, however, argues that its insurance policy
with Reliance provided coverage for Alsobrook’s claim and that
because Reliance is now insolvent, Alsobrook’s claim is barred
by application of the Act.

As an initial matter, we conclude that the “faulty work” exclu-
sion in section III of the policy is irrelevant. For section III to
apply, the damages to the vehicle must have occurred “while
[Earp was] attending, servicing, repairing, parking or storing
[the car].” However, Alsobrook alleged in his complaint that
the damages to his car occurred approximately 2 or 3 months
after Earp negligently performed the repair work. Because the
damages did not occur while Earp was performing work on

Alsobrook’s car, section III of the policy does not cover those
damages. In other words, Alsobrook need not concern him-
self with the “faulty work” exclusion, because section III is
entirely inapplicable.

But Alsobrook’s claim may be covered under section II of
the policy, the liability coverage, unless it is excluded by the
“work you performed” exclusion. We recently considered a
similar provision in Auto-Owners Ins. Co. v. Home Pride Cos.'®
In Auto-Owners Ins. Co., an apartment complex, Appletree
Apartments, Inc. (Appletree), entered into a contract with Home
Pride Companies, Inc. (Home Pride), to install new shingles on
a number of apartment buildings. Following completion of
the project, Appletree began to notice problems with the roof.
Appletree eventually filed suit against Home Pride alleging
that Home Pride failed to install the shingles in a workmanlike
manner and that such faulty workmanship caused substantial
and material damage to the roof structures and buildings. After
the suit was filed, Home Pride made a claim to its insurer,
Auto-Owners Insurance Company (Auto-Owners), for cover-
age under its commercial general liability policy. Auto-Owners
brought a declaratory judgment action against Home Pride
claiming that the insurance policy did not provide coverage
because the faulty workmanship was not an “occurrence” under
the policy.

We explained that “although faulty workmanship, stand-
ing alone, is not an occurrence under a [commercial general
liability] policy, an accident caused by faulty workmanship is
a covered occurrence.” We further explained that “if faulty
workmanship causes bodily injury or property damage to some-
thing other than the insured’s work product, an unintended
and unexpected event has occurred, and coverage exists.”?! We
noted that Appletree had alleged that Home Pride negligently
installed shingles on the apartment buildings, which caused
the shingles to fall off. Additionally, Appletree alleged that

19 Auto-Owners Ins. Co. v. Home Pride Cos., supra note 16.
20 Id. at 535, 684 N.W.2d at 577 (emphasis in original).
l Td, at 535, 684 N.W.2d at 578.

384 be

as a consequence of the faulty work, the roof structures and
buildings experienced substantial damage. We concluded that
the latter allegation “represent[ed] an unintended and unex-
pected consequence of the contractors’ faulty workmanship and
goes beyond damages to the contractors’ own work product.””
Therefore, Appletree had properly alleged an “occurrence”
within the meaning of the insurance policy.

Auto-Owners further argued that coverage was excluded
under the “your work” exclusion in the policy. The “your work”
exclusion provided that “‘[t]his insurance does not apply to:
. ... Damages claimed for any loss, cost or expense incurred
by you . . . for the loss of use, withdrawal, recall, inspection,
repair, replacement, adjustment, removal or disposal of: . . . .
“Your work”. . . .’”? We explained that “[g]enerally speaking,
the ‘your work’ exclusions . . . operate to prevent liability poli-
cies from insuring against an insured’s own faulty workmanship,
which is a normal risk associated with operating a business.”
We noted that “the rationale behind the ‘your work’ exclusions
is that they discourage careless work by making contractors pay
for losses caused by their own defective work, while preventing
liability insurance from becoming a performance bond.”

In rejecting Auto-Owner’s argument, we concluded that the
“your work” exclusion did not exclude Appletree’s damage
claim “because [its] claim extends beyond the cost to simply
repair and replace the contractors’ work, i.e., to reshingle the
roofs.” The claimed damages to the roof structure and build-
ings fell outside of the exclusion, and “to the extent that Home
Pride may be found liable for the resulting damage to the
roof structures and the buildings, Auto-Owners is obligated
to provide coverage.””” Courts in other jurisdictions that have
addressed this issue have similarly concluded that damages

2 Id, at 537, 684 N.W.2d at 579.
2 Id.
4 Id. at 538, 684 N.W.2d at 579.
5 Id.
26 Ig.
27 Td. at 539, 684 N.W.2d at 580.

Le 385
Le

to property outside of the cost of repairing or replacing the
insured’s own work is not excluded under a “your work” exclu-
sion and is therefore covered under the policy.”

In the present case, the “work you performed” exclusion in
section II of Earp’s policy excludes only those damages that
represent the cost to either repair or replace the work that Earp
was contracted to perform. But this exclusion does not act to
exclude damages to property other than the work that Earp was
contracted to perform, i.e., the damages to Alsobrook’s vehicle
that go beyond the cost to repair or replace Earp’s allegedly
negligent work. Here, the only indication in the record with
respect to the actual repairs performed on Alsobrook’s vehicle
is found in Alsobrook’s petition. The petition does not state
with any clarity what exact repairs were requested. Nor is it
evident from the petition what portion of the alleged dam-
ages represents the cost to repair or replace the work Earp was
contracted to perform, versus damages to property beyond the
scope of Earp’s repair work. The petition simply provides a dol-
lar amount representing the total damage to the car.

On this record, there is a genuine issue of material fact as
to how much of Alsobrook’s damages are covered under sec-
tion IIA of the policy and how much is excluded by the “work
you performed” exclusion. Therefore, the district court erred in
concluding that Alsobrook’s entire claim against Earp, besides
the deductible, was barred as a matter of law.

With respect to Alsobrook’s remaining assignment of error
relating to the admission of Kovar’s affidavit, we note that the
record does not establish to what extent, if any, the court relied
on that evidence in reaching its conclusion. Nonetheless, as
Alsobrook argues, the scope of an insurance policy is a ques-
tion of law, with respect to which we have made an independent
determination, without reference to the Kovar affidavit. Because
our independent analysis cures any error in receiving the affida-
vit, we need not consider this assignment of error.

28 See, e.g., Garrett v. Auto-Owners Ins. Co., 689 So. 2d 179 (Ala. App. 1997);
Travelers Ins. Co. v. Volentine, 578 S.W.2d 501 (Tex. Civ. App. 1979).

CONCLUSION
We conclude that a claim need not be a “covered claim” as
defined in § 44-2403(4)(a) to be barred by § 44-2403(4)(b).
Section 44-2403(4)(b) prohibits subrogation claims from being
asserted against an insured of an insolvent insurer, except to
the extent that the claim is outside of or in excess of the insur-
ance policy issued by the insolvent insurer. The district court
erred in concluding, as a matter of law, that Alsobrook’s entire
claim, in excess of the deductible, is barred by the Act. Because
there is a genuine issue of material fact as to what damages are
covered and excluded under the insurance policy, we reverse
the judgment of the district court and remand the cause for fur-
ther proceedings.
REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.
Wricxt, J., not participating.

Crrizens Opposinc INDUSTRIAL LivESTOCK AND VILLAGE BoaRD
oF REYNOLDS, NEBRASKA, APPELLANTS, V. JEFFERSON COUNTY
Boar OF ADJUSTMENT, APPELLEE.

740 N.W.2d 362

Filed October 26, 2007. No. S-06-486.

Steven M. Virgil, Patricia Knapp, and, on brief, James M.
Buchanan for appellants.

Daniel L. Werner, P.C., L.L.O., for appellee.

Heavican, C.J., WriGHT, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Miter-Leran, J.

NATURE OF CASE

This is the second appearance of this case before this court.
Citizens Opposing Industrial Livestock (COIL) and the village
board of Reynolds (the village), appellants, filed an action with
the district court for Jefferson County against appellee, the
Jefferson County Board of Adjustment (the board). Appellants
challenged the board’s ruling that approved a special use permit
allowing the operation of a finishing site for swine. In Citizens
Opposing Indus. Livestock v. Jefferson Cty., 269 Neb. 725, 695
N.W.2d 435 (2005) (COIL I), we concluded that the lack of
verification of the petition did not defeat jurisdiction, and we
reversed the district court’s order of dismissal and remanded the
cause for further proceedings.

Following remand, a bench trial was conducted on appellants’
amended petition. After the trial had concluded, the board filed
a motion to dismiss, claiming that the district court did not have
subject matter jurisdiction because appellants lacked standing to
bring the action. Appellants objected to the motion. Following a
nonevidentiary hearing, the district court entered an order sus-
taining the board’s motion and dismissing the action. Appellants
appeal. Because we conclude that the district court erred by fail-
ing to hold an evidentiary hearing on the board’s motion chal-
lenging appellants’ standing, we reverse the district court’s order
and remand the cause for further proceedings.

STATEMENT OF FACTS
As noted above, this is the second appearance of this case
before this court. The following facts are recited in COIL I:

In February 2004, the Jefferson County Board of
Commissioners approved a special use permit to allow
the operation of a finishing site for swine. In March,
the board of adjustment affirmed the board of commis-
sioners’ decision.

COIL and the village filed a petition in the district court
challenging the ruling by the board . . . . The petition

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was signed by COIL and the village’s attorney, but did
not include a verification affidavit. The board of adjust-
ment moved to dismiss, contending that the district court
lacked jurisdiction because the petition was not verified as
required by [Neb. Rev. Stat.] § 23-168.04.

The district court determined that the petition was not
duly verified and that the failure to file a verified petition
was jurisdictional. So the court dismissed the petition, and
COIL and the village appeal[ed].

COIL I, 269 Neb. at 726, 695 N.W.2d at 436.

Neb. Rev. Stat. § 23-168.04 (Reissue 1997) provides, inter
alia, that anyone aggrieved by a decision of a board of adjust-
ment may file a “petition” with the district court, “duly verified,”
setting forth the purported illegality in the board’s decision. In
COIL I, we determined that the verification requirement con-
tained in § 23-168.04 was not jurisdictional, and as a result, we
reversed the district court’s order dismissing appellants’ petition,
and we remanded the cause for further proceedings.

After remand, appellants filed an amended petition in which
the only change from the original petition was the addition of
a verification. Subsequent to appellants’ filing their amended
petition, the district court ruled that the board’s original answer
would “serve as answer to the amended petition.” In its answer,
the board generally denied appellants’ allegations in their
amended petition to the effect that they possessed an interest in
the litigation. The board did not specifically assert that appel-
lants lacked standing to bring the instant action.

On September 16, 2005, the district court held a bench trial
on appellants’ amended petition. The evidence at trial focused on
the merits of the amended petition. No discussion or challenge
to appellants’ standing was raised at trial. On November 14,
following trial and before resolution of the underlying case, the
board filed a motion to dismiss, claiming that “neither [COIL]
nor [the village] has standing to invoke the jurisdiction of this
court.” On December 9, an objection to the board’s motion was
filed on behalf of appellants.

Both the motion to dismiss and the objection to the motion
were argued on January 19, 2006. The board argued that appel-
lants had failed to prove at trial that they had standing to bring

the lawsuit, and as a result, the district court lacked subject
matter jurisdiction. None of the parties offered evidence at the
hearing. Counsel for appellants argued that an evidentiary hear-
ing was needed in order to address the board’s assertion that
appellants lacked standing. The district court did not set the
motion for an evidentiary hearing.

In an order filed March 30, 2006, the district court concluded
that it lacked subject matter jurisdiction because appellants had
not adduced evidence at trial demonstrating that either COIL
or the village was a proper party plaintiff in the litigation. The
district court sustained the board’s motion and dismissed appel-
lants’ amended petition for lack of standing. Appellants appeal.

ASSIGNMENT OF ERROR
On appeal, appellants assign two errors that can be sum-
marized as claiming that the district court erred in dismissing
appellants’ amended petition for lack of jurisdiction.

STANDARD OF REVIEW

HM This action was filed on March 25, 2004, and thus, we
apply the new rules for notice pleading. See Neb. Ct. R. of
Pldg. in Civ. Actions 1 (rev. 2004). Aside from factual findings,
which are reviewed for clear error, the granting of a motion to
dismiss for lack of subject matter jurisdiction under Neb. Ct.
R. of Pldg. in Civ. Actions 12(b)(1) (rev. 2003) is subject to de
novo review. See Bohaboj v. Rausch, 272 Neb. 394, 721 N.W.2d
655 (2006).

ANALYSIS

The issue presented to this court on appeal is whether, given
the stage of the litigation, the district court erred in granting the
board’s motion to dismiss for lack of standing without first hold-
ing an evidentiary hearing. As we have noted above, appellants’
action was filed on March 25, 2004, and thus, we apply the
new rules for notice pleading. Initially, we note that the board’s
motion was captioned “Motion to Dismiss.” The board did not
specifically identify its motion as one filed under rule 12(b)(1).

Rule 12(b)(1) provides as follows:
(b) How Presented. Every defense, in law or fact,
to a claim for relief in any pleading, whether a claim,

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counterclaim, cross-claim, or third-party claim, shall
be asserted in the responsive pleading thereto if one is
required, except that the following defenses may at the
option of the pleader be made by motion:

(1) lack of jurisdiction over the subject matter.

Hi The board’s motion stated that appellants lacked standing.
The defect of standing is a defect of subject matter jurisdic-
tion. See, generally, Chambers v. Lautenbaugh, 263 Neb. 920,
927, 644 N.W.2d 540, 547 (2002) (stating that “[a]s an aspect
of jurisdiction . . . , standing requires that a litigant have such
a personal stake in the outcome of a controversy as to warrant
invocation of a court’s jurisdiction and justify the exercise of the
court’s remedial powers on the litigant’s behalf’). Accordingly,
we review the board’s motion as one seeking dismissal of appel-
lants’ amended petition for lack of subject matter jurisdiction
filed under rule 12(b)(1).

On appeal, appellants argue that the district court erred when
it sustained the board’s motion to dismiss based on lack of
standing without conducting an evidentiary hearing. Appellants
note that although a trial was held on their amended petition, the
board did not raise a specific challenge to appellants’ standing
until after the trial had concluded. Given the procedural posture
of the case and the stage of the litigation, appellants assert they
were entitled to an evidentiary hearing on the standing issue
raised in the board’s posttrial motion to dismiss. Appellants
assert they are entitled to a reversal of the order of dismissal.
We agree with appellants that the district court erred in dismiss-
ing appellants’ amended petition without affording the parties
the opportunity to establish the factual background necessary to
permit the district court to resolve the standing issue.

Because Nebraska’s notice pleading rules are modeled after
the Federal Rules of Civil Procedure, we look to federal court
decisions for guidance. See Bohaboj v. Rausch, supra. We
recently considered the nature of a motion to dismiss under rule
12(b)(1) in Washington v. Conley, 273 Neb. 908, 912-13, 734
N.W.2d 306, 311 (2007), stating as follows:

It is well established in federal courts that there are
two ways a party may challenge the court’s subject matter
jurisdiction under rule 12(b)(1). The first way is a facial

attack which challenges the allegations raised in the com-
plaint as being insufficient to establish that the court has
jurisdiction over the subject matter of the case. [See, White
v. Lee, 227 F.3d 1214 (9th Cir. 2000); Courtney v. Choplin,
195 F. Supp. 2d 649 (D.N.J. 2002); Zelaya v. .M. Macias,
Inc., 999 F. Supp. 778 (E.D.N.C. 1998).] In a facial attack,
a court will look only to the complaint in order to deter-
mine whether the plaintiff has sufficiently alleged a basis
of subject matter jurisdiction. [See VanHorn v. Nebraska
State Racing Comm., 273 Neb. 737, 732 N.W.2d 651
(2007). See, also, Beatty v. U.S. Food and Drug Admin.,
12 F. Supp. 2d 1339 (S.D. Ga. 1997); Cohen v. Temple
Physicians, Inc., 11 F. Supp. 2d 733 (E.D. Pa. 1998).] The
second type of challenge is a factual challenge where the
moving party alleges that there is in fact no subject matter
jurisdiction, notwithstanding the allegations presented in
the complaint. [See, St. Clair v. City of Chico, 880 F.2d
199 (9th Cir. 1989); Beatty v. U.S. Food and Drug Admin.,
supra.] In a factual challenge, the court may consider and
weigh evidence outside of the pleadings to answer the
jurisdictional question. [See, Krohn v. Forsting, 11 F. Supp.
2d 1082 (E.D. Mo. 1998); Rodriguez v. Texas Com’n on
Arts, 992 F. Supp. 876 (N.D. Tex. 1998), affirmed 199 F.3d
279 (Sth Cir. 2000).]

Hl The federal courts have recognized that the stage of the
litigation at which a motion to dismiss is filed informs the court
of the necessity of holding an evidentiary hearing on the motion.
If the motion is filed at the pleadings stage and the motion chal-
lenges the sufficiency of the complaint to invoke the court’s
jurisdiction, then the district court will review the pleadings to
determine whether there are sufficient allegations to establish
the plaintiff’s standing. See, Bischoff v. Osceola County, Fla.,
222 F.3d 874 (11th Cir. 2000); Haase v. Sessions, 835 F.2d 902
(D.C. Cir. 1987). See, also, 5B Charles Alan Wright & Arthur
R. Miller, Federal Practice and Procedure § 1350 (3d ed. 2004
& Supp. 2007). As indicated above, this is considered a facial
challenge to standing.

Tf, however, the motion to dismiss is filed at a later stage in

the litigation, then the parties can no longer rely on the “‘mere

392 Ee

399

allegations’” in the complaint. See Bischoff v. Osceola County,
Fla., 222 F.3d at 878 (quoting Lujan v. Defenders of Wildlife,
504 U.S. 555, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992)). This
is considered a factual challenge to standing. When a defend-
ant has raised a factual challenge to the plaintiff’s standing, the
federal courts have stated that the trial court should conduct
an evidentiary hearing to squarely present the standing issue
before the court and resolve the factual dispute. See Bischoff v.
Osceola County, Fla., 222 F.3d at 879 (discussing that eviden-
tiary hearing “must” be held in order to “decide disputed factual
questions or make findings of credibility essential to the ques-
tion of standing”). See, also, Linnemeier v. Indiana University-
Purdue University, 155 F. Supp. 2d 1044, 1050 (N.D. Ind.
2001) (stating that “when faced with standing issues, courts are
required to hold an evidentiary hearing to determine disputed
factual issues”).

In the instant case, the board’s unsupported motion to dis-
miss appellants’ amended petition for lack of standing was filed
after trial during the later stages of the litigation and asserted a
factual challenge to appellants’ standing in the case. The district
court did not hold an evidentiary hearing on the board’s motion.
Before the district court and on appeal, the board argues to the
effect that an evidentiary hearing was not needed regarding the
standing issue because the parties had just concluded a trial
on the merits and the district court could rely on the evidence
adduced at trial. While the record below is unclear, it appears
that the district court accepted this approach and decided the
board’s motion, relying, at least in part, on the trial record,
despite appellants’ argument during the proceedings below that
an evidentiary hearing was required on the standing issue. In
this regard, we quote the following pronouncement from the
district court at the conclusion of the argument on the board’s
motion to dismiss: “Well, obviously, I’ve deferred ruling. I have
read the briefs and reviewed all of the evidence and the Bill of
Exceptions or transcription of the hearing. So I will try to get a
decision to you fairly promptly.”

The district court’s failure to hold an evidentiary hearing
denied appellants the opportunity to address the board’s factual
assertion that appellants lacked standing. Although the board

generally denied appellants’ allegations in their amended peti-
tion with respect to their individual interests in the litigation,
the board did not put appellants on notice that standing was
contested until after the trial had concluded, thereby effectively
depriving appellants of an opportunity to offer evidence at trial
on the standing issue. See Church v. City of Huntsville, 30 F.3d
1332, 1336 (11th Cir. 1994) (stating that “as a matter of fair-
ness, the City’s failure to question the plaintiffs’ standing” until
later in proceedings “does affect the standard to which we will
hold plaintiffs . . . . It might well be unfair . . . to impose a
standing burden beyond the sufficiency of the allegations of the
pleadings on a plaintiff . . . unless the defendant puts the plain-
tiff on notice that standing is contested”).

Given the board’s factual challenge to appellants’ stand-
ing, we conclude that the parties should have been given an
opportunity to present evidence relating to the standing issue
raised in the board’s motion to dismiss. See, Bischoff v. Osceola
County, Fla., 222 F.3d 874 (11th Cir. 2000); Church v. City of
Huntsville, supra; Haase v. Sessions, 835 F.2d 902 (D.C. Cir.
1987). We conclude that the district court erred in failing to give
the parties the opportunity to establish the factual background
necessary to permit the district court to resolve the factually
disputed standing issue. We therefore reverse the district court’s
order dismissing appellants’ amended petition and remand the
cause for further proceedings consistent with this opinion.

CONCLUSION

For the reasons stated above, given the stage of the litigation
at which standing was raised as an issue, we conclude that the
district court erred in failing to hold an evidentiary hearing on
the board’s motion to dismiss for lack of subject matter juris-
diction due to lack of standing filed pursuant to rule 12(b)(1).
Accordingly, we reverse the district court’s decision dismissing
the action and remand the cause for further proceedings.
REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.

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Stare oF NEBRASKA, APPELLEE, V. ELRoy L. WABASHAW,
ALSO KNOWN AS Eroy L. WABASHA, ALSO KNOWN AS
Jounny LEE BEARSHIELD, APPELLANT.

740 N.W.2d 583

Filed October 26, 2007. No. S-06-642.

a
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Jerry L. Soucie, of Nebraska Commission on Public Advocacy,
and, on brief, Mark A. Johnson, of Johnson, Morland, Easland &
Lohrberg, P.C., for appellant.

Jon Bruning, Attorney General, James D. Smith, and, on
brief, Susan J. Gustafson for appellee.

Heavican, C.J., WRiGHT, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Miier-Lerman, JJ.

ConnoLty, J.

Elroy L. Wabashaw appeals his convictions for robbery
and use of a firearm to commit a felony. Before his jury
trial, Wabashaw moved to quash the information. He argues
that article I of the “1868 Treaty between the United States
of America and different Tribes of Sioux Indians” (1868
Treaty) and article VI of the U.S. Constitution barred his pros-
ecution. The district court overruled the motion. A jury found
Wabashaw guilty on both charges, and the district court sen-
tenced Wabashaw as a habitual criminal under Neb. Rev. Stat.
§ 29-2221 (Reissue 1995).

Although Wabashaw raises several issues on appeal, the main
issue is whether the district court had jurisdiction over the rob-
bery that occurred in Indian country. We conclude that the dis-
trict court had jurisdiction over the offense and that the relevant
provision of the 1868 Treaty did not divest the district court of
jurisdiction. We affirm.

I. BACKGROUND

Monica Kitto testified that she was working at a gas station
on April 8, 2005, when a person dressed in black and wearing a
white scarf around his face came into the gas station. The robber
pointed a gun at Kitto and gave her a note directing her to put
money in a bag, and she did as instructed. Kitto estimated that
the total amount taken was a little more than $500. The robber
then took the women’s restroom key, threw it at Kitto, and told
her to go to the restroom. Kitto stayed inside the restroom 2 to 3
minutes before she came out and called the police.

Kitto testified that she could not see the robber’s face or hands
because they were covered. Although she could not recognize
the robber’s voice, she described him as slim, 5 feet 8 inches to
5 feet 10 inches tall.

Acting on a tip, Santee Police Chief Michael G. Vance met
with Wabashaw at the police station. As Vance began questioning
Wabashaw, Officer Robert Henry was present, but Henry left on
a police call and did not witness the entire interview. Vance read
Wabashaw his Miranda rights and told Wabashaw that Vance
wanted to talk about the robbery. Wabashaw signed a waiver
of his Miranda rights and initially stated he had nothing to do
with the robbery. Vance then told him that police had recovered
some clothing articles left at a sweat lodge. Vance also told him
a DNA analysis on the clothing would match Wabashaw. Upon
hearing this, Wabashaw told Vance that he “‘did it’” and that he
had acted alone. When Vance asked Wabashaw about the gun
used in the robbery, he stated he left the rifle in a field when he
was running from a police officer. After making this admission
to Vance, Wabashaw wrote and signed a statement stating he
committed the robbery. Because Henry was present at part of
the interview, Vance signed Henry’s name and his own at the
bottom of Wabashaw’s written statement.

Later, the State charged Wabashaw with robbery and use of
a weapon to commit a felony. Wabashaw moved to quash the
information. He alleged that the prosecution was unconstitu-
tional, as prohibited by the 1868 Treaty and article VI of the
U.S. Constitution. The court overruled the motion to quash.

Before trial, the State submitted handwriting samples to a
laboratory for analysis. Claiming the written confession was
a forgery, Wabashaw moved to have a handwriting expert
appointed. The court granted his motion. The record does
not show whether Wabashaw’s trial counsel ever obtained the
expert. Wabashaw argues on appeal that he was denied effective
assistance of counsel because counsel failed to obtain a hand-
writing expert.

At trial, the State called four witnesses, including Vance and
a handwriting expert. The handwriting expert compared more
than 26 known writings and concluded that Wabashaw was the

398 Le

individual who wrote the written confession. Wabashaw’s coun-
sel cross-examined each of the State’s witnesses except Vance,
reserving examination of Vance for Wabashaw’s case in chief.

A jury found Wabashaw guilty of robbery and use of a fire-
arm to commit a felony. At the enhancement hearing, the court
teceived certified records for a 1977 South Dakota conviction.
The court admitted records of the 1977 conviction and another
prior conviction. The court found Wabashaw to be a habitual
criminal. It sentenced him to consecutive prison terms of 12 to
14 years for the robbery conviction and 10 to 12 years on the
weapons conviction.

IL ASSIGNMENTS OF ERROR

Wabashaw assigns, rephrased and reordered, that the district
court erred by (1) overruling Wabashaw’s motion to quash, (2)
not conducting an evidentiary hearing on Wabashaw’s motions
to allow counsel to withdraw and to appoint substitute counsel,
(3) determining that the State sufficiently proved identity to use
a prior conviction to enhance Wabashaw’s sentence, and (4)
accepting a prior conviction from South Dakota for enhance-
ment when South Dakota law precludes the use of the convic-
tion for enhancement purposes.

Wabashaw also assigns that he was denied effective assistance
of counsel. He claims his attorney (1) had a conflict of inter-
est when he had previously represented Henry, who was called
as a witness; (2) failed to request an evidentiary hearing on
Wabashaw’s motion to quash; (3) failed to object to references
to evidence recovered by the police; (4) failed to file a motion
to suppress Wabashaw’s confession as fruit of the poisonous
tree; (5) failed to cross-examine Vance during the State’s case in
chief; and (6) failed to obtain a handwriting expert.

Ill. STANDARD OF REVIEW
Regarding questions of law presented by a motion to quash,
we resolve the questions independently of the lower court’s con-
clusions.'

' See State v. Gozzola, 273 Neb. 309, 729 N.W.2d 87 (2007).

a “

IV. ANALYSIS

1. Tue Districr Courr Hap Jurispicrion
OVER WABASHAW’S PROSECUTION

Wabashaw argues that the district court did not acquire juris-
diction over him because his arrest, detainment, and prosecu-
tion violated article I of the 1868 Treaty and article VI of the
U.S. Constitution. After Wabashaw’s counsel had briefed to
this court, we appointed Wabashaw new counsel. During oral
argument, Wabashaw’s new counsel argued that the record is
insufficient for us to decide the jurisdictional issue. Counsel
suggested that to address the issue, we would need to know
whether Wabashaw is an Indian, and that evidence is not in
the record. We have determined, however, that the court had
jurisdiction regardless of whether Wabashaw is an Indian or a
non-Indian.

(a) Background Concerning Public Law 280

Hl By enacting Public Law 280 in 1953, Congress granted
Nebraska jurisdiction over criminal offenses committed by or
against Indians in Indian country. Public Law 280 is now
codified at 18 U.S.C. § 1162(a) (2000), which provides that
Nebraska .

shall have jurisdiction over offenses committed by or
against Indians in the areas of Indian country . . . to the
same extent that [Nebraska] has jurisdiction over offenses
committed elsewhere within [Nebraska], and the crimi-
nal laws of [Nebraska] shail have the same force and
effect within such Indian country as they have elsewhere
within [Nebraska].

The record shows that the gas station is in Knox County,
Nebraska, within the Santee Sioux Nation—Indian coun-
try—which brings the robbery within the purview of Public
Law 280.

HHH In 1968, Congress provided for the voluntary abandon-
ment of the jurisdiction granted by Public Law 280.7 In 2001,
the Nebraska Legislature offered retrocession of criminal and

? See 25 U.S.C. § 1323 (2000).

civil jurisdiction over the Santee Sioux Reservation.’ We note
that the Legislature’s resolution called for an effective date of
July 1, 2001, but retrocession is not effective until the federal
government accepts it.t The federal government did not immedi-
ately accept the Legislature’s 2001 offer of retrocession; it was
not effective until February 15, 2006.° The retrocession, there-
fore, was not yet effective when the robbery occurred in April
2005 or when the State charged Wabashaw in the district court
that same month.

Hi In a case involving retrocession of jurisdiction over a dif-
ferent reservation, we considered the effect of retrocession on
pending cases and crimes committed before acceptance.° We
decided that Nebraska did not abandon jurisdiction over crimes
committed before the federal government’s acceptance of ret-
rocession.’ So, any jurisdiction the State had over the robbery
under Public Law 280 in 2005 was not lost when the retroces-
sion became effective in 2006.

(b) District Court Had Jurisdiction Regardless of
the Indian Status of Wabashaw or His Victim

Wabashaw’s counsel stated during oral argument that we did
not have a sufficient record to determine jurisdiction because
the record failed to state whether Wabashaw is an Indian. We
determine that regardless of whether Wabashaw is an Indian, the
court had jurisdiction.

Public Law 280 gives Nebraska jurisdiction “over offenses
committed by or against Indians in the areas of Indian coun-
try?® The robbery occurred in Indian country. Therefore, if

3 LR. 17, Legislative Journal, 97th Leg., Ist Sess. 2356, 2358-59 (May 31,
2001).

4 See State v. Goham, 187 Neb. 34, 187 N.W.2d 305 (1971). See, also,
Executive Order No. 11435, 33 Fed. Reg. 17,339 (Nov. 21, 1968).

5 See Notice of Acceptance of Retrocession of Jurisdiction for the Santee
Sioux Nation, NE, 71 Fed. Reg. 7994 (Feb. 15, 2006).

6 See State ». Goham, 191 Neb. 639, 216 N.W.2d 869 (1974).
"Id.
8 See 18 U.S.C. § 1162(a) (2000) (emphasis supplied).

either Wabashaw or his victim is an Indian, Nebraska has
jurisdiction.

Hl The only other possibility is that neither Wabashaw nor
his victim is an Indian. Yet even in that scenario, Nebraska
has jurisdiction because when a non-Indian commits a crime
against another non-Indian in Indian country, jurisdiction rests
in the state.”

Under all possible permutations, the court had jurisdiction.
So, we can resolve the jurisdictional issue despite the record’s
lack of information regarding Wabashaw’s Indian status.

(c) The 1868 Treaty Did Not Divest
the District Court of Jurisdiction

Having determined that jurisdiction does not depend on
Wabashaw’s Indian status, we now analyze the 1868 Treaty.
We assume that Wabashaw is an Indian because the 1868
Treaty provision on which he relies is irrelevant if he is not
an Indian.

Wabashaw argues that the court lacked jurisdiction over him
because his arrest, detainment, and prosecution violated article
I of the 1868 Treaty and article VI of the U.S. Constitution.
Thus, he concludes that the court erred in overruling his motion
to quash.

Wabashaw relies on article I of the 1868 Treaty,
which states:

If bad men among the Indians shall commit a wrong or
depredation upon the person or property of any one, white,
black, or Indian, subject to the authority of the United
States, and at peace therewith, the Indians herein named
solemnly agree that they will, upon proof made to their
agent and notice by him, deliver up the wrong-doer to the
United States, to be tried and punished according to its
laws... 1°

Wabashaw argues that no notice was given to a designated
Santee tribal agent to deliver him over to U.S. authorities.

° See United States v. McBratney, 104 U.S. 621, 26 L. Ed. 869 (1881).

10 Treaty between the United States of America and different Tribes of Sioux
Indians, April 29, 1868, 15 Stat. 635.

402 Le

Therefore, he argues the court was without jurisdiction until he
was brought properly before it under the method described in
the 1868 Treaty.

We do not believe the plain language of the 1868 Treaty
imposes the notice requirement that Wabashaw suggests. Yet,
even if we construe the language to impose such a notice
requirement, we determine that Congress has abrogated
the requirement.

HM Congress may abrogate Indian treaty rights, but it must
clearly express its intent to do so.'! By enacting Public Law
280, Congress clearly intended to subject Indians to Nebraska’s
jurisdiction and criminal laws and to abrogate any inconsistent
treaty provisions. The purported notice requirement in the 1868
Treaty imposes an obligation that does not exist under Nebraska
criminal law and, as such, is inconsistent with Nebraska law.
Additionally, if we concluded that the State lacks jurisdiction
because the arresting authority did not comply with the notice
requirement, it would be inconsistent with Congress’ clear
intent to subject Indians to Nebraska’s jurisdiction.

We conclude that even if we construe the 1868 Treaty lan-
guage to impose a notice requirement, Congress abrogated the
provision by enacting Public Law 280.

In passing, we note that the U.S. Court of Appeals for
the Eighth Circuit recently rejected an argument similar to
Wabashaw’s claim.” Although the Eighth Circuit did not rely
on Public Law 280, the court determined that Congress had
abrogated any notice provision in the 1868 Treaty when it
enacted a separate statute to give Indians citizenship.

We conclude that Wabashaw’s first assignment of error is
without merit because the 1868 Treaty did not divest the court
of jurisdiction. The court did not err in overruling Wabashaw’s
motion to quash.

'| Minnesota v. Mille Lacs Band of Chippewa Indians, 526 U.S. 172, 119 S.
Ct. 1187, 143 L. Ed. 2d 270 (1999).

? See U.S. v. Drapeau, 414 F.3d 869 (8th Cir. 2005), cert. denied 546 U.S.
1119, 126 S. Ct. 1090, 163 L. Ed. 2d. 906 (2006).

a i
2. Tue Districr Court Di Nor Err IN FAILING TO
Conpuct AN EvipenTIARY HEARING

‘Wabashaw contends that the court erred when it did not hold
an evidentiary hearing on his motion to allow trial counsel to
withdraw and to appoint substitute counsel. Wabashaw made
two motions to allow his trial counsel to withdraw: the first
was for an alleged conflict of interest, and the second was for
Wabashaw’s assertion that counsel was not giving Wabashaw
all the materials he requested. The court denied both motions.
Wabashaw now argues that the court had a duty to conduct an
evidentiary hearing to determine whether a basis existed for
substituting counsel.

Wabashaw’s argument is without merit. First, assuming the
court erred in failing to conduct an evidentiary hearing on the
alleged conflict of interest, it was not prejudicial. As shown later
in our discussion, the alleged conflict of interest did not result
in ineffective assistance. So, any error by the court in failing to
conduct an evidentiary hearing on the first motion did not preju-
dice Wabashaw’s defense.

HH Next, the court did not err in failing to hold an eviden-
tiary hearing on Wabashaw’s second motion to appoint sub-
stitute counsel. An indigent defendant’s right to have counsel
does not give the defendant the right to choose his or her own
counsel."? Mere distrust of, or dissatisfaction with, appointed
counsel is not enough to secure the appointment of substitute
counsel.* At the hearing on Wabashaw’s second motion, he
stated that trial counsel had not given him materials to prepare
“live questions” for the witnesses. For this reason—and other
similar dissatisfactions with trial counsel’s conduct—Wabashaw
sought to have the court discharge counsel and appoint sub-
stitute counsel. Wabashaw did not have the right to choose
counsel, and his dissatisfaction with trial counsel was insuffi-
cient to secure substitute counsel. Because Wabashaw’s asserted
grounds for discharging counsel and appointing new counsel
were insufficient, there was no reason for the court to conduct
an evidentiary hearing.

33 See State v. Bjorklund, 258 Neb. 432, 604 N.W.2d 169 (2000).
4 Ig.

3. THE Stare PROVIDED SUFFICIENT PRoor oF IDentiTy To UsE
A Soutx Daxora CONVICTION FOR ENHANCEMENT

Wabashaw contends that the district court erred during the
enhancement stage. He argues that the State failed to prove that
an “Elroy Wabasha” who was convicted for robbery in 1977
in South Dakota was the same person as the defendant in this
case, “Elroy Wabashaw.” The State contends that the evidence at
the enhancement hearings established the two defendants were
the same.

Wabashaw argues that during the enhancement hearing, the
court received testimony comparing two photographs, both
alleged to be of Wabashaw. He argues that the court erred in
overruling his hearsay and authentication objection and that
the ruling was prejudicial. However, we need not determine
whether the court erred in overruling Wabashaw’s objection.
Assuming the court committed an error, it did not prejudice
Wabashaw because the record contained sufficient evidence to
prove his identity.

HM A prior conviction and the identity of the accused
as the person convicted may be shown by any competent evi-
dence.'® This includes the oral testimony of the accused and
authenticated records maintained by the courts or penal and
custodial authorities.'° We have stated that fingerprint identity
testified to by an expert is perhaps the best known method of
the highest probative value in establishing identification.”

Fingerprints of “Elroy Wabasha” were taken in 1981 when.
he was serving his 15-year sentence for the 1977 robbery con-
viction. Knox County authorities also took fingerprints from
Wabashaw when he was in jail in April 2005. At the enhance-
ment hearing, the parties stipulated that if called to testify, a
fingerprint examiner would conclude that the same individual
contributed the fingerprints in both the 1981 set and the 2005
set. As we have stated, this fingerprint evidence is perhaps the
best known method of establishing identity.

15 See State v. Luna, 211 Neb. 630, 319 N.W.2d 737 (1982).
6 Id.
"Ta.

| .

HE «We have also stated that an authenticated record
establishing a prior conviction of a defendant with the same
name is prima facie evidence sufficient to establish identity
for enhancing punishment. And absent any denial or contra-
dictory evidence, it is sufficient to support a finding of a
prior conviction."

The court received a certified copy of the conviction from
the 1977 robbery case. The defendant’s name appears as “Elroy
Wabasha” in the authenticated record, though the defendant’s
name in the present case is “Elroy Wabashaw.”

HHI Under the idem sonans doctrine, a mistake in the spell-
ing of a name is immaterial if both modes of spelling have the
same sound and appearance.’ Here, the spelling discrepancy
is immaterial. Thus, the certified copy of the conviction in the
1977 robbery case was an “authenticated record establishing a
prior conviction of a defendant with the same name.” Therefore,
the record is prima facie evidence sufficient to establish identity
for enhancing punishment.” Furthermore, Wabashaw has not
offered any evidence or claimed that he is not the same person
referred to in the prior conviction record.

We conclude that the court did not err in determining the
State sufficiently proved Wabashaw was the same person as the
“Elroy Wabasha” who was convicted in the 1977 South Dakota
robbery case.

4. NepRaSKA CouLD Use Wasasuaw’s 1977 Conviction FOR
ENHANCEMENT ALTHOUGH SouTH Dakota WouLp No LonGER
Permit Use OF THE CONVICTION FOR ENHANCEMENT

‘Wabashaw contends that the district court erred in accept-
ing his 1977 South Dakota robbery conviction to enhance
his sentence. He argues South Dakota law precludes use of
the conviction for enhancement purposes. Wabashaw relies on
S.D. Codified Laws § 22-7-9 (2004), which states in part: “A
prior conviction may not be considered under [South Dakota’s

18 State v. Thomas, 268 Neb. 570, 685 N.W.2d 69 (2004).

State v. King, 272 Neb. 638, 724 N.W.2d 80 (2006); State v. Laymon, 217
Neb. 464, 348 N.W.2d 902 (1984).

0 See State v. Thomas, supra note 18.

406 Le

enhancement statutes] unless the defendant was, on such prior
conviction, discharged from prison, jail, probation, or parole
within fifteen years of the date of the commission of the prin-
cipal offense.” Wabashaw argues that the South Dakota law
operates as an “‘expungement’” or “‘pardon’” of any prior
felony convictions, for enhancement purposes, 15 years after
discharge.?! Wabashaw argues that “[t]o deny South Dakota’s
treatment of his prior offense as ‘expunged’ would be denying
the Full Faith and Credit of South Dakota’s laws and their treat-
ment of judgments of convictions.””

(a) The Plain Language of Nebraska’s Habitual Criminal
Statute Does Not Preclude Use of the 1977 Conviction
HH Nebraska’s habitual criminal statute does not preclude
the use of Wabashaw’s 1977 conviction. Nebraska’s habitual
criminal statute, § 29-2221, states:

(1) Whoever has been twice convicted of a crime, sen-
tenced, and committed to prison, in this or any other state
or by the United States or once in this state and once at
least in any other state or by the United States, for terms
of not Jess than one year each shall, upon conviction of a
felony committed in this state, be deemed to be an habitual
criminal ....

The statute’s plain language does not impose a time limit for
using a prior conviction. Nor does it provide that an out-of-state
conviction may be used only if it could be used for enhance-
ment in that other state. The statute simply requires that the
defendant was twice previously (1) convicted, (2) sentenced,
and (3) committed to prison for a term not less than 1 year.
Section 29-2221 does contain one, but only one, exception
to the use of a prior conviction. That exception, found in sub-
division (3), provides that if the state grants a person a pardon
because he is innocent, the state cannot use the conviction for
enhancement. Wabashaw claims that the South Dakota statute
operated as a “pardon” of his 1977 conviction and that Nebraska
cannot use the conviction for enhancement. But this so-called

1 Brief for appellant at 36.
2 Ig

| “
“pardon” was not granted because he was innocent and there-
fore does not fit the exception under the Nebraska statute.
Nothing in the language of the Nebraska habitual criminal
statute suggests the court erred in using Wabashaw’s 1977 South
Dakota conviction for enhancement purposes.

(b) The Full Faith and Credit Clause Does Not Require
Nebraska to Recognize South Dakota’s
Treatment of the 1977 Conviction

Wabashaw argues that Nebraska must give full faith and
credit to South Dakota’s treatment of his conviction. We are
not convinced that the Full Faith and Credit Clause of the U.S.
Constitution requires Nebraska to recognize South Dakota’s
treatment of the 1977 conviction as “expunged” for enhance-
ment purposes.

The New Mexico Court of Appeals faced a similar, although
not identical, issue in State v. Edmondson.® In Edmondson,
a New Mexico trial court enhanced the defendant’s sentence,
using a Texas conviction that had been set aside by a Texas
court. The defendant argued on appeal that the Full Faith and
Credit Clause prohibited use of the Texas conviction because
Texas law did not permit such convictions for habitual offender
sentencing. The New Mexico Court of Appeals decided that the
Texas conviction could be used to enhance the defendant’s sen-
tence in New Mexico, even though it could not be used under
the Texas habitual offender statute.

The court refused to apply the Full Faith and Credit Clause.
It stated the clause would “rarely, if ever, compel one state to
be governed by the law of a second state regarding the punish-
ment that can be imposed for a crime committed within the first
state’s boundaries.” The court relied on Hughes v. Fetter.* In
Fetter, the U.S. Supreme Court stated, “[FJull faith and credit
does not automatically compel a forum state to subordinate its
own statutory policy to a conflicting public act of another state;

%3 State v. Edmondson, 112 N.M. 654, 818 P.2d 855 (N.M. App. 1991).
% Td. at 659, 818 P.2d at 860.
°5 Hughes v. Fetter, 341 U.S. 609, 71 S. Ct. 980, 95 L. Ed. 1212 (1951).

408 De

rather, it is for this Court to choose in each case between the
competing public policies involved.”?6

The Edmondson court reasoned that a state’s penal code is
the strongest expression of the state’s public policy. It stated that
“(fJull faith and credit ordinarily should not require a state to
abandon such fundamental policy in favor of the public policy
of another jurisdiction.””” The court ultimately decided that the
policies behind the Texas rule precluding the use of the convic-
tion were not so compelling that full faith and credit required
the rule to prevail over New Mexico law.

HM We find the Edmondson court’s analysis persuasive. We
conclude that the Full Faith and Credit Clause does not prevent
a Nebraska court from using Wabashaw’s 1977 robbery convic-
tion. The court did not err in using Wabashaw’s conviction to
enhance his sentence.

5. WABASHAW’S CLAIMS OF INEFFECTIVE ASSISTANCE OF COUNSEL
HE Wabashaw claims he received ineffective assistance
of counsel in several respects. We need not dismiss an ineffec-
tive assistance of counsel claim merely because a defendant
raises it on direct appeal.” The determining factor is whether
the record is sufficient to adequately review the question.” But
if the defendant has not raised ineffective assistance of counsel
at the trial level and it requires an evidentiary hearing, we will
not address the matter on direct appeal.*°
To establish a right to relief because of ineffective
counsel at trial or on direct appeal, the defendant has the bur-
den first to show that counsel’s performance was deficient; that
is, counsel’s performance did not equal that of a lawyer with
ordinary training and skill in criminal law in the area.*! Next,
the defendant must show that counsel’s deficient performance

%6 Id., 341 USS. at 611.

2 State v. Edmondson, supra note 23, 112 NM. at 659-60, 818 P2d at
860-61.

28 State v. Faust, 265 Neb. 845, 660 N.W.2d 844 (2003).
” Td.

* See id.

3 Id.

| “
prejudiced the defense in his or her case.** To prove prejudice,
the defendant must show that there is a reasonable probability
that but for counsel’s unprofessional errors, the result of the
proceeding would have been different.>* A reasonable prob-
ability is a probability sufficient to undermine confidence in
the outcome.** When a defendant challenges a conviction, the
question is whether there is a reasonable probability that absent
the errors, the fact finder would have had a reasonable doubt
concerning guilt.*>

(a) Wabashaw Was Not Denied Effective Assistance of
Counsel Because of an Alleged Conflict of Interest

Wabashaw contends that he was denied effective assistance
of counsel because of an alleged conflict of interest. Before
trial, Wabashaw asked his trial counsel to file a motion to
withdraw and for appointment of successor counsel. Counsel
had previously represented Henry in an unrelated matter, and
Wabashaw believed counsel would not fully and effectively
examine Henry at trial because of that relationship. The court
overruled the motion. Wabashaw now argues that this alleged
conflict of interest denied him effective assistance of counsel.
We believe the record is sufficient to adequately review this
issue on direct appeal.

HE The right to effective assistance of counsel generally
requires that the defendant’s attorney be free from any conflict
of interest. The phrase “conflict of interest” denotes a situa-
tion in which a lawyer might disregard one duty for another or
when a lawyer’s representation of one client is rendered less
effective because of his or her representation of another client.”
A conflict of interest must be actual, rather than speculative or

? Ia.
8 Id.
See id.
38 Id.

36 U.S. Const. amend. VI; Neb. Const. art. I, § 11; State v. Dunster, 262 Neb.
329, 631 N.W.2d 879 (2001); State v. Narcisse, 260 Neb. 55, 615 N.W.2d
110 (2000).

37 See, State y. Dunster, supra note 36; State v. Narcisse, supra note 36.

410 Le

hypothetical, before a court can overturn a conviction because
of ineffective assistance of counsel.

Hl Wabashaw relies in part on State v. Ehlers.® In Ehlers,
the concern was defense counsel’s attorney-client relationship
with a state witness. The State argued that the relationship gave
rise to continuing obligations of loyalty and confidentiality
that could prevent counsel from conducting a thorough cross-
examination. We noted that the goal is to discover whether a
defense lawyer has divided loyalties that prevent him or her
from effectively representing the defendant. We stated that dis-
qualification is appropriate when the conflict could cause the
defense attorney to improperly use privileged communications
in cross-examination. We also noted that disqualification is
appropriate if the conflict could deter the defense attorney from
intense probing on cross-examination.

At the hearing on the motion to withdraw, the State said
it could not guarantee that it would not call Henry as a wit-
ness because “officers come and go from Santee” and that if
Vance “moved on,” it would be necessary to call Henry. Vance,
however, ultimately testified for the State, and the State did
not call Henry as a witness. Instead, Henry testified for the
defense. Therefore, trial counsel was never in the position of
cross-examining Henry, and the concern in Ehlers regarding
counsel’s inability to conduct a thorough cross-examination was
not present. .

Wabashaw further argues the written confession was a for-
gery. Therefore, he asserts that Vance and Henry’s credibility
was crucial. He claims that trial counsel should have established
the statement’s unreliability. He argues that although counsel
asked Henry if he witnessed the statement, counsel failed to ask
why Henry did not strike his name from the statement. Nor did
counsel ask why he allowed the statement to go forward without
alerting the court that his signature had been “forged.”

Wabashaw has failed to show how counsel’s failure to further
question Henry prejudiced his defense. It is unclear how any

8 Ig,
% State v, Ehlers, 262 Neb. 247, 631 N.W.2d 471 (2001).

further probing of Henry could have swayed the jury. Henry’s
direct testimony established that he did not sign his own name
to the statement. Further questioning regarding Henry’s char-
acter or his conduct would not affect the statement’s veracity
because it was Vance, not Henry, who questioned Wabashaw
and took Wabashaw’s written statement.

Wabashaw has failed to show that counsel’s alleged conflict
of interest prejudiced his defense. Thus, we determine that he
was not denied effective assistance of counsel because of an
alleged conflict of interest.

(b) Counsel’s Failure to Request an Evidentiary Hearing on

the Motion to Quash Was Not Ineffective Assistance

Wabashaw also argues that trial counsel was ineffective in
failing to request an evidentiary hearing on Wabashaw’s motion
to quash. Wabashaw contends that counsel failed to preserve
relevant evidence, thereby materially affecting his ability to
challenge the court’s denial of his motion to quash. Specifically,
Wabashaw alleges that counsel failed to produce evidence show-
ing Wabashaw is an American Indian or that he is a member of
the Sioux tribe protected by the 1868 Treaty.

Counsel’s failure to preserve the evidence did not prejudice
‘Wabashaw. We have concluded that the 1868 Treaty did not
provide a basis for granting the motion to quash. So, Wabashaw
suffered no prejudice when counsel failed to produce evidence
showing he was a member protected by the treaty. Counsel’s
failure to request an evidentiary hearing on the motion was not
ineffective assistance of counsel.

(c) The Record on Direct Appeal Is Insufficient to Review
the Remaining Ineffective Assistance Claims

Wabashaw further argues that counsel was ineffective by
failing to (1) object to references to evidence recovered by
the police, (2) file a motion to suppress Wabashaw’s confes-
sion as fruit of the poisonous tree, (3) cross-examine Vance
during the State’s case in chief, and (4) obtain a forensic hand-
writing expert.

We conclude that the record on direct appeal is not sufficient
to adequately review these claims of ineffective assistance.

412 be

V. CONCLUSION

We conclude that the district court had jurisdiction. The court
did not err in (1) failing to conduct an evidentiary hearing on
Wabashaw’s second motion to allow counsel to withdraw, (2)
determining that the State had made sufficient proof of identity
to use the 1977 conviction to enhance Wabashaw’s sentence, or
(3) accepting the 1977 conviction for enhancement when South
Dakota law precludes its use.

Assuming the court erred in failing to conduct an evidentiary
hearing on Wabashaw’s first motion to allow counsel to with-
draw, it was not prejudicial.

Neither trial counsel’s alleged conflict of interest nor his fail-
ure to request an evidentiary hearing on the motion to is insuf-
ficient to review Wabashaw’s remaining ineffective assistance
claims on direct appeal.

We affirm Wabashaw’s convictions and sentences.

AFFIRMED.

Heavican, C.J., not participating in the decision.

STATE OF NEBRASKA EX REL. NEBRASKA STATE BAR ASSOCIATION,
RELATOR, V. JOHN C. KINNEY, RESPONDENT.
740 N.W.2d 607

Filed November 2, 2007. No. S-87-352.

Kent L. Frobish, Assistant Counsel for Discipline, for
relator.

Robert F. Bartle, of Bartle & Geier Law Firm, for
respondent.

Heavican, C.J., Wricut, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Per CuriaM.

This court disbarred John C. Kinney in May 1987 after he
embezzled about $23,000 from his employer’s law firm. Kinney
applied for reinstatement. We appointed a referee, who recom-
mended that we readmit Kinney contingent upon Kinney’s taking
a course in legal ethics and successfully passing the Nebraska
bar examination. Counsel for Discipline filed exceptions to the
referee’s recommendations.

BACKGROUND
In 1981, Kinney was admitted to the practice of law in
Nebraska. Robert G. Scoville, an attorney practicing in South
Sioux City, Nebraska, hired Kinney as an associate attorney and

State ex rel. NSBA v. Kinney, 225 Neb. 340, 405 N.W.2d 17 (1987).

414 be

paid Kinney a salary. As an employee, Kinney was obligated
to turn over to the law firm all fees earned and paid to him.
In 1984, however, Kinney kept about $20,000 in fees that he
should have turned over to the firm. When this theft came to
light, Scoville confronted Kinney, but agreed to give him another
chance. Scoville did not report the theft to the police, and he
allowed Kinney to continue his employment as an associate.
Kinney’s father paid Scoville the $20,000 restitution.

According to Kinney, he had an alcohol problem when the
1984 incident occurred. Once Scoville discovered the theft,
Kinney entered a 30-day inpatient treatment program. After com-
pleting the program, Kinney became involved with Alcoholics
Anonymous.

In 1986, Scoville discovered that Kinney had again misap-
propriated funds. This time, Kinney had stolen about $23,000.
Scoville fired Kinney and filed a grievance against him with the
Counsel for Discipline in January 1987. Kinney admitted to the
Counsel for Discipline that he had embezzled about $23,000
from Scoville. Kinney agreed to make full restitution to Scoville
over time. The county attorney did not charge Kinney with
a crime.

In April 1987, Kinney signed a voluntary surrender of license,
admitting that he violated DR 1-102(A)(1), (4), and (6) of the
Code of Professional Responsibility. In May 1987, we dis-
barred Kinney.”

Kinney applied for reinstatement of his license in December
1998. We denied his application without a hearing. In October
2006, Kinney filed the current application for reinstatement.
Counsel for Discipline resisted Kinney’s application. We
appointed a referee to conduct an evidentiary hearing. Following
the hearing, the referee recommended that we readmit Kinney to
the practice of law, contingent upon Kinney’s taking a course in
legal ethics and successfully passing the Nebraska bar exami-
nation. Counsel for Discipline filed exceptions to the referee’s
recommendations.

2 Id.

ASSIGNMENTS OF ERROR
Counsel for Discipline takes exception to the referee’s finding
that Kinney has overcome the former adverse judgment as to his
character and that he currently possesses good moral character
sufficient to warrant reinstatement.

STANDARD OF REVIEW

Il In attorney discipline and admission cases, we review
recommendations de novo on the record, reaching a conclusion
independent of the referee’s findings.? When credible evidence
is in conflict on material issues of fact, however, we consider
and may give weight to the fact that the referee heard and
observed the witnesses and accepted one version of the facts
rather than another.‘

ANALYSIS

HM As the court that disbarred Kinney, we have inherent
power to reinstate him to the practice of law.> As recently noted
in State ex rel. Counsel for Dis. v. Mellor,’ this court owes a
solemn duty to protect the public and the legal profession when
considering an application for reinstatement.’ A mere sentimen-
tal belief that a disbarred lawyer has been punished enough will
not justify his or her restoration to the practice of law.® The
primary concern is whether the applicant, despite the former
misconduct, is now fit to be admitted to the practice of law.
Also, we must determine whether there is a reasonable basis to
believe that the present fitness will permanently continue in the
future.? In other words, reinstatement after disbarment should
be difficult rather than easy.!°

3 See State ex rel. Counsel for Dis, v. Mellor, 271 Neb. 482, 712 N.W.2d 817
(2006).

4 See id.

5 See id.

6 Id.

7 See id.

8 Id.

9 Id.

1 Id.

416 Es

HH A disbarred attorney has the burden of proof to establish
good moral character to warrant reinstatement.!' The applicant
can overcome this burden by clear and convincing evidence.”
The proof of good character must exceed that required under
an original application for admission to the bar because it must
overcome the former adverse judgment of the applicant’s char-
acter. “It follows that ‘[t]he more egregious the misconduct,
the heavier an applicant’s burden to prove his or her present
fitness to practice law.”"*

We disbarred Kinney in 1987 after he embezzled nearly
$23,000 from his employer’s law firm. This was not the first
time Kinney had taken money from his employer. In 1984, he
had embezzled about $20,000 in fees from the same employer.
Despite the misconduct that led to Kinney’s disbarment, the
referee determined that Kinney had proved by clear and convinc-
ing evidence that he currently possesses good moral character
that would warrant reinstatement. We agree.

After we disbarred Kinney, he sought alcohol and drug treat-
ment. He completed a 30-day inpatient program for alcohol,
drugs, and gambling, and then lived at a halfway house for
an additional 90 days. Kinney also participated in Alcoholics
Anonymous following his completion of these programs. Kinney
testified that he has not had any alcohol or drug problems since
completing rehabilitation in 1987. He explained that he might
have a glass of wine occasionally when he is at dinner with
friends, but that is the extent of his current alcohol consump-
tion. He further stated that he has attended many social activi-
ties where free alcohol is provided, but has had no recurrence
of his previous alcohol problems. In Mellor,'> we were unable
to predict whether the respondent could function as a lawyer
without reverting to addictive and potentially unlawful behavior.

" Id.

12 Neb. Ct. R. of Discipline 10(J) and (V) (rev. 2005); State ex rel. Counsel for
Dis. v. Mellor, supra note 3.

3 State ex rel. Counsel for Dis. v. Mellor, supra note 3.

4 Id. at 485, 712 N.W.2d at 820, quoting Matter of Robbins, 172 Ariz. 255,
836 P.2d 965 (1992).

'5 State ex rel. Counsel for Dis. v. Mellor; supra note 3.

Here, the record shows that Kinney is effectively addressing his
drug and alcohol problems.

In addition, Kinney has paid restitution to Scoville. According
to Kinney, by 1995, he had already paid Scoville an amount
“in the high teens or low 20s.” He settled his remaining res-
titution with a $2,000 lump-sum payment to Scoville’s estate
in 1995.

One concern Counsel for Discipline raised was that Kinney
had filed for bankruptcy in 1995. Counsel for Discipline
argues that although Kinney made restitution to Scoville and
his estate, Kinney discharged about $30,000 owed to other
creditors. We determine, however, that Kinney had a right to
seek relief under the bankruptcy laws just as any other citizen
would. We will not penalize him for exercising this right under
these circumstances.

Kinney also presented extensive evidence regarding his work
history following his disbarment. In 1988, Kinney moved to
Kansas City, Missouri. There he worked as a contract adminis-
trator for a geotechnical environmental engineering firm. After
leaving the engineering firm in April 2001, Kinney did legal
research as an independent contractor for a staff attorney at
another company. In 2005, Kinney began working with the
staff attorney as a legal assistant 3 days per week. His duties
included conducting legal research and preparing witnesses and
exhibits. The record concerning Kinney’s work history reflects
that Kinney was a responsible and trusted employee.

Kinney has been involved with many charitable organizations
in the Kansas City area. These organizations include the EVE
project (Elders Volunteering for Elders), where he has served as
a volunteer, board member, and board chairman; the First Step
Fund, where as a volunteer, he would help review leases and
offer business assistance; Operation Breakthrough; Friendship
House; Shepherd’s Center; and the Cleaver YMCA project.

At the hearing, two persons testified for Kinney. When asked
his opinion about Kinney’s reputation for honesty and integ-
rity, one responded, “I believe [Kinney is] a trustworthy and
dedicated individual that has used the last 20 years to his great
credit to benefit those around him.” The other individual, a law-
yer, described Kinney as “trustworthy” and “honest.”

Hl Besides this testimony, Kinney offered 11 letters support-
ing his reinstatement, including letters from his wife, friends,
supervisors, and other professional and community acquaint-
ances. Unlike Mellor, where the record contained no testi-
mony or written support from lawyers or judges regarding the
respondent’s character and fitness to practice law, two lawyers
wrote letters supporting Kinney. As we noted in Mellor, legal
professionals who are acquainted with an individual are in a
unique position to assess that person’s character and fitness to
be a lawyer.’ The lawyers writing for Kinney were aware of
Kinney’s past, and yet they fully supported his reinstatement.
We have placed considerable weight on such evidence in decid-
ing whether a disbarred lawyer has met the burden of showing
rehabilitation sufficient to warrant reinstatement.’”

The referee found Kinney’s testimony to be “honest, forth-
right and compelling.” The record reflects that Kinney takes full
responsibility for his past mistakes. We determine that given his
successful rehabilitation, restitution payments, responsible work
history, and volunteer service, Kinney has taken positive steps
over the last 20 years to turn his life around. We conclude that
Kinney has met his burden of establishing good moral character
to warrant reinstatement.

HMM Besides moral reformation, an applicant for reinstate-
ment after disbarment must also otherwise be eligible for admis-
sion to the bar as in an original application.* The applicant
must show that he or she is currently competent to practice law
in Nebraska.

Although Kinney has engaged in law-related employment,
he has not practiced law in the last 20 years. He testified that
he attended continuing education programs through his employ-
ment. These included seminars on contracts, insurance, and
loss prevention. The only actual continuing legal education he
has had, however, was a 3-hour ethics seminar put on by the

6 State ex rel. Counsel for Dis. v. Mellor, supra note 3.
"1a.

8 Id,

See id.

Missouri Bar Association in October 2006. Therefore, we agree
with the referee’s recommendation that Kinney’s readmission to
practice law should be contingent upon his successfully passing
the Nebraska bar examination.

CONCLUSION
We conclude that Kinney has met his burden of showing by
clear and convincing evidence that if he passes the Nebraska
bar examination, his license to practice law in Nebraska should
be reinstated. His application is conditionally granted. Costs
taxed to respondent.
JUDGMENT OF CONDITIONAL REINSTATEMENT.

Stave oF NEBRASKA, APPELLEE, V.
JosEpH EDGAR WHITE, APPELLANT.
740 N.W.2d 801

Filed November 2, 2007. No. S-06-919.

ee
re

Douglas J. Stratton, of Stratton & Kube, P:

for appellant.

Jon Bruning, Attorney General, and James D. Smith for
appellee.

Heavican, C.J., Wricut, ConNoLLy, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Miter-Lerman, J.
NATURE OF CASE
Joseph Edgar White appeals the order of the district court
for Jefferson County which denied White’s motion for DNA
testing filed under the DNA Testing Act, Neb. Rev. Stat.
§§ 29-4116 through 29-4125 (Cum. Supp. 2006). The district

420 —

court determined that testing would not result in noncumulative,
exculpatory evidence and denied DNA testing. We conclude
that the district court erred in such determination, and we there-
fore reverse the denial and remand for further proceedings.

STATEMENT OF FACTS
Following a jury trial, White was convicted of first degree
felony murder in connection with the death of 68-year-old Helen
Wilson. White was sentenced to life imprisonment. White’s con-
viction and sentence were affirmed on appeal to this court. State
v. White, 239 Neb. 554, 477 N.W.2d 24 (1991). The facts of the
case were described in this court’s opinion as follows:

The record shows that on the night of February 5,
1985, White, James Dean, Thomas Winslow, Ada JoAnn
Taylor, and Debra Shelden forcibly entered the victim’s
apartment in Beatrice[, Nebraska,] for the purpose of rob-
bing her. A sixth accomplice, Kathy Gonzalez, entered the
apartment during the course of the robbery. The record
shows that White participated in at least four planning ses-
sions concerning this incident. During those discussions,
White proposed sexually assaulting Mrs. Wilson as well as
robbing her.

Most of the details of the Wilson homicide are set out
in State v. Dean, 237 Neb. 65, 464 N.W.2d 782 (1991).
Specifically, Mrs. Wilson was forced into her bedroom and
was threatened and physically abused when she refused
to tell the intruders where she kept her money. She was
then forced back to the living room, screaming and kick-
ing, and either tripped or was pushed to the floor. At this
point, White and Winslow took turns sexually assaulting
Mrs. Wilson. According to Taylor, White had vaginal inter-
course with the victim, saying that she “deserved it,” while
Winslow held the victim’s legs. Winslow then sodomized.
the victim while White held her down. Meanwhile, Taylor
suffocated Mrs. Wilson with a pillow.

Mrs. Wilson did not move after she was raped, and
appeared to be either dead or near death. The intruders
proceeded to search the apartment for money. Taylor went
into the kitchen and made some coffee for White and

Winslow. Dean testified that after they left the apartment
building, there was a general conversation between Taylor
and White “about how nice it was to do it. They would do
it again. It was fun. If they had the opportunity, they would
do it again.” White, Taylor, Winslow, and Dean then went
to a truckstop and had breakfast.

When Mrs. Wilson’s body was found the next morning
by her brother-in-law, she had a complete fracture through
the lower part of the left humerus, fractured ribs, a frac-
tured sternum, a 2-centimeter vaginal tear, and numerous
bruises, abrasions, and scratches. Her hands were loosely
tied with a towel, and a scarf was tightly wrapped around
her head and tied.

239 Neb. at 555-56, 477 N.W.2d at 24-25.

On October 26, 2005, White filed a motion for DNA test-
ing under the DNA Testing Act. White sought DNA testing of
“any biological material that is related to the investigation or
prosecution” that had resulted in the judgment against him. A
hearing on the motion was held April 7, 2006. On August 2, the
district court entered an order denying White’s motion.

In its order denying White’s motion, the court noted vari-
ous facts that it found relevant to its decision. In addition to
the prosecution of White, the court noted that the State filed
charges against James Dean, Thomas Winslow, Ada JoAnn
Taylor, Debra Shelden, and Kathy Gonzalez in connection with
Wilson’s death. Dean, Taylor, and Shelden pled guilty to aiding
and abetting second degree murder, and Gonzalez pled guilty
to second degree murder. Dean, Taylor, Shelden, and Gonzalez
all testified against White at his trial. Winslow did not testify
against White, but Winslow pled no contest to aiding and abet-
ting second degree murder. At White’s trial, Dean, Taylor, and
Shelden all testified that they saw White and Winslow sexually
assault Wilson. Gonzalez testified that White was at the scene
of the crime. A pathologist testified at trial that Wilson had
suffered vaginal injuries and that her vagina and rectum had
been penetrated. Samples of semen that were found “on the
scene” were subjected to forensic testing, and one sample was
found to be similar to Winslow’s blood type, but no forensic
testing indicated that any sample belonged to White. White

422 Es

testified in his own defense and denied that he was present at
Wilson’s death.

In the August 2, 2006, order, the. court first determined that
DNA testing was effectively not available at the time of White’s
trial. The court did not determine but assumed for purposes
of analysis that biological material had been retained under
circumstances likely to safeguard the integrity of its original
physical composition. Finally, the court determined that DNA
testing would not result in noncumulative, exculpatory evidence
relevant to any claim that White was wrongfully convicted
or sentenced. The court therefore denied White’s motion for
DNA testing.

White appeals the denial of his motion for DNA testing.

ASSIGNMENT OF ERROR
White asserts that the district court erred in denying his motion
for DNA testing and particularly in finding that DNA testing
would not result in noncumulative, exculpatory evidence.

STANDARD OF REVIEW
Hl A motion for DNA testing 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. State v. Phelps,
273 Neb. 36, 727 N.W.2d 224 (2007).

ANALYSIS
We recently set forth the procedure for obtaining DNA testing
pursuant to the DNA Testing Act as follows:

A person in custody takes the first step toward obtain-

ing possible relief under the DNA Testing Act by filing

a motion requesting forensic DNA testing of biologi-
cal material. See § 29-4120(1). Forensic DNA testing is
available for any biological material that (1) is related
to the investigation or prosecution that resulted in the
judgment, (2) is in the actual or constructive possession
of the State or others likely to safeguard the integrity of
the biological material, and (3) either was not previously
subjected to DNA testing or can be retested with more
accurate current techniques. See id. After a motion seeking
forensic DNA testing has-been filed, the State is required

to file an inventory of all evidence that was secured by the
State or a political subdivision in connection with the case.
See § 29-4120(4).

If the threshold requirements of § 29-4120(1) have been
met, then a court is required to order testing only upon a
further determination that “such testing was effectively not
available at the time of trial, that the biological material has
been retained under circumstances likely to safeguard the
integrity of its original physical composition, and that such
testing may produce noncumulative, exculpatory evidence
relevant to the claim that the person was wrongfully con-
victed or sentenced.” § 29-4120(5).

State v. Phelps, 273 Neb. at 40, 727 N.W.2d at 227-28.

In its order in the present case, the district court implicitly
found that the threshold requirements of § 29-4120(1) para-
phrased above were met. The court then considered whether
the three requirements listed in § 29-4120(5) and quoted above
were met. It first found that DNA testing was not available at
the time of White’s trial. The State does not challenge this find-
ing. Because the court would ultimately deny White’s motion
based on the third requirement, the court assumed for purposes
of analysis of the second requirement that the biological mate-
tial had been retained under circumstances likely to safeguard
the integrity of its original physical composition. The court
thereafter determined that DNA testing would not produce
noncumulative, exculpatory evidence relevant to the claim that
White was wrongfully convicted or sentenced, and the court
therefore denied White’s motion. The court’s determination on
the final requirement is challenged on appeal.

The district court characterized White’s argument with regard
to wrongful conviction and sentence as a claim by White that
with the aid of DNA testing, he could establish that he was not
present and did not participate in the crime. The court deter-
mined that even if DNA testing indicated that the biological
samples did not belong to White, such evidence would not com-
pel the conclusion that White was not present. The court further
noted that White was not charged with sexually assaulting
Wilson but with felony murder, which could have been proved
based on White’s participation in the felony robbery even if he

did not participate in a sexual assault. The court noted that even
without biological evidence, there was other evidence, mainly
witness testimony, that White was present at Wilson’s death and
that he participated in the sexual assault. Thus, even if DNA
testing proved that the semen belonged to Winslow and not to
White, such evidence would merely be an additional piece of
evidence to be considered by a jury and would not preclude a
jury from finding White guilty of first degree murder based on
other evidence. In this respect, the court noted that White was
convicted in the original trial despite testimony that biological
evidence found at the scene could not be tied to him. The court
therefore concluded that even if DNA testing were favorable to
White, “the result would be at best inconclusive, and certainly
not exculpatory,” and that such DNA evidence “would be, at
best, cumulative of the other biological evidence.” Finally, the
district court noted that the court that had sentenced White
had “found that there was little appreciable difference in the
degree of culpability between” White and his codefendants,
and the district court in the present case therefore concluded
that DNA evidence favorable to White would not have affected
his sentence.

White argues on appeal that the district court’s analysis was
limited to a consideration of the possible results of DNA testing
as being that the samples belonged to Winslow or to White or
to both, with the most favorable result to White being that the
samples belonged only to Winslow. White asserts that the district
court failed to consider the possibility that DNA testing would
exclude both White and Winslow as contributors to the samples.
White argues that such result would be the most favorable to
him because it would call into question the testimony of the
State’s witnesses against him and would be consistent with his
defense that he was not present at the scene of the crime.

Three witnesses testified that only White and Winslow car-
ried out the sexual assault of Wilson. If DNA testing excluded
White and Winslow, then, White argues, the sample necessarily
belongs to another person, possibly Dean or some other uniden-
tified male. A result showing that neither White nor Winslow
contributed to the sample would raise serious doubts as to the
credibility of the witnesses who stated that only White and

Winslow carried out the sexual assault. Such evidence could
be used by the defense to cross-examine the witnesses and
undermine their testimony regarding the sexual assault and the
murder which, White argues, would be “devastating” to the
prosecution’s case. Brief for appellant at 17.

The heart of the State’s case was the testimony of White’s
codefendants, Dean, Taylor, and Shelden, who each testified
that they saw only White and Winslow sexually assault Wilson.
We agree with White that if DNA testing showed that the
semen samples belonged to neither White nor Winslow, such
evidence would raise questions regarding the identity of the
person or persons who actually contributed to the sample and
who presumably committed the assault. Such a favorable test
result could cause jurors to question the credibility of Dean,
Taylor, and Shelden. Evidence that contradicted such witnesses’
testimony that White and Winslow carried out the sexual assault
could cause jurors to question their testimony regarding other
matters. Evidence that raised serious doubts regarding the cred-
ibility of these witnesses would be favorable to White and
material to the issue of his guilt and, therefore, “exculpatory”
as defined under the DNA Testing Act.

We determine that a DNA test result that excluded both White
and Winslow as contributors to the semen samples would be
exculpatory under the DNA Testing Act’s unique definition of
“exculpatory evidence.” The DNA Testing Act defines “excul-
patory evidence” as evidence “which is favorable to the person
in custody and material to the issue of the guilt of the person
in custody.” § 29-4119. As noted above, DNA test results that
excluded both White and Winslow could raise serious doubts
regarding the testimony of the main witnesses against White.
Although there was other evidence regarding White’s presence
at the crime scene and his involvement in planning the crime,
the testimonies of Dean, Taylor, and Shelden were critical to
the State’s case against White resulting in White’s conviction
for first degree murder.

For the sake of completeness, we note that in addition
to finding that DNA testing would not produce exculpatory
evidence, the district court found that DNA evidence exclud-
ing White as a contributor would be cumulative to forensic

426 Ee

evidence presented at White’s trial, which failed to indicate
that the semen samples belonged to White. The State argues
that White was convicted despite the lack of such forensic
evidence and that DNA evidence excluding White would thus
be cumulative of such evidence. However, we note that there is
a difference between forensic evidence that fails to identify a
person and DNA evidence that excludes the person. See State
v. Houser, 241 Neb. 525, 490 N.W.2d 168 (1992) (noting pro-
bative value of DNA evidence). If DNA testing results specifi-
cally exclude White as a contributor, such evidence would not
be merely cumulative of the forensic evidence, which simply
failed to identify White.

Because DNA testing could result in evidence excluding both
White and Winslow as contributors to the semen samples, we
determine that DNA testing may produce noncumulative, excul-
patory evidence relevant to the claim that White was wrongfully
convicted or sentenced and that the district court erred when it
failed to so determine. The district court therefore abused its
discretion when it denied White’s motion for DNA testing.

We note that in its order denying DNA testing, the district
court, for purposes of analysis, assumed without deciding that
biological material had been retained under circumstances likely
to safeguard the integrity of its original physical composition.
Because the court denied White’s motion for DNA testing for
other reasons, the court did not make a determination on the
retention issue. In appellate proceedings, the examination by
the appellate court is confined to questions which have been
determined by the trial court. State v. Poe, 266 Neb. 437, 665
N.W.2d 654 (2003). Without a determination of this issue,
we cannot order the district court to order DNA testing. We
therefore remand the cause to the district court with orders to
determine whether biological material has been retained under
circumstances likely to safeguard the integrity of its original
physical composition. If the court so finds, it should order DNA
testing of such material.

CONCLUSION
We conclude that the district court erred in its determination
that DNA testing would not produce noncumulative, exculpatory

427

evidence and that the court therefore abused its discretion when
it denied White’s motion for DNA testing. We reverse the denial
and remand the cause to the district court for further proceedings
consistent with this opinion.
REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.

SvaTe OF NEBRASKA, APPELLEE, V.
Tuomas W. WINSLOW, APPELLANT.
740 N.W.2d 794

Filed November 2, 2007. No. S-06-983.

James R. Mowbray and Jerry L. Soucie, of Nebraska
Commission on Public Advocacy, for appellant.

Jon Bruning, Attorney General, and James D. Smith for
appellee.

Heavican, C.J., Wricut, CONNOLLY, GepRarp, STEPHAN,
McCormack, and MILter-Lerman, JJ.

Mitter-Lerman, J.
NATURE OF CASE
Thomas W. Winslow appeals the order of the district court
for Gage County which denied Winslow’s motion for DNA
testing filed under the DNA Testing Act, Neb. Rev. Stat.
§§ 29-4116 through 29-4125 (Cum. Supp. 2006). The district

ang Es

court determined that Winslow was not eligible for DNA test-
ing because he was convicted based on his plea of no contest.
As an alternate ground for denying the motion, the district
court determined that DNA testing would not result in non-
cumulative, exculpatory evidence. We conclude that the district
court erred in both determinations, and we therefore reverse,
and remand for further proceedings.

STATEMENT OF FACTS
On April 24, 1989, Winslow was charged with first degree
murder in connection with the death of 68-year-old Helen
Wilson. After a codefendant, Joseph Edgar White, was con-
victed by a jury of first degree murder, Winslow reached a
plea agreement with the State, and on December 8, 1989,
Winslow pled no contest to a reduced charge of aiding and
abetting second degree murder. As a factual basis in support of
Winslow’s plea, the State relied on the evidence and testimony
of witnesses presented at White’s trial. The trial court accepted
Winslow’s plea, and Winslow was sentenced to imprisonment
for 50 years. Winslow’s sentence was summarily affirmed by
this court. State v. Winslow, 236 Neb. xxvii (No. S-90-193,
Jan. 4, 1991).
The facts of the underlying crime were described in this
court’s opinion in codefendant White’s appeal as follows:
The record shows that on the night of February 5,
1985, White, James Dean, Thomas Winslow, Ada JoAnn
Taylor, and Debra Shelden forcibly entered the victim’s
apartment in Beatrice[, Nebraska,] for the purpose of rob-
bing her. A sixth accomplice, Kathy Gonzalez, entered the
apartment during the course of the robbery. The record
shows that White participated in at least four planning ses-
sions concerning this incident. During those discussions,
White proposed sexually assaulting Mrs. Wilson as well as
robbing her.
Most of the details of the Wilson homicide are set out
in State v. Dean, 237 Neb. 65, 464 N.W.2d 782 (1991).
Specifically, Mrs. Wilson was forced into her bedroom and
was threatened and physically abused when she refused
to tell the intruders where she kept her money. She was

then forced back to the living room, screaming and kick-
ing, and either tripped or was pushed to the floor. At this
point, White and Winslow took turns sexually assaulting
Mrs. Wilson. According to Taylor, White had vaginal inter-
course with the victim, saying that she “deserved it,” while
Winslow held the victim’s legs. Winslow then sodomized
the victim while White held her down. Meanwhile, Taylor
suffocated Mrs. Wilson with a pillow.

Mrs. Wilson did not move after she was raped, and
appeared to be either dead or near death. The intruders
proceeded to search the apartment for money. Taylor went
into the kitchen and made some coffee for White and
Winslow. Dean testified that after they left the apartment
building, there was a general conversation between Taylor
and White “about how nice it was to do it. They would do
it again. It was fun. If they had the opportunity, they would
do it again.” White, Taylor, Winslow, and Dean then went
to a truckstop and had breakfast.

When Mrs. Wilson’s body was found the next morning
by her brother-in-law, she had a complete fracture through
the lower part of the left humerus, fractured ribs, a frac-
tured sternum, a 2-centimeter vaginal tear, and numerous
bruises, abrasions, and scratches. Her hands were loosely
tied with a towel, and a scarf was tightly wrapped around
her head and tied.

State v. White, 239 Neb. 554, 555-56, 477 N.W.2d 24, 24-
25 (1991).

On February 22, 2006, Winslow filed a motion for DNA
testing under the DNA Testing Act. Winslow sought DNA test-
ing of “any biological material that is related to the investiga-
tion or prosecution” that resulted in the judgment against him.
Hearings on the motion were held April 7 and 18. On August 29,
the district court entered an order denying Winslow’s motion.

In the order, the court noted various facts related to Winslow’s
case that it found relevant to its decision. In addition to the pros-
ecutions of Winslow and White, the court noted that the State
filed charges against James Dean, Ada JoAnn Taylor, Debra
Shelden, and Kathy Gonzalez in connection with Wilson’s death.
Dean, Taylor, and Shelden pled guilty to aiding and abetting

430 Le

second degree murder, and Gonzalez pled guilty to second
degree murder. Dean, Taylor, Shelden, and Gonzalez all testified
against White at his trial. Winslow did not testify against White.
At White’s trial, Dean, Taylor, and Shelden all testified that they
saw White and Winslow, and only White and Winslow, sexually
assault Wilson. Gonzalez testified that White was at the scene
of the crime. A pathologist testified at White’s trial that Wilson
had suffered vaginal injuries and that her vagina and rectum
had been penetrated. Samples of semen that were found “on the
scene” were subjected to forensic testing, and one sample was
found to be similar to Winslow’s blood type, but no forensic
testing indicated that any sample belonged to White.

In its August 29, 2006, order, the district court first addressed
the State’s argument that Winslow waived his right to DNA
testing because he pled no contest rather than being convicted
after a trial. The court noted that ordinarily, the voluntary entry
of a guilty plea or a plea of no contest waives every defense
to a charge, whether the defense is procedural, statutory, or
constitutional. Based on this principle, the court concluded that
Winslow had waived his right to DNA testing because of his
plea of no contest.

In the event it was incorrect in its conclusion that Winslow
waived his right to DNA testing, the district court consid-
ered Winslow’s motion on its merits. The court first deter-
mined that DNA testing was effectively not available at the
time of Winslow’s prosecution. The court did not determine
but assumed for purposes of analysis that biological material
had been retained under circumstances likely to safeguard the
integrity of its original physical composition. Finally, the court
determined that DNA testing would not result in noncumulative,
exculpatory evidence relevant to any claim that Winslow was
wrongfully convicted or sentenced.

Regarding wrongful conviction, the court characterized
Winslow’s objective of testing as a claim by Winslow that with
the aid of DNA testing, he could establish that he was not pres-
ent and, therefore, did not participate in the crime of which
he stood convicted. The court determined that even if DNA
testing indicated that the biological samples did not belong to
Winslow, such evidence would not compel a conclusion that

Winslow was not present or did not aid and abet the murder.
The court noted that even without biological evidence, there
was other evidence, mainly witness testimony from White’s
trial, that Winslow was present at Wilson’s death and that he -
participated in the sexual assault and robbery. Thus, even if
DNA testing proved that the semen belonged to White and not
to Winslow, such evidence would merely be an additional piece
of evidence to be considered by a jury and would not preclude a
jury from finding Winslow guilty of aiding and abetting second
degree murder based on other evidence. The court therefore
concluded that even if DNA testing were favorable to Winslow,
“the result would be at best inconclusive, and certainly not
exculpatory.” Because the court found that DNA testing would
not result in noncumulative, exculpatory evidence, the court
denied Winsiow’s motion for DNA testing. Finally, the district
court noted that the court that had sentenced Winslow relied
on Winslow’s significant prior criminal record, his psychiatric
records, the plea agreement, and Winslow’s failure to testify
against White in setting Winslow’s sentence. The court in the
present case therefore concluded that DNA evidence favorable
to Winslow would not have changed his sentence.
Winslow appeals the denial of his motion for DNA testing.

ASSIGNMENTS OF ERROR
Winslow asserts that the district court erred in denying his
motion for DNA testing and particularly in (1) concluding that
his entry of a plea of no contest waived his right to DNA testing
and (2) finding that DNA testing would not result in noncumu-
lative, exculpatory evidence.

STANDARDS OF REVIEW

Hl The interpretation of a statute is 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. Neiman v. Tri R Angus, ante p. 252, 739 N.W.2d
182 (2007).

HB A motion for DNA testing 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. State v.
Phelps, 273 Neb. 36, 727 N.W.2d 224 (2007).

ANALYSIS
DNA Testing. Act Allows Testing in Connection
With Plea-Based Convictions.

The district court denied Winslow’s motion for DNA test-
ing on the basis that Winslow waived his right to DNA testing
because he pled no contest rather than being convicted after a
trial. Contrary to the district court’s reasoning, we conclude as a
matter of law that under the DNA Testing Act, a defendant who
was convicted based on a plea is eligible for testing, and that
a defendant does not waive such rights if his or her conviction
was based on a plea.

The district court reasoned that a defendant who pleads
waives relief under the DNA Testing Act because normally a
plea. waives all defenses to a criminal charge and, therefore,
the defendant has already waived any defense that may be
supported by DNA testing results. Initially, we note that the
entry of a plea does not invariably waive all forms of relief
pertaining to a plea-based conviction. Thus, for example, we
have stated that a court will consider an allegation that the
plea and associated conviction were the result of ineffective
assistance of counsel brought under the postconviction act,
Neb. Rev. Stat. §§ 29-3001 to 29-3004 (Reissue 1995). State
v. Barnes, 272 Neb. 749, 724 N.W.2d 807 (2006). Further, the
court’s analysis did not focus on the specific language pertain-
ing to the relief available under the DNA Testing Act, which
we believe controls our analysis. The district court’s reasoning
ignores the fact that under the DNA Testing Act, a court is
required to order DNA testing if, among other requirements,
the court determines that such testing may produce evidence
“relevant to the claim that the person was wrongfully convicted
or sentenced.” § 29-4120(5) (emphasis supplied). With respect
to the impact the results of DNA testing might have on a sen-
tence, we note that we customarily consider challenges to sen-
tences in plea-based convictions. See State v. Burkhardt, 258
Neb. 1050, 607 N.W.2d 512 (2000) (guilty plea waived right
to challenge factual basis for conviction, but this court con-
sidered challenge to sentence). Because DNA testing results
may be used to support a claim that the person was wrongfully
sentenced, it does not follow that a person who was convicted

based on a plea has waived his or her rights to relief under the
DNA Testing Act.

More importantly, contrary to the reasoning of the district
court, the language of the DNA Testing Act does not limit the
scope of its relief to persons convicted following a trial. In
this regard, we note that § 29-4120(1) of the DNA Testing Act
provides, “Notwithstanding any other provision of law, a per-
son in custody pursuant to the judgment of a court may, at any
time after conviction, file a motion, with or without supporting
affidavits, in the court that entered the judgment requesting
forensic DNA testing . . . .” The language of the DNA Testing
Act affords relief to persons “in custody pursuant to the judg-
ment of a court,” and such persons may include those in cus-
tody pursuant to either a conviction following trial or a plea-
based conviction.

The language of Nebraska’s DNA Testing Act may be
contrasted to the language of DNA testing statutes in other
states where courts have determined, based on the specific
language of their relevant DNA testing statutes, that relief
pursuant to such statutes is limited to defendants who were
found guilty following trial and testing is not available to
defendants convicted pursuant to a plea. In People v. Byrdsong,
33 A.D.3d 175, 180, 820 N.Y.S.2d 296, 299 (2006), the court
noted that New York’s statute referred a number of times to
“‘trial resulting in the judgment.’” Based on such language,
the court concluded that “the New York State statute explicitly
requires conviction by verdict and judgment after trial” and
that therefore, a defendant who pled guilty was not entitled
to relief under the New York statute. Id. See, also, Stewart v.
State, 840 So. 2d 438 (Fla. App. 2003) (stating that Florida
DNA testing statute referring to defendant who “‘has been
tried and found guilty’” excludes defendant who pled guilty
or nolo contendere) (abrogated by amendment of statute as
recognized in Lindsey v. State, 936 So. 2d 1213 (Fla. App.
2006)); People v. Lamming, 358 Ill. App. 3d 1153, 1155, 833
N.E.2d 925, 927, 295 Ill. Dec. 719, 721 (2005) (stating that
Illinois DNA testing statute requiring that “identity was at issue
at his trial” excludes defendant who pled guilty). We recog-
nize that Nebraska’s DNA Testing Act contains a reference to

34 ee

“trial” in that an order for DNA testing requires, inter alia, “a
determination that such testing was effectively not available at
the time of trial.” § 29-4120(5). However, reading Nebraska’s
DNA Testing Act as a whole, we do not read this reference to
limit the scope of the relief granted under the DNA Testing
Act to persons convicted after a trial. See Weeks v. State, 140
S.W.3d 39 (Mo. 2004) (stating that despite some references to
“time of trial,” Missouri DNA testing statute, when read as a
whole, applied both to those convicted after plea and to those
convicted after trial).

Nebraska’s DNA Testing Act applies to “a person in custody
pursuant to the judgment of a court,” § 29-4120(1), and is more
similar to the language of the Kansas statute at issue in State v.
Smith, 34 Kan. App. 2d 368, 119 P.3d 679 (2005). The Kansas
statute referred to “‘a person in state custody, at any time after
conviction.’” Id. at 370, 119 P.3d at 682. The Kansas court
noted that the “statute itself fails to restrict its ambit based
upon the plea entered by the defendant” and concluded that
it would be inconsistent with the statute if DNA testing were
denied solely because the conviction was the result of a guilty
plea. Id. at 371, 119 P.3d at 683. The Kansas court stated, “The
legislature is perfectly capable of limiting such postconviction
telief to those who pled not guilty or no contest to the mate-
rial charges, and no such limitation appears in the text of the
statute.” Id.

Hl Nebraska’s DNA Testing Act, read as a whole, does not
limit its application to those who were convicted following a
trial. The Legislature expressed a broad intent that “wrong-
fully convicted persons have an opportunity to establish their
innocence through [DNA] testing,” § 29-4117, and that the
court shall order DNA testing upon a showing that the biologi-
cal material may be “relevant to the claim that the person was
wrongfully convicted or sentenced,” § 29-4120(5). Based on
such intent and the language of the DNA Testing Act, we con-
clude that the DNA Testing Act does not exclude persons who
were convicted and sentenced pursuant to pleas. The district
court in this case therefore erred in concluding that because
of his plea, Winslow was not entitled to relief under the DNA
Testing Act.

DNA Testing May Produce Noncumulative,
Exculpatory Evidence.

In the event it was incorrect in its conclusion that Winslow
waived his right to DNA testing, the district court considered the
merits of Winslow’s motion. Winslow asserts on appeal that the
court erred in its determination that testing would not produce
noncumulative, exculpatory evidence. We agree with Winslow
and conclude that the court erred in such determination.

We recently set forth the procedure for obtaining DNA testing
pursuant to the DNA Testing Act as follows:

A person in custody takes the first step toward obtain-
ing possible relief under the DNA Testing Act by filing
a motion requesting forensic DNA testing of biologi-
cal material. See § 29-4120(1). Forensic DNA testing is
available for any biological material that (1) is related
to the investigation or prosecution that resulted in -the
judgment, (2) is in the actual or constructive possession
of the State or others likely to safeguard the integrity of
the biological material, and (3) either was not previously
subjected to DNA testing or can be retested with more
accurate current techniques. See id. After a motion seeking
forensic DNA testing has been filed, the State is required
to file an inventory of all evidence that was secured by the
State or a political subdivision in connection with the case.
See § 29-4120(4).

If the threshold requirements of § 29-4120(1) have been
met, then a court is required to order testing only upon a
further determination that “such testing was effectively not
available at the time of trial, that the biological material
has been retained under circumstances likely to safeguard
the integrity of its original physical composition, and that
such testing may produce noncumulative, exculpatory evi-
dence relevant to the claim that the person was wrongfully
convicted or sentenced.” § 29-4120(5).

State v. Phelps, 273 Neb. 36, 40, 727 N.W.2d 224, 227-
28 (2007).

We note that as a factual basis in support of Winslow’s plea,
the State relied on the evidence and testimony of witnesses at
the trial of Winslow’s codefendant, White. Around the time

436 Ee

Winslow filed his motion for DNA testing, White also filed a
motion for DNA testing. White’s motion was also denied. The
appeals of Winslow’s and White’s motions for DNA testing were
consolidated for briefing and oral argument before this court.

In White’s appeal, we concluded that the district court erred
in its determination that DNA testing would not result in noncu-
mulative, exculpatory evidence. We adopt the reasoning and con-
clusion in State v. White, ante p. 419, 740 N.W.2d 801 (2007),
in the present case. We noted in State v. White, supra, that DNA
testing could exclude both White and Winslow as contributors
to the semen samples collected at the scene of the crime, and
we determined that such DNA test result would be “exculpa-
tory evidence” under the unique definition of “exculpatory” in
Nebraska’s DNA Testing Act. Section 29-4119 defines exculpa-
tory evidence as follows: “For purposes of the DNA Testing Act,
exculpatory evidence means evidence which is favorable to the
person in custody and material to the issue of the guilt of the
person in-custody.” In State v. White, we noted that if White and
Winslow were excluded as contributing to the semen sample,
such evidence would be favorable to White and material to the
issue of White’s guilt, because it would undermine the credibil-
ity of witnesses against White who testified that only White and
Winslow had sexually assaulted Wilson. We therefore reversed
the denial of White’s motion for DNA testing and remanded the
cause to the district court with directions.

We similarly conclude that the court in the present case erred
in determining that DNA testing could not result in noncumula-
tive, exculpatory evidence relevant to the claim that Winslow was
wrongfully convicted or sentenced. As in State v. White, supra,
DNA testing could exclude White and Winslow as contributors
to the semen sample. Because the factual basis for Winslow’s
plea consisted of the evidence and testimony from White’s trial,
the potential test results that would be noncumulative, exculpa-
tory evidence in White’s case would also be noncumulative,
exculpatory evidence in Winslow’s case. Such evidence could
raise doubts regarding the veracity of the testimony at White’s
trial that served as the factual basis for Winslow’s plea and
would therefore be favorable to Winslow and relevant to his
claim of wrongful conviction. Evidence raising serious doubt

regarding such testimony could also be favorable to Winslow
and relevant to a claim that he was wrongfully sentenced. That
is, even if Winslow were placed at the scene of the crime, such
evidence excluding Winslow as a contributor would also be rele-
vant to a claim by Winslow that he was less culpable than the
sentencing court had believed him to be and that therefore, he
was wrongfully sentenced.

We conclude that the district court erred in concluding that
DNA testing would not result in noncumulative, exculpatory
evidence and that therefore, the district court abused its discre-
tion when it denied Winslow’s motion for DNA testing on such
basis. Similar to the situation in State v. White, supra, the court
assumed for purposes of analysis, but did not decide, that bio-
logical material had been retained under circumstances likely to
safeguard the integrity of its original physical composition. We
therefore remand the cause to the district court to make a finding
on the retention issue and, if proper circumstances exist, to order
DNA testing of such material.

CONCLUSION

We conclude that under the DNA Testing Act, relief is avail-
able to defendants whether they were convicted following trial
or convicted based on a plea. The district court therefore erred
in concluding that because Winslow pled no contest, he waived
his rights under the DNA Testing Act. The court also erred in
determining that DNA testing would not produce noncumula-
tive, exculpatory evidence. The court abused its discretion when
it denied Winslow’s motion for DNA testing. We reverse the
denial and remand the cause for further proceedings consistent
with this opinion.
REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.

438 Le

Connie REIMERS-HILD, APPELLANT, V.
Stare OF NEBRASKA ET AL., APPELLEES.
TAL N.W.2d 155

Filed November 9, 2007. No. S-06-203.

re

Clarence E. Mock II and Denise E. Frost, of Johnson &
Mock, for appellant.

Ralph A. Froehlich, Jay L. Welch, and Adam R. White, Senior
Certified Law Student, of Locher, Pavelka, Dostal, Braddy &
Hammes, L.L.C., for appellees.

Heavican, C.J., WricHT, ConNoLLy, GERRARD, McCormack,
and Mituer-Lerman, JJ.

Gerrarb, J.

The coverage required by Nebraska’s Uninsured and
Underinsured Motorist Insurance Coverage Act! does not apply
to “[bJodily injury, sickness, disease, or death of the insured with
respect to which the applicable statute of limitations has expired
on the insured’s claim against the uninsured or underinsured
motorist.”? The question presented in this case is whether a stat-
ute of limitations can be said to “expire” if the insured settles
his or her claim against the alleged tort-feasor within the statu-
tory limitations period, but does not file a complaint against the
tort-feasor within the applicable statute of limitations.

BACKGROUND

Connie Reimers-Hild was a graduate student at the University
of Nebraska (University), and employed by the University as a
graduate research assistant. She was a passenger in a University
vehicle when she was injured in a collision with Michael Johns
on June 8, 1999. Reimers-Hild’s injuries arose out of and in the
course of her employment,’ and the State of Nebraska paid work-
ers’ compensation benefits for Reimers-Hild. The State is ‘self-
insured pursuant to the Nebraska Workers’ Compensation Act,*
and Sedgwick Claims Management Services, Inc. (Sedgwick),
is the State’s third-party claims administrator for workers’ com-
pensation claims.

The State had obtained an “All Lines Aggregate Insurance
Policy,” issued by Northland Insurance Company (Northland),
that was in effect at the time of the accident. The Northland
policy provided uninsured and underinsured motorist cover-
age in the amount of $50,000 for each person, but the policy
also contained a self-insured retention of $300,000 for each
loss under that section of the policy. As a result, the State was
solely responsible for, and Northland had no obligation under
the policy to pay, any claim made against the uninsured and
underinsured motorist coverage of the policy. Sedgwick was

' Neb. Rev. Stat. §§ 44-6401 to 44-6414 (Reissue 2004).

2 § 44-6413(1)(e).

3 See Neb. Rev. Stat. § 48-101 et seq. (Reissue 2004 & Cum. Supp. 2006).
4 Id.

440 be

also the third-party claims administrator for claims made on the
Northland policy.

Guide One Insurance Company (Guide One) was Johns’ motor
vehicle liability insurer. Guide One settled Reimers-Hild’s claim
against Johns, for the policy limit of $25,000, before June 8,
2003, when the 4-year statute of limitations would have expired
on that claim.’ As part of the settlement, Reimers-Hild executed
a “Release of All Claims” in which she accepted the $25,000 as
consideration for “the final release and discharge” of her claim
against Johns. Reimers-Hild never filed suit against Johns. The
State, through Sedgwick, was notified of and expressly con-
sented to the settlement, and Guide One paid $12,271.62 to
Sedgwick to satisfy the State’s workers’ compensation lien.

After settling her claim with Johns, Reimers-Hild demanded
payment from the State, through Sedgwick, under the State’s
underinsured motorist coverage. Sedgwick denied the claim
on November 3, 2003. Reimers-Hild did not file a claim with
the State Claims Board, or any other State agency. Instead, on
December 12, she filed a complaint in the district court against
the State and the University. An amended complaint, filed July
15, 2004, added Northland as a defendant. The defendants’
answer alleged, as an affirmative defense, that Reimers-Hild’s
claim for underinsured motorist benefits was barred because
the underlying tort claim had “expired” within the meaning
of § 44-6413(1)(e).

The defendants moved for a separate trial on whether
Reimers-Hild’s claim was barred by the statute of limitations,°
which motion the district court granted. Pursuant to the parties’
pretrial memoranda, the court’s pretrial order specified that the
sole issue at trial was to be whether Reimers-Hild’s claim for
underinsured motorist coverage was timely filed. A trial was
had on a stipulated record. The court determinéd that the case
“is governed by Section 44-6413(1)(e)” and that “[b]ecause
Reimers-Hild failed to commence an action against Johns within
four years, her action here is barred.” The court entered judg-
ment against Reimers-Hild, and she appeals.

5 See Neb. Rev. Stat. § 25-207 (Reissue 1995).
6 See Neb. Rev. Stat. § 25-221 (Cum. Supp. 2006).

a “
ASSIGNMENT OF ERROR
Reimers-Hild assigns, consolidated and restated, that the

district court erred in finding that her claim was barred by
§ 44-6413(1)(e).

STANDARD OF REVIEW
Hl The meaning of a statute is a question of law. When
reviewing questions of law, an appellate court has an obligation
to resolve the questions independently of the conclusion reached
by the trial court.”

ANALYSIS

HMM Section 44-6413(1)(e) bars as untimely an insured’s
claim for uninsured or underinsured motorist benefits when
the statute of limitations on the underlying claim against the
uninsured or underinsured motorist has “expired.”* The purpose
underlying § 44-6413(1)(e) is the protection of the insurer
when it may have to pay uninsured or underinsured motorist
benefits.? The statute makes it the responsibility of the insured
to preserve the claim against the tort-feasor in order to protect
the insurer’s rights against the tort-feasor.'°

But the insured can prevent the statute of limitations from
“expiring” against the underlying tort-feasor by filing a timely
complaint against the tort-feasor. In Schrader v. Farmers Mut.
Ins. Co.,"' an insured who had been injured in an automobile
accident brought suit against the tort-feasor within the 4-year
statute of limitations applicable to that claim, and then settled
the claim. The insured sought underinsured motorist benefits
from his insurer, and when they were unable to reach an agree-
ment, the insured filed a complaint against the insurer in the
district court.

HM The insurer in Schrader raised a statute of limitations
defense pursuant to § 44-6413(1)(e), because the insured’s

7 Zach v. Nebraska State Patrol, 273 Neb. 1, 727 N.W.2d 206 (2007).

8 Schrader v. Farmers Mut. Ins. Co., 259 Neb. 87, 608 N.W.2d 194 (2000).
° Dworak v. Farmers Ins. Exch., 269 Neb. 386, 693 N.W.2d 522 (2005).
See id.

1 Schrader, supra note 8.

442 es

complaint against the insurer had not been filed within 4 years
of the accident. The district court agreed and entered judgment
against the insured. We reversed the judgment, explaining that
§ 44-6413(1)(e) “does not apply if an insured timely files a
claim against an uninsured or underinsured motorist because the
statute of limitations on the insured’s claim against the unin-
sured or underinsured motorist never expired” within the mean-
ing of § 44-6413(1)(e).2

The district court in this case reasoned that our decision
in Schrader did not apply to Reimers-Hild, because she had
not filed a complaint against the alleged tort-feasor. But we
believe this to be a distinction without a difference. Reimers-
Hild’s settlement with Johns extinguished her claim against
him, and the statute of limitations applicable to that claim
never “expired.” .

‘We base that conclusion on the purpose of § 44-6413(1)(e),
the plain meaning of the statute, and our case law explain-
ing the statute’s function. As previously noted, the purpose of
§ 44-6413(1)() is to protect the insurer’s right to pursue a claim
against the tort-feasor by making it the insured’s responsibility
to preserye the claim. More specifically, the statute operates to
disallow a claim for uninsured or underinsured motorist cover-
age where the insured has allowed the underlying tort claim to
become barred by not settling or bringing suit within the period
of limitations.'? Such a provision is unnecessary when the under-
lying tort claim has been settled, whether or not the insured files
suit against the tort-feasor before settling. Whether the insurer’s
interests have been adequately preserved by the settlement is
a subject addressed by other provisions of the Uninsured and
Underinsured Motorist Insurance Coverage Act."*

Hl That understanding of § 44-6413 is reflected in the
Legislature’s use of the word “expired” to describe the stat-
ute of limitations for a claim that is time barred. The word
“expire,” as a legal term, is generally understood to refer to a

2 See id. at 92, 608 N.W.2d at 198.
8 Cf. Hamm y, Allied Mut. Ins. Co., 612 N.W.2d 775 (Iowa 2000).
See, evg., §§ 44-6412 and 44-6413(1)(a).

a .
natural conclusion brought about by the passage of time, not a
premature termination effected by some other cause.’ This is
consistent with our decision in Schrader, in which the statute
of limitations on the underlying tort claim did not “expire,”
because it was prematurely terminated by suit and settlement.
The settlement in this case, although not preceded by a law-
suit, also prevented the statute of limitations on the underlying
tort claim from expiring due to passage of time, because the
settlement (with the express consent of the State) extinguished
the claim against Johns prior to the running of the statute
of limitations.

HH It would be a needless formality, and a waste of judicial
resources, to require an insured to file a complaint against an
uninsured or underinsured motorist where a settlement agree-
ment has already been reached, and § 44-6413(1)(e) does not
require such an action.'® Instead, we hold that § 44-6413(1)(e)
does not apply when an insured has settled his or her claim
against an uninsured or underinsured motorist before the statute
of limitations applicable to that claim would have expired. The
district court erred in concluding otherwise.

Hl We note, before concluding, what is not at issue in this
appeal. The record, particularly the pleadings and pretrial order,
establishes that the only issue presented to the district court
and decided in this proceeding was whether § 44-6413(1)(e)
barred Reimers-Hild’s claim against the defendants. And it is
well established that an appellate court will not consider an
issue on appeal that was not presented to or passed upon by the
trial court.'7

The defendants, however, have raised two issues in their
appellate brief that they did not raise in the trial court. First,

15 See, e.g., In re Morgan, 181 B.R. 579 (N.D. Ala. 1994); Mackey v. Bristol
West Ins. Services, 105 Cal. App. 4th 1247, 130 Cal. Rptr. 2d 536 (2003);
Munford Union Bank v. American Ambassador, 15 $.W.3d 448 (Tenn. App.
1999); Waynesville Security Bank v. Stuyvesant Ins. Co., 499 S.W.2d 218
(Mo. App. 1973).

1 Cf. Jones v. Sanger, 204 W. Va. 333, 512 S.E.2d 590 (1998).

Coral Prod. Corp. v. Central Resources, 273 Neb. 379, 730 N.W.2d 357
(2007).

the defendants argue that Reimers-Hild’s action is against the
State and is barred by sovereign immunity. We recognize that
sovereign immunity implicates a jurisdictional issue'® that may
be raised at any time by any party.!? But the record before us
was created by stipulation, and the parties at the time of that
stipulation apparently did not contemplate the argument the
defendants have asserted on appeal. We do not know what argu-
ments might have been made below, or what evidence might
have been adduced, had the State raised a sovereign immunity
defense in the district court. For that reason, we do not consider
the defendants’ sovereign immunity argument.

The defendants also claim that the form of notice Reimers-
Hild gave Sedgwick, of the proposed settlement with Johns, was
insufficient. Again, this was not raised below, and we do not
consider it on appeal. Nor do we consider what statute of limi-
tations would apply to Reimers-Hild’s claim for underinsured
motorist benefits, or whether there are other statutory barriers to
that claim. The sole question argued below and properly before
us now is whether § 44-6413(1)(e) operated to bar the claim,
and we have answered that question.

CONCLUSION
Because Reimers-Hild settled her claim against Johns,
the statute of limitations on that claim did not expire,
and § 44-6413(1)(e) does not apply to her claim for under-
insured motorist benefits. The judgment of the district court is
reversed, and the cause is remanded for further proceedings.
REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.
Stepuan, J., not participating.

8 See Northwall v. State, 263 Neb. 1, 637 N.W.2d 890 (2002).

9 See Betterman v. Department of Motor Vehicles, 273 Neb. 178, 728 N.W.2d
570 (2007).

Stare of NEBRASKA, APPELLEE, V.
Tumotuy E. AGEE, APPELLANT.
TAL N.W.2d 161

Filed November 9, 2007. No. S-06-594.

446 Le
Timothy E. Agee, pro se.

Jon Bruning, Attorney General, and James D. Smith for
appellee.

Wricut, Conno.ty, GERRARD, STEPHAN, McCormack, and
Miter-Lerman, JJ.

GERRARD, J.

Timothy E. Agee appeals from the denial of his motion for
the return of property seized from his residence by police,
who were investigating Agee’s reported involvement in several
thefts. The theft charge was dismissed, but the court refused to
order the return of property the State argued had been stolen.
This appeal requires us to consider the circumstances under
which the State can refuse to return seized property, and the
burden of proving such circumstances. In this case, because
the State did not present evidence establishing a basis for
refusing to return the property, we reverse the order of the
district court.

BACKGROUND

Agee was charged with theft by deception’ in an information
filed November 23, 2004. The information generally charged
Agee with using deception to obtain property, valued at over
$1,500,” from a department store.

For context, it is helpful to note that on the same date, Agee
was charged in a separate information with unlawful posses-
sion with intent to deliver a controlled substance; specifically,

' See Neb. Rev. Stat. § 28-512 (Reissue 1995).
? See Neb. Rev. Stat. § 28-518(1) (Reissue 1995).

_ “
marijuana.? A habitual criminal charge was later added. The
marijuana had been discovered during the execution of a
search warrant at Agee’s residence on October 8, 2004.4 The
search warrant was supported by information suggesting that
Agee was involved in an ongoing scheme to use checks and
fraudulent driver’s licenses to make purchases at local depart-
ment stores.>

Following a jury trial, on May 24, 2005, the district court
convicted Agee on the marijuana charge and found him to be
a habitual criminal. On July 25, the theft charge was dismissed
without prejudice on the State’s motion. On August 31, the
court sentenced Agee to 10 years’ imprisonment on the drug and
habitual criminal convictions.

On April 19, 2006, Agee filed a pro se motion in the district
court for an order directing the county sheriff to return property
that had been seized from Agee’s home, during the October
8, 2004, execution of the search warrant, as evidence of theft.
Specifically, Agee asked for the return of 3 watches, 1 diamond
bracelet, 2 cellular telephones, 10 assorted articles of clothing,
an unspecified number of photographs, and Agee’s wallet and
Social Security card. Agee specifically alleged that the items
were not illegal per se and that they had value to him.

A hearing was held at which Agee, acting pro se, appeared
telephonically. In response to Agee’s motion, counsel for the
State represented that one of the watches, the bracelet, and the
cellular telephones were stolen property. The State said it had no
record of another two watches. The State explained that the cloth-
ing had been stolen from the department store and had already
been returned to the store. Agee indicated he had receipts show-
ing how he had lawfully purchased the clothing and bracelet.

No evidence was adduced at the hearing by either party.
Nonetheless, the court explained that “[t]hey tell me [the
watch] is stolen, [the bracelet] is stolen, there isn’t [another]

3 See Baltensperger v. United States Dept. of Ag., 250 Neb. 216, 548 N.W.2d
733 (1996) (taking judicial notice of proceedings in related case).

4 See State v. Agee, No. A-05-1153, 2006 WL 2129117 (Neb. App. Aug. 1,
2006) (not designated for permanent publication).

5 See id.

448 be

watch, and the clothes are stolen and they have already been
given back to the owner, that being [the department store].”
The court overruled Agee’s motion except as to his Social .
Security card and photographs, which were ordered returned.
Agee appealed.

ASSIGNMENT OF ERROR
Agee argues that the district court committed reversible
error when it overruled his motion for the return of his per-
sonal property. ©

STANDARD OF REVIEW
Hl The denial of a motion for return of seized property is
reviewed for an abuse of discretion.*

ANALYSIS

HM Property seized in enforcing a criminal law is said to
be “in custodia legis,” or in the custody of the court.’ Property
seized and held as evidence is to be safely kept by the officer
seizing it unless otherwise directed by the court, and the officer
is to exercise reasonable care and diligence for the safekeeping
of the property.* The property shall be kept so long as neces-
sary for the purpose of being produced as evidence at trial.? The
court in which a criminal charge was filed has exclusive juris-
diction to determine the rights to seized property, and the prop-
erty’s disposition.” The proper procedure to obtain the return of
seized property is to apply to the court for its return.!!

6 See, State v, Allen, 159 Neb. 314, 66 N.W.2d 830 (1954); State v. Maestas,
11 Neb. App. 262, 647 N.W.2d 122 (2002); Neb. Rev. Stat. §§ 29-818 to
29-820 (Reissue 1995 & Cum. Supp. 2006). See, also, DeLoge v. State, 156
P.3d 1004 (Wyo. 2007).

7 See, Allen, supra note 6; Maestas, supra note 6.

8 Nash v. City of North Platte, 205 Neb. 480, 288 N.W.2d 51 (1980). See,
also, § 29-818.

% § 29-818.

1 See, State v. Holmes, 221 Neb. 629, 379 N.W.2d 765 (1986); Allen, supra
note 6; State v. Cox, 3 Neb. App. 80, 523 N.W.2d 52 (1994), affirmed 247
Neb. 729, 529 N.W.2d 795 (1995); §§ 29-818 to 29-820.

' See, Allen, supra note 6; Maestas, supra note 6.

Le .

We digress, at this point, to respond to the State’s contention
that we lack jurisdiction over this appeal. Although not disput-
ing the district court’s jurisdiction to decide Agee’s motion,
the State suggests that the court’s denial of the motion is not
a final, appealable order. The Nebraska Court of Appeals has
held that the denial of a motion for the return of seized prop-
erty is appealable as an order affecting a substantial right made
upon a summary application in an action after judgment.” The
State disagrees, contending that a criminal proceeding is not an
“action.” An order denying the return of seized property after
a criminal proceeding has concluded is perhaps better charac-
terized as an order made in a special proceeding than an order
made in an action after judgment.‘ But regardless, we agree
with the Court of Appeals’ ultimate conclusion that an order of
this kind, made after the conclusion of criminal proceedings, is
final and reviewable on appeal, so we proceed to the merits of
Agee’s argument.

HMB Although this court has not discussed the issue, the
general rule is well established that upon the termination of
criminal proceedings, seized property, other than contraband,
should be returned to the rightful owner unless the government
has a continuing interest in the property.’ “‘[I]t is fundamental
to the integrity of the criminal justice process that property
involved in the proceeding, against which no Government

® See, Maestas, supra note 6; Neb. Rev. Stat. § 25-1902 (Reissue 1995).

8 See In re Interest of R.G., 238 Neb. 405, 470 N.W.2d 780 (1991) (“action”
means civil action), disapproved on other grounds, O’Connor v. Kaufman,
255 Neb. 120, 582 N.W.2d 350 (1998).

™ See, § 25-1902; In re Interest of R.G., supra note 13 (special proceeding
includes every special statutory remedy not in itself action).

5 See, e.g., U.S. v. David, 131 F.3d 55 (2d Cir. 1997); Sovereign News Co. v.
United States, 690 F.2d 569 (6th Cir. 1982); United States v. Wright, 610
F.2d 930 (D.C. Cir. 1979); DeLoge, supra note 6; Newman v. Stuart, 597 So.
2d 609 (Miss. 1992); DeBellis v. New York City Property Clk., 79 N.Y.2d 49,
588 N.E.2d 55, 580 N.Y¥.S.2d 157 (1992); State v. Ell, 338 N.W.2d 845 (S.D.
1983); Banks v Detroit Police Dep’t, 183 Mich. App. 175, 454 N.W.2d 198
(1990).

450 Le

claim lies, be returned promptly to its rightful owner.’”!® While
the government is permitted to seize evidence for use in inves-
tigation and trial, such property must be returned once criminal
proceedings have concluded, unless it is contraband or subject
to forfeiture."’ It would be antithetical to the notions of fairness
and justice under which we operate to convert the government’s
right to temporary possession to a right to hold such property
indefinitely." Thus, a motion for the return of property is
properly denied only if the claimant is not entitled to lawful
possession of the property, the property is contraband or sub-
ject to forfeiture, or the government has some other continuing
interest in the property.”

HE The State’s primary contention on appeal is that Agee
presented no evidence supporting his claim to the property. But
this argument misapprehends the burden of proof in such a
proceeding. When criminal proceedings have terminated, the
person from whom property was seized is presumed to have a
right to its return, and the burden is on the government to show
that it has a legitimate reason to retain the property.” It is long
established that a presumption of ownership is created by exclu-
sive possession of personal property and that evidence must
be offered to overcome that presumption.”4 One in possession

6 Wright, supra note 15, 610 F.2d at 934. Accord People v. Strock, 931 P.2d
538 (Colo. App. 1996).
" See US. v. Chambers, 192 F.3d 374 (3d Cir. 1999).

8 See Government of Virgin Islands v. Edwards, 903 F.2d 267 (3d Cir.
1990). .

® See, David, supra note 15; U.S. v. Fitzen, 80 F.3d 387 (9th Cir. 1996);
DeLoge, supra note 6; State v, Alaway, 64 Wash. App. 796, 828 P.2d 591
4992).

%® See, Chambers, supra note 17; U.S. », Dean, 100 F3d 19 (5th Cir. 1996);
United States v, Martinson, 809 F.2d 1364 (9th Cir. 1987); DeLoge, supra
note 6; Com. v. Fontanez, 559 Pa. 92, 739 A.2d 152 (1999); DeBellis, supra
note 15; State v. Shore, 522 A.2d 1215 (RI. 1987); Strock, supra note
16; Banks, supra note 15; State v. Card, 48 Wash. App. 781, 741 P.2d 65
(1987).

1 In re Estate of Severns, 217 Neb. 803, 352 N.W.2d 865 (1984). See
Edwards, supra note 18.

of property has the right to keep it against all but those with
better title,” and the “mere fact of seizure” does not require
that “entitlement be established anew.” Seizure of property
from someone is prima facie evidence of that person’s right to
possession of the property, and unless another party presents
evidence of superior title, the person from whom the property
was taken need not present additional evidence of ownership.

In this case, the State argued to the district court that much
of the property was stolen. We agree that stolen property should
be returned to its rightful owner.** In most cases, the theft of
the property will be substantiated by the findings underlying a
criminal conviction.” But here, the charges had been dismissed.
The State had seized property from Agee, and he was presum-
ably entitled to its return once the proceedings were concluded,
but the State did not overcome that presumption by presenting
evidence of a cognizable claim or right of possession adverse to
Agee’s.”” Nor was the property contraband per se, which may
not be returned because its possession is inherently unlawful.*
Nor did the State present evidence of any of the other grounds
that have been used to justify the government’s retention of
property, such as an ongoing investigation,” a tax lien,°? an
imposed fine, or an order of restitution.”

% Edwards, supra note 18.
23 Wright, supra note 15, 610 F.2d at 939. Accord Edwards, supra note 18.

%4 See, Fitzen, supra note 19; Edwards, supra note 18; Wright, supra note 15;
Fontanez, supra note 20; Shore, supra note 20; Ell, supra note 15; Strock,
supra note 16; Banks, supra note 15.

25 See § 29-820(1)(a).
26 See Dean, supra note 20.

27 See, id.; Fitzen, supra note 19; Edwards, supra note 18; Banks, supra note
15; Card, supra note 20.

28 See Boggs v. Rubin, 161 F.3d 37 (D.C. Cir. 1998).
2 See, e.g., DeLoge, supra note 6.

% See, e.g., Fitzen, supra note 19; United States v. Francis, 646 F.2d 251 (6th
Cir. 1981).

3! See, e.g., David, supra note 15.
% See, e.g., U.S. v. Mills, 991 F.2d 609 (9th Cir. 1993).

452 be

Hl The district court erred in relying on the representations
made by the State, instead of demanding evidence relevant to
the State’s allegations. The State must do more than assert,
without evidentiary support, that the property was stolen, or is
not in the State’s possession.>? An attorney’s assertions at trial
are not to be treated as evidence.™ Instead of taking the State’s
assertions at face value, the court was obliged to take evidence
to support its factual findings respecting its decision to grant or
deny Agee’s motion. The court abused its discretion by sub-
stantially denying Agee’s motion without requiring the State to
submit evidence supporting its continued retention or disposi-
tion of the property.*°

We recognize that there was some dispute, in the district
court, about whether certain items claimed by Agee were actu-
ally in the possession of the State. But police executing a search
warrant are required to keep an inventory that should make it a
straightforward matter for the State to establish what property
was seized from Agee and how that property was disposed of.”
And the State’s seizure of most of the items was not disputed.
We also note that the State admitted to having already returned
some items to the store from which they had allegedly been sto-
len, apparently without direction from the court. This was con-
trary to the court’s exclusive jurisdiction over such property.°*
It has been consistently held, however, that the government’s
disposition or destruction of property does not moot a motion

33 See, Chambers, supra note 17; Mora y. U.S., 955 F.2d 156 (2d Cir. 1992);
DeLoge, supra note 6; Scott v. State, 922 So. 2d 1024 (Fla. App. 2006).

34 Cochran y, Bill’s Trucking, 10 Neb. App. 48, 624 N.W.2d 338 (2001); City
of Lincoln v. MJM, Inc., 9 Neb. App. 715, 618 N.W.2d 710 (2000).

35 See, Chambers, supra note 17; U.S. v. Burton, 167 F.3d 410 (8th Cir. 1999);
Ruf v. U.S., 20 F.3d 63 (2d Cir. 1994); Mora, supra note 33; DeLoge, supra
note 6; Scott, supra note 33; Dailey v. State, 640 So. 2d 1059 (Ala. App.
1993); Card, supra note 20.

3 See DeLoge, supra note 6.

37 See, Neb. Rev. Stat. § 29-815 (Reissue 1995); Rufu, supra note 35. See,
also, State ex rel. Wagner v. Amwest Surety Ins. Co., ante p. 121, 738
N.W.2d 813 (2007).

38 See, Holmes, supra note 10; Allen, supra note 6; Cox, supra note 10;
§§ 29-818 to 29-820.

for return of the property, although we have no need in this
appeal to discuss the scope of available relief.”

CONCLUSION
Once the criminal proceedings against Agee were concluded,
Agee was presumptively entitled to the return of property
seized from him unless the State presented evidence justify-
ing its refusal to do so. The district court erred in substantially
denying Agee’s motion without requiring the State to submit
such evidence. The district court’s order denying Agee’s motion
is reversed, and the cause is remanded for further proceedings.
[REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.
Heavican, C.J., not participating.

® See, e.g., Chambers, supra note 17; U.S. v. Kanasco, Ltd., 123 F.3d 209 (4th
Cir. 1997); Thompson v. Covington, 47 F.3d 974 (8th Cir. 1995); Rufu, supra
note 35; Martinson, supra note 20; Francis, supra note 30. Compare, ¢.g.,
Okoro v. Callaghan, 324 F.3d 488 (7th Cir, 2003); U.S. v. Hall, 269 F.3d
940 (8th Cir. 2001); U.S. v. Potes Ramirez, 260 F.3d 1310 (11th Cir, 2001);
U.S. v. Bein, 214 F.3d 408 (3d Cir. 2000); Pefia v. U.S., 157 F.3d 984 (Sth
Cir. 1998) (discussing split over jurisdiction to award money damages).

David HoGELIN AND INTERNATIONAL ASSOCIATION OF
FureriGuTers Locat No. 1575, APPELLEES, Vv.
Crry or Cocumpus, NEBRASKA, A POLITICAL
SUBDIVISION, AND DEAN HEFTI, IN HIS OFFICIAL
CAPACITY AS CHIEF OF THE Ciry OF COLUMBUS
Fire DEPARTMENT, APPELLANTS.

TAL N.W2d 617

Filed November 16, 2007. No. S-06-641.

Mark A. Fahleson and David J.A. Bargen, of Rembolt Ludtke,
L.L-P., for appellants.

John E. Corrigan, of Dowd, Howard & Corrigan, L.L.C.,
for appellees.

Heavican, C.J., WricuT, CoNnNoLty, GERRARD, STEPHAN,
McCormack, and Minter-Lerman, JJ.

GERRARD, J. .

This case involves a dispute between the City of Columbus
(the City) and its firefighters about whether training sessions
mandated by the City would have resulted in a violation of state
Jaw regulating the hours firefighters can be required to work.!
The district court concluded that the scheduled sessions were
unlawful and enjoined the City from requiring them. The issues
presented in this appeal are whether the scheduled training ses-
sions would have violated the law and whether the firefighters
were entitled to injunctive relief.

BACKGROUND

At the time of trial, the City maintained a force of 12 full-time
career firefighters and 72 volunteers. A shift for paid firefighters
was 24 hours, and the fire department had three shifts that rotated
on a 3-day cycle to provide full-time, 24-hour coverage. The
City’s description of the job of “Firefighter/Emergency Medical
Technician” stated, in relevant part, that the job “require[d]
knowledge and skill acquired only through specialized training”
and that firefighters would be required to “successfully com-
plete all required in-service training requirements.”

Dean Hefti, the Columbus fire chief, explained that for their
safety, emergency management responders need to be trained
in awareness and operations with respect to hazardous mate-
rials. In addition, the City had received a homeland security

' See Neb. Rey. Stat. § 35-302 (Reissue 2004).

456 Le

grant for a hazardous materials response team. Hefti testified
that the grant money was at risk unless the City assembled
such a team. To that end, Hefti arranged mandatory hazardous
materials training sessions. But Hefti said that while the grant
“was there,” the reason he made the training mandatory was
“the safety of the firefighters and the responding personnel to
industrial accidents, car accidents, et cetera,’ as well as pub-
lic safety. Firefighters had attended off-shift training sessions
before, but had done so at their own individual request, subject
to Hefti’s approval.

The training sessions at issue in this case were scheduled
and conducted by the State Fire Marshal Training Division, and
held at the Columbus Fire Department. Hefti explained that the
State Fire Marshal was used because it met “NFPA code” and
was available at no cost. The training sessions were scheduled
for 7 p.m. on Thursday evenings: May 5, 12, and 26, 2005;
June 23 and 30; and July 7, 14, 21, and 28. Hefti said that the
State Fire Marshal did not agree to alternative schedules he
had suggested,

Letters to Hefti from the State Fire Marshal Training Division
explained that “[tJhere must be at least 14 students in attendance
at the course or it may be subject to cancellation. Please make
sure your members attend these courses, since proper training
is vital to every emergency response organization.” The letters
also encouraged Hefti to invite others, such as law enforcement
and emergency services personnel, and included a form letter
for that purpose.

Hefti sent a memorandum to all career personnel explain-
ing the mandatory training schedule. David Hogelin, presi-
dent of the firefighters’ union, the International Association of
Firefighters Local No. 1575 (the Union), objected on the fire-
fighters’ behalf. Hogelin’s letter to Hefti explained that “[nJine
weeks of every Thursday night is a strain on the families of
the fighters, who already spend every third day at the station.”
Hogelin suggested that the training could be accomplished
more quickly and on duty time.

Hogelin’s letter specifically cited state law as barring the
mandatory training sessions. Section 35-302 provides that

firefighters employed by cities having paid fire departments
“shall not be required to remain on duty for periods of time
which will aggregate in each month more than an average
of sixty hours per week.” Hogelin explained that including
the additional training hours, Columbus firefighters would be
required to work an average of 61.76 hours a week.

In response to Hogelin’s letter, Hefti and the Columbus city
administrator provided Hogelin with a memorandum concluding
that the required sessions were legal under the collective bar-
gaining agreement (CBA) between the Union and the City and
that the sessions would remain mandatory. Section 35-302 pro-
vides that a firefighter’s single-duty shift shall be 24 consecutive
hours, followed by an off-duty period as necessary to comply
with the statute, “unless by voluntary agreement between the
city and the firefighter, any firefighter may be permitted to work
an additional period of consecutive time,” and may return to
work after less than 24 hours off duty. The City’s position was
that the CBA was such a “voluntary agreement,” because it pro-
vided in relevant part that

[a]ll management rights, functions, responsibilities, and
authority not specifically limited by the express terms
of this Agreement [or] State Statute . . . are retained by
the [City] and remain exclusively within the rights of the
[City]. These rights, powers, and authority include, but are
not limited to . . . the scheduling of operations and the time
to be worked... .
The CBA also provided that the normal work schedule would be
“24 hours on, followed by 48 hours off, with the workday start-
ing at 8 a.m.” but that “[sJhould it be necessary in the judgment
of the [City] to establish different work schedules or starting
time, notice of such changes shall be given to the Union as far
in advance as is reasonably possible.” Hogelin averred, how-
ever, that as Union president, he had never discussed waiving
any rights of Union members under § 35-302.

On May 10, 2005, Hogelin and the Union (hereinafter collec-
tively the Union) filed a complaint in the district court against
Hefti and the City (hereinafter collectively the City), seeking
declaratory and injunctive relief, and a motion for a temporary

458 Es

injunction. An evidentiary hearing on the motion was held
on May 27 on the underlying legal issues and the firefight-
ers’ damages.

Hogelin averred that pursuant to a court-ordered visitation
schedule, he was entitled to visitation with his son on every
Thursday evening he was not scheduled to work and that the
mandatory training would have the effect of depriving him of
visitation. Ryan Loewnstein averred that he received a writ-
ten reprimand after he failed to attend a May 5, 2005, training
session, even though Hefti had already approved his request
for leave to attend a wedding in North Carolina. Several other
firefighters had been reprimanded for failing to attend the train-
ing sessions. Hefti also conceded that although fewer than 14
students attended the May 12 session, it had not been canceled.

The district court concluded that the mandatory training
schedule would invade the firefighters’ off-duty hours, protected
by § 35-302. The court further concluded that the collective bar-
gaining agreement did not override § 35-302. The court found
that the firefighters would suffer irreparable harm, as Hefti had
already reprimanded firefighters who had failed to attend train-
ing in their off-duty hours, and that “the threat of additional
disciplinary measures for future nonattendance is real and genu-
ine, not imaginary.” The court entered a temporary injunction
ordering Hefti and the City not to impose the mandatory haz-
ardous materials training. On substantially the same evidence,
on May 10, 2006, the court entered a permanent injunction to
the same effect.

ASSIGNMENTS OF ERROR
The City assigns that the court erred in granting relief to
the Union because (1) the requirement that firefighters attend
hazardous materials training does not violate § 35-302, (2)
training is not “harm” entitling the Union to injunctive relief,
and (3) even if the training is “harm,” it is compensable by
money damages.

STANDARD OF REVIEW
Hi Ax action for injunction sounds in equity. In an appeal of
an equity action, an appellate court tries the factual questions

de novo on the record and reaches a conclusion independent of
the findings of the trial court.?

Hi The meaning of a contract is a question of law, in connec-
tion with which an appellate court has an obligation to reach its
conclusions independently of the determinations made by the
court below.’

ANALYSIS

VIOLATION OF § 35-302

We note, initially, that the City’s brief does not take issue
with the court’s conclusion that the hazardous materials train-
ing requirement, if implemented, would place the firefighters’
working hours in violation of the 60-hour-per-week limitation
imposed by § 35-302. Instead, the City’s argument that the
requirement would not violate § 35-302 is premised entirely
on the CBA, so our analysis of the City’s first assignment of
error is also limited to the effect of the CBA. Section 35-302
provides in full:

Firefighters employed in the fire departments of cit-
ies having paid fire departments shall not be required to
remain on duty for periods of time which will aggregate in
each month more than an average of sixty hours per week.
Each single-duty shift shall consist of twenty-four consecu-
tive hours and shall be followed by an off-duty period as
necessary to assure compliance with the requirements of
this section unless by voluntary agreement between the
city and the firefighter, any firefighter may be permitted
to work an additional period of consecutive time and may
return to work after less than a twenty-four-hour off-duty
period. Any firefighter may be assigned to work less than
a twenty-four-hour shift, but in such event the firefighter
shall not work in excess of forty hours per week. No fire-
fighter shall be required to perform any work or service

? Pony Lake Sch. Dist. v. State Committee for Reorg., 271 Neb. 173, 710
N.W.2d 609 (2006), cert. denied 547 U.S. 1130, 126 S. Ct. 2058, 164 L. Ed.
2d 784,

3 Penfield Oil Co. v. Winstrom, 272 Neb. 219, 720 N.W.2d 886 (2006).

460 |

as such firefighter during any period in which he or she is
off duty except in cases of extraordinary conflagration or
emergencies or job-related court appearances.
The City claims that the ‘provisions of the CBA set forth
above effected a “voluntary agreement,” within the meaning of
§ 35-302, to alter the firefighters’ work schedules by conferring
scheduling authority on the City.

We note that there is substantial authority for the proposition
that some statutory rights, particularly those intended to serve an
important public policy or guarantee the personal rights of indi-
vidual workers, cannot be waived through collective bargaining.
For instance, an individual’s statutory protection against dis-
crimination cannot generally be waived by his or her collective
bargaining agent.> “While a union undeniably has the power to
waive statutory rights related to collective activity . . . certain
other statutory tights stand on a different footing. . . . Rights
of this kind, which are of a personal, and not merely economic,
nature are beyond a labor union’s ability to bargain away.”* But
for purposes of our analysis in this case, we assume, without
deciding, that the rights protected by § 35-302 could be waived
through collective bargaining. We need not answer that question,
because we conclude that the CBA at issue in this case did not
effect such a waiver. .

[il It is well settled that a waiver in a collective bargaining
agreement must be established by clear and express contractual

4 See Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S. Ct. 1011, 39
L. Ed. 2d 147 (1974). See, e.g. Cooper v. Smithfield Terminal Ry. Co.,
635 A.2d 952 (Me. 1993); School Comm. of Brockton v. Massachusetts
Commission Against Discrimination, 377 Mass. 392, 386 N.E.2d 1240
(1979); Wright v. City of Santa Clara, 213 Cal. App. 3d 1503, 262 Cal. Rptr.
395 (1989); City of Orlando v. Intern. Ass’n of F. F, etc., 384 So. 2d 941
(Fla. App. 1980). Cf. Matter of ABC v Roberts, 61 N.Y.2d 244, 461 N.E.2d
856, 473 N.Y.S.2d 370 (1984) (waiver of statutory rights permissible where
legislative purpose not contravened).

5 See Alexander, supra note 4.

© School Comm. of Brockton, supra note 4, 377 Mass. at 399, 386 N.E.2d at
1244, .

language.’ As the U.S. Supreme Court has stated, “we will
not infer from a general contractual provision that the parties
intended to waive a statutorily protected right unless the under-
taking is ‘explicitly stated.’ More succinctly, the waiver must be
clear and unmistakable.”* .

HMM An employer bears the burden of establishing that
a clear and unmistakable waiver has occurred.° A clear and
unmistakable waiver may be found in the express language of
a collective bargaining agreement, or it may even be implied
from the structure of an agreement and the parties’ course of
conduct.!° But a waiver of statutory rights in a CBA must be
knowingly made and must specifically address the subject upon
which the waiver is claimed."! The contract must demonstrate
that the intent of the parties was to preempt statutory rights.”
No waiver will be implied unless it is clear that the parties were
aware of their rights and made the conscious choice, for what-
ever reason, to waive them.!?

7 Central City Educ. Ass’n v. IELRB, 149 Ill. 2d 496, 599 N.E.2d 892, 174
Ill. Dec. 808 (1992). See Crete Ed. Assn. v. Saline Cty. Sch.' Dist. No. 76-
0002, 265 Neb. 8, 654 N.W.2d 166 (2002). See, e.g., Carson v. Giant Food,
Inc., 175 F.3d 325 (4th Cir. 1999); N.L.R.B. v. New York Telephone Co., 930
F.2d 1009 (2d Cir. 1991); Timkin Roller Bearing Company v. N. L. R. B.,
325 F.2d 746 (6th Cir. 1963); State ex rel. v. Local School Dist., 89 Ohio St.
3d 191, 729 N.E.2d 743 (2000); Appeal of White Mts. Regional School Bd.,
125 N.H. 790, 485 A.2d 1042 (1984); Faust v. Ladysmith-Hawkins School
Systems, 88 Wis. 2d 525, 277 N.W.2d 303 (1979); Francini v. Phoenix
Newspapers, Inc., 188 Ariz. 576, 937 P.2d 1382 (Ariz. App. 1996).

8 Metropolitan Edison Co. v. NLRB, 460 U.S. 693, 708, 103 S. Ct. 1467, 75
L. Ed. 2d 387 (1983). Accord, Wright v. Universal Maritime,Service Corp.,
525 U.S. 70, 119 S. Ct. 391, 142 L. Ed. 2d 361 (1998); Hammond v. State,
Dept. of Transp., 107 P.3d 871 (Alaska 2005); Pasco Police Ass’n v. City of
Pasco, 132 Wash. 2d 450, 938 P.2d 827 (1997); Dept. of Cent. Management
Services v. Bd., 373 Ill. App. 3d 242, 869 N.E.2d 274, 311 Ill. Dec. 600
(2007).

° New York Telephone Co., supra note 7.

9 Id.

"| See Pasco Police Ass’n, supra pote 8. .

2 See, Local School Dist., supra note 7; Dept! of Cent. Management Services,
supra note 8.

"3 New York Telephone Co., supra note 7; Pasco Police Ass’n, supra note 8.

462 Le

. The parties’ CBA in this case does not demonstrate a clear
and unmistakable waiver.of the firefighters’ rights under
§ 35-302. There is no mention in the CBA of the statute or its
requirements,'* and silence in the bargaining agreement on such
an issue does not meet the test.'* The language relied upon by
the City refers only in general terms to the City’s responsibility
for establishing duty schedules, and “[b]road, general language
is not sufficient to meet the level of clarity required to effect a
waiver in a CBA.”'® In fact, to the extent that statutory limita-
tions on working conditions are mentioned in the CBA, that
language supports the Union’s argument, because the CBA
reserves to the City all management responsibilities “not . . .
limited by . . . State Statute.” (Emphasis supplied.) And the only
evidence in the record relevant to the negotiations between the
parties, Hogelin’s affidavit, implies that § 35-302 was not the
subject of bargaining.

“ [8] The City contends that the authority cited above is inap-
plicable to this case, because § 35-302 permits firefighters to
voluntarily agree to work beyond the hours permitted by the
statute. The City asserts that because § 35-302 contains an
“exception” for voluntary agreements, the CBA is not really
a “waiver” of statutory rights that must be clear and unmis-
takable. But the City’s argument is unavailing. The fact that
rights under § 35-302 can be waived by voluntary agreement
does not prove that they were waived in the absence of evi-
dence to that effect. And contrary to the City’s suggestion, a
voluntary agreement as allowed by § 35-302 is a “waiver” of
a statutory right. A “waiver” is “a voluntary and intentional
relinquishment of a known right.”"” Section 35-302 provides
firefighters with statutory rights and permits firefighters to
waive those rights by voluntary agreement, but does not alter

4 See, Bratten v. SSI Services, Inc., 185 F.3d 625 (6th Cir. 1999); Quint v. A.E.
Staley Mfg. Co., 112 B.3d 1 (1st Cir, 1999). Compare, e.g., Frontier Ins. Co.
v. Koppell, 225 A.D.2d 93, 648 N.Y.S.2d 812 (1996).

'S See Timkin Roller Bearing Company, supra note 7.

6 Carson, supra note 7, 175 F.3d at 331.

"” Faust, supra note 7, 88 Wis. 2d at 532-33, 277 N.W.2d at 306. See, also,
Crete Ed, Assn., supra note 7; Koppell, supra note 14.

the well-established principle that such a waiver must be clearly
and expressly established.

In short, we will not assume that the Union waived a statu-
tory right unless that waiver is clearly established, and nothing
in the CBA or the record in this case establishes a clear and
unmistakable waiver of the firefighters’ rights under § 35-302.
The City’s first assignment of error is without merit.

AVAILABILITY OF INJUNCTIVE RELIEF .

The City contends that even if the mandatory training sched-
ule was in violation of § 35-302, injunctive relief was inappro-
priate. We disagree.

Hl We acknowledge that an injunction is an extraordinary
remedy that ordinarily should not be granted except in a clear
case where there is actual and substantial injury. Such a remedy
should not be granted unless the right is clear, the damage is
irreparable, and the remedy at law is inadequate to prevent a
failure of justice.!* The City argues that the firefighters had an
adequate remedy at law.

HB «But an adequate remedy at law means a remedy
which is plain and complete and as practical and efficient to
the ends of justice and its prompt administration as the remedy
in equity.” And an injury is irreparable when it is of such a
character or nature that the party injured cannot be adequately
compensated in damages, or when the damages which may
result cannot be measured by any certain pecuniary standard.”°
Irreparable injury, as used in the law of injunction, does not
necessarily mean that the injury is beyond the possibility of
compensation in damages, nor that it must be very great.?*

HE The City argues that the firefighters were not entitled
to injunctive relief because “being required to attend [hazardous
materials] training three hours a week for a few weeks in the
summer certainly does not rise to the level of an ‘irreparable

'8 Lambert v. Holmberg, 271 Neb. 443, 712 N.W.2d 268 (2006).

1 Id.

29 See Rath v. City of Sutton, 267 Neb. 265, 673 N.W.2d 869 (2004).
1 Id.

464 es

harm.’”” But that requirement violates state law, and unlawful
acts by public officers may, in a proper case, be restrained.”
When an action is brought to enforce a statute or make effec-
tive a declared policy of the Legislature, the standards of public
interest and not the requirements of private litigation measure
the propriety and need for injunctive relief. Here, the firefight-
ers were being required to work in excess of the hours that
the Legislature has determined, as a matter of public policy, to
be permissible without specific agreement. That represents an
injury that the district court correctly considered in determining
the relief to be afforded. We also note the City’s implicit con-
cession that the firefighters were entitled to monetary compen-
sation for the time spent in training. Effectively, the City would
be unlawfully expending public funds—also an injury subject
to injunction. . .

The City also contends that the mandatory training was not
“harm” at all, because the firefighters would benefit from the
training, and had requested training in the past. We disagree with
the City’s suggestion that an unlawful work requirement does
not “harm” an individual simply because it is beli¢ved to be for
the individual’s own good. And in any event, the Legislature’s
decision to enact § 35-302 forecloses that contention.

Next, the City argues that the harm was not irreparable
because it involved time at work, which is compensable in
money damages. It is not entirely clear, however, what pecuni-
ary standard the City is suggesting should be applied to com-
pensate the firéfighters for its unlawful work requirements. It
appears that the City is contending that the firefighters would
be made whole if they were paid the wages due for the work
required of them.

But if the sole relief available to the Union is that the City
simply pay the firefighters wages for the time spent training,

® Brief for appellants at 24.
3 See Kuester v. State, 191 Neb. 680, 217 N.W.2d 180 (1974).

24 See Edwards v. Boston, 408 Mass. 643, 562 N.B.2d 834 (1990). See, also,
Tulsa Order of Police Lodge v. Tulsa, 39 P3d 152 (Okla. Civ. App. 2001);
Weimer v. City of Baton Rouge, 915 So. 2d 875 (La. App. 2005).

2 See Farrell v. School Dist. No. 54, 164 Neb. 853, 84 N.W.2d 126 (1957).

then § 35-302 would be effectively unenforceable. We have
stated that “if an absence of irreparable harm (beyond the ille-
gality of the expenditure itself) prevents a court from deciding
if-an illegal expenditure of public funds has occurred, following
the law becomes irrelevant to those entrusted to uphold it”
Similarly, if the City was permitted to require firefighters to
work whatever hours it pleased, subject only to the requirement
that they be paid, then § 35-302 would cease to be relevant to
those charged with obeying it.

HH Instead, we have said that a remedy at law is not ade-
quate if the situation requires and the law permits preventative
relief as preventing the repetition and continuance of wrongful
acts.*” Whether damages are to be viewed by a court of equity
as “irreparable” depends more upon the nature of the right
which is injuriously affected than upon the pecuniary measure
of the loss suffered.* And in certain circumstances, severe
personal inconvenience can constitute irreparable injury justify-
ing issuance of injunctive relief.” We have. little difficulty in
concluding on the facts of this case that the City’s violation of
state law, expressed intent to continue violating state law, and
imposition upon firefighters that resulted from that policy, justi-
fied the district court’s order of injunctive relief.>°

In arguing to the contrary, the City relies on Davenport v.
International Broth. of Teamsters, in which the D.C. Circuit
concluded that members of a flight attendants’ union. were
not entitled to.an injunction against a change in their work
schedules that exceeded the limitations imposed by their CBA.
But Davenport is readily distinguishable. In Davenport, the
flight attendants’ “principal contention” was that the proposed

26 Rath, supra note 20, 267 Neb. at 281, 673 N.W.2d at 885.

27 Adams v. Adams, 156 Neb. 778, 58 N.W.2d 172 (1953).

28 Burroughs Wellcome & Co. v. Johnson Wholesale Perfume Co., 128 Conn.
596, 24 A.2d 841 (1942). See Armbruster v. Stanton-Pilger Drainage Dist.,
169 Neb. 594, 100 N.W.2d 781 (1960).

2° CWA v. Treffinger, 291 N.J. Super. 336, 677 A.2d 295 (1996).

30 See, Adams, supra note 27; Burroughs Wellcome & Co., supra note 28.

31 Davenport v. International Broth. of Teamsters, 166 F.3d 356 (D.C. Cir.
1999).

466 |

schedules “increase[d] the flight time required of flight atten-
dants in a given duty period, while at the same time eliminat-
ing attendants’ per diem pay and hotel allowances because
overnight stays are no longer required on such trips.”? The
D.C. Circuit concluded that their injury could be remedied with
money damages, invoking the proposition that “ ‘temporary loss
of income, ultimately to be recovered, does not usually con-
stitute irreparable injury.’”** In other words, the issue decided
by the D.C. Circuit in Davenport was whether the income lost
by the flight attendants was an irreparable harm. In the present
case, lost.income is not at issue.

HE Finally, the City argues that injunction should have
been denied because the benefits to the firefighters and the
public from hazardous materials training outweighed any injury
to the firefighters resulting from the training requirement. We
acknowledge the general proposition that injunction may be
withheld when it is likely to inflict greater injury than the griev-
ance complained of.** “‘If the protection of a legal right even
would do a plaintiff but comparatively little good and would
produce great public or private hardship, equity will withhold
its discreet and beneficent hand and remit the plaintiff to his
legal rights and remedies.’

But the City’s public policy argument is forestalled by
§ 35-302. It is the function of the Legislature through the
enactment of statutes to declare what is the law and public
policy of this state.%* Although the City adduced very little
evidence at trial to support its public policy argument, we are
not in a position to question the benefits of training firefighters
about hazardous materials. But those benefits must be obtained
either within the limitations imposed as a matter of public
policy by the Legislature or with the voluntary agreement of

32 ‘Id, at 367.

3 id.

% Lambert, supra note 18. See, also, Edwards, supra note 24,
35 Lambert, supra note 18, 271 Neb. at 451, 712 N.W.2d at 276.

3 In re Claims Against Atlanta Elev. Inc., 268 Neb. 598, 685 N.W.2d 477
(2004).

the firefighters to do otherwise. Section 35-302 contains excep-
tions for “extraordinary conflagration or emergencies or job-
related court appearances.” Perhaps job-related training should
be added to that list of exceptions. But if so, that decision
belongs to the Legislature.

For those reasons, we find the City’s remaining assignments
of error to be without merit.

CONCLUSION
We conclude that the parties’ collective bargaining agreement
did not effect a waiver of the firefighters’ rights under § 35-302
and that the district court did not err in enjoining the City’s
enforcement of its unlawful policy. The judgment of the district
court is affirmed.
AFFIRMED.

Rick EASTLICK, APPELLANT, V. LUEDER CONSTRUCTION COMPANY,
A DISSOLVED NEBRASKA CORPORATION, ET AL., APPELLEES.
741 N.W2d 628

Filed November 16, 2007. No. S-06-721.

468 Es

eee

Michaela Skogerboe and James E. Harris, of Harris Kuhn
Law Firm, L.L.P., for appellant.

Patricia McCormack and Eugene L. Hillman, of Hillman,
Forman, Nelsen, Childers & McCormack, for appellees.

Heavican, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, and
Miter-Lerman, JJ.

Waricst, J.
NATURE OF CASE

Rick Eastlick was employed as a bricklayer for Monona
Masonry, Inc. (Monona), which was doing masonry work at
a church construction site in Fremont, Nebraska. Eastlick was
working on scaffolding when it collapsed, and he sustained seri-
ous injuries. The general contractor for the project was Lueder
Construction Company (Lueder). Eastlick sued Lueder for dam-
ages. The district court concluded that Lueder owed no duty to
Eastlick related to the accident, and it granted Lueder’s motion
for summary judgment. Eastlick appeals.

SCOPE OF REVIEW

HM Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue as
to any material fact or as to the ultimate inferences that may
be drawn from those facts and that the moving party is entitled
to judgment as a matter of law. Papillion Rural Fire Prot. Dist.
vy. City of Bellevue, ante p. 214, 739 N.W.2d 162 (2007). In
reviewing a summary judgment, an appellate court views the
evidence in a light most favorable to the party against whom
the judgment is granted and gives such party the benefit of all
reasonable inferences deducible from the evidence. Id.

FACTS

On October 24, 2000, Eastlick was working on scaffolding
at a church construction project. The scaffolding collapsed, and
Eastlick fell approximately 20 feet to the ground, sustaining
injuries, including a fracture of the right femur that required
surgery. Eastlick also developed posttraumatic stress disorder.

The metal scaffolding was described as a “Morgan scaffold.”
The sections of scaffolding stacked on top of each other, with
planks in between to allow workers to walk on the scaffolding.
The scaffolding was held together by straight braces and “X”
braces. The planks were mechanically raised as brickwork was
finished and the work area became higher from the ground.

On the day of Eastlick’s accident, two sections of scaffold-
ing were in place, but no planks had been set up. Another
bricklayer, Jesse Stout, said he and Eastlick were directed by
a Monona employee to change the straight brace at the top of
the scaffolding. They climbed to the top of the scaffolding, and
Eastlick removed an X brace rather than a straight brace, result-
ing in a collapse of the scaffolding.

Richard Gegzna, who worked as a bricklayer foreman for
Monona at the time of the accident, explained that a Morgan
scaffold is a single tower connected together in 9-foot sections
with a cable crank. Sections can be added using X braces
and straight braces. Eastlick and Stout climbed the scaffolding
to change a straight brace that held the scaffolding together
because one of the bars was bent. Gegzna’s back was turned
when the accident occurred, but he saw the two men hit the

470 Ee

ground. He examined the scaffolding later and determined that
pins had been removed from the X brace on Eastlick’s side of
the scaffolding. Gegzna testified that if an X brace and a straight
brace were both removed, the scaffolding could fall.

According to Gegzna, Lueder did not recommend the type
of scaffolding or provide instructions on setup or disman-
thing. Lueder did not direct Monona as to the tools to be used,
but Lueder had specifications on how the work should be
done, and it had a safety program and policy. Gegzna did not
recall whether Monona employees participated in Lueder’s
safety program.

Wayne Schiltz, a field supervisor for Monona at the time
of the accident, stated that the Morgan scaffolding owned by
Monona was used on the jobsite. Lueder did not deliver or
make repairs to the Morgan scaffolding and had nothing to do
with how the scaffolding was erected. Schiltz said that Eastlick
had experience with scaffolding and usually helped with repairs
of scaffolding or replacement of parts.

Schiltz described the X brace as a unit with a pin through the
center of it. The straight brace holds the scaffolding together
and stabilizes the X brace. It takes three people to safely erect
or dismantle the scaffolding. Schiltz said that Eastlick had dam-
aged a brace with a forklift as the scaffolding was brought in
and that Schiltz directed Eastlick and Stout to replace the brace.
They leaned a section of scaffolding against another section and
then removed the bent brace without first replacing it. The scaf-
folding then fell. Schiltz did not see the accident, but he saw
that the scaffolding had collapsed.

Schiltz opined that it was “[uJnbelievable for two men that
has [sic] worked for us for many years with the same very
equipment and do something so horrendous as that. It’s unbe-
lievable.” Eastlick and Stout told Schiltz that they had pulled
the pins out of the brace. Three pins were missing from the
collapsed scaffolding.

Eastlick filed a complaint against Lueder, Monona, and
American Family Mutual Insurance Company on October 20,
2004, alleging that Lueder, as the general contractor, had con-
trol and supervision over all aspects of the construction project
and had a duty to foresee that the masonry work was likely to

create peculiar risks or involve peculiar or inherent dangers.
Eastlick alleged that Lueder (1) violated its nondelegable duty
to provide a reasonably safe place to work; (2) violated its
statutory duties under the requirements of the Occupational
Safety and Health Administration (OSHA); (3) violated its
nondelegable duties to see that the work performed by the
independent contractors involving peculiar risks was done with
a requisite degree of care by taking adequate safety precautions
and measures; and (4) failed to ensure that the scaffolding was
erected, moved, and dismantled under the supervision of or by
a competent, qualified person.

Eastlick alleged that as a result of the accident, he was
injured and incurred hospital, medical, and related health care
expenses. He claimed that he was totally disabled from October
24 through December 4, 2000, resulting in lost wages of $6,945,
and that he would continue to sustain lost earnings and loss of
earning capacity in the future.

Lueder denied Eastlick’s allegations but admitted it was
the general contractor for the construction project. Lueder
alleged that Eastlick’s exclusive remedy was workers’ com-
pensation; that Lueder owed no duty of care to Eastlick,
who was an employee of a subcontractor; and that the use
of. scaffolding did not involve a peculiar risk or constitute an
ultrahazardous activity.

The district court sustained Lueder’s motion for summary
judgment and overruled Eastlick’s motion for partial summary
judgment. The court found that the peculiar risk doctrine did
not apply. There was no dispute that Monona owned the scaf-
folding and that the scaffolding had been erected by Monona
employees. The court found that Lueder’s duty to Eastlick
extended only to provide a reasonably safe place to work and
did not include a duty to inspect equipment that was owned,
directed, or controlled by Monona. There was no dispute that
Monona was cited by OSHA for safety violations and that
Lueder was not cited for any OSHA violation. The court con-
cluded that the record did not support an action for negligence
against Lueder.

Eastlick’s motion to reconsider was overruled, and he timely
perfected this appeal.

412 be

ASSIGNMENTS OF ERROR

Eastlick assigns the following errors, summarized and
restated: The district court erred (1) in finding that Lueder, as
general contractor, owed no duty to Eastlick and that Eastlick
had no claim against Lueder for his injuries; (2) in dismissing
Eastlick’s claim based on the finding that Lueder had no duty
to inspect equipment owned, directed, and controlled by its
subcontractor (Monona), where Eastlick’s claim was based on
an unsafe condition and activity on the premises; (3) in finding
that the work performed by Eastlick at the time of the accident
did not create a peculiar risk of physical harm without the taking
of special precautions; (4) in finding that there was no breach
of Lueder’s duty to Eastlick, which was an issue of fact; and (5)
in failing to find that’Lueder owed Eastlick a duty to keep the
premises in a reasonably safe condition.

ANALYSIS

Eastlick, who was employed as a bricklayer for Monona,
sustained serious injuries when the scaffolding he was standing
on collapsed. Eastlick alleged that Lueder’s negligence resulted
in his injuries. In order to prevail in a negligence action, a plain-
tiff must establish the defendant’s duty to protect the plaintiff
from injury, a failure to discharge that duty, and damages proxi-
mately caused by the failure to discharge that duty. National
Am. Ins. Co. v. Constructors Bonding Co., 272 Neb. 169, 719
N.W.2d 297 (2006).

The first issue is whether Lueder, the general contractor,
owed Eastlick a duty to protect him from the injury that
occurred. Related to this issue is whether Lueder maintained
control over Eastlick’s workplace and whether Lueder breached
any of its nondelegable duties to Eastlick by failing to provide a
safe place to work, violating a statute or rule of law, or violating
its duty of due care if Eastlick’s work involved a special risk.

HMM Whether a legal duty exists for actionable negligence
is a question of law dependent on the facts in a particular case.
Didier v. Ash Grove Cement Co., 272 Neb. 28, 718 N.W.2d 484
(2006). When reviewing questions of law, an appellate court
has an obligation to resolve the questions independently of the
conclusions reached by the trial court. Id.

Lueder was the general contractor on the jobsite pursuant
to a written construction contract with the owner. The contract
provided that Lueder was required to supervise and direct the
work at the site; that the contractor was responsible to the owner
for acts and omissions of the contractor’s employees, subcon-
tractors, and their agents or employees; and that the contractor
was responsible for initiating, maintaining, and supervising
all safety precautions and programs. The subcontract between
Lueder and Monona included a provision that the subcontrac-
tor, Monona, agreed to assume the entire responsibility and
liability for all damages or injury to all persons arising out of
or resulting from the execution of the work provided for in the
subcontract.

HM Generally, one who employs an independent contractor
is not liable for physical harm caused to another by the acts or
omissions of the contractor or his servants. Jd. There are two
recognized exceptions to the general rule which may allow
the employer of an independent contractor to be held vicari-
ously liable to a third party. “Those two exceptions are where
(1) the employer retains control over the contractor’s work or
(2) the employer has a nondelegable duty to protect another
from harm.” Id. at 34, 718 N.W.2d at 490. Nondelegable duties
include (1) the duty of an owner in possession and control of
premises to provide a safe place for work by an independent
contractor’s employee, (2) a duty imposed by statute or rule of
law, and (3) the duty of due care when the independent contrac-
tor’s work involves special risks or dangers. See id.

The contract between Lueder and Monona required that
Monona assume the entire responsibility and liability for any
injury to any person arising out of the work done by Monona.
There was no evidence that Lueder had control over the work
being done by Eastlick. Although Lueder had control of the
jobsite, it did not control Eastlick’s work or the tools and scaf-
folding that he was using.

There is no dispute that the scaffolding was owned, main-
tained, erected, and dismantled by Monona. It was intended
for use by Monona and its employees. Although Lueder had
a supervising role, it did not direct the masonry work done by
Monona, nor did it have control over the manner in which the

am Es

masonry work was done. There was no evidence that Lueder
had control over the work performed by Monona.

HM Eastlick argues that Lueder owed a nondelegable duty
to him to keep the premises in a reasonably safe condition. “A
nondelegable duty means that an employer of an independent
contractor, by assigning work consequent to a duty, is not
relieved from liability arising from the delegated duties negli-
gently performed.” Dellinger v. Omaha Pub. Power Dist., 9 Neb.
App. 307, 311-12, 611 N.W.2d 132, 137 (2000), citing Parrish
v. Omaha Pub. Power Dist., 242 Neb. 783, 496 N.W.2d 902
(1993). Liability for breach of a nondelegable duty is an excep-
tion to the general rule that one who employs an independent
contractor is not liable for the independent contractor’s negli-
gence. Dellinger v. Omaha Pub. Power Dist., supra.

Lueder has not disputed that it had a nondelegable duty to
provide a safe place to work for Monona employees. The record
shows that Eastlick was not injured because the workplace was
unsafe. Rather, he was injured when he removed a brace on the
scaffolding in an incorrect manner. The scaffolding was owned,
erected, and maintained by Monona, Eastlick’s employer, and
not by Lueder, the general contractor. There was no evidence
presented to show that Lueder breached any nondelegable duty
to provide a safe workplace.

Eastlick also argues that Lueder was negligent by statute
or rule of law because OSHA regulations provide that Lueder
should have ensured that Eastlick had proper training to work
on the scaffolding. He also claims that the court cannot infer
that Lueder did not violate an OSHA standard because Lueder
was not cited by OSHA.

As the district court noted, there was no dispute in the evi-
dence that the scaffolding was owned and erected by Monona
and that Monona was cited for OSHA violations. There was
no evidence that Lueder was cited for any OSHA violation.
The court stated that Nebraska statutes pertaining to scaffold-
ing place the responsibility for proper erection and dismantling
of scaffolding on the company that owns and maintains the
scaffolding in use. See Neb. Rev. Stat. §§ 48-425 and 48-428
(Reissue 2004). The Nebraska statutes pertaining to scaffolding
safety have been applied by this court to persons who erect,

construct, or supply the scaffolding. See Hand v. Rorick Constr.
Co., 190 Neb. 191, 206 N.W.2d 835 (1973). The district court
found no support for an action for negligence against Lueder by
rule of law or statute, and we agree.

Il Eastlick also argues that the overwhelming weight of
the evidence supports a finding that the acts of moving and
dismantling scaffolding involve special risks or dangers, which
imposed a duty of due care on Lueder. A peculiar risk must
involve some special hazard resulting from the nature of the
work done, which calls for special precautions. Dellinger v.
Omaha Pub. Power Dist., supra.

Examples of types of work which this court has previously
held to demonstrate peculiar risks include steel construction
work (Parrish v. Omaha Pub. Power Dist., supra), painting the
inside of an underground tank creating highly combustible paint
fumes (Anderson v. Nashua Corp., 246 Neb. 420, 519 N.W.2d
275 (1994)), and steamfitter work near the opening on a floor
deck that exposed vertical reinforcing rods (Simon v. Omaha P.
P. Dist., 189 Neb. 183, 202 N.W.2d 157 (1972)).

In Dellinger v. Omaha Pub. Power Dist., 9 Neb. App. 307,
611 N.W.2d 132 (2000), the Nebraska Court of Appeals dis-
tinguished cases in which an injury can be traced to an act of
negligence, such as the failure to fasten one end of a board on
a scaffoldlike structure, from those in which a peculiar risk is
associated with the work being done. Although there may have
been peculiar risks associated with the steel construction work
the employee was doing, the actual risk he faced was the result
of a failure to properly secure a piece of equipment.

The case at bar is similar. The injury Eastlick sustained was
not the result of merely working on the scaffolding, but was
the result of a failure to follow proper procedures. There was
no evidence that the acts of erecting, repairing, or dismantling
the scaffolding carried with them a peculiar risk, although cer-
tain safety precautions were necessary. The record does not
show that the district court erred in finding that the peculiar
tisk doctrine did not apply to the facts of this case. There is no
evidence that Lueder breached any nondelegable duty arising as
a result of any peculiar risk associated with Eastlick’s work on
the scaffolding.

416 Le

Eastlick relies on Parrish v. Omaha Pub. Power Dist., 242
Neb. 783, 496 N.W.2d 902 (1993), in which this court reversed
the award of summary judgment granted to the owner and the
general contractor. However, in that case, the owner of the
construction site specifically retained the right to inspect all
work, the right to monitor overall progress of the work, and
the right to take over the construction if the general contractor
failed to perform the work according to the contract. A licensed
professional engineer who worked for the owner was stationed
at the site for daily contact with the work. He exerted some
supervisory control over the construction. The project manager
for Omaha Public Power District was involved in coordinating
and supervising the work of the general contractor throughout
the construction. This court noted that the district’s personnel
at the construction site were active participants and not just
passive observers.

Hand v. Rorick Constr. Co., 190 Neb. 191, 206 N.W.2d 835
(1973), is more applicable to the case at bar. An employee of
a masonry subcontractor sued a general contractor for injuries
the employee sustained in a fall from a scaffold. The contract
between the owner and the general contractor provided that the
contractor would take all necessary precautions for the safety
of employees.

HM This court noted that the instrumentality which caused
the injury was not the premises, but, rather, was the equip-
ment owned, controlled, and erected by the subcontractor, who
was the employer of the injured worker. The evidence did not
establish that the general contractor had any right to control the
instrumentalities used by the subcontractor. We held that “the
duty of a general contractor to employees of a subcontractor
extends only to providing a reasonably safe place to work as
distinguished from apparatus, tools, or machinery furnished by
the subcontractor for the use of his own employees.” Id. at 197,
206 N.W.2d at 838.

“[A] general contractor’s mere failure to inspect a scaffold
owned, erected, and controlled by the subcontractor and fur-
nished by the subcontractor for the use of his own employees
does not make the general contractor liable to the subcontrac-
tor’s employees for injuries caused by defects in the scaffold.”

Id. at 197, 206 N.W.2d at 838-39. A contractual provision
stating that the general contractor would take all necessary
precautions for the safety of employees working on the jobsite
did not enlarge the common-law duty of the general contractor
to a subcontractor’s employees such that the general contractor
would be required to inspect tools, equipment, and apparatus
furnished by the subcontractor for the exclusive use of its own
employees. Id.

In the present case, the record shows that Hastlick was
injured after he and Stout climbed the scaffolding to change a
brace. Eastlick removed the brace before its replacement had
been fastened, and the scaffolding fell to the ground. Gegzna, a
foreman for Monona, Eastlick’s employer, testified that Lueder
did not recommend the type of scaffolding, provide instructions
on its setup or dismantling, or direct Monona as to the tools to
be used. Schiltz, a field supervisor for Monona, stated that the
scaffolding was owned by Monona. Lueder did not deliver or
make repairs to the scaffolding and had no part in its erection.
It was Schiltz who directed Eastlick and Stout to repair the
scaffolding. Eastlick had experience working with the scaffold-
ing and frequently helped with repairs or replacement. Schiltz
found it “unbelievable” that employees with the experience of
Eastlick and Stout would attempt to change the brace without
first replacing it.

Summary judgment is proper when the pleadings and evi-
dence admitted at the hearing disclose no genuine issue as to
any material fact or as to the ultimate inferences that may be
drawn from those facts and that the moving party is entitled to
judgment as a matter of law. Papillion Rural Fire Prot. Dist. v.
City of Bellevue, ante p. 214, 739 N.W.2d 162 (2007). In review-
ing a summary judgment, an appellate court views the evidence
in a light most favorable to the party against whom the judgment
is granted and gives such party the benefit of all reasonable
inferences deducible from the evidence. Id.

We have reviewed the evidence in a light most favorable to
Eastlick and given him the benefit of all reasonable inferences
deducible from the evidence. We find that there was no genuine
issue of material fact as to whether Lueder owed any nondel-
egable duty to Eastlick beyond providing a safe place to work.

Eastlick’s injuries were not the result of an unsafe premises,
but, rather, the result of work completed in a negligent man-
ner. Thus, the evidence supports the district court’s finding that
Lueder was entitled to summary judgment.

CONCLUSION
The judgment of the district court is affirmed.
AFFIRMED.
McCormack, J., not participating.

Stare oF NEBRASKA, APPELLEE, V.
JeFFREY HESSLER, APPELLANT.
741 N.W.2d 406

Filed November 30, 2007. No. S-05-629.

480 be

James R. Mowbray and Jeffery A. Pickens, of Nebraska
Commission on Public Advocacy, for appellant.

Jon Bruning, Attorney General, and J. Kirk Brown
for appellee.

Wricut, ConNoLty, GERRARD, STEPHAN, McCormack, and
Miter-Lerman, JJ., and Hannon, Judge, Retired.

Miter-Lerman, J.
I. NATURE OF CASE

Jeffrey Hessler was convicted in the district court for Scotts
Bluff County of first degree murder, kidnapping, first degree
sexual assault on a child, and use of a firearm to commit a
felony. Following Hessler’s conviction for first degree murder,
the jury found that three statutory aggravating circumstances
existed. After the convictions and findings of aggravating cir-
cumstances but prior to sentencing, the court granted Hessler’s
pro se request to waive counsel for the remainder of the case.
Hessler appeared pro se at the sentencing proceeding. In its sen-
tencing order, the sentencing panel accepted the jury’s verdicts
finding that three statutory aggravating circumstances existed.
The panel further concluded that no statutory or nonstatutory
mitigating factors were established, that mitigating factors did
not approach or exceed the weight of the aggravating circum-
stances, and that a death sentence would not be excessive or
disproportionate to sentences previously imposed in similar
circumstances. The panel therefore sentenced Hessler to death
for first degree murder; to life imprisonment without parole for
kidnapping; to 40 to 50 years’ imprisonment for sexual assault;
and to 20 to 25 years’ imprisonment for the firearms conviction,
with each sentence to be served consecutively to the others.

This automatic appeal followed. After Hessler filed a pro
se brief assigning no error, we appointed counsel to represent
Hessler on appeal. Appointed counsel filed a brief assigning
various errors with respect to the guilt, aggravation, and sen-
tencing phases of the trial. We affirm Hessler’s convictions
and sentences.

Il. STATEMENT OF FACTS

On the morning of February 11, 2003, 15-year-old Heather
Guerrero left her home in Gering, Nebraska, to make deliveries
on her newspaper route. Heather never returned home. A search
was conducted, and on the morning of February 12, Heather’s
body was found in the basement of an abandoned house near
Lake Minatare, Nebraska.

During the investigation of Heather’s disappearance, a wit-
ness who was walking his dog on the morning of February
11, 2003, reported that he had heard a scream and had seen a
silver or tan Nissan Altima drive by at a high rate of speed. A
car matching that description belonged to a friend of Hessler’s
who had allowed Hessler to drive the car. A search of the car
revealed three boxes of live ammunition, some spent casings,
and Hessler’s wallet. After police questioned Hessler, Hessler
gave police his semiautomatic handgun. In response to inter-
togation, Hessler admitted to having sex with Heather but
asserted that it was consensual. Hessler said that after Heather
indicated she would not keep the encounter secret, he “freaked
out,” took her to the basement of the abandoned house, and
shot her.

On February 26, 2003, the State filed an information charg-
ing Hessler with five counts in connection with the death
of Heather: count I, premeditated murder; count Il, felony
murder; count III, kidnapping; count IV, first degree sexual
assault; and count V, use of a firearm to commit a felony. In
connection with counts I and II, the State gave notice of aggra-
vating circumstances and alleged that under Neb. Rev. Stat.
§ 29-2523 (Cum. Supp. 2006), (1) Hessler had a substantial
prior history of serious assaultive or terrorizing criminal activ-
ity (§ 29-2523(1)(a)); (2) the murder was committed in an
effort to conceal the commission of the crimes of the kidnap-
ping and sexual assault of Heather and the sexual assault of
another girl, J.B. (§ 29-2523(1)(b)); and (3) the murder was
especially heinous, atrocious, cruel, or manifested exceptional
depravity by ordinary standards of morality and intelligence
(§ 29-2523(1)(d)).

482 Es

On May 19, 2003, Hessler made an oral motion to plead
guilty to count I, felony murder, and to count IV, first degree
sexual assault. The court responded that it would deny the
motion until it had time to research the issue. Hessler filed a
written motion to plead guilty on June 4, and a hearing was held
June 18. The court denied the motion in an order dated July
25. The court stated that Hessler did not have an absolute right
to have his plea accepted and that accepting the plea would
cause more uncertainty than finality because both counts I and
Il charged Hessler with first degree murder and accepting a
plea on one of the counts would create confusion as to whether
trial was necessary or permitted on the other count. Hessler
attempted to appeal the July 25 order, but this court dismissed
the appeal for lack of jurisdiction. State v. Hessler, 267 Neb.
xxii (No. S-03-967, Feb. 11, 2004).

On April 9, 2004, Hessler filed a motion to plead guilty to the
count of felony murder and to all remaining counts other than
premeditated murder. A hearing on the motion was scheduled
for April 14. On that day, the State filed a motion to dismiss
the count of felony murder. At the hearing, the court first con-
sidered the State’s motion to dismiss. The court sustained the
motion to dismiss the count of felony murder and then denied
Hessler’s motion to plead guilty to that count. Hessler declined
to plead guilty to the remaining counts. Hessler attempted to
appeal the April 14 order, but this court again dismissed the
appeal. State v. Hessler, 268 Neb. xxiv (No. S-04-497, Sept. 1,
2004), cert. denied 543 U.S. 1161, 125 S. Ct. 1320, 161 L. Ed.
2d 131 (2005).

On October 6, 2004, Hessler filed a plea in bar in which he
asserted that he had previously been convicted and sentenced
for an offense relating to another victim which he claimed was
an element of the capital murder charge set forth in this case.
During the investigation of the death of Heather, police linked
Hessler to the August 20, 2002, sexual assault of J.B., who, like
Heather, was a teenage girl who was delivering newspapers at
the time she was assaulted. The State charged Hessler in con-
nection with the sexual assault of J.B. After the crimes were
committed and the charges filed in the instant case, on July 14,
2003, Hessler pled no contest to first degree sexual assault of

J.B. Hessler was sentenced on August 21 to imprisonment for
30 to 42 years for the sexual assault of J.B. He did not appeal
the conviction or sentence. In the plea in bar filed in this case,
Hessler asserted that the Double Jeopardy Clause barred use of
the sexual assault of J.B. to prove an aggravating circumstance
in the present case because such use would subject him to a
second prosecution and punishment for the sexual assault of
J.B. On November 17, 2004, the court overruled Hessler’s plea
in bar. Hessler attempted to appeal the denial, but on November
24, we dismissed the appeal for lack of jurisdiction. State v.
Hessler, 268 Neb. xxv (No. S-04-1304, Nov. 24, 2004).

Jury selection in Hessler’s trial began November 29, 2004.
Jury summonses had been sent to 250 people, and potential
jurors were sent a supplemental questionnaire which asked,
inter alia, whether the potential juror had formed an opinion
about Hessler’s guilt or innocence and the basis for such opin-
ion. The venire included 107 potential jurors. The court excused
65 potential jurors, leaving 42 potential jurors upon whom the
parties could exercise peremptory challenges. Hessler made
motions to excuse six potential jurors for cause. The court
overruled the motions after questioning the potential jurors
regarding, inter alia, whether they could set aside their opin-
ions and render impartial verdicts. Hessler later used peremp-
tory challenges to remove four of the potential jurors he had
sought to excuse, and the State used a peremptory challenge to
Temove one.

Only one of the six potential jurors that Hessler moved to
excuse became a member of the jury. That juror was R.C.E.
In response to questioning by the court and by Hessler, R.C.F.
stated that he had formed the opinion that Hessler was guilty
based on newspaper reports. R.C.F. initially stated, “I do not
presume that he’s innocent, no, sir.” However, R.C.F. stated in
Tesponse to questioning from the court that his opinion was not
so strong that he could not set it aside and take an oath to ren-
der a fair and impartial verdict based solely upon the evidence
presented at trial and the instructions given by the court. In
teply to a question from Hessler’s counsel, R.C.F. responded
that Hessler did not need to prove his innocence and stated: “If
I felt without a shadow of a doubt that he was guilty I would

484 Ee

say so but I would not . . . Hessler does not prove that he’s inno-
cent or guilty, I realize that comes from the State, not from {the
defense].” R.C.F. also stated:
I believe in the death penalty but I also believe in a fair and
impartial trial and I can set aside those feelings and those
opinions and listen to the facts.

. .. [If the facts are such that the death penalty is not
warranted, then I could be very fair and impartial.

Following examination of the venire but before the exercise
of peremptory challenges, Hessler made an oral motion to
change venue. Hessler asserted that he could not receive a fair
trial in Scotts Bluff County and argued that his assertion was
supported by responses to questionnaires indicating that a large
number of potential jurors had formed the opinion that he was
guilty. The court overruled the motion to change venue.

At trial, a videotape of the February 12, 2003, interrogation of
Hessler was played to the jury. Other evidence at trial included,
inter alia, testimony of a firearms examiner who opined that
Hessler’s gun fired the cartridge found near Heather’s body,
testimony of a medical technologist who testified that DNA test-
ing could not exclude Heather as a contributor to DNA found on
Hessler’s clothing and in the car Hessler was using, and testi-
mony of a doctor who performed an autopsy on Heather’s body
and who testified that a gunshot wound to the head caused her
death and that injuries to her vaginal area could be consistent
with either forcible penetration or consensual sex. On December
7, 2004, the jury returned verdicts of guilty on the counts of first
degree murder, kidnapping, first degree sexual assault, and use
of a firearm to commit a felony.

Following the verdicts, and prior to and during the aggrava-
tion hearing, Hessler filed various motions, including, inter alia,
motions to declare the Nebraska death penalty statutes uncon-
stitutional on various bases, a motion based on double jeopardy
grounds to prohibit the State from presenting evidence at the
aggravation hearing regarding the sexual assault of J.B. and
from seeking a verdict on the aggravating circumstance found
in § 29-2523(1)(a) based on such evidence, and a motion for
a jury instruction at the aggravation hearing requiring the jury

to make unanimous, written findings of fact in support of any
aggravating circumstances the jury found to exist. Although
Hessler later waived counsel, Hessler was represented by coun-
sel in connection with the court’s consideration of his various
motions, including his constitutional challenge to the death pen-
alty statutes, his Double Jeopardy challenge involving J.B., and
his jury instruction request. The court overruled the motions.
At the aggravation hearing, the State presented, inter alia, evi-
dence of the sexual assault of J.B. On December 9, 2004, the
jury found that all three aggravating circumstances alleged by
the State existed.

On March 31, 2005, Hessler filed a pro se motion titled
“Motion to Invoke My Sixth-Amendment Right and to Expurgate
the Advocate of the State and to Delineate Myself.” The court
had a hearing scheduled to consider various motions filed by
counsel on the day Hessler filed his pro se motion. At the hear-
ing, the court first considered Hessler’s pro se motion. After
questioning Hessler, the court determined that by: the motion,
Hessler sought to remove his counsel, waive his right to coun-
sel, and appear pro se at sentencing. The court then questioned
Hessler about his “current status and mental abilities” which
included questions regarding his age, his education, and his
understanding of the proceedings. In response to the ques-
tions, Hessler indicated that he had been prescribed unspeci-
fied “antipsychotics” and “antihypnotic” drugs but that he had
not taken his medications that particular day. The court further
questioned Hessler regarding his understanding of his right to
counsel, of what he would forgo if he waived his right to coun-
sel, and of what would be required of him in order to represent
himself in further proceedings. In response to questions regard-
ing his ability to represent himself against the State, which
would be represented by attorneys, Hessler said, “I’ve got God
on my side, God’s guiding me. . . . I just go by what God tells
me.” He also indicated that he was not concerned “because
[his] wishes are the same as the State.” Hessler further indi-
cated that although he was not generally dissatisfied with his
counsel’s performance, he wanted to represent himself because
counsel “refuse[d] to comply with [his] wishes.” Following
such questioning, the court found that Hessler had “knowingly,

486 be

intelligently, [and] voluntarily decided to represent himself in
this case.” The court nevertheless instructed counsel to prepare
for the sentencing hearing and to be on standby at sentencing in
the event that Hessler changed his mind and wished to consult
with counsel. Although Hessler indicated his intent to withdraw
various motions made by counsel, including a motion challeng-
ing electrocution as a method of execution, the court allowed
counsel to present evidence in support of such motions in order
to make a complete record.

On May 16, 2005, the sentencing proceeding was held before
a sentencing panel that included the trial judge and two other
judges. Hessler appeared pro se but his former counsel was
present on standby. At the beginning of the hearing, the presid-
ing judge again questioned Hessler regarding his decision to
appear pro se. Hessler indicated that he still wanted to appear
pro se, that he understood his right to counsel and the conse-
quences of. proceeding without counsel, and that no one had
made promises or threats or done anything to get him to waive
counsel. The court again stated its finding that Hessler know-
ingly, intelligently, and voluntarily waived his right to counsel
but told Hessler that he could inform the court if at any time he
wished to be assisted by standby counsel.

At the sentencing hearing, Hessler offered into evidence,
and the court received, a document signed by Hessler titled
“Tnterlocutory Statement of the Defendant.” In the document,
Hessler requested the sentencing panel “to bring the Justice
and Wrath of GOD onto myself.” He further requested that “the
True Intentions of This Court follows GOD’S COMMANDS
and My Wishes and that is to ONLY to be the following... .
I, JEFFREY ALAN HESSLER , MUST BE PUT TO DEATH
WITHOUT DIALECTIC.”

The document continued for several more pages in which
Hessler discussed his remorse for the death of Heather, his opin-
ion that death was the proper punishment, his feelings regarding
the progress of the trial, and his life in general. Hessler offered
no other evidence which would bear on mitigating circumstances
or other factors to be considered in connection with sentencing.

The State asked the court “to take judicial notice of all the
exhibits that were received at trial and the aggravation hearing

| “
as well.” The court had previously received into evidence “a
two volume transcript of the proceedings of both the trial and
the aggravation hearing,” and the court stated that it would
“make all the exhibits from the two proceedings available for
the three-judge panel for their consideration and deliberations.”
The State offered no further evidence. Hessler declined to make
a closing statement in his own behalf. The State made a clos-
ing statement in which it urged the panel to impose a death
sentence for first degree murder and to impose the maximum
sentences on the other counts. Hessler declined to rebut the
State’s closing statement. The court informed Hessler that he
had a “final opportunity to make a statement to the court”
regarding anything he wanted the court to consider. Hessler
declined to make a statement.

Later that day, the sentencing panel announced its deci-
sion and entered its sentencing order. The panel recited the
relevant facts and, finding the facts true beyond a reasonable
doubt, unanimously accepted the jury’s verdicts. The panel next
found that the three asserted aggravating circumstances existed
beyond a reasonable doubt and unanimously accepted the jury’s
findings regarding aggravating circumstances. The panel then
considered mitigating circumstances but unanimously con-
cluded that no statutory and no nonstatutory mitigating factors
were established in this case. The panel further unanimously
concluded beyond a reasonable doubt that an imposition of
death would not be excessive or disproportionate to sentences
previously imposed in similar circumstances. The panel finally
unanimously concluded that (1) aggravating circumstances jus-
tified imposition of a death sentence; (2) mitigating circum-
stances did not approach or exceed the weight given to aggra-
vating circumstances; and (3) a death sentence would not be
excessive or disproportionate to penalties imposed in similar
cases, considering both the crime and the defendant. The panel
imposed sentences of death for first degree murder, life impris-
onment without parole for kidnapping, imprisonment for 40 to
50 years for first degree sexual assault on a child, and imprison-
ment of 20 to 25 years for use of a firearm to commit a felony.
The panel ordered that each sentence be served consecutively
to the others. .

488 Es

This automatic appeal followed.

Ill. ASSIGNMENTS OF ERROR

On August 9, 2005, Hessler filed a pro se appellant’s brief
in which he assigned no error. Instead, in the brief, Hessler
repeated much of the content of the document he entered into
evidence at the sentencing hearing. A replacement brief order
was issued by the Clerk of the Supreme Court, and in response,
Hessler informed this court that he did not want nor did he
file this appeal and that he would not file any more briefs or
other statements. This court on September 28, 2005, appointed
counsel to represent Hessler in this automatic appeal. Counsel
subsequently filed an appellant’s brief on Hessler’s behalf.

Hessler, through counsel, asserts that the district court erred
in (1) denying his motions to plead guilty to felony murder; (2)
violating the Double Jeopardy Clause by allowing the State to
use the sexual assault of J.B. to prove an aggravating circum-
stance; (3) failing to excuse for cause potential jurors who had
formed opinions regarding Hessler’s guilt; (4) overruling his
motion to change venue; (5) overruling his motion to declare
Nebraska death penalty statutes unconstitutional on various
bases, including (a) vagueness of aggravating circumstances
described in § 29-2523(1)(a), (b), and (d); (b) failure to require
or allow the jury to determine mitigating circumstances, to
assign a weight to aggravating circumstances, and to determine
the sentence; and (c) unconstitutionally penalizing a defendant’s
exercise of the right to a jury trial on aggravating circumstances;
(6) denying his request for an instruction in the aggravation
phase requiring the jury to make unanimous, written findings
of fact to support each aggravating circumstance found to exist;
(7) granting his request to waive counsel and appear pro se at
sentencing and failing to make a determination regarding his
competency to waive counsel; and (8) receiving into evidence
at sentencing the records of the guilt and aggravation phases of
the trial.

IV. STANDARDS OF REVIEW .
HA trial court is given discretion as to whether to accept
a guilty plea; this court will overturn that decision only where

there is an abuse of discretion. State v. Brown, 268 Neb. 943,
689 N.W.2d 347 (2004).

Hl The retention or rejection of a venireperson as a juror is a
matter of discretion with the trial court and is subject to reversal
only when clearly wrong. State v. Quintana, 261 Neb. 38, 621
N.W.2d 121 (2001).

HA motion for change of venue is addressed to the discre-
tion of the trial judge, whose ruling will not be disturbed absent
an abuse of discretion. State v. Rodriguez, 272 Neb. 930, 726
N.W.2d 157 (2007).

Hl The constitutionality of a statute is a question of law,
regarding which the Nebraska Supreme Court is obligated to
reach a conclusion independent of the determination reached
by the trial court. State v. Marrs, 272 Neb. 573, 723 N.W.2d
499 (2006).

[Il To establish reversible error from a court’s refusal to give
a requested instruction, an appellant has the burden to show that
(1) the tendered instruction is a correct statement of the law,
(2) the tendered instruction is warranted by the evidence, and
(3) the appellant was prejudiced by the court’s refusal to give the
tendered instruction. State v. Blair, 272 Neb. 951, 726 N.W.2d
185 (2007).

[ll In determining whether a defendant’s waiver of counsel
was voluntary, knowing, and intelligent, an appellate court applies
a “clearly erroneous” standard of review. State v. Gunther, 271
Neb. 874, 716 N.W.2d 691 (2006).

V. ANALYSIS

1. No Asuse oF Discretion IN DENIAL oF Motions
to PLEAD Guitry To FELony MurpER

In his first assignment of error, Hessler asserts that the dis-
trict court erred when it denied his motions to plead guilty to
the felony murder count. Although the assignment of error men-
tions the granting of the State’s motion to dismiss the felony
murder count, Hessler makes no specific argument regarding
the dismissal. We therefore treat the assignment of error as lim-
ited to the denial of Hessler’s motions to plead guilty to felony
murder. See In re Interest of Michael U., 273 Neb. 198, 728
N.W.2d 116 (2007) (errors assigned but not argued will not be

490 |

addressed by appellate court). A trial court is given discretion
as to whether to accept a guilty plea; this court will overturn
that decision only where there is an abuse of discretion. Brown,
supra. We conclude that the court did not abuse its discretion
when it denied Hessler’s motions to plead guilty to felony
murder.

As noted above, the State originally charged Hessler with
both premeditated murder and felony murder and denominated
the two as separate counts in the information. Hessler twice
moved the court to allow him to plead guilty to felony murder,
and the court denied both motions. In its order denying Hessler’s
first motion to plead guilty, the court noted that if the plea to
felony murder were accepted, there would be confusion as to
whether Hessler should thereafter also be tried for premeditated
murder. The court determined that accepting the plea “would
create more uncertainty than finality, would not eliminate the
need for a full trial of the facts either at the evidentiary phase
or the sentencing phase, and would not significantly save costs
or court time.”

Hessler asserts that the court’s reasons are clearly untenable.
He argues that the State assumed the risk of his pleading to one
count when it charged premeditated murder and felony murder
as separate counts and that the court acted as a safety net and
unfairly assisted the prosecution by saving it from this tactical
error. Hessler asserts that he had valid reasons to plead guilty
to felony murder, including a strategy to avoid the death pen-
alty, his feelings of remorse and desire to accept responsibility
for the crime, and a desire to spare his family and the victim’s
family the emotional trauma of a trial.

HM With regard to whether courts must accept a defendant’s
plea of guilty, we have stated:

It is well established that a criminal defendant has no
absolute right to have his or her plea of guilty or nolo con-
tendere accepted even if the plea is voluntarily and intel-
ligently made. . . . Our cases recognize that a trial court
has a large measure of discretion in deciding whether to
accept a guilty plea.

State v. Brown, 268 Neb. 943, 947, 689 N.W.2d 347, 351 (2004)
(citations omitted). We stated in Brown that our jurisprudence

grants trial courts “wide discretion in rejecting plea agreements
for substantive reasons.” 268 Neb. at 950, 689 N.W.2d at 352.
This court will overturn a decision on whether to accept a plea
of guilty only where there is an abuse of discretion. Id. A judi-
cial abuse of discretion exists only when the reasons or rulings
of a trial judge are clearly untenable, unfairly depriving a liti-
gant of a substantial right and denying a just result in matters
submitted for disposition. State v. Davlin, 272 Neb. 139, 719
N.W.2d 243 (2006).

Although we do not necessarily agree with each substantive
reason recited by the court, we find no abuse of discretion in the
decision to deny the motions to plead guilty to felony murder.
Hessler had no absolute right to plead guilty, see Brown, supra,
and therefore, the ruling did not deprive him of a substantial
tight. Nor did the ruling deny Hessler a just result. Hessler
argues that his desire to plead guilty to felony murder was part
of a strategy to avoid the death penalty. However, felony murder
and premeditated murder are both theories of first degree mur-
der subject to the death penalty. See State v. Nesbitt, 264 Neb.
612, 633, 650 N.W.2d 766, 785 (2002) (“premeditated murder
and felony murder are simply alternate methods of committing
first degree murder”). Had Hessler pled guilty to felony murder,
he still would have stood convicted of first degree murder and
the death penalty still would have been a possible sentence.
Also, a plea to felony murder would not necessarily have
spared Hessler’s family and the victim’s family the emotional
trauma of a trial on other counts. With the death penalty still
a possible sentence, trial still would have been required on the
aggravating circumstances, and the sentencing panel still would
have been required to consider the circumstances of the crime.
The State likely would have presented much of the evidence it
presented in the guilt phase of the trial at the aggravation and
sentencing phases if Hessler had been allowed to plead.

Because the denial did not deprive Hessler of a substantial
tight or a just result, we conclude that the court’s denial of
Hessler’s motions to plead guilty to felony murder was within
the court’s “wide discretion.” See Brown, supra. We teject
Hessler’s first assignment of error.

492 Le

2. No Dous.e JzopARDY VIOLATION IN Usk OF PRIOR SEXUAL
ASSAULT OF ANOTHER VICTIM TO PROVE
AGGRAVATING CIRCUMSTANCE

In his second assignment of error, Hessler asserts that the
district court erred in various rulings. As Hessler argues this
assignment of error, his general claim is that the court erred in
allowing the State to use his prior sexual assault of J.B. to prove
the aggravating circumstance of § 29-2533(1)(a), prior history
of serious assaultive criminal activity, and that such use sub-
jected him to a second punishment for that crime in violation of
the Double Jeopardy Clause. We conclude that use of the prior
sexual assault of J.B. to prove an aggravating circumstance did
not violate the Double Jeopardy Clause.

Hessler argues that as the crime in the present case was
charged, the sexual assault of J.B. was an element of the offense
of capital murder, and that it violated the Double Jeopardy
Clause to use the prior assault, for which he had already been
tried and punished, as an element of another crime. In support
of his argument, Hessler cites two U.S. Supreme Court cases,
Ring v. Arizona, 536 U.S. 584, 122 S. Ct. 2428, 153 L. Ed.
2d 556 (2002), and Sattazahn v. Pennsylvania, 537 U.S. 101,
123 S. Ct. 732, 154 L. Ed. 2d 588 (2003). In Ring, the U.S.
Supreme Court, in holding that the Sixth Amendment requires
that aggravating circumstances be found by a jury, stated that
“aggravating factors operate as ‘the functional equivalent of
an element of a greater offense.” 536 U.S. at 609 (quoting
Apprendi v. New Jersey, 530 U.S. 466, 120 S. Ct. 2348, 147 L.
Ed. 2d 435 (2000)). In Sattazahn, three justices of the Court
cited and quoted Ring and stated that “for purposes of the Sixth
Amendment’s jury-trial guarantee, the underlying offense of
‘murder’ is a distinct, lesser included offense of ‘murder plus
one or more aggravating circumstances.’” 537 U.S. at 111. In
determining whether the Double Jeopardy Clause applied to
capital sentencing proceedings to determine the existence of
aggravating circumstances, the three justices found no reason
to distinguish between what constitutes an offense for Sixth
Amendment jury purposes and what constitutes an offense for
Fifth Amendment double jeopardy purposes. Jd. Hessler argues

that these statements in Ring and Sattazahn mean that aggravat-
ing circumstances are elements of the offense of capital murder
and that therefore, the sexual assault of J.B., which was alleged
as an aggravating circumstance, was a lesser-included offense of
the capital murder of Heather.

We note initially that the Nebraska Legislature has provided
that “the aggravating circumstances are not intended to con-
stitute elements of the crime generally unless subsequently so
required by the state or federal constitution.” Neb. Rev. Stat.
§ 29-2519(2)(d) (Cum. Supp. 2006). We do not believe that the
explanatory comments in Ring and Sattazahn lead to the con-
clusion that an aggravating circumstance should be treated as an
element of capital murder, and we reject Hessler’s suggestion
that we treat an aggravating circumstance as an element of capi-
tal murder. In Ring, the Court referred to aggravating circum-
stances as the “functional equivalents” of elements only for the
purpose of resolving the question of whether a jury was required
to find aggravating circumstances. In Schriro v. Summerlin,
542 U.S. 348, 124 S. Ct. 2519, 159 L. Ed. 2d 442 (2004), the
Court stated that the holding in Ring did not alter the range of
conduct that the statutes at issue subjected to the death penalty,
but instead altered the method for determining whether conduct
was punishable by death by requiring a jury determination of
aggravating circumstances. These statements in Schriro indicate
that the Court did not consider aggravating circumstances to be
substantive elements of the crime of capital murder. Instead,
the Court considered aggravating circumstances as functional
equivalents of elements for the limited purpose of determining
whether Sixth Amendment jury guarantees extended to findings
of aggravating circumstances,

Sattazahn v. Pennsylvania, 537 U.S. 101, 123 S. Ct. 732,
154 L. Ed. 2d 588 (2003), also does not support Hessler’s argu-
ment. The issue in Sattazahn was whether the Double Jeopardy
Clause prohibited a second capital sentencing for the same
crime. Three justices of the Court in Sattazahn stated, “If a jury
unanimously concludes that a State has failed to meet its burden
of proving the existence of one or more aggravating circum-
stances, double-jeopardy protections attach to that ‘acquittal’
on the offense of ‘murder plus aggravating circumstance(s).’”

494 Es

537 U.S. at 112. The three justices determined that double
jeopardy protections would attach once a jury concluded that no
aggravating circumstances existed and that therefore, a second
capital sentencing would be prohibited. The Court in Sattazahn
did not state that double jeopardy protections prohibited the
use of evidence of prior crimes to establish an aggravating
circumstance in a subsequent case involving a different crime.
Furthermore, the portions of Sattazahn on which Hessler relies
were from a section of the opinion that was joined by only
three justices, and the views expressed by the three were not
endorsed by a majority of the Court. See State v. Mata, 266
Neb. 668, 668 N.W.2d 448 (2003) (rejecting similar argument
based on Sattazahn).
The issue in the present case is different from those in Ring

y. Arizona, 536 U.S. 584, 122 S. Ct. 2428, 153 L. Ed. 2d 556
(2002), and Sattazahn, supra. The issue here is whether evi-
dence of a prior offense can be used to prove prior history as
an aggravating circumstance in a capital trial involving a later
offense. This question is more similar to the question of whether
the sentence for a subsequent crime may be enhanced based on
prior crimes. In Witte v. United States, 515 U.S. 389, 115 S. Ct.
2199, 132 L. Ed. 2d 351 (1995), the Court stated that the con-
sideration of prior conduct in connection with sentencing for a
subsequent offense does not result in additional punishment for
such prior conduct. The Court stated that enhancement or recidi-
vism statutes do not change the penalty imposed for the earlier
offense and stated:

In repeatedly upholding such recidivism statutes, we have

rejected double jeopardy challenges because the enhanced

punishment imposed for the later offense “is not to be

viewed as either a new jeopardy or additional penalty for

the earlier crimes,” but instead as “a stiffened penalty for

the latest crime, which is considered to be an aggravated

offense because a repetitive one.”
515 USS. at 400.

IJ Under this reasoning, we determine that the use of

a prior offense to prove an aggravating circumstance under
§ 29-2523(1)(a) does not increase the penalty for the prior
offense and does not expose the defendant to new jeopardy for

such offense. Instead, the finding of an aggravating circumstance
is used to increase the potential punishment for the latest crime
which in the present case is first degree murder. We therefore
conclude that because the use of evidence of a prior offense to
prove an aggravating circumstance under § 29-2523(1)(a) does
not expose the defendant to new jeopardy for the prior offense,
such use does not violate the Double Jeopardy Clause.

In sum, in the present case, evidence regarding the sexual
assault of J.B. was used to prove that an aggravating circum-
stance existed and to enhance the potential punishment for
Hessler’s conviction for the first degree murder of Heather.
Such evidence was not used to prove a substantive element of
the crime of first degree murder, and the use of such evidence
did not subject Hessler to additional punishment for the sexual
assault of J.B. We conclude that the use of evidence of Hessler’s
sexual assault of J.B. did not violate the Double Jeopardy Clause
and that Hessler’s second assignment of error is without merit.

3. No REVERSIBLE ERROR IN OVERRULING OF Morions
To ExcusE Jurors FoR CAUSE

In his third assignment of error, Hessler asserts that the
district court’ erred when it overruled his motions to excuse
various potential jurors for cause. The retention or rejection of
a venireperson as a juror is a matter of discretion with the trial
court and is subject to reversal only when clearly wrong. State
v. Quintana, 261 Neb. 38, 621 N.W.2d 121 (2001). The court
overruled Hessler’s challenges with respect to six potential
jurors, but in his brief, Hessler makes arguments with respect
to only five of the six. Hessler argues that the five should have
been excused for cause because each person had formed the
opinion that Hessler was guilty and did not adequately dem-
onstrate that he or she could act as an impartial juror despite
such opinion. Only one of the five, R.C.F., actually became a
member of the jury. Three were removed by Hessler’s use of
peremptory challenges, and one was removed by the State’s
use of a peremptory challenge. We conclude that reversal is not
warranted based on those challenged individuals who did not
become members of the jury and that the court did not err in
overruling Hessler’s motion to excuse R.C.F.

Hessler argues that each potential juror should have been
struck for cause pursuant to Neb. Rev. Stat. § 29-2006(2) (Reissue
1995), which states that good cause to challenge a juror includes
that “he has formed or expressed an opinion as to the guilt or
innocence of the accused.” Section 29-2006(2) further provides
that if a potential juror has formed an opinion, the court should
examine him or her regarding the grounds for such opinion. If
the opinion was formed based upon “conversations with wit-
nesses of the transactions or reading reports of their testimony
or hearing them testify,” dismissal is mandatory. Id. See, also,
State v. Myers, 190 Neb. 466, 209 N.W.2d 345 (1973). However,
if the opinion was formed based on “reading newspaper state-
ments, communications, comments or reports, or upon rumor
or hearsay,” then the person may still serve if (1) the potential
juror “shall say on oath that he feels able, notwithstanding such
opinion, to render an impartial verdict upon the law and the evi-
dence” and (2) the court is satisfied that the potential juror “is
impartial and will render such verdict.” § 29-2006(2).

HE We have stated that “the erroneous overruling of a chal-
lenge for cause will not warrant reversal unless it is shown on
appeal that an objectionable juror was forced upon the challeng-
ing party and sat upon the jury after the party exhausted his or
her peremptory challenges.” State v. Quintana, 261 Neb. at 52,
621 N.W.2d at 134. In this case, four of the five potential jurors
that Hessler complains of on appeal were struck by the use of
peremptory challenges. Under Quintana, there can be no rever-
sal based on a challenge to a potential juror if that person was
not ultimately included on the jury, even if the defendant was
required to use a peremptory challenge to remove the person.
Therefore, reversal is not warranted in this case based on the
overruling of Hessler’s challenges to those persons who did not
become members of the jury.

HM The only challenged individual who became a member
of the jury was R.C.F. Although R.C.F. initially stated that he
had formed an opinion regarding Hessler’s guilt, R.C.F. also
stated that such opinion was based on newspaper reports and
that his opinion was not so strong that he could not set it aside
and take an oath to render a fair and impartial verdict. Although
during questioning by defense counsel, R.C.F. stated that “I do

not presume that he’s innocent, no, sir,” R.C.F. also said, inter
alia, that “Hessler does not prove that he’s innocent or guilty,
I realize that comes from the State, not from [the defense].”
Viewed in context, we believe that despite R.C.F’s initial state-
ments that he had formed an opinion and that he did not presume
Hessler to be innocent, other later statements made by R.C.E
indicate he understood that as a juror, he needed to be and could
be impartial, and that the State had the burden to prove Hessler
guilty rather than Hessler’s having the burden to prove himself
innocent. We believe the court reasonably could have assessed
R.C.F’s statements and his demeanor and concluded that R.C.F.
could render an impartial verdict. In this respect, we note that
deference is given to a trial court’s determinations in these
matters. The U.S. Supreme Court recently stated that in deci-
sions regarding challenges to potential jurors, “[d]eference to
the trial court is appropriate because it is in a position to assess
the demeanor of the venire, and of the individuals who com-
pose it, a factor of critical importance in assessing the attitude
and qualifications of potential jurors.” Uttecht v. Brown, 551
U.S. 1, 9, 127 S. Ct. 2218, 167 L. Ed. 2d 1014 (2007). Based
on our review of the questioning of R.C.F.,, and taking R.C.F’s
responses as a whole and giving proper deference to the court’s
assessment of R.C.R’s demeanor, we conclude that the court
was not clearly erroneous in overruling Hessler’s motion to
excuse R.C.F,

Reversal cannot be based on challenges to potential jurors
who did not become members of the jury, and the court was not
clearly wrong when it overruled the motion to excuse R.C.F. We
therefore reject Hessler’s third assignment of error.

4. No Error IN DENIAL OF MorTIon TO CHANGE VENUE

In his fourth assignment of error, Hessler asserts that the
district court erred in denying his request to change venue on
the basis that he could not receive a fair trial in Scotts Bluff
County. A motion for change of venue is addressed to the discre-
tion of the trial judge, whose ruling will not be disturbed absent
an abuse of discretion. State v. Rodriguez, 272 Neb. 930, 726
N.W.2d 157 (2007). We conclude that the court did not abuse its
discretion when it denied Hessler’s request to change venue.

Hessler did not move to change venue prior to jury selec-
tion, and he did not offer evidence regarding newspaper stories
or other publicity regarding the crime. Instead, his arguments
in favor of changing venue were based on voir dire examina-
tions of potential jurors. Hessler noted that a large number of
potential jurors had seen or heard reports of the crime and had.
formed opinions regarding Hessler’s guilt. He argues on appeal
that the court did not exercise sufficient care during jury selec-
tion because the court did not strike various persons for cause
and because R.C.F. became a member of the jury. Hessler asserts
that jury selection was complicated by the large number of
persons who had formed opinions based on news reports, and
he notes that many had to be excused based on such opinions.
Hessler argues that the jury selection process demonstrated that
“local conditions and pretrial publicity made it impossible for
[him] to secure a fair and impartial jury in Scotts Bluff County,”
brief for appellant at 62, and that therefore, he was denied his
tight to an impartial jury.

In State v. Quintana, 261 Neb. 38, 54, 621 N.W.2d 121, 135
(2001), we noted that jurors who had heard publicity about the
case “agreed that they could set aside any information that they
knew about the case and that they would make decisions solely
from what they heard in court.” Because the record in Quintana
showed that an impartial jury had been chosen, we concluded
that the defendant had not shown that he could not receive a fair
trial in the county at issue and that the court did not abuse its
discretion in denying the defendant’s motion to change venue.

Similar to Quintana, we determine that Hessler has not shown
that a change of venue was necessary, because an impartial jury
was in fact selected, and that Hessler therefore did not show
that he could not receive a fair trial in Scotts Bluff County. As
noted above, R.C.F. was the only person actually on the jury of
whom Hessler complains on appeal. As we determined above,
the record shows that in response to questioning, R.C.F. indi-
cated that he could render an impartial verdict. Hessler makes
no other argument that the jury was not impartial; he argues only
that it was difficult to select a jury because of alleged partiality
in the venire.

Because Hessler has not shown that his actual jury was par-
tial, he has not shown that it was impossible to seat an impar-
tial jury or that he could not receive a fair trial in Scotts Bluff
County. We therefore conclude that the court did not abuse its
discretion when it denied Hessler’s motion for change of venue,
and we reject his fourth assignment of error.

5. Dara Penarty Statutes Nor SHown
TO BE UNCONSTITUTIONAL

In his fifth assignment of error, Hessler asserts that the
district court erred when it denied his motions to declare the
Nebraska death penalty statutes unconstitutional. The constitu-
tionality of a statute is a question of law, regarding which the
Nebraska Supreme Court is obligated to reach a conclusion
independent of the determination reached by the trial court.
State v. Marrs, 272 Neb. 573, 723 N.W.2d 499 (2006). Hessler
argues that the death penalty statutes are unconstitutional in
various respects. He asserts first that the three statutory aggra-
vating circumstances alleged in this case are unconstitutionally
vague and indefinite. The aggravating circumstances alleged in
this case were § 29-2523(1)(a), “substantial prior history of seri-
ous assaultive or terrorizing criminal activity”; § 29-2523(1)(b),
“murder was committed in an effort to conceal the commission
of a crime”; and § 29-2523(1)(d), murder that is “especially
heinous, atrocious, [and] cruel.” Hessler also asserts that the
death penalty statutes are unconstitutional with respect to the
limited role the statutes give the jury in capital sentencing. He
specifically argues that the statutes are unconstitutional in that
they fail to allow the jury to consider mitigating circumstances,
to assign a weight to aggravating circumstances, and to suggest,
recommend, or determine whether a death sentence or a life
sentence should be given. Hessler also argues that the statutory
requirement that a sentencing panel determines the sentence
even when a jury determines aggravating circumstances is an
unconstitutional penalty on the defendant’s exercise of his or
her right to a jury trial in the aggravation phase. As a matter
of law, we reject each of Hessler’s assertions that the Nebraska
death penalty statutes are unconstitutional.

500 a

(a) Aggravating Circumstances

With respect to § 29-2523(1)(a), (b), and (d), Hessler asserts
that each of these aggravating circumstances is unconstitution-
ally vague. We note that this court has previously rejected
similar challenges regarding each of the aggravating circum-
stances. Challenges to § 29-2523(1)(a) were rejected in State
v. Bjorklund, 258 Neb. 432, 604 N.W.2d 169 (2000); State
v. Ryan, 248 Neb. 405, 534 N.W.2d 766 (1995); and State v.
Holtan, 197 Neb. 544, 250 N.W.2d 876 (1977), disapproved
on other grounds, State v. Palmer, 224 Neb. 282, 399 N.W.2d
706 (1986). Challenges to § 29-2523(1)(b) were rejected in
Bjorklund, supra; State v. Lotter, 255 Neb. 456, 586 N.W.2d
591 (1998), modified 255 Neb. 889, 587 N.W.2d 673 (1999);
and State v. Moore, 250 Neb. 805, 553 N.W.2d 120 (1996),
disapproved on other grounds, State v. Reeves, 228 Neb. 511,
604 N.W.2d 151 (2000). And challenges to § 29-2523(1)(d)
were rejected in State v. Gales, 269 Neb. 443, 694 N.W.2d
124 (2005); Bjorklund, supra; and State v. Ryan, 233 Neb.
74, 444 N.W.2d 610 (1989). Hessler has cited no subsequent
federal or state authority that would call such rulings into ques-
tion, and Hessler has not articulated any persuasive arguments
why our prior reasoning is faulty or any other reason why
this court should overrule such precedent. We therefore reject
Hessler’s arguments that the aggravating circumstances set forth
in § 29-2523(1)(a), (b), and (d) are unconstitutionally vague
and indefinite.

(b) Jury’s Role in Capital Sentencing

Hessler’s remaining arguments generally deal with the jury’s
role in capital sentencing. Under Nebraska death penalty sen-
tencing statutes, after the guilt phase of the trial, the jury’s only
role in sentencing is to find whether aggravating circumstances
exist. Pursuant to Neb. Rev. Stat. § 29-2520 (Cum. Supp.
2006), a jury determines whether aggravating circumstances
exist unless the defendant waives his or her right to such a jury
determination. Pursuant to Neb. Rev. Stat. § 29-2521 (Cum.
Supp. 2006), after a jury has found aggravating circumstances
or the defendant has waived the right to such jury determina-
tion, a panel of three judges determines the sentence, which

determination includes finding mitigating circumstances, bal-
ancing aggravating and mitigating circumstances, and conduct-
ing a proportionality review.

Hessler asserts that the death penalty statutes are uncon-
Stitutional because they do not require the jury to (1) find
mitigating circumstances; (2) weigh aggravating and mitigat-
ing circumstances; or (3) suggest, recommend, or determine
whether a sentence of life or a sentence of death should be
imposed. Hessler argues that the statutory scheme is “irrational,
unworkable, incoherent, and incapable of rendering a fair and
just determination of life and death,” brief for appellant at 68,
because the sentencing panel, which was not the fact finder dur-
ing the aggravation phase, is not in as good a position as the jury
to assign a weight to the aggravating circumstances, to weigh
aggravating circumstances against mitigating circumstances, and
to determine the sentence.

In State v. Gales, 265 Neb. 598, 658 N.W.2d 604 (2003) (Gales
JD), we noted that the U.S. Supreme Court in Ring v. Arizona, 536
US. 584, 122 S. Ct. 2428, 153 L. Ed. 2d 556 (2002), held that
there is a Sixth Amendment right to have a jury determine the
existence of any aggravating circumstance upon which a capital
sentence is based. However, we determined in Gales J that the
holding in Ring was not so broad as to require that a jury make
additional determinations with regard to capital sentencing. We
stated that we did not read Ring or other authority “to require
that the determination of mitigating circumstances, the balanc-
ing function, or proportionality review be undertaken by a jury.”
265 Neb. at 628-29, 658 N.W.2d at 627. In State v. Gales, 269
Neb. 443, 694 N.W.2d 124 (2005) (Gales Il, we again rejected
an argument that a jury is required to determine mitigating
circumstances and to have input into the appropriate sentence
in capital cases. We determined that the defendant in Gales IT
presented no basis to reconsider our decision in Gales I, and we
noted that later holdings in the U.S. Supreme Coutt, see United
States v. Booker, 543 U.S. 220, 125 S. Ct. 738, 160 L. Ed. 2d
621 (2005), only reinforced our prior decision.

Similarly, in the present case, Hessler has cited no author-
ity that would require us to reconsider our decisions in Gales I
and Gales II. While Ring requires that a jury find aggravating

502 be

circumstances, neither Ring nor other authority requires that
a jury find mitigating circumstances, weigh aggravating and
mitigating circumstances, or have further input into determining
the sentence. We are not persuaded by Hessler’s arguments, and
in the absence of authority, we reject his assertions that a jury
must make such determinations.

(c) Exercise of Right to Jury in Aggravation Phase

As a final challenge to the constitutionality of the death
penalty statutes, Hessler asserts that the statutory scheme impro-
perly penalizes a defendant’s exercise of the right to have a
jury find aggravating circumstances. Hessler argues that if a
defendant prefers to have the same fact finder determine both
the aggravating circumstances and the sentence, the defendant
must waive the right to have a jury find aggravating circum-
stances and instead must allow the sentencing panel to find
aggravating circumstances because the statutory scheme does
not allow a jury to determine the sentence. Hessler argues that
being forced to make such a choice unconstitutionally burdens
the defendant’s assertion of the right to a jury determination of
aggravating circumstances.

Hessler relies on United States v. Jackson, 390 U.S. 570, 88
S. Ct. 1209, 20 L. Ed. 2d 138 (1968), to support this argument.
In Jackson, the U.S. Supreme Court found unconstitutional a
federal statutory provision that authorized the imposition of a
death sentence only when a jury recommended the death sen-
tence. Under the statute, if the defendant waived jury trial or
pled guilty, the maximum possible sentence the court could
impose was a life sentence. The Court determined that the
statutory provision was unconstitutional because it improperly
coerced or encouraged the defendant to waive his or her Sixth
Amendment right to a jury or his or her Fifth Amendment right
to plead not guilty and because it needlessly penalized the
defendant who asserted such rights.

We do not find Hessler’s reliance on Jackson applicable or
persuasive. Unlike Jackson, under the Nebraska death penalty
statutes, a defendant cannot avoid the risk of a death penalty
by waiving the right to a jury determination of aggravating
circumstances; even if the defendant waived such right, the

sentencing panel could still impose a death penalty. Under the
statutory provision in Jackson, the defendant could completely
avoid the death penalty by waiving a jury trial or by plead-
ing guilty. Under the Nebraska statutes, there is no such direct
benefit achieved at the expense of waiving the right to a jury as
there was in Jackson. By waiving the right to a jury under the
Nebraska statutes, the sole benefit is that the defendant avoids
the circumstance wherein the jury as fact finder finds aggravat-
ing circumstances and the judicial panel as fact finder deter-
mines the sentence. While the sentencing panel might be more
thoroughly versed about the case if it had also found aggravat-
ing circumstances, this does not mean that the sentencing panel
would necessarily make a sentencing decision that was more
favorable to the defendant. Unlike Jackson, in which the benefit
to waiving the right to a jury was the elimination of exposure
to the death penalty, the Nebraska statutory scheme does not
provide a clear advantage to a defendant who waives his or
her right to have a jury determine aggravating circumstances.
The Nebraska statutory scheme does not improperly coerce or
encourage a defendant to waive his or her right to a jury and
does not penalize a defendant who asserts such right. We reject
Hessler’s argument that the statutory scheme is unconstitutional
pursuant to Jackson.

(d) Conclusion
Having concluded that each of Hessler’s challenges to the
constitutionality of Nebraska death penalty statutes is without
merit, as a matter of law, we reject Hessler’s fifth assignment
of error.

6. No Error IN REFUSAL OF INSTRUCTION REQUIRING JuRY TO
Make Unanimous, WrirTEN FinpINcs oF Fact
IN AGGRAVATION PHASE

In his sixth assignment of error, Hessler asserts that the
court erred when it refused his requested instruction in the
aggravation phase of the trial that would have required the jury
to unanimously find facts supporting each alleged aggravating
circumstance and to set forth such findings in writing. To estab-
lish reversible error from a court’s refusal to give a requested

504 Ee

instruction, an appellant has the burden to show that (1) the
tendered instruction is a correct statement of the law, (2) the
tendered instruction is warranted by the evidence, and (3) the
appellant was prejudiced by the court’s refusal to give the ten-
dered instruction. State v. Blair, 272 Neb. 951, 726 N.W.2d 185
(2007). We conclude that the court did not err in refusing the
instruction, because the instruction did not accurately state the
law and Hessler has not shown that he was prejudiced by the
refusal to give the instruction.

Hessler requested an instruction to the jury in the aggravation
phase which read:

You, the jury, shall make written findings of fact based
upon the trial of guilt and the aggravation hearing, identify-
ing which, if any, of the alleged aggravating circumstances
have been proven to exist beyond a reasonable doubt. Each
finding of fact with respect to each alleged aggravating cir-
cumstance shall be unanimous. If you are unable to reach
a unanimous finding of fact with respect to an aggravating
circumstance, you must find that the State did not prove
the alleged aggravating circumstance.

Hessler argues that the instruction was necessary to avoid the
burden on the right to a jury trial found to be unconstitutional
in United States v. Jackson, 390 U.S. 570, 88 S. Ct. 1209, 20
L. Ed. 2d 138 (1968). Hessler asserts that if the instruction
were given, it could ameliorate the negative effects wherein
the jury finds aggravating circumstances and the sentencing
panel determines the sentences. He argues that when the jury
finds aggravating circumstances, the sentencing panel is not
adequately familiar with the facts underlying the aggravating
circumstances to properly weigh such circumstances. Hessler
also notes that if the sentencing panel made findings on aggra-
vating circumstances, the panel would be statutorily required
to be unanimous regarding the facts supporting an aggravat-
ing circumstance and to set forth such facts in a written order.
Hessler argues that the jury should also be required to be unani-
imous regarding the specific facts that support an aggravating
circumstance and that the jury should be required to set forth
such facts in writing in order to better inform the sentencing
panel’s decision.

We note that in the aggravation phase in this case, the court
instructed the jury that in order to find that an aggravating
circumstance existed, it needed to “unanimously agree beyond
a reasonable doubt that an aggravating circumstance is true”
and “unanimously decide that the state proved each essential
element of an aggravating circumstance beyond a reasonable
doubt.” Because the court properly instructed the jury that it
needed to be unanimous in finding that the State proved the
existence of an aggravating circumstance and each element of
such circumstance and that the Nebraska death penalty statutes
require no more, Hessler has failed to demonstrate any error of
law in the instruction given or prejudice from the failure to give
the instruction he requested.

Nebraska statutes require that when the right to a jury deter-
mination of aggravating circumstances has been waived and the
sentencing panel finds aggravating circumstances, the “panel
shall make written findings of fact . . . identifying which, if any,
of the alleged aggravating circumstances have been proven”
and that “[eJach finding of fact with respect to each alleged
aggravating circumstance shall be unanimous.” § 29-2521(2).
However, when the jury determines aggravating circumstances,
the statutes provide only that the jury “shall deliberate and
return a verdict as to the existence or nonexistence of each
alleged aggravating circumstance,” that “[e]ach aggravating cir-
cumstance shall be proved beyond a reasonable doubt,” and
that “[eJach verdict with respect to each alleged aggravating
circumstance shall be unanimous.” § 29-2520(4)(f). The statutes
do not require a jury to make written findings of fact or to be
unanimous regarding the specific facts that support its verdict.
The statutes require only that the jury return a verdict as to
each alleged aggravating circumstance and that each such ver-
dict be unanimous. The instructions given by the court in this
case accurately stated the law, and the instruction requested by
Hessler did not accurately state the law.

Hessler’s reliance on United States v. Jackson, 390 U.S. 570,
88 S. Ct. 1209, 20 L. Ed. 2d 138 (1968), in connection with this
assignment of error is not persuasive. As noted in connection
with the previous assignment of error, Hessler asserts that there
are inherent disadvantages in the situation where the jury finds

506 Le

aggravating circumstances and the sentencing panel determines
the sentence and that such disadvantages coerce or encourage
a defendant to waive his or her right to a jury determination of
aggravating circumstances and needlessly penalize defendants
who assert such right. Hessler asserts that if the jury were
required to make unanimous written findings of fact, it would
lessen these perceived disadvantages. As we concluded in con-
nection with the previous assignment of error, the Nebraska
statutes are not unconstitutional under Jackson. The statutes
do not require unanimous written findings of fact, and no such
requirement need be imposed in order to save the statutes from
being unconstitutional.

Neither Jackson nor other authority requires that the jury
make unanimous written findings of fact. Because the tendered
instruction was not a correct statement of law and because
Hessler has shown no prejudice, the court’s refusal to give
Hessler’s requested instruction was not reversible error. We
reject Hessler’s sixth assignment of error.

7. District Court Dip Nor Err IN GRANTING HEssLER’s
Waiver oF Ricut To CouNsEL AND ALLOWING Him
TO APPEAR Pro SE aT SENTENCING

Hessler, through appellate counsel, asserts that the district
court erred when it granted his pro se motion to waive counsel
and allowed him to appear pro se at the sentencing proceed-
ing. He specifically claims that the court erred when it failed
to conduct a hearing to determine his competency to waive
counsel and when it found that he knowingly, voluntarily, and
intelligently waived his right to counsel. On the record before
us, we conclude that the court did not err in granting Hessler’s
motion to waive counsel.

(a) Standards for Determining Whether
Defendant May Waive Counsel
Hessler cites Godinez v. Moran, 509 U.S. 389, 113 S. Ct.
2680, 125 L, Ed. 2d 321 (1993), and asserts that the inquiry into
whether a defendant should be allowed to waive counsel is a
two-step process in which the court considers, first, whether the
defendant is competent to waive counsel and, second, whether

the defendant has knowingly and voluntarily waived counsel.
Hessler argues that the court failed to follow Godinez because
the court did not sua sponte conduct a competency hearing and
did not make an explicit finding that he was competent to waive
counsel. He also claims that the Court erred when it determined
that his waiver of counsel was made knowingly, voluntarily,
and intelligently.

HH In Godinez, the U.S. Supreme Court referred to what it
described as a “two-part inquiry,” 509 U.S. at 401, into whether
a court should accept a defendant’s waiver of counsel. The
Court indicated that where a defendant seeks to waive counsel,
the trial court must be assured that the defendant is competent
to do so and that “[iJn addition to determining that a defendant
who seeks to plead guilty or waive counsel is competent, a trial
court must satisfy itself that the waiver of his constitutional
tights is knowing and voluntary.” 509 U.S. at 400. The two-part
inquiry set forth in Godinez is therefore, first, a determination
that the defendant is competent to waive counsel and, second, a
determination that the waiver is knowing and voluntary.

HH The Court in Godinez also stated that the standard for
determining whether a defendant is competent to waive counsel
is the same as the standard for determining whether a defen-
dant is competent to stand trial. In this regard, the Court stated
that the standard for competence is “whether the defendant
has ‘sufficient present ability to consult with his lawyer with a
reasonable degree of rational understanding’ and has ‘a rational
as well as factual understanding of the proceedings against
him.’” 509 U.S. at 396. See People v. Halvorsen, 42 Cal. 4th
379, 165 P.3d 512, 64 Cal. Rptr. 3d 721 (2007) (recognizing
Godinez’ holding that standard for competency to waive trial is
same as standard for competency to stand trial where defendant
argued that court should have had doubt regarding his compe-
tency to stand trial after court concluded he was incapable of
representing himself). Finally, in a footnote in Godinez, the
Court noted:

We do not mean to suggest, of course, that a court is
required to make a competency determination in every
case in which a defendant seeks to plead guilty or to waive

his right to counsel. As in any criminal case, a competency
determination is necessary only when a court has reason to
doubt the defendant’s competence.

509 U.S. at 401 0.13.

In response to Hessler’s arguments, the State asserts that the
court’s inquiry in this case met the requirements set forth in
State v. Dunster, 262 Neb. 329, 631 N.W.2d 879 (2001), and
that the record supported a finding that Hessler’s waiver of
counsel was made knowingly, voluntarily, and intelligently. In
Dunster, we stated, “A defendant may waive the constitutional
right to counsel, so long as the waiver is made knowingly,
voluntarily, and intelligently.” 262 Neb. at 349, 681 N.W.2d at
898. However, we also noted in Dunster that before granting
the defendant’s request to discharge counsel, defense counsel
had questioned the defendant’s competence to waive counsel
and the trial court received evidence relative to the defendant’s
competence and determined that the defendant was competent.
In concluding that the trial court in Dunster did not err in
granting the request to discharge counsel, we determined that
“{t}he record shows that [the defendant] was competent and his
request to discharge counsel was made knowingly, intelligently,
and voluntarily.” 262 Neb. at 355, 681 N.W.2d at 902. Thus, as
is apparent in Dunster, our jurisprudence is consistent with the
two-part inquiry in Godinez v. Moran, 509 U.S. 389, 113 S. Ct.
2680, 125 L. Ed. 2d 321 (1993), which requires both that the
trial court be assured that the defendant is competent to waive
counsel and that the waiver is made knowingly, voluntarily,
and intelligently.

(b) On the Record Before Us, the District Court Did Not
Have Reason to Doubt Hessler’s Competence and
No Competency Hearing Was Required

Although the analysis of whether a defendant may waive
counsel is a two-part inquiry involving competence and waiver,
a formal competency determination is not necessary in every
case in which a defendant seeks to waive counsel. As noted
above, pursuant to footnote 13 in Godinez, an explicit com-
petency determination is necessary only when the court has
reason to doubt the defendant’s competence. Unlike Dunster,

mz ~

supra, trial counsel in this case did not move for a competency
hearing as a predicate to the court’s consideration of Hessler’s
motion to waive counsel. Limiting our consideration only to the
record on appeal, as we must, we determine that the proceed-
ings did not provide reason to doubt Hessler’s competence to
waive counsel and that the court did not err when a compe-
tency hearing was not conducted, nor did it err when it did not
make an explicit determination that Hessler was competent to
waive counsel.

As noted above, the standard for determining competence is
“whether the defendant has ‘sufficient present ability to consult
with his lawyer with a reasonable degree of rational understand-
ing’ and has ‘a rational as well as factual understanding of the
proceedings against him.’” Godinez, 509 U.S. at 396. When
Hessler filed his motion to waive counsel, he was still repre-
sented by counsel, and counsel did not move for a determination
of Hessler’s competence at that time, compare Dunster, supra,
and there is no indication in the record on appeal that counsel
had earlier challenged Hessler’s competence to stand trial. There
was no indication throughout pretrial proceedings and the trial
itself that Hessler was unable to consult with counsel with a
reasonable degree of rational understanding. To the contrary, the
record contains references to consultations between Hessler and
his counsel, both prior to and during the trial.

With respect to whether Hessler had a rational and factual
understanding of the proceedings, we note that the court had
observed Hessler over many months prior to trial and at trial,
and that although Hessler indicated he was not on medications
on the day the court considered his request to waive counsel,
the court was in a position to be satisfied that any medication
Hessler was or was not on did not compromise his present com-
petence to waive counsel. See LaHood vy. State, 171 S.W.3d 613
(Tex. App. 2005) (stating, generally, that although defendant
was on medication, competency inquiry not mandated where
there was no indication of present inability to communicate or
understand proceeding). See, also, U.S. v. Dalman, 994 F.2d 537
(8th Cir. 1993). We also note that although Hessler’s pro se fil-
ings, including his motion to waive counsel, contain irrelevant
matter, they nevertheless indicate that Hessler understood the

510 Le

factual nature of the proceedings against him and the potential
consequences of such proceedings. Such filings indicate that he
had a rational and factual understanding that he was being pros-
ecuted for the death of Heather and that the death penalty was
a potential punishment for that crime. See People v. Halvorsen,
42 Cal. 4th 379, 403, 165 P.3d 512, 529, 64 Cal. Rptr. 3d 721,
741 (2007) (concluding that although defendant’s “ ‘rambling,
marginally relevant speeches’” might evidence some form of
mental illness, record did not show that defendant lacked
understanding of nature of proceedings and that more than
“‘bizarre actions’” or “ ‘bizarre statements’” were required to
raise doubt about competence). On the record before us and
under the standard set forth in Godinez v. Moran, 509 U.S. 389,
113 S. Ct. 2680, 125 L. Ed. 2d 321 (1993), we believe that the
trial court could reasonably determine that Hessler appeared to
have an understanding of the proceedings and that therefore,
the court did not have reason to doubt Hessler’s competence to
waive counsel. Thus, on this record, the court did not err when
it did not declare a doubt regarding Hessler’s competence and
did not conduct a competency hearing, nor did it err when it did
not make an explicit competency determination in connection
with Hessler’s motion to waive counsel.

(c) District Court Did Not Err in Finding Hessler’s Waiver

of Counsel Was Knowing, Voluntary, and Intelligent

Hessler claims that even if he was competent, his waiver of
counsel was not knowing, voluntary, and intelligent. We deter-
mine that the court was not clearly erroneous in finding that
his waiver of counsel was knowing, voluntary, and intelligent.
When a criminal defendant has waived the right to counsel, this
court reviews the record to determine whether under the totality
of the circumstances, the defendant was sufficiently aware of his
or her right to counsel and the possible consequences of his or
her decision to forgo the aid of counsel. State v. Gunther, 271
Neb. 874, 716 N.W.2d 691 (2006).

We note that Hessler was represented by counsel through-
out pretrial proceedings and during the guilt and aggravation
phases of his trial. In other cases, we have found that the fact
that a defendant has had the advice of counsel throughout the

prosecution is an indication that the defendant’s waiver of coun-
sel and election to proceed pro se was knowing and voluntary.
Gunther, supra; State v. Wilson, 252 Neb. 637, 564 N.W.2d 241
(1997). The fact that Hessler was represented at earlier stages
indicates that he was aware of his right to counsel and that he
knew what he would forgo if he waived counsel.

We also note that the court questioned Hessler extensively
regarding his knowledge of his right to counsel and the con-
sequences of waiving counsel. Hessler’s answers indicated
that he was aware of his right to counsel and that he knew
the consequences of waiving such right. The court also ques-
tioned Hessler regarding whether his waiver was voluntary,
and Hessler’s answers indicated that he was not being forced
or coerced into waiving counsel. Based on our review of the
record, we conclude that under the totality of the circumstances,
Hessler was aware of his right to counsel and the consequences
of waiving such right and that the court was not clearly errone-
ous in its determination that Hessler’s waiver of counsel was
knowing, voluntary, and intelligent.

(d) Conclusion

On the record before us, we cannot say that the court erred
when it did not sua sponte conduct a competency hearing, and
there was no error when the court did not make an explicit
determination that Hessler was competent to waive counsel.
Further, the court was not clearly erroneous in its determination
that Hessler’s waiver was knowing, voluntary, and intelligent.
We therefore conclude that on this record, the district court
did not err in granting Hessler’s motion to waive counsel and
appear pro se at sentencing. Accordingly, we reject Hessler’s
seventh assignment of error.

8. No Error IN Receipt oF REcoRDs OF GUILT
AND AGGRAVATION PHASES OF TRIAL
AT SENTENCING PROCEEDING
In his final assignment of error, Hessler asserts that the dis-
trict court erred in the sentencing phase by receiving into evi-
dence the records of the guilt and aggravation phases of the trial
and in using such evidence to determine his sentences. Hessler

512 be

argues that the sentencing panel’s receipt of such evidence was
erroneous because it was not authorized by statute. We con-
clude that the court was authorized to consider such evidence
and did not err in admitting it.

HE We have stated that the sentencing phase is separate
and apart from the trial phase and that the traditional rules of
evidence may be relaxed following conviction so that the sen-
tencing authority can receive all information pertinent to the
imposition of sentence. State v. Bjorklund, 258 Neb. 432, 604
N.W.2d 169 (2000). We have also stated that a sentencing court
has broad discretion as to the source and type of evidence and
information which may be used in determining the kind and
extent of the punishment to be imposed, and evidence may be
presented as to any matter that the court deems relevant to the
sentence. Id. We have also stated that “the sentencing court,
in imposing the death penalty, has . . . the statutory authority
to consider the trial record.” State v. Ryan, 248 Neb. 405, 442,
534 N.W.2d 766, 790 (1995). We cited § 29-2521 (Reissue
1995) as the statutory basis for these statements in Ryan and
Bjorklund. The version of § 29-2521 in effect at the time of
Ryan and Bjorklund provided that in the sentencing proceed-
ing, “evidence may be presented as to any matter that the
court deems relevant to sentence,” including matters relating to,
aggravating and mitigating circumstances, and that “[aJny such
evidence which the court deems to have probative value may be
received.” As indicated below, we believe the principles referred
to in Ryan and Bjorklund apply under the current version of
Nebraska’s death penalty statutes.

In the current version, § 29-2521(2) (Cum. Supp. 2006)
addresses sentencing determination proceedings wherein the
defendant has waived the right to a jury determination of
aggravating circumstances and the sentencing panel decides
aggravating circumstances. Section 29-2521(2) contains pro-
visions similar to those quoted above from the prior version.
Section 29-2521(3) of the current version addresses sentenc-
ing determination proceedings wherein, as in the present case,
a jury has found aggravating circumstances and a sentencing

panel determines the sentence. Section 29-2521(3) provides that
evidence may be presented as to “any matter that the presiding
judge deems relevant to . . . mitigation . . . and . . . sentence
excessiveness or disproportionality.” The statute further provides
that “[a]Jny such evidence which the presiding judge deems to
have probative value may be received.” We determine that the
current version of § 29-2521(2) and (3) gives the sentencing
panel statutory authority to consider the trial record.

Section 29-2521 gives broad discretion to the presiding judge
of the sentencing panel to determine the type of evidence rele-
vant to the sentencing determination. In addition, the death
penalty statutes read as a whole make clear that the sentencing
panel needs to consider evidence of the crime and of aggravat-
ing circumstances in order to properly perform its balancing
and proportionality sentencing functions. Under Neb. Rev. Stat.
§ 29-2522 (Cum. Supp. 2006), the sentencing panel is required
to determine whether aggravating circumstances justify impo-
sition of a death sentence, whether mitigating circumstances
exceed or approach the weight of aggravating circumstances,
and whether a death sentence is excessive or disproportionate
to the penalty imposed in similar cases “considering both the
crime and the defendant.” The records of the guilt and aggrava-
tion phases of the trial clearly have probative value regarding
these issues. The sentencing panel needs to understand the
circumstances of the crime to “consider . . . both the crime and
the defendant.” Jd. The record of the guilt phase provides infor-
mation regarding the circumstances of the crime which aids the
sentencing panel in determining whether a death sentence would
be excessive or disproportionate, and the record of the aggrava-
tion phase assists the sentencing panel in the conduct of its bal-
ancing duty. Receipt of the records of the guilt and aggravation
phases is authorized under the discretion given the presiding
judge under § 29-2521.

‘We conclude that the court in this case did not err by receiv-
ing evidence of the guilt and aggravation phases of the trial in
the sentencing hearing. We reject Hessler’s final assignment
of error.

514 Le

9. HessLer’s SENTENCE Is PROPORTIONAL TO
Tose IN SimiLar Cases

Hl Finally, we are required to determine whether the death
sentence imposed on Hessler is proportional to sentences imposed
in similar cases. Pursuant to Neb. Rev. Stat. § 29-2521.03
(Reissue 1995), this court is required, upon appeal, to determine
the propriety of a death sentence by conducting a proportionality
review. Proportionality review under § 29-2521.03 looks only to
other cases in which the death penalty has been imposed, State v.
Bjorklund, 258 Neb. 432, 604 N.W.2d 169 (2000), and requires
us to compare the aggravating and mitigating circumstances of
this case with those present in other cases in which the death
penalty was imposed, and ensure that the sentence imposed in
this case is no greater than those imposed in other cases with
the same or similar circumstances, State v. Gales, 269 Neb. 443,
694 N.W.2d 124 (2005). See, State v. Dunster, 262 Neb. 329,
631 N.W.2d 879 (2001); Bjorklund, supra; State v. Lotter, 255
Neb. 456, 586 N.W.2d 591 (1998).

In the present case, the State alleged, and the jury and sentenc-
ing panel found, the existence of three statutory aggravating cir-
cumstances: (1) Hessler had a substantial prior history of serious
assaultive or terrorizing criminal activity (§ 29-2523(1)(a)); (2)
the murder was committed in an effort to conceal the commission
of the crimes of the kidnapping and sexual assault of Heather
and the sexual assault of another girl, J.B. (§ 29-2523(1)(b));
and (3) the murder was especially heinous, atrocious, cruel, or
manifested exceptional depravity by ordinary standards of moral-
ity and intelligence (§ 29-2523(1)(d)). At sentencing, Hessler
offered no evidence other than his “Interlocutory Statement of
the Defendant” that would bear on mitigating circumstances,
and the sentencing panel concluded that no statutory and no
nonstatutory mitigating circumstances were established. The
panel also concluded that a death sentence would not be exces-
sive or disproportionate to penalties imposed in similar cases,
considering both the crime and the defendant.

We have reviewed our relevant decisions on direct appeal
from other cases in which aggravating circumstances were found
and the death penalty was imposed by the district court. See,
e.g., Gales, supra (and cases gathered therein). In considering

es 515
Le

proportionality in its sentencing order, the sentencing panel in
this case took particular note of the circumstances presented in
Gales, supra; State v. Joubert, 224 Neb. 411, 399 N.W.2d 237
(1986); Bjorklund, supra; and State v. Otey, 205 Neb. 90, 287
N.W.2d 36 (1979). We also find these cases to be of particular
note in considering the proportionality of the sentence in this
case. In Gales, the defendant was convicted of the first degree
murder of a 13-year-old girl he had sexually assaulted, the first
degree murder of the girl’s 7-year-old brother, and the attempted
second degree murder of the children’s mother. The defendant
in Gales was sentenced to death based upon, inter alia, aggra-
vating circumstances under § 29-2523(1)(a), (b), and (d). In
Joubert, the defendant was convicted of the first degree mur-
ders of a 13-year-old boy and a 12-year-old boy, both of whom
disappeared during early morning hours, one while delivering
newspapers. The defendant in Joubert was sentenced to death
based upon aggravating circumstances under § 29-2523(1)(a),
(b), and (d). In Bjorklund, the defendant was convicted of
the first degree murder of an 18-year-old girl he had sexually
assaulted, and the defendant was sentenced to death based upon
aggravating circumstances under § 29-2523(1)(a), (b), and (d).
In Otey, the defendant was convicted of the first degree murder
of a woman he had sexually assaulted, and the defendant was
sentenced to death based upon aggravating circumstances under
§ 29-2523(1)(b) and (d). We further note State v. Williams, 205
Neb. 56, 287 N.W.2d 18 (1979), in which the defendant was
convicted of the first degree murders of two women and the
sexual assault of another woman and was sentenced to death
based upon aggravating circumstances similar to those in the
present case. Having reviewed the relevant cases, we find that
the imposition of the death sentence in this case is proportional
to that in the same or similar circumstances.

VI. CONCLUSION
Having rejected each of Hessler’s assignments of error and
having found that the death sentence imposed in this case is
proportional, we affirm Hessler’s convictions and sentences.
AFFIRMED.
Heavican, C.J., not participating.

516 Le

NEBRASKA DEPARTMENT OF HEALTH AND HUMAN SERVICES,
APPELLEE, V. PAULA WEEKLEY, APPELLANT.
741 N.W.2d 658

Filed November 30, 2007. No. S-06-292.

ee

Lynnette Z. Boyle, of Tietjen, Simon & Boyle, for appellant.

Jon Bruning, Attorney General, and Frederick J. Coffman for
appellee.

Heavican, C.J., Wricut, CoNNoLLy, GERRARD, STEPHAN,
McCormack, and Mizter-Lerman, JJ.

GerrarD, J.

Paula Weekley, a former employee of the Nebraska Department
of Health and Human Services (DHHS), appeals from the order
of the district court for Dodge County affirming DHHS’ deci-
sion to terminate her employment. On appeal, Weekley argues
that pursuant to Neb. Rev. Stat. § 84-917(2)(a) (Reissue 1999),
the district court for Dodge County did not have jurisdiction
over this appeal. We conclude that DHHS’ petition was not filed
in compliance with § 84-917(2)(a), and as a result, the district
court for Dodge County did not have jurisdiction.

Dn ML
|

FACTS

Weekley was a protection and safety worker for DHHS
and was assigned to perform case work for Adult Protective
Services (APS). APS workers assist elderly and vulnerable
adults in potentially neglectful or abusive settings and serve as
resources for citizens who need assistance in caring for elderly
and vulnerable adults.

On Friday, September 6, 2002, APS received a telephone
call from a nurse at the Fremont Area Medical Center who was
concerned about the care an elderly woman was receiving at
the woman’s home. On September 9, the case was assigned to
Weekley. Weekley was on annual leave at the time, but returned
to her office on Tuesday, September 10.

Upon returning to work on September 10, 2002, Weekley
reviewed her telephone messages, intake forms, and other docu-
ments that had accumulated on her desk during her absence.
Among the documents she reviewed was the intake report per-
taining to the elderly woman. Under DHHS regulations, Weekley
was to make face-to-face contact with the subject of the report
within 5 days. But Weekley was unable to locate her and never
made face-to-face contact. On September 23, a fire broke out at
the elderly woman’s home, resulting in her death.

On October 21, 2002, Weekley received a “Written Notice of
Allegations,” relating to the handling of the case and informing
Weekley that if the allegations were substantiated, she would
be subject to disciplinary action. On January 2, 2003, the pro-
tection and safety administrator issued a “Written Notice of
Discipline” terminating Weekley’s employment. The protection
and safety administrator testified that the decision was based
on the current information related to the handling of the elderly
woman’s case and Weekley’s previous conduct that had resulted
in disciplinary actions. Weekley filed a grievance with DHHS.
The agency director reviewed Weekley’s case and affirmed
the protection and safety administrator’s decision to terminate
Weekley’s employment.

Weekley appealed the agency director’s decision through
the administrator of the Department of Administrative Services
(DAS). Pursuant to the grievance procedures in Weekley’s
labor contract, a “mini hearing” was held before the designee

518 Le

of the employee relations administrator of the DAS in Lincoln,
Lancaster County, Nebraska. The relevant provisions of the labor
contract relating to the “mini hearing” process are as follows:

4.10.2 MINI HEARING PROCESS. When an
appeal has been submitted to the Administrator of the
DAS Employee Relations Division, and before a hearing
officer/arbitrator is appointed, the Administrator of the
DAS Employee Relations Division or his/her designee may
confer with the Union representative, or grievant, if the
grievant chooses not to be represented by [the Nebraska
Association of Public Employees/American Federation of
State, County and Municipal Employees] or any other rep-
resentative, and the Agency representative to discuss and
attempt to informally resolve the grievance. In cases where
the grievant is not represented by the union, a union rep-
resentative may attend the hearing and observe. . . . This
conference (mini-hearing) shall be informal and the rules
of evidence shall not apply. All exhibits that the Agency
or Grievant want the Administrator of the DAS Employee

* Relations Division/Designee to consider must be received
by the DAS Employee Relations Division and the opposing
party a minimum of three days before the mini-hearing. .
. . Neither party may be represented by anyone licensed
(active or inactive) to practice law in the State of Nebraska
at this conference.

4.10.3 The Administrator of the DAS Employee
Relations Division or his/her designee may request a con-
ference with the parties to discuss resolution of the griev-
ance and shall have the authority to interview witnesses or
require documents and other items to be produced prior
to the conference. . . . However, the intent of the parties
is that the matter be considered at this step in an informal
manner and be resolved as expeditiously as possible.

4.10.4 After the conference and a review of the griev-
ance and other documents submitted by the parties, the
Administrator of the DAS Employee Relations Division
or his/her designee shall issue a written decision to the
parties to reverse, modify or uphold the answer made by
the Agency Head at Step 2. This decision shall be issued

De LE
|

within 20 workdays of the conference and shall include a
description of the events giving rise to the grievance and.
the rationale upon which the decision is made. If a written
decision is not rendered within 20 workdays, either party
may request the grievance be heard before the hearing
officer/arbitrator, as appropriate. This decision shall not
constitute a part of the appeal record if the matter is heard
by an arbitrator or a hearing officer.

4.10.5 If either party is not satisfied with the decision
made by the Administrator of the DAS Employee Relations
Division or his/her designee, that party shall give notice
that the appeal be heard by a hearing officer/arbitrator
. . . by filing a notice with the Administrator of the DAS
Employee Relations Division in the office of the Employee
Relations Division within 7 workdays of receipt of the
decision from the Administrator of the DAS Employee
Relations Division or his/her designee.

4.10.6 If notice is not received within the prescribed
time frames, the decision of the Administrator of the DAS
Employee Relations Division or his/her designee shall be
considered final.

In accordance with these provisions, the appointed designee
of the DAS employee relations administrator conducted the
“mini hearing” in Lancaster County. At the “mini hearing,”
each party called one witness, submitted exhibits, and presented.
oral arguments. Following the “mini hearing,” the appointed
designee issued a written decision setting forth findings of fact,
conclusions of law, and affirming DHHS’ decision to terminate
Weekley’s employment.

Weekley appealed this decision to the State Personnel Board.
A hearing officer was appointed, and a hearing was conducted.
in Dodge County, Nebraska. At the hearing, both parties were
given the opportunity to present new or different testimony
and exhibits, examine and cross-examine witnesses, and offer
argument in support of their position. Following the hearing,
the hearing officer made findings of fact, conclusions of law,
and a recommendation. For his recommendation, the hearing
officer explained that “[i]f the Board concludes that the fact that
[the elderly woman] died overrides all other considerations, the

520 Ee

Board should dismiss [Weekley] and uphold the discipline.” The
hearing officer further recommended, however, that “[i]f the
Board concludes that [Weekley] can be a competent performer
for [DHHS] if demoted to a position requiring less independent
judgement and with more day-to-day supervision, the Board
should reject [DHHS’] discipline and sustain the Grievance.”

The State Personnel Board adopted the hearing officer’s
findings of fact and conclusions of law, but concluded that the
hearing officer’s recommendation was insufficient. The State
Personnel Board concluded that Weekley “was guilty of the
conduct alleged, but the discipline imposed was not warranted
based on the evidence presented.” The board then remanded the
matter to DHHS for further action.

DHHS appealed the State Personnel Board’s decision by fil-
ing a petition for review in the Dodge County District Court.
In her answer, Weekley asserted that the Dodge County District
Court did not have jurisdiction because DHHS’ petition for
further review was not filed “in the district court of the county
where the action is taken,” as required by § 84-917. The district
court rejected Weekley’s argument and concluded that DHHS’
petition for further review was properly filed in the Dodge
County District Court.

The district court further concluded that DHHS had “met
its burden of proof that its decision to terminate [Weekley’s
employment] was made in good faith and for just cause, given
the nature and severity of the infraction and in consideration
with the history of discipline and performance contained in
the employee’s personnel file.’ Accordingly, the court rein-
stated DHHS’ decision to terminate Weekley’s employment.
Weekley appealed.

ASSIGNMENTS OF ERROR
Weekley assigns that the district court erred in finding (1) that
it had jurisdiction to hear this case because the court erroneously
concluded that the “mini hearing” was not the first adjudicated
hearing, (2) that DHHS had just cause for disciplining Weekley,
and (3) that DHHS’ decision to terminate Weekley’s employ-
ment was made in good faith and for cause.

LO
Es

STANDARD OF REVIEW
Hf Statutory interpretation presents a question of law, in
connection with which an appellate court has an obligation to
reach an independent conclusion irrespective of the determina-
tion made by the court below.!

ANALYSIS

HMM Before reaching the legal issues presented for review,
it is the duty of an appellate court to settle jurisdictional
issues presented by a case.’ Where a district court has statu-
tory authority to review an action of an administrative agency,
the district court may acquire jurisdiction only if the review is
sought in the mode and manner and within the time provided
by statute?

Hl The jurisdictional requirements for obtaining judicial
review of a final administrative decision under the Administrative
Procedure Act are set forth in § 84-917(2)(a). This section pro-
vides, in relevant part, that “[p]roceedings for review shall be
instituted by filing a petition in the district court of the county
where the action is taken within thirty days after the service of
the final decision by the agency.”* We have repeatedly interpreted
the phrase “‘county where the action is taken’” to mean “‘“the
site of the first adjudicated hearing of a disputed claim.”’”>

Weekley argues that the “mini hearing” held in Lancaster
County was the first adjudicated hearing and that therefore, under
§ 84-917(2)(a), DHHS’ petition for further review should have
been filed in the district court for Lancaster County. Weekley
contends that DHHS incorrectly filed its petition for further

| Zitterkopf v. Maldonado, 273 Neb. 145, 727 N.W.2d 696 (2007).

2 Cerny y. Todco Barricade Co., 273 Neb. 800, 733 N.W.2d 877 (2007).

3 Essman v. Nebraska Law Enforcement Training Ctr., 252 Neb. 347, 562
N.W.2d 355 (1997).

4 § 84-917(2)(a).

5 Reiter v. Wimes, 263 Neb. 277, 281, 640 N.W.2d 19, 23 (2002). Accord,
Essman v. Nebraska Law Enforcement Training Ctr, supra note 3; Metro
Renovation v. State Dept. of Labor, 249 Neb. 337, 543 N.W.2d 715 (1996),
disapproved on other grounds, State v. Nelson, ante p. 304, 739 N.W.2d 199
(2007).

522 Es

review in Dodge County, and as a result, the district court for
Dodge County did not have jurisdiction over this appeal.

DHHS argues that its petition for further review was properly
filed in the district court for Dodge County because the “mini
hearing” held in Lancaster County did not constitute an adju-
dicated hearing. In support of this argument, DHHS points to
the procedures governing the grievance process—in particular,
the informal nature in which “mini hearings” are conducted.
DHHS notes that in a “mini hearing,” the rules of evidence
do not apply, neither party may be represented by anyone
licensed to practice law, and the written decision issued at the
conclusion of the “mini hearing” does not become a part of the
appeal record.

Notwithstanding the procedural limitations and the informal
nature of the “mini hearing,” we are not persuaded by DHHS’
argument that the “mini hearing” was not an adjudicated hear-
ing. Neither § 84-917(2)(a) nor any of our previous decisions
addressing this issue require that to qualify as the first adju-
dicated hearing, the hearing must apply the formal rules of
evidence, allow representation of counsel, or create a transcript
that is part of the record on appeal. Instead, given the record
before us, we conclude that the “mini hearing” in Lancaster
County was the first adjudicated hearing.

In so finding, we note that the procedures governing the “mini
hearing” in this case are very similar to those used in small
claims court. Proceedings in small claims court are conducted
on a very informal basis with a minimum of procedural require-
ments.° Parties are not represented by counsel’; matters are tried
without a jury®; the “hearing and disposition of all matters shall
be informal”; the formal rules of evidence do not apply"; and,

© Henriksen v. Gleason, 263 Neb. 840, 643 N.W.2d 652 (2002); Harris v.
Eberhardt, 215 Neb. 240, 338 N.W.2d 53 (1983).

7 Neb. Rev. Stat. § 25-2803(2) (Reissue 1995).
8 Neb. Rev. Stat. § 25-2805 (Cum. Supp. 2006).
9 Neb. Rey. Stat. § 25-2806 (Reissue 1995).

10 Id.

Dr LE]
|

on appeal, all cases are tried by the district court de novo."
Yet, in spite of the informal nature of these proceedings, we
would not say that a decision issued by a small claims court is
anything less than an adjudication. The decision of the small
claims court is a “judgment,” and when the time for appeal has
run, the prevailing party can obtain execution on that judgment
as in any other case in county court. Likewise, we cannot
say that the “mini hearing” in the present case, which shares
much of the same procedural informality, is anything other than
an adjudication.

Here, the “mini hearing” was held in the presence of the
appointed designee who sat as a decisionmaker. Prior to the
“mini hearing,” both DHHS and Weekley were given the oppor-
tunity to submit exhibits and briefs to the appointed designee.
And at the “mini hearing,” the parties were allowed to present
witnesses, offer exhibits, and present oral arguments. Moreover,
following the “mini hearing,” the appointed designee issued
a written decision that, if not appealed, would have become
the final and binding decision. In other words, an agency-
appointed decisionmaker issued a ruling based on evidentiary
submissions, that in the absence of an appeal, would have been
a legally binding determination of the dispute. A hearing was
held, however informal, and the appointed designee adjudicated
the dispute based on that hearing.

DHHS also claims that the decision rendered by the appointed
designee following the “mini hearing” was not an “‘adjudica-
tion,’” because it was not “‘the determination by the highest or
ultimate authority of an agency.”? DHHS asserts that the high-
est authority in this case was the State Personnel Board hear-
ing officer who was appointed, conducted a hearing in Dodge
County, and issued a decision.

We rejected a similar argument in Essman v. Nebraska Law
Enforcement Training Ctr. In Essman, we were urged to create

4 Neb. Rev. Stat. § 25-2734 (Reissue 1995).

2 § 25.2806.

13 Brief for appellee at 21-22.

¥ Essman v. Nebraska Law Enforcement Training Ctr, supra note 3.

524 |

an exception to the “first adjudicated hearing” rule by holding
that “where the agency conducts a subsequent hearing and has
the power to receive additional evidence before issuing its final
order, the site of the last hearing should be ‘the county where the
action is taken’ for purposes of § 84-917(2)(a).""* We declined
to create such an exception. We explained that our construction
of the statute “provides a party with a clear statement of where
to file a petition seeking judicial review of an administrative
action,” and there is “no reason to complicate compliance with
the rule by grafting unnecessary exceptions upon it.”!

As in Essman, we conclude here that conducting a subsequent
hearing, where new or additional evidence may be received,
does not change the character of the first adjudicated hearing.
And in the present case, for the reasons explained above, the
first adjudicated hearing was in Lancaster County. Therefore,
we agree with Weekley that the Dodge County District Court
lacked jurisdiction to overrule the State Personnel Board and
affirm DHHS’ termination of Weekley’s employment. Having
so determined, we need not consider Weekley’s remaining
assignments of error.

We recognize that DHHS, unfortunately, faced a difficult
choice in deciding where to prosecute its appeal. And parties
should not be discouraged from pursuing alternative means of
resolving their disputes. However, confusion could have been
avoided in this case had the labor contract been drafted to more
expressly elect between mediation and a binding hearing on the
merits. Nonetheless, the negotiated contract set the rules and we
are called upon to judge the proceedings accordingly.

CONCLUSION
We conclude that the “mini hearing” held in Lancaster
County was the first adjudicated hearing. As such, pursuant to
§ 84-917(2)(a), DHHS was required to file its petition for further
review in the district court for Lancaster County. But DHHS
filed its petition for further review in Dodge County, rather than
Lancaster County, and the Dodge County District Court did not

'5 [d, at 351, 562 N.W.2d at 358.
\6 Jd. at 351-52, 562 N.W.2d at 358.

have jurisdiction. The judgment of the district court is vacated,
and the cause is remanded with directions to dismiss DHHS’
petition for review.
‘VACATED AND REMANDED WITH
DIRECTIONS TO DISMISS.

a
IN RE Trust CREATED BY LAVOHN C. IsviIk, DECEASED.
Security NATIONAL BANK, TRUSTEE OF THE LAVoEN C. Isvik
REVOCABLE TRUST, APPELLEE, AND Iowa State UNIVERSITY
FOUNDATION ET AL., INTERESTED PARTIES, APPELLEES,
v. Mary ELten RICKERT AND LaVoun C.

STINE, APPELLANTS.
TAL N.W.2d 638

Filed November 30, 2007. No. S-06-420.

526 Le
William J. Lindsay, Jr., and Francie C. Riedmann, of Gross &
Welch, P.C., L.L.O., for appellants.

Richard J. Gilloon and Bradley B. Mallberg, of Erickson &
Sederstrom, P.C., for appellee Security National Bank.

David S. Houghton and J.P. Sam King, of Lieben, Whitted,
Houghton, Slowiaczek & Cavanagh, P.C., L.L.O., for appellees
Towa State University Foundation et al.

Heavican, C.J., WricuT, COoNNoLLy, GERRARD, STEPHAN,
McCormack, and Miuier-Lerman, JJ.

STEPHAN, J.

LaVohn C. Isvik, as settlor of the LaVohn C. Isvik Revocable
Trust, wrote a letter to the trustee stating that she was revoking
the trust and requesting that all holdings of the trust be conveyed
to her. Approximately 2 weeks later, she died unexpectedly.
In trust administration proceedings commenced by the trustee
following her death, the county court for Douglas County con-
cluded that Isvik did not intend to revoke the trust, but only
to discharge the trustee. The issue presented in this appeal is
whether the court erred in reforming the revocation letter to con-
form to what it perceived to be Isvik’s true intent. In resolving
this issue, we must decide whether the county court also erred
in relying upon extrinsic evidence of intent.

I. BACKGROUND
Under the terms of the original trust created by Isvik in 1995,
she was the sole trustee and her two daughters, Mary Ellen
Rickert and LaVohn C. Stine, the appellants herein, were contin-
gent death beneficiaries. Isvik reserved the right “[t]o amend or
revoke this agreement, in whole or in part, by written instrament
filed with my trustee... .”

In 2003, Isvik amended the trust instrument by naming
George E. Nelson as cotrustee. After her husband died later
that year, Isvik again amended the trust instrument to add
beneficiaries and alter trust property distributions. Under the
terms of the second amendment, the appellants were named the
beneficiaries, upon Isvik’s death, of certain real estate located
in Douglas County, Nebraska. The amendment also added
Jowa State University Foundation; Delta Tau Delta Scholarship
Foundation, Inc.; Sigma Kappa Foundation, Inc.; Klemme
United Methodist Church; and Trinity Lutheran Church (col-
lectively the charities) as beneficiaries of the remainder of the
trust assets.

Sometime thereafter, Isvik became dissatisfied with Nelson’s
performance as cotrustee. In December 2004, she sent a let-
ter to Nelson, removing him as cotrustee and naming Security
National Bank (the Bank) as successor trustee. The letter was
drafted by Isvik’s attorney William Lynch and signed by Isvik.
In February 2005, Isvik executed a third amendment to the trust
in which she appointed the Bank as sole trustee.

Isvik subsequently became dissatisfied with the Bank’s per-
formance in this capacity. In July 2005, she and Rickert met
with Douglas Oldaker and James Kerkhove of the Bank’s trust
department. Although Oldaker was not present for the begin-
ning of the meeting, Rickert testified that Isvik “shook . . .
Kerkhove’s hand . . . wished him a good day [and] said ‘I’m
revoking my trust.’” However, Oldaker and Kerkhove both testi-
fied that their impression from the meeting was that Isvik was
only interested in removing the Bank as trustee. Oldaker asked
Isvik to give the Bank 30 more days in which to address her
concerns and improve its service. With Rickert’s concurrence,
Isvik agreed to Oldaker’s proposal.

Still displeased with the Bank, Isvik composed a letter to
Oldaker. Because of her impaired vision, Isvik dictated the letter
to her personal assistant, Ruth Capps, who typed it. The letter,
signed by Isvik and received by the Bank on August 26, 2005,
stated in part: “I am revoking my Trust as of this date. Consider
this my notice to you[.] Make no further transactions with any of
my holdings and convey all materials pertaining to and including
my holdings to me immediately.” Rickert testified that she had a

528 Le

telephone conversation with Isvik on August 25. She stated that
Isvik had indicated that she had just sent a letter to the Bank
revoking her trust and that she felt “‘relieved.’”

Oldaker testified that when he received this letter on August
26, 2005, he called Isvik to inquire about her intent. Oldaker tes-
tified that, based on his legal training, he was concerned about
her use of the term “revoking” and that he wanted to clarify
that she actually intended to revoke the trust and thus alter the
dispositive provisions of her estate. He reminded her that “by
revoking the trust, it would throw the trust assets into probate.”
Oldaker testified that after this discussion with Isvik, he con-
cluded that she wanted to act as her own trustee and did not want
her trust assets to pass through probate. Oldaker stated that the
Bank proceeded as if the trust had not been revoked.

Lynch testified that he also received a copy of the letter. On
or about August 29, 2005, Lynch called Isvik “to find out why
she sent the letter and what was going on.” Lynch stated that
his initial impression from Isvik was that she wanted to revoke
the trust. However, after some discussion about the effects of
revocation, Lynch concluded that Isvik only wanted to remove
the Bank as trustee and did not want to revoke the trust. Lynch
testified that he and Isvik agreed that he would prepare legal
documents necessary to name new trustees of her trust.

Isvik was scheduled to meet with Lynch on September 7,

2005, to sign the new trust documents. On September 4, she
died froni injuries sustained in a fall 2 days earlier. As a result,
Isvik never reviewed or signed the new trust documents.
‘- After Isvik’s death, the Bank filed a trust registration state-
ment and a petition for trust administration with the county court
for Douglas County pursuant to Neb. Rev. Stat. §§ 30-3812 to
30-3820 (Cum. Supp. 2006). The Bank sought “an order declar-
ing whether the Trust was revoked by the August 26, 2005 letter
or should be reformed to effect a change in trustee only.” The
appellants moved to dismiss the petition and strike the trust
registration statement. Subsequently, the charities entered an
appearance as interested parties.

The county court conducted a consolidated evidentiary hear-
ing on the Bank’s petition and the appellants’ motion to dismiss.
The unsigned documents prepared by Lynch were received in

evidence over the appellants’ objection. Subsequently, the court
entered an order in which it found by clear and convincing evi-
dence that Isvik’s use of the term “revoke” in her August 2005
letter “was a mistake and was only an attempt to change the
trustee and not to terminate the trust itself” The court further
determined that because the letter did not revoke the trust and
no formal change of the trustee was made prior to Isvik’s death,
the Bank remained the trustee. The court directed the Bank to
carry out the terms and administer the trust pursuant to Neb.
Rev. Stat. § 30-3866 (Cum. Supp. 2006), and denied the appel-
lants’ motion to dismiss and motion to strike.

Following the entry of the county court’s order, the appel-
jants filed a motion requesting that no supersedeas bond or
undertaking be required in order to pursue an appeal. The court
entered an order on April 7, 2006, in which it required a super-
sedeas bond or undertaking in the amount of $50,000. On April
10, the appellants timely filed their notice of appeal and depos-
ited the appropriate docketing fees and cost bond. On the same
day, the appellants filed a “Bond Commitment” in the county
court which professed their diligence in attempting to obtain a
supersedeas bond. Attached to the bond commitment was a let-
ter from a surety company stating that it would issue. the bond
upon receipt of an irrevocable letter of credit. On April 25, the
appellants filed a $50,000 supersedeas bond with the clerk of
the county court.

After this appeal was docketed in the Nebraska Court of
Appeals, the Bank, joined by the charities, filed a motion to dis-
miss on grounds that the appellants failed to file a supersedeas
bond or undertaking within 30 days of the county court’s final
order, as required by Neb. Rev. Stat. § 30-1601(3) (Cum. Supp.
2006). The Court of Appeals overruled the motion but ordered
the parties to submit supplemental briefs on the issue, which
they did. Subsequently, we moved the appeal to our docket.on
our own motion pursuant to our statutory authority to regulate
the caseloads of the appellate courts of this state. See Neb. Rev.
Stat. § 24-1106(3) (Reissue 1995).

Il. ASSIGNMENTS OF ERROR
The appellants assign, restated, consolidated, and reordered,
that the county court erred in (1) considering extrinsic evidence

530 Ee

of Isvik’s intent in the trust revocation letter, (2) receiving
exhibit 10, (3) finding that Isvik’s trust revocation letter was a
mistake, (4) reforming the terms of Isvik’s trust revocation let-
ter without clear and convincing evidence of a contrary intent,
and (5) finding that the Bank was the trustee on the date of
Isvik’s death.

Ill. STANDARD OF REVIEW

HH In the absence of an equity question, an appellate court,
reviewing probate matters, examines for error appearing on the
record made in the county court.! When reviewing a judgment
for errors appearing on the record, the inquiry is whether the
decision conforms to the law, is supported by competent evi-
dence, and is neither arbitrary, capricious, nor unreasonable.”

HB Appeals involving the administration of a trust are
equity matters and are reviewable in an appellate court de novo
on the record.? A proceeding to reform a written instrument
is an equity action.‘ Accordingly, we review the reformation
issues in this trust administration proceeding de novo on the
record. In a review de novo on the record, an appellate court
reappraises the evidence as presented by the record and reaches
its own independent conclusions with respect to the matters at
issue.>

HMM Statutory interpretation presents a question of law.®
When reviewing questions of law, an appellate court has an
obligation to resolve the questions independently of the conclu-
sion reached by the trial court.”

| In re Trust of Rosenberg, 273 Neb. 59, 727 N.W.2d 430 (2007).

2 Id.

3 Id.; In re R.B. Plummer Memorial Loan Fund Trust, 266 Neb. 1, 661
N.W.2d 307 (2003).

* Haines v, Mensen, 233 Neb. 543, 446 N.W.2d 716 (1989); Newton v. Brown,
222 Neb. 605, 386 N.W.2d 424 (1986); Hohneke v. Ferguson, 196 Neb. 505,
244 N.W.2d 70 (1976).

> Shearer v. Shearer, 270 Neb. 178, 700 N.W.2d 580 (2005).
® Rohde v. City of Ogallala, 273 Neb. 689, 731 N.W.2d 898 (2007).
Id.

Hl Where the Nebraska Evidence Rules commit the evidentiary
question at issue to the discretion of the trial court, the admis-
sibility of evidence is reviewed for an abuse of discretion.*

Iv. ANALYSIS

1. ApPLicaBiLiry OF Nesraska UNirorm Trust Cope

The revocable trust which is the subject of this proceed-
ing was created in 1995. The Nebraska Uniform Trust Code
(NUTC), Neb. Rev. Stat. §§ 30-3801 to 30-38,110 (Cum. Supp.
2006), was enacted in 2003 and became operative on January
1, 2005. Except as otherwise provided in the NUTC, it applies
“to all trusts created before, on, or after January 1, 2005” and
“to all judicial proceedings concerning trusts commenced on
or after January 1, 2005.” This trust administration proceeding
was commenced on September 22, 2005. We have noted that
the NUTC is generally applicable to all trusts in existence on
January 1, 2005, subject to certain statutory and perhaps con-
stitutional exceptions.'° Here, the parties have directed us to no
exception to the applicability of the NUTC to the preexisting
trust, and we have found none. Accordingly, we conclude that
the NUTC applies to this proceeding.

2. SUPERSEDEAS BOND
As noted, the appellees’ motion for summary dismissal was
overruled but the parties were ordered to file supplemental briefs
on the issue of whether the appeal should be dismissed because a
supersedeas bond was not filed within 30 days of the order from
which the appeal was taken. We address this threshold issue.
HI Appellate review under the NUTC is governed by
§ 30-1601(3), which provides in pertinent part:
When the appeal is by someone other than a personal
representative, conservator, trustee, guardian, or guardian

® Worth v. Kolbeck, 273 Neb. 163, 728 N.W.2d 282 (2007).
 § 30-38,110(a)(1) and (2).

1 In re Trust Created By Inman, 269 Neb. 376, 693 N.W.2d 514 (2005). See,
also, John M. Gradwohl & William H. Lyons, Constitutional and Other
Issues in the Application of the Nebraska Uniform Trust Code to Preexisting
Trusts, 82 Neb. L. Rev. 312 (2003).

532 —

ad litem, the appealing party shall, within thirty days after
the entry of the judgment.or final order complained of,
deposit with the clerk of the county court a supersedeas
bond or undertaking in such sum as the court shall direct
. conditioned that the appellant will satisfy any judg-
ment and costs that may be adjudged against him or her
. unless the court directs that no bond or undertaking
need be deposited. If an appellant fails to comply with
this subsection, the Court of Appeals on motion and notice
may take such action, , including dismissal of the appeal,
as is just.
We view the authority to dismiss an appeal conferred by this
statute as discretionary in nature, in that it directs that a court
“may” take such action as is just. Generally, when the word
“may” is used in a statute, “permissive or discretionary action
is presumed.”" Here, the record reflects that the appellants had
initiated but not completed efforts to obtain a supersedeas bond
within the 30-day period. The bond was actually filed 46 days
after the entry of judgment. There is no indication that the late
filing resulted in prejudice or delay. We conclude that dismissal
would not be just under these circumstances.

3. REFORMATION
Isvik’s final letter to the Bank is unambiguous. In the let-
ter, she clearly.and unequivocally stated, “I am revoking my
Trust as of this date[,]” and she directed the Bank to convey
all trust holdings and materials to her. In reforming this docu-
ment, the county court relied upon the following provision of
the NUTC:

The court may reform the terms of a trust, even if
unambiguous, to conform the terms to the settlor’s inten-
tion if it is.proved by clear and convincing evidence that
both the settlor’s intent and the terms of the trust were
affected by a mistake of fact or law, whether in expression
or inducement.”

4 Neb. Rev. Stat. § 49-802(1) (Reissue 2004).
"2 § 30-3841 (emphasis supplied).

In order to resolve the questions presented in this appeal, we
must initially decide whether Isvik’s letter is subject to refor-
mation under this provision. If so, we must determine whether
extrinsic evidence as to Isvik’s intent can be considered and,
finally, whether there is clear and convincing evidence that
Isvik’s true intent at the time she signed and mailed the let-
ter was to discharge the Bank as trustee but keep the trust
in existence.

(a) Was Letter “Term of a Trust” Subject to
Reformation Under § 30-3841?

HM The NUTC defines the phrase “terms of a trust” as “the
manifestation of the settlor’s intent regarding a trust’s provisions
as expressed in the trust instrument or as may be established by
other evidence that would be admissible in a judicial proceed-
ing.” Here, the trust instrument reflects the reserved power
of the settlor, during her lifetime, “[t]o amend and revoke this
agreement, in whole or in part, by written instrument filed with
[the] trustee . . . ” This reserved power contemplates and indeed
requires that the manifestation of a settlor’s intent to revoke
the trust must appear in a subsequently executed and delivered
document which is distinct from the trust instrument itself. We
conclude that a document by which a settlor purports to revoke
a revocable trust is a term of that trust within the meaning
of § 30-3841.

(b) May Court Consider Extrinsic Evidence Regarding
Settlor’s Intent in Determining Whether Terms of
Trust Were Affected by Mistake of Fact or Law
and Thus Subject to Reformation
Under § 30-3841?

The appellants argue that because Isvik’s intent to revoke the
trust was unambiguously stated in her letter to the Bank, the
county court erred in receiving extrinsic evidence of a contrary
intent. They rely upon In re Trust Created by Cease," in which

13 § 30-3803(19).
™ In re Trust Created by Cease, 267 Neb. 753, 756, 677 N.W.2d 495, 498
(2004).

534 Es

we held that parol evidence of intent should not have been
admitted with respect to a document executed by the settlor of
a revocable trust who was also its trustee, stating that he was
resigning as trustee and that such resignation was “‘intended to
terminate said trust.’” We held that the document was unambigu-
ous and operated to terminate the trust as a matter of law upon
its execution.

In re Trust Created by Cease was decided before the NUTC
became effective and did not involve the issue of reformation
based upon mistake. Accordingly, it is not controlling on the
precise issue presented here. Nor is this a case in which a party
seeks to alter, vary, or contradict the terms of a written contract
by proof of a prior or contemporaneous oral agreement, which
would be prohibited by the parol evidence rule.’ The par-
ties have not directed us to any pre-NUTC Nebraska case law
addressing the admissibility of extrinsic evidence of intent in an
action to reform a trust instrument or related document, and this
is our first occasion to consider the issue under the NUTC.

Section 30-3841 is taken verbatim from § 415 of the Uniform
Trust Code. The comment to that section draws a distinction
between reformation and resolution of an ambiguity:

Resolving an ambiguity involves the interpretation of lan-
guage already in the instrument. Reformation, on the other
hand, may involve the addition of language not originally
in the instrument, or the deletion of language originally
included by mistake, if necessary to conform the instru-
ment to the settlor’s intent. Because reformation may
involve the addition of language to the instrument, or the
deletion of language that may appear clear on its face, reli-
ance on extrinsic evidence is essential. To guard against
the possibility of unreliable or contrived evidence in such
circumstance, the higher standard of clear and convincing
proof is required.'6

The NUTC specifically provides that it is supplemented by
the “common law of trusts and principles of equity” except to

'5 See Par 3, Inc. v. Livingston, 268 Neb. 636, 686 N.W.2d 369 (2004).

16 Unif. Trust Code § 415, 7C U.L.A. 514, comment at 515 (2006) (emphasis
supplied).

the extent modified by the code or another statute.'” In equitable
actions to reform other types of written instruments, we have
held that extrinsic evidence is admissible to prove mistake and
actual intent. For example, in an action involving reformation
of an insurance policy, we noted that the “power of a court to
correct a mutual mistake implies the admissibility of competent
and necessary proof of such mistake.”'* We have held that the
parol evidence rule does not apply in an action seeking refor-
mation of a contract on grounds of mistake and fraud, because
such evidence is necessary to a determination of the antecedent
agreement between the parties.’ In such cases, “the evidence . . .
is mainly or wholly oral” because “[iJn order to prove the mis-
take it is indispensable to show by parol in what particulars the
writing differs from the oral agreement.” Thus, we have held
extrinsic evidence to be admissible in actions seeking reforma-
tion of deeds,”! promissory notes,” and insurance policies.”

Here, Isvik unambiguously informed the Bank that she was
revoking her trust. The county court was not asked to interpret
her words, but, rather, to determine whether she wrote them in
a mistaken attempt to achieve the different objective of leaving
the trust in place but discharging the Bank as trustee. Based
upon the comment to § 415 of the Uniform Trust Code and
our consistent prior holdings that extrinsic evidence of intent is
admissible in equitable actions for reformation of written instru-
ments, we conclude that the county court did not err in receiving
extrinsic evidence on the issue of Isvik’s intent. We consider that
evidence in our de novo review.

17 § 30-3806.

18 Central Granaries Co. v. Nebraska L. M. Ins. Ass’n., 106 Neb. 80, 84, 182
N.W. 582, 584 (1921).

19 Johnson y. Stover, 218 Neb. 250, 354 N.W.2d 142 (1984).

20 Story v. Gammell, 68 Neb. 709, 712, 94 N.W. 982, 983 (1903).

21 Johnson v. Stover; supra note 19.

2 Lincoln Equipment Co. v. Eveland, 173 Neb. 174, 112 N.W.2d 755 (1962).
3 Fadden v. Sun Ins. Office, 124 Neb. 712, 248 N.W. 62 (1933).

536 Es

(c) Is There Clear and Convincing Evidence That Isvik’s Intent
When She Signed and Mailed Her Letter to Bank
‘Was Not to Revoke Trust, but, Rather, to
Discharge Bank as Trustee?

The parties do not question Isvik’s competency at the time
she signed and mailed the letter. Isvik was a college graduate,
was in good health, and appeared mentally alert and capable
of handling her own affairs. Although her vision was impaired,
she was able to read legal documents with the assistance of a
mechanical device.

The evidence of Isvik’s intent when- she signed and mailed
the letter to the Bank is primarily circumstantial and supports
conflicting inferences. There is evidence to support a reasonable
inference that Isvik intended to discharge the Bank as trustee
but not revoke her trust. Several witnesses testified that Isvik
was dissatisfied with the Bank’s performance as trustee. Rickert
testified that Isvik was upset with the Bank for not redistributing
the assets between her trust and her husband’s trust. She also
indicated that Isvik was disturbed by the Bank’s suggestion that
she use her Social Security benefits for living expenses. Capps
stated that Isvik was upset with the manner in which the Bank
was handling distributions from her trust. Oldaker admitted that
at their July 2005 meeting, Isvik expressed dissatisfaction with
how the Bank was distributing money.

Lynch, as Isvik’s attorney, had been aware of her dissatisfac-
tion with the Bank’s performance. When he received a copy of
her letter, he called her to discuss her intent and determine his
future role. From her response, he formed an initial impression
that she intended to revoke the trust. However, after further dis-
cussion, he concluded that she intended to remove the Bank as
trustee but not revoke the trust. In a similar vein, Oldaker testi-
fied that when he spoke with Isvik on the telephone after receiv-
ing her letter, he concluded that she wished to serve as her own
trustee but not revoke her trust. He stated that Isvik indicated
she did not want her estate to pass through probate.

Evidence of Isvik’s fondness for the charities designated as
trust beneficiaries also supports an inference that she did not
intend to revoke the trust. Capps testified that Isvik had spoken

highly of the charities and stated that she wanted them to even-
tually receive the trust assets. Isvik’s attorney testified that the
documents he prepared after his telephone conversation with
Isvik made no changes in the trust beneficiaries.

But there is also evidence supporting an inference that Isvik
intended precisely what she said in her letter to the Bank. Isvik
had previously signed documents prepared by her attorney
which changed the designation of her trustee. None of these
documents utilized language indicating revocation of the trust.
Rickert testified that during a conversation with Isvik in July
2005, Isvik stated that she disliked having someone else own-
ing her house and that she had said, “‘I don’t want the trust.
I don’t know why I need a trust. I can’t see the point of the
trust.” Rickert also testified that when she accompanied Isvik
to the Bank to meet with trust officers in July, Isvik expressed to
Rickert, prior to the meeting, her desire to revoke the trust, but
then agreed to allow the Bank more time to improve its perfor-
mance. Rickert also testified that during a telephone conversa-
tion on August 25, Isvik stated that she had sent a letter to the
Bank revoking her trust and that she felt “‘relieved.’”

Capps testified that Isvik had discussed revoking her trust
and that she believed she needed to do so in order to manage
her own money. There is also evidence that Isvik understood
that she could create a new trust after revoking the existing one.
Capps testified that LaVohn was considering a new trust “to be
used after [her] death or in [an] émergency.” :

As noted above, the testimony of Lynch regarding his tele-
phone conversation with her following receipt of a copy of her
letter to the Bank could support an inference of mistake. But the
testimony could also be understood to mean that Isvik actually
intended to revoke the trust at the time she signed and mailed
the letter, but then changed her mind after discussing the matter
with Lynch. Such a “post-execution change of mind” would not
afford a basis for reformation.* °

Because our review is de novo, we must reach
an independent conclusion as to whether there is clear and

24 Restatement (Third) of Property: Wills and Other Donative Transfers § 12.1,
comment h, at 374 (2003).

538 —

convincing evidence that the unambiguous language used by
Isvik was the product of mistake and that her true intent was
only to discharge the Bank as trustee. Clear and convincing
evidence is that amount of evidence which produces in the trier
of fact a firm belief or conviction about the existence of a fact
to be proved. It has been described as “more than a prepon-
derance of evidence, but less than proof beyond a reasonable
doubt.” Evidence may be clear and convincing despite the fact
that other evidence may contradict it.” But even taking into
consideration that the trial court saw and heard the testimony of
the witnesses, we conclude that the conflicting evidence as to
Isvik’s intent is at least evenly balanced. Based upon our review
of this record, we cannot reach a firm belief or conviction that
Isvik mistakenly expressed her true intent in her letter to the
Bank. Accordingly, we conclude that the county court erred in
reforming the unambiguous written notice of revocation which
Isvik submitted to the trustee.

V. CONCLUSION
For the reasons discussed, we conclude that the county court
did not err in receiving extrinsic evidence of Isvik’s intent
when she signed and mailed her letter to the Bank, in which
letter she unambiguously stated that she was revoking her trust.
Based upon our de novo review, we conclude that it has not
been proved by clear and convincing evidence that Isvik’s state-
ment of her intent was the product of a mistake. The trust was
revoked and ceased to exist prior to Isvik’s death. Accordingly,
we reverse the judgment of the county court and remand the
cause with directions to vacate its order of March 10, 2006, and
dismiss the trust administration proceeding.
REVERSED AND REMANDED WITH DIRECTIONS.

25 Nebraska Legislature on behalf of State v. Hergert, 271 Neb. 976, 720
N.W.2d 372 (2006).

26 In re Interest of Eden K. & Allison L., 14 Neb. App. 867, 875, 717 N.W.2d
507, 514 (2006); In re Interest of Kindra S., 14 Neb. App. 202, 705 N.W.2d
792 (2005).

2 In re Estate of Brionez, 8 Neb. App. 913, 603 N.W.2d 688 (2000).

539

ALAN H. GoopMAN AND KATHLEEN M. BRENNAN, APPELLANTS,
v. Ciry oF OMAHA ET AL., APPELLEES.
142. N.W.2d 26

Filed November 30, 2007. No. S-06-532.

William J. Brennan for appellants.

Alan M. Thelen, Assistant Omaha City Attorney, for appellee
City of Omaha.

J. William Gallup for appellees Anthony L. Gross et al.

Heavican, C.J., Wricut, CoNNoLiy, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

McCormack, J.
NATURE OF CASE
The Omaha Zoning Board of Appeals (the Board) approved
for a 5-year time period a request for a variance by Midwest
Accounting & Tax Service, Inc. (Midwest). Alan H. Goodman and
Kathleen M. Brennan (the appellants) filed a petition appealing

this approval to the district court for Douglas County. The dis-
trict court affirmed the decision of the Board and dismissed the
appellants’ appeal. Within 10 days of the district court’s order,
the appellants filed a motion for new trial and a motion to alter
or amend. The district court denied the appellants’ motions, and
the appellants perfected this appeal.

BACKGROUND

Anthony L. Gross, trustee of the Richard Gross Living Trust,
was issued a violation by the City of Omaha Planning Department
as a result of Midwest’s operation of an accounting and tax busi-
ness out of a residential home located in Omaha, Nebraska.
Gross was directed to remove the operation of Midwest from the
dwelling or comply with the Omaha Municipal Code. Midwest
applied to the Board for a variance from Omaha zoning ordi-
nances in order to continue conducting its business from the
residence. Midwest, which had operated at the residential loca-
tion since 1976 and employed four full-time employees and one
part-time employee during the busy season, based its application
on unnecessary hardship. On June 16, 2005, the Board approved
Midwest’s request, subject to the following restrictions: Midwest
is allowed to operate at the residential location for a maximum
of 5 years, Midwest is not allowed to advertise on the property,
and Midwest is not allowed to employ more employees than the
number it currently employed.

The appellants filed a petition on appeal with the district
court. At the hearing before the court, the appellants offered 14
exhibits, which included the bill of exceptions from the proceed-
ings before the Board. The court received into evidence exhibits
1 and 2, which composed the bill of exceptions, and exhibit 13
which was a copy of an Omaha ordinance. The court sustained
objections made to the remaining exhibits.

On January 13, 2006, the district court entered an order affirm-
ing the decision of the Board and dismissing the appellants’
appeal. The court found that the Board’s decision was legal, was
supported by the evidence, and was not arbitrary, unreasonable,
or clearly wrong. On January 23, the appellants filed a motion
for new trial and a motion to alter or amend the judgment or

a “
order. The district court overruled the appellants’ motions on
April 13. On May 12, the appellants filed this appeal.

ASSIGNMENTS OF ERROR

The appellants contend the district court erred in (1) over-
ruling their motion for new trial and motion to alter and amend
the judgment, (2) allowing conduct prohibited by Omaha zoning
ordinances when Midwest was in violation of those ordinances
when it filed its request for a variance, (3) failing to receive into
evidence newly discovered evidence, (4) affirming the variance
granted by the Board when the record contained no evidence of
hardship, (5) affirming the Board’s decision when state statute
allows the Board to grant variances only where the spirit of the
ordinance shall be observed, (6) finding that an inconvenience
translates into a hardship for Midwest, and (7) allowing a board.
member to have prehearing contact with two of Midwest’s
stockholders on three occasions.

STANDARD OF REVIEW
HM On appeal, a district court may disturb the decision of
a zoning appeals board only when the decision was illegal or is
not supported by the evidence and is thus arbitrary, unreasonable,
or clearly wrong.’ In reviewing a decision of the district court
regarding a zoning appeal, the standard of review is whether the
district court abused its discretion or made an error of law.”

ANALYSIS

Il 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.? Accordingly, before we
address the merits of the appellants’ claims, we must first deter-
mine whether we have jurisdiction over this appeal.

HB Jurisdiction is defined as a court’s power or authority to
hear a case.‘ An appellate court acquires no jurisdiction unless

1 Lamar Co. v. Omaha Zoning Bd. of Appeals, 271 Neb. 473, 713 N.W.2d 406
(2006).

2 Id.

3 Williams v. Baird, 273 Neb. 977, 735 N.W.2d 383 (2007).

* Kuhlmann v. City of Omaha, 251 Neb. 176, 556 N.W.2d 15 (1996).

the appellant has satisfied the requirements for appellate juris-
diction.> Pursuant to Neb. Rev. Stat. § 25-1912(1) (Cum. Supp.
2006), an appeal must be filed within 30 days of the final order
from which an appeal is taken. Generally, the running of the
statutory time for filing an appeal may be tolled upon the filing
of a motion for new trial or a motion to alter or amend.®

Within 10 days of the district court’s January 13, 2006, order,
which affirmed the decision of the Board, the appellants filed
both a motion for new trial and a motion to alter or amend.
The appellants did not file their notice of appeal until May 12,
which was within 30 days of the district court’s April 13 order
overruling the appellants’ motion for new trial and motion to
alter or amend. The jurisdictional question before this court is
whether the appellants’ motions tolled the statutory time for
filing an appeal.

Motion For New TRIAL

We have stated:

A motion for a new trial is restricted to a trial court, and
where the district court acts in the capacity of an appel-
late court, such a motion is not a proper pleading and it
does not stop the running of time for perfecting an appeal.
This is true whether that court is hearing appeals from the
county court or from some other lower tribunal.”

In Hueftle v. Northeast Tech. Community College,’ we con-
cluded that a motion for new trial filed with the district court did
not toll the time within which to file an appeal where the district
court functioned as an intermediate court of appeals. In Hueftle,
the appellee filed a petition in error in the district court from the
Northeast Technical Community College Board of Governors’

5 Manske v. Manske, 246 Neb. 314, 518 N.W.2d 144 (1994).

6 See Jackson v. Board of Equal. of City of Omaha, 10 Neb. App. 330, 630
N.W.2d 680 (2001).

7 Interstate Printing Co. v. Department of Revenue, 236 Neb. 110, 112-13,
459 N.W.2d 519, 522 (1990). See, also, Morello v. City of Omaha, 5 Neb.
App. 785, 565 N.W.2d 41 (1997).

® Huefile v. Northeast Tech. Community College, 242 Neb. 685, 496 N.W.2d
506 (1993).

decision terminating the employment of the appellee. The dis-
trict court vacated the board’s decision, and the board filed
a motion for new trial. The district court denied the board’s
motion, and the board appealed. The board’s appeal was filed
Jess than 30 days after the district court denied its motion, but
more than 30 days after the court’s order vacating the board’s
decision was entered.
We explained in Hueftle that although a motion for new trial
may be appropriately filed in a trial court,
“ijt is improper to move for a new trial in a court which
reviewed the decision of a lower court or administrative
agency and thus functioned not as a trial court but as an
intermediate court of appeals. . . . It necessarily follows
then that the filing of a motion for new trial in a court
which functioned as an intermediate court of appeals does
not stop the running of the time within which to perfect an
appeal from the reviewing court.”®
The present case concerns an appeal from a zoning board of
appeals to the district court. Decisions of the zoning board of
appeals are reviewable by a district court pursuant to Neb. Rev.
Stat. §§ 14-413 and 14-414 (Reissue 1997).! Section 14-413
provides that a zoning board of appeals’ decision may be
reviewed by a district court, but the scope of the district court’s
review is limited to the legality or illegality of the board’s deci-
sion. Section 14-414 provides that the district court’s authority
is limited to the power to reverse, modify, or affirm the deci-
sion brought before that court for review. In Kuhlmann v. City
of Omaha," we characterized the district court’s role in appeals
from a zoning appeals board as an appellate court. Because the
district court in this case functioned as an intermediate court
of appeals, and not as a trial court, the appellants’ motion for
new trial did not stop the running of the time within which to
perfect an appeal.

° Id, at 687, 496 N.W.2d at 507 (citation omitted).
"© Kuhlmann v, City of Omaha, supra note 4.
4 Ta.

544 Le

Motion to ALTER OR AMEND

The appellants did not file an appeal within 30 days of the
district court’s January 13, 2006, order. Because the appellants’
motion for new trial did not toll the time within which to file
an appeal, this court lacks jurisdiction of this appeal unless the
30-day time period was tolled by the appellants’ motion to alter
or amend.

Like a motion for new trial, a timely motion to alter or amend
tolls the time for filing a notice of appeal.!? Neb. Rev. Stat.
§ 25-1329 (Cum. Supp. 2006) provides in part, “A motion to
alter or amend a judgment shall be filed no later than ten days
after the entry of the judgment.” Neb. Rev. Stat. § 25-1301(1)
(Cum. Supp. 2006), defines a judgment as “the final determi-
nation of the rights of the parties in an action.” We described
“judgment” in Strunk v. Chromy-Strunk® as “a court’s final con-
sideration and determination of the respective rights and obliga-
tions of the parties to an action as those rights and obligations
presently exist.”

As noted above, the district court in this case was function-
ing as an intermediate court of appeals. The order issued by
the district court was not a judgment, but, rather, was an appel-
late decision reviewing the judgment rendered by the Board.
Accordingly, we determine that under these circumstances, the
appellants’ motion to alter or amend was not an appropriate
motion to file after the district court’s decision and did not toll
the time for filing a notice of appeal.

CONCLUSION
Because the appellants did not file a notice of appeal within
30 days of the district court’s January 13, 2006, order and
because the time period in which to file an appeal was not tolled,
this court does not have jurisdiction over the appellants’ appeal.
APPEAL DISMISSED.

1 See Allied Mut. Ins. Co. v. City of Lincoln, 269 Neb. 631, 694 N.W.2d 832
(2005).
3 Strunk v. Chromy-Strunk, 270 Neb. 917, 929, 708 N.W.2d 821, 834 (2006).

IN RE GUARDIANSHIP AND CONSERVATORSHIP OF LinpA S. CoRDEL,
AN INCAPACITATED AND PROTECTED PERSON.
Harry Y. WOLFSON, APPELLANT, V. WILLIAM E.
Spier, JR., GUARDAN AND CONSERVATOR
oF Linpa S. CorDEL, APPELLEE.
TAL N.W.2d 675

Filed November 30, 2007. No. S-06-591.

Clayton Byam, Thomas F. Hoarty, Jr., and Daniel T. Hoarty,
of Byam & Hoarty, for appellant.

W. Matthew Semple, of Seidler & Seidler, P.C., for appellee,
and William E. Seidler, Jr., of Seidler & Seidler, P.C., pro se.

Heavican, C.J., Wricut, CoNNoLty, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

McCormack, J.
BACKGROUND
Harry Y. Wolfson is the father of Linda S. Cordel, an
incapacitated adult, and is also trustee of a trust for her

546 a

benefit. Wolfson appeals an order of the county court approv-
ing $80,002.81 in fees and expenses for Cordel’s guardian
and conservator. Wolfson asserts that the county court erred in
approving an intermediate account without first conducting an
evidentiary hearing, which he had requested. The guardian and
conservator asserts that Wolfson lacked standing to intervene in
the accounting! and to prosecute this appeal.”

FACTS

Cordel is approximately 53 years old and has multiple
sclerosis. Her condition makes decisionmaking difficult and
requires care in an assisted living facility. Cordel appointed
Wolfson as her attorney in fact pursuant to a contingent plenary
durable power of attorney.? Additionally, it is undisputed that
Wolfson is the trustee of a discretionary trust benefiting Cordel,
and he voluntarily signed a personal guaranty of the payments for
the assisted living facility where Cordel is currently residing.

In October 2002, Cordel’s husband petitioned for the appoint-
ment of a guardian and conservator for Cordel, nominating
himself as guardian and conservator. Wolfson objected to the
allegation of need for a guardian or conservator, but cross-
petitioned that in the event Cordel were declared incapacitated,
Wolfson should be appointed guardian and conservator. The
court ultimately appointed an agreed-upon neutral party, William
E. Seidler, Jr., as guardian and conservator. Cordel’s marriage
has since been dissolved.

This appeal concerns the court’s approval of an intermediate
account of Seidler’s fees and expenses. Seidler filed a motion
for approval of accounting and fees on March 24, 2006. The
motion was accompanied by a sworn affidavit and an attached
itemization detailing $80,002.81 in fees and expenses over the
previous 4 years. All work relating to the guardianship and con-
servatorship, including making telephone calls and reviewing
bills, was charged at either Seidler’s hourly rate of $125 or the

1 See Neb. Rev. Stat. $$ 30-2209(21) (Cum. Supp. 2006) and 30-2645(a)
(Reissue 1995).

? See Neb. Rev. Stat. § 30-1601 (Cum. Supp. 2006).
3 See Neb. Rev. Stat. § 49-1515 (Reissue 2004).

lower rates of his legal assistants. The totals were 478.6 hours
at $125 per hour, 74.7 hours at $94.38 per hour, and 234.3
hours at $50 per hour. The itemization claimed $631.21 in costs
incurred and $781.60 in expenses.

Wolfson filed, as “the father of the Incapacitated and Protected
Person and an interested party herein,” an objection to the fees
and moved the court for an evidentiary hearing on his objection.
Seidler filed a motion to strike based on the alleged failure of
Wolfson to indicate his standing in the proceedings. A hearing
on the motions was held on April 26, 2006. Wolfson’s attorney
responded to Seidler’s motion to strike by arguing at the hear-
ing that Wolfson had standing as a person interested in Cordel’s
welfare. When a person identified in the record only as “a
male voice,” presumably Seidler or his attorney, suggested that
Wolfson did not have standing, the court said, “Yeah, we’ve
been through it several times; I agree.” A “male voice,” presum-
ably Wolfson or his attorney, argued that he believed $80,000
was a large sum and that an evidentiary hearing should be held
to determine whether that amount was fair and reasonable. The
court, without receiving any evidence or listening to any testi-
mony or argument regarding the reasonableness of the fees,
approved the fees. The court concluded: “Well, it’ll be appealed
no matter what their [sic] ruling is, because [Wolfson] is not
going to agree to pay . . . Seidler; never wanted to in the first
place. I’m going to show your objection is made and it’s over-
ruled. The fees are approved.” A written order was issued that
same day approving the fees, but indicating, on a standardized
form, that “no objections to the accounting (or allowance of
fees) has/have been filed.” Wolfson appeals.

ASSIGNMENT OF ERROR
Wolfson assigns that the county court erred when it granted
Seidler’s application for fees without receiving any evidence as
to the reasonableness of the fee application and without holding
an evidentiary hearing on the fee application.

4 See § 30-2209(21).

STANDARD OF REVIEW

HMB An appellate court reviews guardianship and conser-
vatorship proceedings for error appearing on the record made
in the county court.> 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.‘

HM The question of jurisdiction is a question of law.’ The
meaning of a statute is also a question of law.’ On a question of
law, an appellate court is obligated to reach a conclusion inde-
pendent of the determination reached by the court below.?

ANALYSIS

The county court’s April 26, 2006, order did not specifi-
cally address Wolfson’s motion for an evidentiary hearing, but
approved the intermediate account after stating that “no objec-
tions” were filed. While the court stated at the hearing that
Wolfson’s objection was “overruled,” the court also indicated
it did not believe Wolfson had standing to object. Based on
the record before us, we conclude that the basis of the county
court’s decision was its conclusion that Wolfson lacked stand-
ing to intervene to request an evidentiary hearing.

Wolfson asserts that in his personal capacity and in his capac-
ity as the trustee of a trust of which Cordel is a beneficiary, he
has standing to intervene in the intermediate account because
he is an “[iJnterested person” to the proceedings as defined in
§ 30-2209(21), which states in full:

Interested person includes heirs, devisees, children,
spouses, creditors, beneficiaries, and any others having
a property right in or claim against a trust estate or the
estate of a decedent, ward, or protected person which may

> See In re Guardianship & Conservatorship of Trobough, 267 Neb. 661, 676
N.W.2d 364 (2004).

6 Id.

7 Nebraska Dept. of Health & Human Servs. v, Struss, 261 Neb. 435, 623
N.W.2d 308 (2001).

8 In re Estate of Nemetz, 273 Neb. 918, 735 N.W.2d 363 (2007).

° In re Estate of Mousel, 271 Neb. 628, 715 N.W.2d 490 (2006).

PS rrrcrtC“‘(‘Céi
be affected by the proceeding. It also includes persons
having priority for appointment as personal representa-
tive, and other fiduciaries representing interested persons.
The meaning as it relates to particular persons may vary
from time to time and must be determined according
to the particular purposes of, and matter involved in,
any proceeding.

Wolfson also asserts that he has standing as a “person inter-
ested in the welfare” of Cordel, a protected person, as provided
for in § 30-2645(a). Section 30-2645, entitled “Petitions for
orders subsequent to appointment,” states:

(a) Any person interested in the welfare of a person for
whom a conservator has been appointed may file a petition
in the appointing court for an order (1) requiring bond or
security or additional bond or security, or reducing bond,
(2) requiring an accounting for the administration of the
trust, (3) directing distribution, (4) removing the conserva-
tor and appointing a temporary or successor conservator,
or (5) granting other appropriate relief.

Seidler argues that Wolfson does not have standing to ask
for an evidentiary hearing. Seidler asserts that the “[aJny person
interested” language of § 30-2645(a) is constrained by the defi-
nition of “[iJnterested person” in § 30-2209(21). Seidler argues
that § 30-2209(21) is narrowly limited to the categories of per-
sons specifically listed. According to Seidler, Wolfson does not
qualify under any of these categories.

In In re Guardianship of Gilmore,!° the Nebraska Court of
Appeals considered whether the Department of Health and
Human Services had standing to petition for the removal of a
guardian. The court noted that the part of § 30-2209(21) which
states that the meaning of “interested person” would vary from
time to time, and be determined according to the particular pur-
poses of and matter involved in any proceeding, “would appear
to give that otherwise narrow definition considerable breadth."
Ultimately, though, the court relied on a provision which gave

'© In re Guardianship of Gilmore, 11 Neb. App. 876, 662 N.W.2d 221
(2003).
4 Jd, at 881, 662 N.W.2d at 225.

standing to petition for removal of a guardian to “‘any person
interested in [the] welfare’” of the ward."? The court found
the phrase “any person interested,” although not specifically
defined in the probate code, to be broader than the definition of
“fnterested person” contained in § 30-2209(21).

The court in In re Guardianship of Gilmore noted that the
phrase “person interested in the welfare” of a protected person
appears only in those statutes dealing with protected persons.
The court concluded that the phrase showed a legislative intent
“to allow persons who are interested in a protected person, but
who do not satisfy the definition of ‘interested person,’ to bring
matters affecting the welfare of protected persons to the atten-
tion of the local probate court.” In other words, the statutes
referring to “any person interested in the welfare” of a protected
person “are worded to allow people without a legal interest to
bring the matter to the local court’s attention.”"*

In In re Conservatorship of Kloss, the Supreme Court of
Montana similarly considered the meaning of “‘any person who
is interested in [the protected person’s] welfare,” in a statute
specifying who had standing to petition for the appointment
of a conservator. The court held that an attorney who sought
to intervene was not required to have a personal stake in the
outcome in order to have standing. While other statutory provi-
sions relating to conservatorships contained “interested person”
terminology similar to that contained in § 30-2209(21), the
court stated that it refused to limit the language of the more
specific statute with the narrower definition of “interested per-
son.” The court noted that the narrower definition of “interested
person” stated that its meaning “‘may vary from time to time
and must be determined according to the particular purposes of
and matter involved in any proceeding’” and found the statutory
provision for “‘any person who is interested’” in the welfare

2 Id.
13 Id. at 881-82, 662 N.W.2d at 225-26.
™ See id. at 882, 662 N.W.2d at 226.

15 In re Conservatorship of Kloss, 326 Mont. 117, 119, 109 P:3d 205, 207
(2005) (emphasis in original).

of the protected person to be more directly relevant.'* This, the
court concluded, reflected the Legislature’s intent to broadly
define those who have standing to petition the court on behalf
of another.”

We agree with the foregoing analysis. We note that the term
“interested person” is found primarily in provisions of the pro-
bate code relating to the administration of decedents’ estates.'®
In contrast, the “[a]ny person interested in the welfare” language
of § 30-2645(a) is found only in statutes concerning the welfare
of an incapacitated person. This departure from the financial
interests specified in § 30-2209(21) is appropriate, given the
different focus of proceedings involving protected persons.

I We thus conclude that Wolfson’s standing to intervene in
his daughter’s guardianship and conservatorship is not limited
to one of the narrow categories listed in § 30-2209(21). In con-
struing a statute, we will give the statute its plain and ordinary
meaning and we will not resort to interpretation to ascertain the
meaning of statutory words which are plain, direct, and unam-
biguous.”® The plain meaning of § 30-2645(a) is evident: “Any
person interested in the welfare of a person for whom a conser-
vator has been appointed” has standing to intervene. (Emphasis
supplied.) To limit the persons “interested in the welfare” of
the protected person to those listed in § 30-2209(21) would be
superfluous and incongruent with the term “any.’”’-It would
also be contrary to the language of § 30-2209(21) itself, which
specifically states that the meaning of an “[iJnterested person”
may vary.

16 Id, at 120, 109 P.3d at 207.

"” See id. See, also, In re Estate of Edwards, 794 P.2d 1092 (Colo. App.
1990).

8 See Neb. Rev. Stat. §§ 30-2220 and 30-2467 (Cum. Supp. 2006) and
30-2325, 30-2356, 30-2406, 30-2410, 30-2416, 30-2421, 30-2425, 30-2427,
30-2432, 30-2438, 30-2440, 30-2443, 30-2445 through 30-2450, 30-2457,
30-2473, 30-2474, 30-2476, 30-2482, 30-24,103, 30-24,122, and 30-24,124
(Reissue 1995).

1 See Japp v. Papio-Missouri River NRD, 273 Neb. 779, 733 N.W.2d 551
(2007).

2 See § 30-2645(a).

552 Le

Seidler next argues that even if § 30-2645(a) is interpreted
broadly, Wolfson failed to demonstrate his interest in Cordel’s
welfare. The Court of Appeals in In re Guardianship of
Gilmore” stated that “the county judge, under the applicable
standard of review, can make the determination of whether the
petitioner is really interested in the welfare of the person sub-
ject to the proceedings.” Seidler concedes that “a father is quite
likely interested in the welfare of his child.” He reads In re
Guardianship of Gilmore, however, as stating that this interest
must be independently evidenced by the record, regardless of
whether the genuine interest was challenged below. Seidler then
points out that there was no evidence offered or received at the
April 26, 2006, hearing before the county court.

The fact that someone is the parent of the protected person
would normally be strong evidence of interest in the protected
person’s welfare. Parents are specifically given standing for
other proceedings such as the appointment of a guardian,”
appointment of a conservator, or other protective order.% In
addition, Neb. Rev. Stat. § 30-2654(a)(1) (Reissue 1995) states
that the conservator, after appointment, is to “consider recom-
mendations relating to the appropriate standard of support, edu-
cation and benefit for the protected person made by a parent.”
Still, we agree with Seidler that under § 30-2645(a), being a
parent of the protected person does not guarantee standing.

We disagree, however, with Seidler that standing was prop-
erly denied in this case. Wolfson cannot be prejudiced for the
failure to present evidence on standing when the very issue
Wolfson complains of is the county court’s refusal to grant
Wolfson’s request for an evidentiary hearing. Seidler’s only
challenge to Wolfson’s standing was made the day the court
heard the motions. Seidler made no specific allegation nor

21 In re Guardianship of Gilmore, supra note 10, 11 Neb. App. at 882, 662
N.W.2d at 226,

% Brief for appellee at 16.

%3 Neb. Rev. Stat. §§ 30-2617 (Reissue 1995) and 30-2625 and 30-2627 (Cum.
Supp. 2006).

24 Neb. Rev. Stat. §§ 30-2633, 30-2634, and 30-2639 (Cum. Supp. 2006).

presented evidence indicating that Wolfson was not, in fact,
interested in Cordel’s welfare.

It is unclear from this record whether the county court would
have granted Wolfson’s request for an evidentiary hearing had
it found Wolfson to have standing. But we note that we have
previously disapproved of a probate court’s practice of holding
informal discussion instead of an evidentiary hearing. We have,
in other circumstances, vacated orders for lack of competent
evidence because an evidentiary hearing was not held.* We
have not specifically addressed intermediate accounts, but Neb.
Rev. Stat. § 30-2648 (Reissue 1995) states in relevant part that
“[s]ubject to appeal or vacation within the time permitted, an
order, made upon notice and hearing, allowing an intermedi-
ate account of a conservator, adjudicates as to his liabilities
concerning the matters considered in connection therewith.”
(Emphasis supplied.)

The allowance of conservator fees is largely a matter of dis-
cretion, and the reasonable value of services is a question of
fact.** But the deference granted to the county court is based
on the fact that it had the opportunity to observe the witnesses
and evaluate their credibility.” In considering language similar
to that of § 30-2648, the court in In re Trust Created by Will of
Enger explained:

A requirement of “hearing” in judicial proceedings, aside
from any constitutional requirement of due process, by
common consent presupposes a proceeding before a com-
petent tribunal for the trial of issues between adversary
parties, the presentation and consideration of proofs and

25 See In re Trust of Rosenberg, 269 Neb. 310, 693 N.W.2d 500 (2005). See,
also, In re Guardianship & Conservatorship of Larson, 270 Neb. 837, 708
N.W.2d 262 (2006); In re Guardianship & Conservatorship of Trobough,
supra note 5.

26 In re Conservatorship of Mansur, 367 N.W.2d 550 (Minn. App. 1985). See,
also, Neb. Rev. Stat. § 30-2643 (Cum. Supp. 2006); In re Guardianship
& Conservatorship of Karin P., 271 Neb. 917, 716 N.W.2d 681 (2006)
(whether guardian ad litem fees were reasonable depended on equities and
circumstances of each particular case).

21 See In re Conservatorship of Mansur, supra note 26.

554 Le

arguments, and determinative action by the tribunal with
respect to the questions raised by the issues presented.”
Hl We conclude that pursuant to § 30-2648, there is no final
adjudication of an intermediate account without an evidentiary
hearing. Because no hearing was held in this case, the court
shall, after remand, hold a hearing regarding Seidler’s fees
and expenses.

CONCLUSION
The county court’s dismissal of Wolfson for lack of standing
is reversed, and the cause is remanded for further proceedings
consistent with this opinion.
REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.

28 In re Trust Created by Will of Enger, 225 Minn. 229, 237-38, 30 N.W.2d
694, 700 (1948). See, also, Guardianship of Estate of Slakmon, 83 Cal. App.
3d 224, 147 Cal. Rpt. 777 (1978).

Terry HickEY AND THE FRATERNAL ORDER OF Potice, LopcE -
No. 52, APPELLANTS, V. CIviL SERVICE COMMISSION OF
Douaias County, NEBRASKA, AND DouGLAS
County, NEBRASKA, APPELLEES.
TAL N.W.2d 649

Filed November 30, 2007. No. S-06-802.

John E. Corrigan, of Dowd, Howard & Corrigan, L.L.C., for
appellants.

Stuart J. Dornan, Douglas County Attorney, Peter J. Garofalo,
and Bernard J. Monbouquette, for appellees.

Heavican, C.J., Wricut, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

McCormack, J.
NATURE OF CASE

This case presents a petition in error from the decision of the
Douglas County Civil Service Commission (the Commission)
to approve the termination of Terry Hickey’s employment with
Douglas County. This decision was as a consequence of a sick
leave violation and other rule violations from the preceding
12 months. Hickey’s primary argument is that his termination
of employment was based on a sick leave violation that was
not listed in the predisciplinary hearing notice and that, there-
fore, such termination violated his right to due process of law.'
Hickey also argues that the termination of his employment was
disproportionate to the violation.

BACKGROUND
Hickey had been an employee of Douglas County for nearly
16 years. He had been working for approximately 5 years as
a security officer at the Douglas County Health Center (the
Health Center) before being discharged. On November 1, 2004,
Hickey received a 3-day suspension for attempting to place
handcuffs on a female employee at the Health Center and for

' See Cleveland Board of Education v. Loudermill, 470 U.S. 532, 105 S. Ct.
1487, 84 L. Ed. 2d 494 (1985).

556 Le

pulling the hair on the back of her neck. On May 12, 2005,
Hickey received a 3-day unpaid suspension and was required to
attend sexual harassment training after it was found that he had
been verbally inappropriate and used profanity with a female
employee of another Douglas County department.

On May 19, 2005, Hickey suffered a fracture to his hand
while repairing a truck in his driveway. There is no evidence
that this injury occuired while working at outside employment.
Because Hickey’s security job presented a “potential combative
situation,” his physician recommended that Hickey not return
to his job as a security officer for 4 weeks. Healing went more
slowly than expected, and Hickey was not released to work
until July 22. From May 19 to July 22, Hickey took paid sick
leave from Douglas County.

Besides the “potential risk environment” of his security job,
Hickey’s physician advised Hickey that he could use his hand
within the cast as he was able. Hickey had his own lawn care
and snow removal business, and during the time he was on sick
leave, he continued to work, mowing and treating lawns for
his business.

The Commission’s personnel policy manual provides for
paid sick leave under article 21, section 2. Section 2(a) states
in part, “Employees are prohibited from working in any other
employment while utilizing sick leave with pay. Violation of
these provisions may result in disciplinary action.” Section 2(b),
entitled “Definition of Sick Leave,” lists reasons for absence
that qualify as sick leave. The first of the reasons listed, section
2(b)(1), is “[a]bsence necessitated because of bona fide illness
or injury,” with the caveat that “employees who become injured
as a result of engaging in secondary employment outside of the
County service shall not be entitled to sick leave with pay for
such injury.”

James C. Tourville, the director of the Health Center, sent
Hickey a notice of a predisciplinary hearing. The notice listed
the Commission rules under which the charges against Hickey
had been brought. That list included article 13, section 5(a)(9),
misuse of sick leave, and article 21, section 2(a), sick leave.
The notice did not specifically list article 21, section 2(b). The
notice also listed the November 1, 2004, and May 12, 2005,

disciplinary actions and advised that the current action could
constitute multiple instances of disciplinary action within a
12-month period. Under the “Notice of Pending Charges and
Explanation of Evidence” portion, it stated in full:

May 19, 2005

It was brought to Management’s attention that you -had
injured your right hand while off duty.

You informed Management later this same day that your
right hand had been fractured and you would need to be
off work on medical leave for three (3) weeks.

June 21[,] 2005

It was brought to Management’s attention that you were
seen unhitching your equipment trailer from your dump
truck and that you were working on your second job.

July 12-13, 2005

You were observed using your right hand, without a
cast, performing duties associated with your second job.
These duties included you turning a valve and cranking the
hitch on your trailer with your right hand.

‘You were also observed using your right hand to sup-
port your weight, to pull yourself up on your tractor, and
driving the tractor while spraying chemical on a field in
Gretna[, Nebraska].

This work was being performed while you were on
Sick Leave from Douglas County due to an injury to your
tight hand.

Your absence from work on Sick Leave continued
through July 21, 2005.

Hickey’s employment was terminated after the disciplinary
hearing. We do not have a record of that proceeding. The notice
of disciplinary action sent on July 29, 2005, informed Hickey
of his termination of employment. The notice, citing article 21,
section 2(a), repeated the explanation of the evidence quoted
above and summarized that during the disciplinary hearing,
Hickey was told he had been working at his second job while
on paid sick leave.

Hickey appealed to the Commission, which held a hearing
on October 13, 2005. In opening statements to the Commission,
Hickey’s counsel stated that to his knowledge, the only reason

558 Ee

Hickey’s employment was terminated was because he was
alleged to have been engaged in off-duty employment while on
sick leave and that termination was excessive. Hickey’s counsel
argued that Hickey was unaware of the rule against working
while on paid sick leave; Hickey’s supervisor knew Hickey had
a second job, and Hickey’s supervisor never advised Hickey of
this rule or asked him to stop working during sick leave. The
county attorney, in his opening remarks, responded: “And the
evidence will show that . . . Hickey not only ignored certain
work rules prohibiting the engagement in secondary employ-
ment while being on sick leave. The work rules would state that
one is disqualified from receiving sick leave benefits when one
becomes injured in another line of work.” It is undisputed that
this was the first time it had ever been suggested that Hickey had
violated section 2(b), as opposed to 2(a).

Hickey called Tourville as his first witness. Tourville testified
that he was not Hickey’s immediate supervisor but that, as direc-
tor of the Health Center, it was ultimately his decision to termi-
nate Hickey’s employment. Hickey’s counsel handed Tourville
a copy of the notice of disciplinary action Tourville had sent to
Hickey, and the following colloquy took place:

[{Hickey’s counsel:] Now, is it your understanding of
the facts of this case that . . . Hickey was injured while
he was engaging in employment outside of the... .
Health Center?

[Tourville:] That’s correct.

Q. Who told you that?

A. I don’t recall who told me, but I had — I had learned.
that he — was informed that he had injured himself outside
of employment.

a. . : . Pll show you page 21-2 of Exhibit 2 which is part
of the personnel manual .. . Do you see where —

Q. — it directs that a person is not eligible for sick
leave if they’re [sic] injured in employment outside of their
[sic] employment with the County?

A. Yes, I do.

ee 559
Le

Q. Was that one of the reasons that you disciplined
— you decided to terminate this man?

A. That was the reason he couldn’t use sick leave
while he was injured outside his — outside of the County
employment, yes.

Q. Okay. Well —

A. Yes.

Q. Well, look at [the notice of disciplinary action]. And
you show me where you mentioned to him anywhere in
there that he violated that work rule.

A. It would be Section — Article 21, Section 2, sick
leave, on page two of the letter.

Q. And Section 2(a), sick leave — if I can see this.

A. Uh-huh, sure. It would be on the page before. It starts
on the page before that.

Q. Oh, so it wasn’t this provision. It was some other
provision; right?

A. It’s part of that same provision.

Q. Oh, because this is under Section 2(b), isn’t it?

A. (No audible response.)

Q. Let’s take a look at the whole manual. If you look at
Section 2(a), that provides that you can’t receive sick leave
if you’re working off duty; right?

Q.... So... under Section A, were employees
advised — that employees are prohibited from working
in any — any other employment while utilizing sick leave
pay; right?

A. That’s correct.

Q. And that’s why — that’s why you terminated this
man; correct?

A. That would be correct.

Q. Okay. So the fact that he was receiving sick leave
while he was — because you think he was injured in his
employment outside of the County, that didn’t have any-
thing to do with it, did it?

A. Rephrase your question.

Q. You see at page 21-2 under Section (b)(1) of this
particular article where... .

560 Ee

Q. ... [E]mployees who become injured as a result of
engaging in secondary employment outside of the County
service shall not be entitled to sick leave with pay for
such injuries.

Q. Now, does that — are you telling me that that had
something to do with your decision to discipline this guy?

A. I relied on Article 21 under “discipline” that
states that he could not be paid sick leave when he was
— when he injured himself on another job outside the
County employment.

Q. Did you ever tell him that?

A. He had all this at the time of the hearing.

Q. So you are telling us now that you told him that
he shouldn’t have been on sick leave because he got
injured while he was off duty and working in some other
employment?

A. That was cited on the letter that we sent to him —

Q..Where?

A. What I cited was Article 21, Section 2(a), sick
leave.

Q. Okay. And this is Article 21, Section 2(b), isn’t it?

- A. Il cited 2(a).

Q. Okay. So you never told him that you thought he
violated Section 2(b)?

A. No, I cited 2(a).

Q. So you would agree that my question — that this
statement is correct: That you never told him that you
thought he violated Section 2(b) or Article 21?

A. No, I told him 2(a), Section 2(a).

During cross-examination, the county attorney confirmed that
Tourville, as the department head, relied on direct supervisors to
report on employee infractions. He then reviewed with Tourville
the notice of predisciplinary hearing that Tourville sent to Hickey
and had Tourville read article 21, section 2(a), “[elmployees
are prohibited from working at any other employment while

— 561
be |

utilizing sick leave with pay.” Tourville then agreed that it was
“fair to say” that “the discipline imposed on July 29, 2005,
against . . . Hickey rested on his actions as set forth in the
notice of disciplinary action under those particular provisions.”
Tourville further testified that the discipline rested on the accu-
mulation of violations within a 12-month period.

After Tourville’s testimony, Hickey made a motion to dis-
miss based on Tourville’s testimony that the reason he termi-
nated Hickey’s employment was his belief that Hickey had
been injured in other employment. Hickey argued that it was
a clear violation of Hickey’s due process rights to have never
been advised in the notice of predisciplinary hearing that he had
violated article 21, section 2(b). The county attorney responded
that Hickey had purposefully called Tourville first in order to
confuse him as to what grounds Hickey’s discipline was based
upon. According to the county attorney, Tourville had clarified
on cross-examination that the basis for the sick leave violation
was section 2(a) and not section 2(b) and that section 2(a) was
listed in Hickey’s notice of predisciplinary hearing, as well as
his postdisciplinary notice.

The motion to dismiss was denied, and the hearing pro-
ceeded with the testimony of Chuck Franek. Franek is the head
of security at the Health Center and was Hickey’s supervisor.
Franek testified that he never inquired about whether Hickey
was working a second job when he was injured and that he
never had any knowledge that Hickey’s injury was incurred in
secondary employment. Franek explained that the prohibition
against taking sick pay when the absence is due to an on-the-
job injury from outside employment had “nothing to do with”
Hickey’s violation. Instead, Franek explained the violation in
question involved working in secondary employment while
receiving paid sick leave, a violation under section 2(a).

Photographic evidence was introduced at the hearing show-
ing that Hickey continued to work, maintaining lawns for his
lawn care business on dates for which he was receiving paid
sick leave. There was no evidence that the hand injury leading
to the sick leave was connected with outside employment.

The Commission upheld the Health Center’s decision to
terminate Hickey’s employment, and Hickey filed a petition in

562 |

error in the district court. The district court affirmed Hickey’s
termination of employment. Hickey appeals.

ASSIGNMENTS OF ERROR
Hickey assigns that the district court erred in (1) holding that
Hickey received adequate due process at his pretermination and
posttermination of employment hearings and (2) upholding the
decision of the Commission denying Hickey’s appeal of his ter-
mination of employment.

STANDARD OF REVIEW

[Hl In reviewing an administrative agency decision on a peti-
tion in error, both the district court and the appellate court review
the decision of the administrative agency to determine whether
the agency acted within its jurisdiction and whether the decision
of the agency is supported by sufficient relevant evidence.”

I The determination of whether the procedures afforded an
individual comport with constitutional requirements for proce-
dural due process presents a question of law.? On a question of
Jaw, an appellate court is obligated to reach a conclusion inde-
pendent of the court below.*

ANALYSIS

Hickey first contends that the district court should have
reversed his termination of employment because testimony by
Tourville at the Commission hearing shows that such termina-
tion was based, in whole or in part, on an alleged violation of
section 2(b), prohibiting taking paid sick leave when the leave
was necessitated by injury incurred in secondary employment.
Hickey asserts that because he was not informed of this alleged
ground for his discipline, he was not afforded a meaningful
opportunity to respond to the allegation, and that his due process
rights were violated.

2 See, Maxon v. City of Grand Island, 273 Neb. 647, 731 N.W.2d 882 (2007);
Ashby v. Civil Serv. Comm., 241 Neb. 988, 492 N.W.2d 849 (1992).

3 Barnett v. City of Scottsbluff, 268 Neb. 555, 684 N.W.2d 553 (2004); Billups
v. Nebraska Dept. of Corr. Servs. Appeals Bd., 238 Neb. 39, 469 N.W.2d
120 (1991).

4 See Barnett v. City of Scottsbluff, supra note 3.

Hl The parties do not dispute that Hickey had a protected
property interest in his continued employment. In Cleveland
Board of Education v. Loudermill, the U.S. Supreme Court held
that when a public employer deprives an employee of a property
interest in continued employment, constitutional due process
requires that the deprivation be preceded by (1) oral or writ-
ten notice of the charges, (2) an explanation of the employer’s
evidence, and (3) an opportunity for the employee to present
his or her side of the story.’ A pretermination of employment
procedure functions as “an initial check against mistaken deci-
sions—essentially, a determination of whether there are reason-
able grounds to believe that the charges against the employee are
true and support the proposed action.””

Hickey relies on Martin v. Nebraska Dept. of Public
Institutions,’ in which the Nebraska Court of Appeals reversed
a termination of employment because of the failure to provide
adequate due process. The employee’s termination of employ-
ment in Martin was based in part on charges of insubordination.
The employee was notified that he was alleged to have acted
insubordinately prior to a pretermination of employment meeting
with his employer. However, it was not until after this meeting
that an investigation was conducted into the alleged insubordina-
tion, which included reviewing documents and interviewing the
employees. The information gathered by the investigation was
then relied upon by the employer when it decided to terminate
his employment. The information from the investigation was not
available to the employee until after such termination. The Court
of Appeals concluded that the employee was denied due process
because he never had an opportunity to rebut the evidence upon
which his employment was terminated.

5 Cleveland Board of Education v. Loudermill, supra note 1.

6 See, id.; Nebraska Pub. Emp. v. Otoe Cty., 257 Neb. 50, 595 N.W.2d 237
(1999); Unland v. City of Lincoln, 247 Neb. 837, 530 N.W.2d 624 (1995).

7 Cleveland Board of Education v. Loudermill, supra note 1, 470 U.S. at
545-46.

8 Martin v. Nebraska Dept. of Public Institutions, 7 Neb. App. 585, 584
N.W.2d 485 (1998).

564 : Le

Hickey asserts that his termination of employment was simi-
larly based on grounds of which he was unaware prior to the
decision to make such termination. We disagree. The evidence
is sufficient to show that Hickey’s termination of employment
was, in fact, based only on the grounds stated in the predisci-
plinary notice. Hickey makes no argument that if his employ-
ment was actually terminated for a section 2(a) violation, as
opposed to a section 2(b) violation, he was denied due process,
and we find no due process violation. Hickey was notified that
he was subject to discipline for working in outside employment
while receiving paid sick leave. He had a chance to respond to
this charge at the disciplinary hearing.

It is true that Tourville testified that he terminated Hickey’s
employment for receiving paid leave when his injury was
incurred during secondary employment, in violation of sec-
tion 2(b). But Tourville also’ testified, during both direct and
cross-examination, that he terminated Hickey’s employment for
violating the policy of working in secondary employment while
receiving paid sick leave, a violation of section 2(a). Nothing
in Tourville’s testimony demonstrates a belief that Hickey’ S
employment was terminated for both.

Tourville’s testimony began with the statement that Hickey
was injured outside of his employment with the county—not
that he was injured during outside employment. He then said,
in response to Hickey’s leading questions, Hickey violated the
sule that one cannot claim paid sick leave if one’s injury was
incurred in secondary employment, section 2(b). But later,
without expressly acknowledging the inconsistency, Tourville
also clearly stated that Hickey’s employment was terminated
for working in outside employment while receiving paid sick
leave, a violation of section 2(a). As we read the record, under
examination, Tourville was simply confused. Aside from those
portions of Tourville’s testimony discussed above, there is noth-
ing in the record to indicate that Hickey’s last violation was
based on anything other than section 2(a): working in secondary
employment while receiving paid sick leave. The notice of pre-
disciplinary hearing cites section 2(a), and the evidence listed
as supporting the violation consists of facts relating to Hickey’s
employment while on sick leave. The postdisciplinary notice of

termination of employment again recites section 2(a) and the '
evidence relating to Hickey’s working in secondary employ- !
ment while receiving paid sick leave. Franek testified before the '
Commission that section 2(b) had nothing to do with Hickey’s
termination of employment and that Hickey’s violation instead
involved section 2(a). The exhibits offered by the county at the
hearing before the Commission were relevant only to Hickey’s
outside employment during paid sick leave. In short, the record
clearly establishes, despite Tourville’s confusion, that Hickey’s
employment was terminated for violating section 2(a) and that
he had notice of and the opportunity to defend himself against
that charge. We find no due process violation. H
Hickey also asserts that regardless of whether he received |
due process, we should reverse, because the Commission’s order |
was arbitrary and capricious and was unsupported by relevant
evidence. On this point, Hickey argues that the suggested dis-
ciplinary guidelines of the policy manual set forth only an oral
warning or official reprimand for a first offense of misuse of
sick leave. In addition, Hickey claims he was unaware of the
sick leave policy prohibiting outside employment while on sick
leave with pay. Hickey points out that his supervisor, Franek,
never asked Hickey if he was working while on sick leave,
nor did Franek inform him of this prohibition. In sum, Hickey
argues that Tourville was predisposed to terminate Hickey’s
employment and that such termination was disproportionate to
the violation.
Hl Evidence supports an administrative agency’s decision |
reviewed in an error proceeding if the agency could reason-
ably find the facts for the agency’s decision on the basis of the
relevant evidence contained in the record before the agency.’
“Arbitrary and capricious” action by an administrative agency
is action 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.!°
There is no dispute that Hickey violated article 21, section
2(a), of the policy manual. Nor does Hickey dispute that he

° Wagner v. City of Omaha, 236 Neb. 843, 464 N.W.2d 175 (1991).
0 Ig.

566 —

signed an acknowledgment of receipt of the policy manual and
that he was responsible for following the rules of the manual.
Hickey ignores the fact that the reason for his discharge was not
just the singular sick leave violation, but that this was his third
policy violation in the past 12 months.

The policy manual sets forth discharge as a reasonable conse-
quence of a third violation of either of the rules the county found
Hickey had violated on November 1, 2004, and May 12, 2005.
The policy manual also recommends discharge as an acceptable
consequence of a third violation of sick leave policies. The pol-
icy manual explains that although the range of reasonable pen-
alties for various offenses refers only to successive instances
of the same offense, single violations of different work rules
may also occur. In that case, “the Elected Official/Department
Head may wish to take action other than that delineated for
the first offense under each violation.” Hickey committed such
violations, and the recommended discipline is within the range
recommended by the county’s disciplinary guidelines. As such,
we conclude that Tourville’s decision to discharge Hickey from
his employment was supported by sufficient relevant evidence
and was not arbitrary, capricious, or unreasonable.

CONCLUSION
We affirm the decision of the district court which affirmed
the Commission’s decision to uphold Hickey’s discharge
from employment.
AFFIRMED.

Stare OF NEBRASKA, APPELLEE, V.
Jerroip A. McLEzop, APPELLANT.
741 N.W.2d 664

Filed November 30, 2007. No. S-07-013.

Jerrold A. McLeod, pro se.

Jon Bruning, Attorney General, and George R. Love for
appellee.

Heavican, C.J., WricHt, CoNNoLty, GERRARD, STEPHAN,
McCormack, and Minter-Leroman, JJ.

Srepuan, J.

Jerrold A. McLeod is serving a life sentence on a plea-based
conviction of first degree murder. He appeals from an order of
the district court for Lancaster County denying his motion for
postconviction relief without an evidentiary hearing. We find no
error and affirm.

I. BACKGROUND

On April 14, 1999, McLeod pled no contest to an amended
information charging him with first degree murder. McLeod was
17 years old on the date of sentencing. Prior to accepting the
plea, the district court questioned McLeod in order to determine
whether his plea was knowingly, voluntarily, and intentionally
made. McLeod informed the court that he had recently obtained
his diploma through the GED program. He stated he had not
taken any alcohol, drugs, or medication in the last 72 hours, nor
was he under the care of a psychiatrist. The court determined
he was competent.

The court then informed McLeod that his attorney had filed
a motion to transfer the cause to juvenile court and that if his
plea was accepted, he would be waiving the right to a hearing
on that motion. It further informed him that a motion to sup-
press certain statements he had made was pending and that his
plea would mean that the motion would not be heard. McLeod
acknowledged that he understood the effect of his plea on those
motions. The court then informed McLeod that he was pre-
sumed innocent and that he had a right to a jury trial, a right
to confrontation, and a right to call witnesses in his defense; all
rights that he would be waiving by entering the plea. McLeod

acknowledged that he was aware of the effect of his plea on his
constitutional rights.

In addition, the court informed McLeod, “If you are found
guilty in this case, you will be found guilty of a felony and
that can be used against you later on in life” The court
further explained:

Being convicted for a felony can also lead to the loss of
certain of your civil rights, including but not necessar-
ily limited to your right to vote and your right to carry a
firearm... .

. .. If you should continue to get into trouble of a felony
nature, the fact of this conviction could be used at some
later time to make-the penalty for the later conviction
more severe.

The court then specifically stated, “If you are found guilty in
this case . . . there is only one penalty that I can impose in this
matter and that is a sentence of life imprisonment.” McLeod
stated that he understood the court’s explanation.

The court specifically asked whether anyone had threat-
ened, pressured, or coerced McLeod into giving up the rights
it had previously explained, and he responded, “No.” McLeod
affirmed that other than the plea agreement, he was not prom-
ised anything in exchange for giving up his rights. He stated
that he understood the rights that were explained to him and
that he had no questions about them. McLeod then stated that
he was satisfied with the performance of his counsel and that
he freely and voluntarily waived his rights. His counsel stated
that he was satisfied that McLeod understood his rights and that
he knowingly, voluntarily, and intentionally waived them. The
court then accepted McLeod’s plea.

Thereafter, the State described the terms of the plea agree-
ment. In exchange for McLeod’s plea to first degree murder, the
State agreed not to file additional charges against him related to
the crimes that took place on the day of the murder, including
robbery and concealing evidence. In addition, the State agreed
not to file charges against McLeod related to a separate burglary
committed after the murder and a separate theft committed prior
to the murder. The State further agreed not to file any charges

570 |

against McLeod relating to an attempt to escape from custody
after the murder.

After the plea agreement was described, McLeod again
affirmed that he had not been promised anything more than the
terms of the plea agreement in exchange for his plea and that
no one had threatened, pressured, or coerced him to plead. The
State then offered a factual basis for the charge, in which it
was explained that McLeod, then 16 years old, possessed and
fired a shotgun during a burglary attempt which resulted in the
death of one person. After the court accepted the factual basis
for the plea, it sentenced McLeod to life in prison. In doing so,
the court noted, “I understand that as we have gone through
the plea that . .. McLeod knows that I have no discretion in
sentencing.” Similarly, McLeod’s counsel noted “[w]e under-
stand the court has no discretion in sentencing . . . .” Counsel
further stated that McLeod “knows he has a life sentence now
that he is going to have to serve and hopefully demonstrate
during his time in the institution that something good can
come out of this horrible tragedy.” Counsel further stated that
McLeod “understands that for him to get anywhere in life and
be considered for something less than [a] life sentence, he has
to begin something.” After imposing the life sentence, the court
informed McLeod:

What that means . . . is that you remain in prison unless
and until your sentence is commuted to a term of years.
Until then, you are not eligible for parole. Whether it is
ever commuted, is not something that is not [sic] up to me.
But at some time, unless the rules change between here
and then, it is up to the Board of Pardons.

Neither McLeod nor his counsel offered any objection either
before or after the sentence was imposed.

McLeod’s trial counsel timely filed a direct appeal, based
solely upon a claim that his sentence was excessive. This
court granted the State’s motion for summary affirmance.! On
September 7, 2006, McLeod filed a verified motion for postcon-
viction relief, asserting that both his trial and appellate counsel
had been ineffective. McLeod also filed motions to proceed in

' State v. McLeod, 258 Neb. xxi (No. S-99-717, Nov. 10, 1999).

forma pauperis and for appointment of counsel. After ordering
the State to respond to the postconviction motion, the district
court denied McLeod postconviction relief without an eviden-
tiary hearing or appointment of counsel. McLeod filed this
timely appeal, which we moved to our docket based on our
statutory authority to regulate the caseloads of the appellate
courts of this state.”

Il. ASSIGNMENTS OF ERROR
McLeod assigns, restated, consolidated, and renumbered, that
the district court erred in (1) ordering the State to respond to
his postconviction motion and allowing the State to present evi-
dence on the issue of whether he was entitled to an evidentiary
hearing, (2) denying him postconviction relief without an evi-
dentiary hearing, and (3) failing to appoint him counsel.

Ill. STANDARD OF REVIEW

HMMM 40 evidentiary hearing on a motion for postconviction
relief is required on an appropriate motion containing factual
allegations which, if proved, constitute an infringement of the
movant’s rights under the Nebraska or federal Constitution.
When such an allegation is made, an evidentiary hearing may
be denied only when the records and files affirmatively show
that the defendant is entitled to no relief.> A defendant request-
ing postconviction relief must establish the basis for such relief,
and the findings of the district court will not be disturbed unless
they are clearly erroneous.*

IV. ANALYSIS

1. Posrconvicrion ProceDURE
Hl MclLeod’s first assignment of error challenges the pro-
cedure utilized by the district court in determining, without an
evidentiary hearing, that he was not entitled to postconviction

2 See Neb. Rev. Stat. § 24-1106(3) (Reissue 1995).

3 State v. Hudson, 270 Neb. 752, 708 N.W.2d 602 (2005); State v. Marshall,
269 Neb. 56, 690 N.W.2d 593 (2005).

* State v. McHenry, 268 Neb. 219, 682 N.W.2d 212 (2004); State v. Dean, 264

Neb. 42, 645 N.W.2d 528 (2002).

572 De

relief. Under the Nebraska Postconviction Act,> the district
court has discretion to adopt reasonable procedures for deter-
mining what the motion and the files and records show, and
whether any substantial issues are raised, before granting a full
evidentiary hearing.© We examine such procedures for abuse of
discretion, which 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.”

On the day after McLeod filed his verified motion for post-
conviction relief requesting an evidentiary hearing and a motion
for appointment of counsel, the district court entered an order
in which it ordered the State to file a written response to the
postconviction motion and deferred ruling on the motion for
appointment of counsel until it had made a determination as to
whether an evidentiary hearing was required. The State filed a
response in which it moved to deny an evidentiary hearing on
the ground that the files and records showed that McLeod was
not entitled to the relief sought in his motion. McLeod filed
an objection to the procedure utilized by the court in requiring
the State to respond to his motion, and he moved to recuse the
district judge.

The district court conducted a hearing on McLeod’s proce-
dural objection and motion to recuse and the State’s motion
to deny an evidentiary hearing on the postconviction claim.
McLeod participated in the hearing by telephone. The court
overruled McLeod’s objection and motion and then received
two exhibits offered by the State: the bill of exceptions and
judge’s minutes from McLeod’s 1999 plea and sentencing pro-
ceedings. At the close of the hearing, the court took the matter
under submission and later entered a written order denying
postconviction relief.

5 Neb. Rev. Stat. §§ 29-3001 to 29-3004 (Reissue 1995).
© State v. Dean, supra note 4.
7 Id.; State v. Hamik, 262 Neb. 761, 635 N.W.2d 123 (2001).

The procedure followed by the district court in this case is
similar to that which we upheld in State v. Dean.* There, we
noted that it was not unusual for a court to conduct a hearing to
determine which files and records it may examine before deter-
mining whether to grant an evidentiary hearing on a motion
for postconviction relief and that the procedure did not deprive
the prisoner of a substantial right. We conclude, as we did in
Dean, that the district court did not abuse its discretion with
respect to procedures it utilized for reviewing files and records
of McLeod’s conviction and sentence.

2. DENIAL OF PosTCONVICTION RELIEF

In his motion for postconviction relief, McLeod alleged that
he was denied rights secured by the 6th and 14th amendments
to the U.S. Constitution and Neb. Const. art. I, § 11, because his
counsel was ineffective in advising him regarding his plea and
in representing him on appeal from his conviction and sentence.
We note that McLeod was represented by the same lawyer at
the time of his plea and on direct appeal, and accordingly, this
postconviction proceeding was his first opportunity to assert
claims of ineffective assistance of counsel.”

HEM In order to establish a right to postconviction relief
based on a claim of ineffective assistance of counsel, the defen-
dant has the burden first to show that counsel’s performance
was deficient; that is, counsel’s performance did not equal that
of a lawyer with ordinary training and skill in criminal law in
the area. Next, the defendant must show that counsel’s deficient
performance prejudiced the defense in his or her case. The two
prongs of this test, deficient performance and prejudice, may
be addressed in either order.'° Normally, a voluntary guilty plea
waives all defenses to a criminal charge. However, in a post-
conviction action brought by a defendant convicted because of
a guilty plea or a plea of no contest, a court will consider an
allegation that the plea was the result of ineffective assistance

8 State v. Dean, supra note 4.
° See State v. Jones, 264 Neb. 671, 650 N.W.2d 798 (2002).
10 State v. Barnes, 272 Neb. 749, 724 N.W.2d 807 (2006).

of counsel.’ When a conviction is based upon a guilty plea
or a plea of no contest, the prejudice requirement for an inef-
fective assistance of counsel claim is satisfied if the defendant
shows a reasonable probability that but for the errors of counsel,
the defendant would have insisted on going to trial rather than
pleading guilty.’

Given that relief was denied without an evidentiary hearing,
we must determine whether McLeod alleged facts which sup-
port his claim that he was denied effective assistance of counsel;
and if so, whether the files and records affirmatively show that
he is entitled to no relief.

(a) Inducement of Plea

McLeod alleged in his postconviction motion that his counsel
was ineffective “for having induce [sic] [McLeod] to accept the
plea agreement by assuring him that ‘more than likely you'll be
released before age forty’, all the while knowing that [McLeod]
would be given a life sentence if he plead [sic] to the charge of
Murder in the First Degree.” McLeod further alleged that his
attorney advised him that if he were to take responsibility for
his actions and show remorse, “‘Someday, they’ll see your case
and take into account your age, nature of the crime and circum-
stances that lead [sic] to this grave tragedy.’” McLeod alleged
that this led him to believe that he would in fact be sentenced
to a term of years and that had he understood the reality of his
situation, he would have refused to plead and insisted upon
a trial.

As reflected in the record of the plea hearing, McLeod spe-
cifically denied that any promises had been made to induce his
plea and that he was not subjected to any threats, pressure, or
coercion. He also expressed his understanding that life impris-
onment was the only sentence which could be imposed by the
court. The statements which McLeod now attributes to his law-
yer do not constitute a basis for postconviction relief. At most,

" See, State v. Barnes, supra note 10; State v. Deckard, 272 Neb. 410, 722
N.W.2d 55 (2006).

1 See State v. Thomas, 262 Neb. 138, 629 N.W.2d 503 (2001).

"3 See, State v. McHenry, supra note 4; State v. Dean, supra note 4.

he has alleged that his lawyer advised him there was a chance of
future clemency in the form of commutation, which was consis-
tent with the court’s statement at sentencing that McLeod would
remain in prison for the rest of his natural life unless and until
his sentence was commuted to a term of years by the Board of
Pardons and that he would not be eligible for parole prior to any
such commutation.

(b) Pending Motions

McLeod alleges that his counsel could not have made an
adequate assessment of the proposed plea agreement without
knowing the ultimate disposition of his pending motions to
suppress a statement and to transfer his case to juvenile court.
But he alleges no facts upon which to assess the merits of the
motions, nor does he allege that the State’s offer of a plea
agreement would have remained open if counsel had insisted
upon disposition of the motions before responding. The record
clearly reflects McLeod’s understanding that his right to obtain
a disposition of the pending motions would be waived if the
court accepted his plea and that he affirmatively chose to accept
the plea agreement with that knowledge.

(c) Factual Basis for Plea

McLeod alleged that his counsel was ineffective in advising
him to enter a plea to a charge for which there was no factual
basis and in “failing to file a motion in arrest of judgment chal-
lenging the plea” as lacking a factual basis. At the sentencing
hearing, the parties stipulated to the submission of a six-page
narrative of the crime, which describes McLeod’s involvement
in the crime, as the factual basis for his plea. In response to
questions from the court, McLeod indicated that he had read the
document, that he did not wish to comment on its content, and
that he still wished to enter a plea of no contest. The document
disclosed that McLeod and two other individuals attempted to
invade a residence in order to steal drugs. McLeod was armed
with a .410 shotgun, and one of his accomplices was armed with
a 12 gauge shotgun. McLeod admitted firing his .410 shotgun
at the individual that was killed. A firearms examiner, however,
noted that the pellets actually removed from the victim likely

576 a

came from the 12 gauge shotgun. Based on this, McLeod asserts
that the factual basis showed he was guilty of aiding and abet-
ting at best, but not guilty of first degree murder.

Hl McLeod alleged that this document established that he
was merely an aider and abettor, and therefore could not have
been found guilty of first degree murder. This claim lacks merit
because the common-law distinction between principal and
aider and abettor has been abolished in Nebraska; a person
who aids, abets, procures, or causes another to commit any
offense may be prosecuted as if he or she were the principal
offender. The record reflects a factual basis for McLeod’s
plea, and his counsel could not be ineffective for failing to
contend otherwise.

(d) Speedy Trial

McLeod alleged that his counsel was ineffective in failing
to preserve his constitutional right to a speedy trial guaranteed
by the Sixth Amendment to the U.S. Constitution. In support
of this claim, he alleged that his plea occurred 11 months after
his arrest and that although his counsel filed certain motions
“which would have tolled this time for the prosecution,” such
motions “did little for [McLeod] and much for the prosecution.”
He alleged no facts to support this conclusion.

Hl Determining whether a defendant’s constitutional right
to a speedy trial has been violated requires a balancing test in
which the courts must approach each case on an ad hoc basis.
This balancing test involves four factors: (1) length of delay,
(2) the reason for the delay, (3) the defendant’s assertion of
the right, and (4) prejudice to the defendant.'® None of these
four factors standing alone is a necessary or sufficient condi-
tion to the finding of a deprivation of the right to speedy trial.
Rather, the factors are related and must be considered together
with other circumstances as may be relevant.'* McLeod has
not alleged facts to establish that he had a colorable claim of

\ State v. Contreras, 268 Neb. 797, 688 N.W.2d 580 (2004); Neb. Rev. Stat.
§ 28-206 (Reissue 1995).

5 State v. Sims, 272 Neb. 811, 725 N.W.2d 175 (2006).

16 Id.

denial of his constitutional right to a speedy trial at the time he
entered his plea. Defense counsel is not ineffective for failing
to raise an argument that has no merit.!’ Moreover, the record
clearly reflects that McLeod knowingly and voluntarily waived
his right to trial when he entered his plea.

(e) Appeal

In his postconviction motion, McLeod alleged that his coun-
sel was ineffective in “filing a frivolous appeal for excessive
sentence, knowing that the only sentence that the court could
impose for the charge of Murder in the First Degree was a
life sentence.” He alleged that counsel should have raised “the
speedy trial issue” and “lack of [a] factual basis for the charge
of Murder in the First Degree” in his appeal.

McLeod alleged no facts concerning his directions to or com-
munications with his attorney regarding an appeal. McLeod’s
direct appeal was clearly without merit, but whether it was
frivolous may depend upon whether McLeod directed his coun-
sel to file it."* But even where defense counsel completely
fails to file an appeal, the question of whether a defendant is
prejudiced thereby often depends upon “evidence that there
were nonfrivolous grounds for appeal or that the defendant in
question promptly expressed a desire to appeal.”"? Here, there is
no allegation that McLeod specifically requested or directed his
attorney to appeal his conviction or sentence. For the reasons
discussed above, McLeod’s claims regarding speedy trial and
lack of factual basis would not have constituted “nonfrivolous
grounds for appeal.” McLeod has not alleged facts to establish
ineffective assistance of appellate counsel, and his conclusory
allegations are refuted by the record.

State v. McHenry, supra note 4.
18 See State v. Trotter, 259 Neb. 212, 609 N.W.2d 33 (2000).

® Roe v. Flores-Ortega, 528 U.S. 470, 485, 120 S. Ct. 1029, 145 L. Ed. 2d
985 (2000) (cited and quoted in State v. Wagner, 271 Neb. 253, 710 N.W.2d
627 (2006)).

578 —

(f) Summary
Based upon our examination of the postconviction motion
and the files and records of the underlying criminal proceeding,
we conclude that the district court did not err in denying post-
conviction relief without conducting an evidentiary hearing.

3. DENIAL OF Motion To Appoint COUNSEL

McLeod asserts that the district court erred in fail-
ing to appoint him counsel so that he could conduct further
discovery on his postconviction motion. Under the Nebraska
Postconviction Act, it is within the discretion of the trial court
as to whether counsel shall be appointed to represent the defen-
dant.2? When the assigned errors in a postconviction petition
before the district court contain no justiciable issues of law or
fact, it is not an abuse of discretion to fail to appoint counsel
for an indigent defendant.” Based upon our conclusion that
McLeod’s postconviction motion and the files and records of
his case do not present any justiciable issue with respect to
postconviction relief, we conclude that the district court did
not abuse its discretion in denying his motion for appointment
of counsel.

V. CONCLUSION
For the reasons discussed, we affirm the judgment of the

district court.
AFFIRMED.

2 State v. Bao, 269 Neb. 127, 690 N.W.2d 618 (2005).
ad,

Donna EGGLESTON, SPECIAL ADMINISTRATOR OF THE LypiA M.
MuLtis EstaTE, APPELLANT AND CROSS-APPELLEE, V.
ArbelTH L. KovacicH, APPELLEE
AND CROSS-APPELLANT.

742. N.W.2d 471

Filed December 7, 2007. No. S-06-684.

=
=

580 —

po
A

Phillip G. Wright and Casey E. Miller, of Wright & Associates,
for appellant.

Jeanette Stull, of Perry, Guthery, Haase & Gessford, P.C.,
L.L.O., for appellee.

Heavican, C.J., Wricut, ConNnoLty, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Mitter-Lerman, J.
I. NATURE OF CASE

Donna Eggleston, as special administrator of the estate
of Lydia M. Mullis, appeals the order of the district court
for Otoe County imposing a constructive trust on one bank
account referred to as “account 547-745” but not on any other
account owned by Mullis at her death. Eggleston asserts that
the court erred in failing to impose a constructive trust on
all of Mullis’ assets. Ardeith L. Kovacich cross-appeals and
asserts that the court erred in imposing a constructive trust on

account 547-745. For reasons that differ from those of the dis-
trict court, we affirm.

Il. STATEMENT OF FACTS

Mullis died in September 2000. She was survived by two
daughters, Kovacich and Eggleston.

In 1999, Mullis met with an attorney to discuss estate plan-
ning. As a result of such planning, Mullis established a revo-
cable trust into which she transferred a farm she owned near
Cook, Nebraska. She also executed a will which provided that
all assets she owned at death would become property of the
trust. The terms of the trust provided that after Mullis’ death,
the trust would be divided equally between Kovacich and.
Eggleston. The trust document named Kovacich as the first
successor trustee and Eggleston as the second successor trustee.
Mullis’ will named Kovacich as the personal representative and
Eggleston as the alternate personal representative in the event
Kovacich was unable or unwilling to serve. At the time Mullis
executed the trust documents and the will, she also executed
a durable power of attorney naming Kovacich as her attorney
in fact.

Shortly after the documents noted above were signed, Mullis
and Kovacich went to the Syracuse, Nebraska, branch of the
First National Bank of Unadilla, now known as Countryside
Bank (hereinafter the Bank), to open an account. The account
was numbered 351-213 by the Bank. The signature card, some-
times referred to as the “contract of deposit,” for account
351-213 named Mullis and Kovacich as owners of the account.
The signature card included a section titled “Ownership of
Account” which designated the account as a “Multiple-Party
Account” and a section titled “Rights at Death” which desig-
nated the account as a “Multiple-Party Account With Right of
Survivorship.” A section of the signature card titled “Agency
(Power of Attorney) Designation” was left blank. The signature
card was signed by both Mullis and Kovacich.

On August 24, 2000, another account, numbered 547-745,
was opened at the Bank. The signature card for account
547-745 named Mullis and Kovacich as owners of the account.
The signature card for account 547-745 included a section

582 be

titled “Ownership of Account” which designated the account
as a “Multiple-Party Account” and was initialed by Kovacich
but not by Mullis. In the section titled “Rights at Death,” the
account was designated as a “Multiple-Party Account With
Right of Survivorship” and was initialed by Kovacich but
not by Mullis. A section of the signature card titled “Agency
(Power of Attorney) Designation” was left blank. The signa-
ture portion of the card for account 547-745 was not signed by
Mullis. Instead, beneath Mullis’ typed name, Kovacich signed
her own name followed by the designation “POA” which the
parties and the district court have assumed without contradic-
tion stands for “power of attorney.”

Mullis died a few weeks after account 547-745 was opened.
The inheritance tax worksheet prepared for her estate reported
various accounts and bonds jointly owned by Mullis and
Kovacich which totaled $148,650.72. Among the accounts were
351-213, which had a value of $13,889.66 at the date of Mullis’
death, and 547-745, which had a value of $42,954.96 at the date
of Mullis’ death. The worksheet also showed that at her death,
Mullis owned a farm valued at $60,000 and personal property
valued at $3,000. The worksheet showed that the jointly owned
accounts and bonds were to be distributed to Kovacich and that
the farm and personal property were to be distributed evenly
between Kovacich and Eggleston.

On October 1, 2003, Eggleston filed a complaint against
Kovacich in district court. Eggleston had been appointed by the
county court of Otoe County to act as special administrator of
the estate. Eggleston alleged two causes of action. The first was
for conversion. Eggleston alleged that Kovacich had used her
position as Mullis’ attorney in fact to convert to her own use
various assets, including accounts 351-213 and 547-745 and the
bonds that were used as the initial deposit for account 547-745.
Eggleston alleged that the bonds had been held in the names of
Mullis and Eggleston. As her second cause of action for imposi-
tion of a constructive trust, Eggleston alleged that the accounts
and bond proceeds were placed in Kovacich’s name under a
constructive trust to be used for the benefit of Mullis during her
lifetime and that at Mullis’ death, such funds were to be divided
equally between Kovacich and Eggleston according to the terms

of the trust. Eggleston sought an accounting of such funds and
an order directing Kovacich to turn the funds over to the estate
for proper distribution.

Following trial, the district court entered an order dated
December 5, 2005. The court concluded that with respect to all
accounts and bonds other than accounts 351-213 and 547-745,
there was no evidence to suggest that Mullis intended any-
thing other than that the accounts and bonds were to belong to
Kovacich upon Mullis’ death.

With respect to account 351-213, the court determined that
the evidence, including testimony of the Bank employee who
assisted in opening the account, indicated that the decision to
designate this account as a joint account with Kovacich was
Mullis’ decision without undue influence by Kovacich. The
court concluded that the evidence failed to show conversion on
the part of Kovacich. The court also concluded that the evidence
did not support a finding that account 351-213 was set up as an
account “for the convenience of” Mullis.

With respect to account 547-745, the court found the evi-
dence to be “more troublesome.” The court in its order found
the following: In the summer of 2000, Mullis was taken to
live with Kovacich in Rock Springs, Wyoming, due to Mullis’
declining health and her need for help in dealing with her
affairs. In August 2000, Mullis returned to Nebraska to move
into a nursing home in Syracuse. Mullis was concerned with
the costs of the nursing home and decided to open a new
account to take care of nursing home expenses and related
finances. On August 24, the same day Mullis moved into the
nursing home, account 547-745 was opened. The signature
card for account 547-745 was not signed by Mullis but was
signed by Kovacich pursuant to the power of attorney. The
funds in the account came from two sources—U.S. bonds and
a Commercial Federal Bank account. The Commercial Federal
Bank account was jointly owned by Mullis and Kovacich and
amounted to $25,248.08. The U.S. bonds that were liquidated
to fund account 547-745 were held in the names of Mullis and
Eggleston. There were also U.S. bonds held in the names of
Mullis and Kovacich, but such bonds were not liquidated to
fund account 547-745. Kovacich testified at trial that account

584 |

547-745 was set up the way it was “[bJecause that’s the proce-
dure as far as being on an account with somebody in case they
[sic] become disabled or something that you can take care of
their [sic] financial things.”

The court concluded in its order that when account 547-745
was set up, it was not Mullis’ intention that Kovacich be entitled
to all of the funds in the account at her death. The court in its
order noted Kovacich’s argument based on statute to the effect
that Mullis’ intention was not relevant because the account was
set up as a multiple-party account with right of survivorship.
Kovacich argued that under current Nebraska statutes, such an
account belongs to the surviving party and that the intention

. of the party who created the account is not relevant. Kovacich
noted that current Neb. Rev. Stat. § 30-2723(a) (Reissue 1995)
provides that “on death of a party sums in deposit in a
imultiple-party account belong to the surviving party or parties.”
Kovacich contrasted the current statute to former Neb. Rev. Stat.
§ 30-2704(a) (Reissue 1989) which provided that sums in a
joint account belonged to the surviving party or parties “unless
there is clear and convincing evidence of a different intention
at the time the account is created.” Kovacich argued at trial and
on appeal that because the current statute omits the language
regarding the decedent’s intention, the Legislature intended to
eliminate consideration of the intention of the person creating
the account. The court rejected Kovacich’s arguments and con-
cluded that under the current statutes, a court would be justified
in receiving extrinsic evidence if it found that the account was
opened solely for the convenience of the party who supplied
the funds and was not intended as a gift or death benefit for the
other party. The court concluded that account 547-745 was set
up as a “convenience account” to take care of Mullis’ financial
needs while she was in the nursing home and was not intended
as a gift or death benefit to Kovacich.

In view of its conclusions, the district court imposed a con-
structive trust on account 547-745 requiring Kovacich to hold
Eggleston’s interest in the account as trustee for the benefit of
Eggleston as beneficiary and to account for all profits Kovacich
received from the account. The court entered judgment in favor
of Kovacich with regard to all accounts and bonds other than

account 547-745, and dismissed Eggleston’s complaint with
regard to such other accounts and bonds. The court reserved the
issue of an accounting with regard to account 547-745.

A hearing on the accounting was held May 8, 2006. In an
order entered May 26, the court noted Kovacich’s argument that
the funds held in the account should be prorated based on the
sources of funds used to establish the account. The two sources
were U.S. bonds owned by Mullis and Eggleston in the amount
of $17,637.44 and a Commercial Federal Bank account owned
by Mullis and Kovacich in the amount of $25,248.08. The court
rejected Kovacich’s argument and determined that Mullis’ inten-
tion was to establish a new account and that the sources lost
their identities when they were liquidated and put into the new
account. The court determined that because account 547-745
was a “convenience account,” the account should have been an
asset of Mullis’ estate. The court determined that the balance of
account 547-745 at the date of Mullis’ death was $42,954.96,
and the court calculated interest of $9,770.70 from the date of
death until the date of the order. The court therefore entered
judgment against Kovacich and ordered her to pay $52,725.66
to Eggleston, as special administrator of the estate, for distribu-
tion from the estate.

Eggleston appeals, and Kovacich cross-appeals.

Ill. ASSIGNMENTS OF ERROR
In her appeal, Eggleston asserts that the district court erred
in failing to impose a constructive trust on all of Mullis’ assets,
including account 351-213 and the other accounts and bonds. In
her cross-appeal, Kovacich asserts that the court erred in impos-
ing a constructive trust on account 547-745.

IV. STANDARDS OF REVIEW

HM An: action to impose a constructive trust sounds in equity.
Anderson v. Bellino, 265 Neb. 577, 658 N.W.2d 645 (2003). In
an appeal of an equitable action, an appellate court tries factual
questions de novo on the record, provided that where credible
evidence is in conflict on a material issue of fact, the appel-
late court considers and may give weight to the fact that the
trial judge heard and observed the witnesses and accepted one

version of the facts rather than another. Ferer v. Aaron Ferer &
Sons Co., 273 Neb. 701, 732 N.W.2d 667 (2007).

V. ANALYSIS

The district court imposed a constructive trust on account
547-745, but did not impose a constructive trust on account
351-213 or any of the other accounts or bonds. In her appeal,
Eggleston asserts that the court erred in failing to impose a
constructive trust on all of the accounts and bonds, including
account 351-213; in her cross-appeal, Kovacich asserts that
the court erred in imposing the constructive trust on account
547-745. For the reasons discussed below, which differ in
some respects from those of the district court, we conclude that
because Eggleston established constructive fraud by virtue of
Kovacich’s use of her power of attorney to designate account
547-745 as a multiple-party account with right of survivorship,
the court did not err in imposing a constructive trust on account
547-745. We further conclude that the district court did not err in
declining to impose a constructive trust on account 351-213 and
the other assets. In reaching these conclusions, we first analyze
the cross-appeal and thereafter consider the appeal.

1. STANDARDS FoR IMposinc ConstRUCTIVE TRUSTS

HB In view of the contentions of the parties, we review the
standards applicable to constructive trusts. A constructive trust
is a relationship, with respect to property, subjecting the person
who holds title to the property to an equitable duty to convey it
to another on the ground that his or her acquisition or retention
of the property would constitute unjust enrichment. Trieweiler
v. Sears, 268 Neb. 952, 689 N.W.2d 807 (2004). Intangible
property and liquid assets such as stocks and bank and invest-
ment accounts may be held subject to a constructive trust. Id.
Regardless of the nature of the property upon which the con-
structive trust is imposed, a party seeking to establish the trust
must prove by clear and convincing evidence that the individual
holding the property obtained title to it by fraud, misrepresenta-
tion, or an abuse of an influential or confidential relationship
and that under the circumstances, such individual should not,
according to the rules of equity and good conscience, hold and
enjoy the property so obtained. Jd.

Applying these standards in the present case, we determine
that if Eggleston established that Kovacich obtained title to the
accounts at issue by some form of actual or constructive fraud,
misrepresentation, or abuse of an influential or confidential
relationship such as her position as Mullis’ attorney in fact,
then a constructive trust would be an appropriate form of equi-
table relief with respect to the accounts at issue.

2. Cross-AppEAL: District Courr Dip Nor Err IN Imposinc
A Constructive Trust on Account 547-745

(a) Cross-Appeal: District Court Erred in Concluding That
Account 547-745 Was a Convenience Account and not a
Multiple-Party Account With Right of Survivorship
and Erred in Considering Extrinsic Evidence
to Determine the Nature of the Account

At issue in this appeal is the proper characterization and treat-
ment of accounts under article 27 of the Nebraska Probate Code
contained in chapter 30 of the Nebraska Revised Statutes. In this
connection, we examine under what circumstances a court may
look to extrinsic evidence to determine the nature of an account.
In the present case, we conclude that because the contract of
deposit for account 547-745 contained provisions substantially
in the form provided in Neb. Rev. Stat. § 30-2719(a) (Reissue
1995), the court should have determined from the face of the
contract of deposit that account 547-745 was a multiple-party
account with right of survivorship. The district court should not
have looked to extrinsic evidence to determine the nature of the
account and erred in concluding that account 547-745 was a
“convenience account.”

Under § 30-2719(a), a “contract of deposit that contains
provisions in substantially the form provided in this subsection
establishes the type of account provided, and the account is
governed by the provisions of sections 30-2716 to 30-2733
applicable to an account of that type.” Section 30-2719(a) con-
tains a sample account form providing for designation of vari-
ous features including ownership (“Single-Party Account” or
“Multiple-Party Account”); rights at death (including, inter alia,
“Right of Survivorship,” “POD (Pay on Death) Designation,”
or single-party account passing at death as part of party’s

588 De

estate); and “Agency (Power of Attorney) Designation” (allow-
ing a party to designate an agent to make account transac-
tions for the party but not have ownership or rights at death
unless otherwise designated). Section 30-2719(b) provides that
a “contract of deposit that does not contain provisions in sub-
stantially the form provided in subsection (a) of this section
is governed by the provisions of sections 30-2716 to 30-2733
applicable to the type of account that most nearly conforms to
the depositor’s intent.”

Hl We read § 30-2719 as providing that extrinsic evidence of
the depositor’s intent as to what type of account was created is
relevant only when the contract of deposit is not in substantially
the form provided in § 30-2719(a). When the contract of deposit
for an account is substantially in such form, the account will be
treated as being the type of account designated on the form; if
the contract of deposit is not in such form, then the depositor’s
intent is relevant to determine the type of account pursuant
to § 30-2719(b).

As noted by Kovacich, prior to the 1993 revisions of the
Nebraska Probate Code, § 30-2704(a) provided that “[s]ums
remaining on deposit at the death of the party to a joint account
belong to the surviving party or parties as against the estate
of the decedent unless there is clear and convincing evidence
of a different intention at the time the account is created.”
(Emphasis supplied.) Kovacich notes that the current statute
omits the exception regarding a different intention. Further,
current § 30-2723 merely states that “on death of a party sums
on deposit in a multiple-party account belong to the surviving
party or parties.”

Under the prior statute, a court could examine extrinsic
evidence to determine whether “the intention at creation of [a
joint] account was other than the intention that all funds belong
to the surviving party or parties to the account.” In re Estate of
Lienemann, 222 Neb. 169, 175, 382 N.W.2d 595, 600 (1986).
Thus, under the former statute, a court could, as the court did in
this case, determine that a joint account, known under the cur-
rent statutes as a “multiple-party account,” was opened solely
as a convenience to allow the secondary owner to make trans-
actions on behalf of the principal owner without there having

been an intention to give the secondary owner rights to the
account at the principal owner’s death.

The current statutes provide a mechanism for creation of an
account wherein an agent may be permitted to write checks, but
the agent would not stand to inherit the funds in the account,
except by virtue of another vehicle for inheritance other than
the form of the account. Under the current statutes, and consis-
tent with the form contained in § 30-2719(a), an account may
be set up as a single-party account with an agency designation.
This structure for an agency account allows the agent to make
account transactions without having an ownership interest or
rights at death. See § 30-2719 and Neb. Rev. Stat. § 30-2720
(Reissue 1995). Under the current statutes, account holders
have the opportunity to set up an account with an agency desig-
nation in order to have the desired features of a “convenience
account.” The purpose of the form provided under § 30-2719(a)
appears to be to make clear account holders’ intentions regard-
ing issues of ownership, rights at death, and agency designation
and, therefore, to make unnecessary an examination of extrinsic
evidence to determine such intentions.

We note further that article 27 of the Nebraska Probate Code
is based on the Uniform Probate Code’s revised article VI. The
comment to Uniform Probate Code § 6-212 (the counterpart of
§ 30-2723) states that the purpose of the drafters was

to permit a court to implement the intentions of parties to
a joint account governed by Section 6-204(b) [the counter-
part of § 30-2719(b)] if it finds that the account was
opened solely for the convenience of a party who supplied
all funds reflected by the account and intended no present
gift or death benefit for the other party.
Unif. Probate Code § 6-212, comment, 8 U.L.A. 441 (1998).
We believe this comment is consistent with our reading above
that intention is relevant only when the contract of deposit
does not substantially follow the form set forth in § 30-2719(a)
and is therefore governed by § 30-2719(b), the latter of which
permits an assessment of “the type of account that most nearly
conforms to the depositor’s intent”? When the contract of
deposit is not in the form outlined in § 30-2719(a), a court may
look to extrinsic evidence to determine whether the intention

590 Le

of the depositor was to set up an account formerly commonly
referred to as a “convenience account” but perhaps more aptly
now referred to as an “agency account.” See §§ 30-2719 and
30-2720. See, also, Introducer’s Statement of Intent, L.B. 250,
Judiciary Committee, 93d Leg., 1st Sess. (Mar. 10, 1993).
However, if the contract of deposit is in the form provided in
§ 30-2719(a), then a court looks only to the contract of deposit
and treats the account as the type of account designated in the
contract of deposit.

The contract of deposit for account 547-745 in the present
case was substantially in the form provided in § 30-2719(a).
The signature card contained provisions regarding ownership,
rights at death, and agency designation. Because the signature
card in account 547-745 was in such form, under § 30-2719(a),
the account was the type indicated on the card and the district
court should not have looked to extrinsic evidence of intent to
determine the type of account. The signature card indicated that
account 547-745 was a multiple-party account with a right of
survivorship. Sections of the card which could have been used to
designate the account as an agency account were left blank.

We conclude that the district court erred in this case when it
looked to extrinsic evidence to determine the nature of account
547-745. The district court further erred when it concluded,
contrary to the designation in the signature card, that account
547-745 was a “convenience account” that at death would pass
as part of Mullis’ estate, rather that a multiple-party account
with right of survivorship. To the extent that the district court
rested its decision to impose a constructive trust based on its
erroneous determination that account 547-745 was a “conven-
ience account,” such reasoning was in error. The district court
erred when it failed to conclude that account 547-745 was a
multiple-party account with right of survivorship.

(b) Cross-Appeal: District Court Did Not Err in Imposing
Constructive Trust on Account 547-745 Because
Eggleston Established Constructive
Fraud by Kovacich

Although the court erred in reasoning that a constructive
trust should be imposed on account 547-745 because it was a

“convenience account,’ we nevertheless conclude that it was
proper to impose a constructive trust because Eggleston estab-
lished constructive fraud with respect to account 547-745. As
noted above, a constructive trust may be imposed when it is
found that property was obtained “by fraud, misrepresenta-
tion, or an abuse of an influential or confidential relationship.”
Trieweiler v. Sears, 268 Neb. 952, 978, 689 N.W.2d 807,
834 (2004).

HE In prior cases, we have noted that fraud may include
constructive fraud and that abuse of an influential or confiden-
tial relationship may include using a power of attorney to make
a gift to oneself. Constructive fraud generally arises from a
breach of duty arising out of a fiduciary or confidential relation-
ship. Crosby v. Luehrs, 266 Neb. 827, 669 N.W.2d 635 (2003).
Constructive fraud is a breach of a legal or equitable duty
which, irrespective of the moral guilt of the fraud-feasor, the law
declares fraudulent because of its tendency to deceive others, to
violate public or private confidence, or to injure public interests.
Id. Constructive fraud is implied by law from the nature of the
transaction itself. The existence or nonexistence of an actual
purpose to defraud does not enter as an essential factor in deter-
mining the question; the law regards the transaction as fraudu-
lent per se. Jd. Neither actual dishonesty of purpose nor intent to
deceive is an essential element of constructive fraud. Id.

In an action in which relief is sought on account
of alleged fraud, the existence of a confidential or fiduciary
relationship, or status of unequal footing, when shown, does
not shift the position of the burden of proving all elements of
the fraud alleged, but nevertheless may be sufficient to allow
fraud to be found to have existed when in the absence of such
a status it could not be so found, and thus to have the effect of
placing the burden of going forward with the evidence upon the
party charged with fraud. Crosby v. Luehrs, supra. In situations
involving an attorney in fact, we have determined that a prima
facie case of constructive fraud is established if the plaintiff
shows that the defendant held the principal’s power of attorney
and that the defendant, using the power of attorney, made a gift
to himself or herself. Id. A fiduciary’s acquisition of a right
of survivorship in property, even absent a present possessory

592 Es

interest, is generally sufficient to establish that a fiduciary has
profited from a transaction. Jd. The burden of going forward
under such circumstances falls upon the defendant to establish
by clear and convincing evidence that the transaction was made
pursuant to power expressly granted in the power of attorney
document and made pursuant to the clear intent of the donor.
The fiduciary bears the burden of proving the fairness of the
transaction. Id.

In the present case, Eggleston established that Kovacich held
Mullis’ power of attorney and that Kovacich, using the power
of attorney, made a gift to herself via account 547-745. As in
Crosby v. Luehrs, supra, Kovacich’s acquisition of a right of
survivorship in account 547-745 was sufficient to establish that
she profited by opening account 547-745 using the power of
attorney. Eggleston therefore established a prima facie case of
constructive fraud.

After Eggleston established a prima facie case, the burden fell
upon Kovacich to establish by clear and convincing evidence
that the designation of account 547-745 as a multiple-party
account with right of survivorship was (1) made pursuant to
power expressly granted in the power of attorney document and
(2) made pursuant to the clear intent of Mullis. With respect to
the first requirement, the power of attorney document executed
by Mullis named Kovacich as attorney in fact and stated that the
attorney in fact had power to, inter alia, “make gifts to any per-
son, including my attorney, if my attorney deems such gifts wise
for tax and/or estate planning purposes, provided, however, that
my attorney shall not make gifts to my attorney’s creditors, my
attorney’s estate, or the creditor’s [sic] of my attorney’s estate.”
Although it is arguable that Kovacich established that she was
authorized to make gifts to herself, we need not resolve this issue
because Kovacich failed to establish that the gift of a right of
survivorship in account 547-745 was made pursuant to the clear
intent of Mullis. To the contrary, at trial, Kovacich testified that
account 547-745 was established “[b]ecause that’s the procedure
as far as being on an account with somebody in case they [sic]
become disabled or something that you can take care of their
{sic] financial things.” Thus, the evidence, including Kovacich’s
own testimony, indicated that Mullis intended the account to be

an agency account in which Kovacich had the power to make
transactions but did not have an ownership interest.

Although extrinsic evidence of Mullis’ intention regarding
account 547-745 was not relevant to the question considered
above regarding the type of account, the evidence is relevant to
determining the existence of constructive fraud. In determining
above that account 547-745 was a multiple-party account with
right of survivorship, extrinsic evidence of intention was not
relevant because the contract of deposit was in substantially the
form provided in § 30-2719(a). However, in connection with
the issue of constructive fraud, the question is not the type of
treatment to be accorded account 547-745; instead, the ques-
tion is whether Kovacich, using her power of attorney, desig-
nated account 547-745 as the type of account Mullis intended
it to be.

Eggleston established a prima facie case of constructive fraud,
and Kovacich failed to establish that Mullis’ clear intent was to
create the account as a multiple-party account with right of
survivorship. Imposing a constructive trust on account 547-745
was a proper remedy for such constructive fraud, and we there-
fore conclude that the district court did not err in imposing a
constructive trust on account 547-745.

3. AppeaL: Districr Courr Dip Nor Err In DECLINING TO IMposE
A Constructive Trust on Account 351-213
AND OTHER ASSETS

In her appeal, Eggleston argues that the court erred in fail-
ing to impose a constructive trust on account 351-213 and the
other accounts and bonds. We conclude that the district court
did not err in determining that account 351-213 and the other
accounts and bonds were designated with right of survivorship
to Kovacich. We further conclude that the district court did
not err in determining that the evidence did not establish that
Kovacich used the power of attorney to open account 351-213
or any other accounts and that therefore, Eggleston has not
established constructive fraud with respect to such accounts.
We therefore conclude that the court did not err when it
declined to impose a constructive trust on account 351-213 and
the other accounts and bonds.

594 a

With respect to account 351-213, the contract of deposit was
substantially in the form set forth in § 30-2719(a). The signature
card indicated that the account was a multiple-party account
owned by Mullis and Kovacich with right of survivorship. The
signature card was signed by both Mullis and Kovacich. The
section in which an agency designation could be made was
left blank. On its face, account 351-213 was a multiple-party
account with right of survivorship. See § 30-2719(a) and (b).
With regard to the remaining accounts and bonds, the evidence
indicates that the accounts and bonds were designated as giv-
ing a right of survivorship to Kovacich and that the related
contracts of deposit were either substantially in the form set
forth in § 30-2719(a) or, if such contracts of deposit were not
in such form, that Eggleston failed to provide evidence pursuant
to § 30-2719(b) that Mullis’ intention was anything other than
that Kovacich should have a right of survivorship. We therefore
determine that account 351-213 and the other accounts and
bonds provided a right of survivorship to Kovacich.

With respect to constructive fraud, we note that unlike the
signature card for account 547-745 which Kovacich signed
for Mullis using the power of attorney, the signature card for
account 351-213 was signed by Mullis herself. Kovacich also
signed as an owner, but she did not use the power of attorney
to sign the card on Mullis’ behalf. There is no indication that
Kovacich opened any of the other accounts or bonds using the
power of attorney. Because Kovacich did not use the power
of attorney to open account 351-213 or the other accounts
and bonds, Eggleston did not establish that Kovacich used
her power of attorney to make a gift to herself with respect to
such accounts. Eggleston therefore did not establish a prima
facie case of constructive fraud with respect to such accounts.
Furthermore, Eggleston did not establish constructive fraud in
any other sense with respect to account 351-213 or the other
accounts and bonds, nor did she establish conversion.

The evidence shows that Kovacich had a right of survivor-
ship with respect to account 351-213 and the other accounts and
bonds, and Eggleston did not establish constructive fraud with
respect to account 351-213 and the other assets. We therefore
conclude that the district court did not err when it declined to

impose a constructive trust on account 351-213 and the other
accounts and bonds.

VI. CONCLUSION
Because Eggleston established constructive fraud with
respect to account 547-745 but failed to establish constructive
fraud with respect to account 351-213 and the other accounts
and bonds, we conclude that the district court did not err in
imposing a constructive trust on account 547-745 but not on
account 351-213 and the other assets. Although our reason-
ing differs from that of the district court, we affirm the district
court’s order.
AFFIRMED.

Corey Brett HEINZE, APPELLANT, V.
TayLor HEINZE, APPELLEE.
742. N.W.2d 465

Filed December 7, 2007. No. S-06-722.

Vincent M. Powers, of Vincent M. Powers & Associates, and
Steven B. Filiman, of Fillman Law Offices, for appellant.

Timothy J. Thalken and Rex A. Rezac, of Fraser Stryker, P.C.,

L.L.O., for appellee.

Heavican, C.J., Wricut, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Waricut, J.
NATURE OF CASE

While riding in an automobile driven by his wife, Corey
Brett Heinze was injured in an accident in Colorado. Corey
and his wife, Taylor Heinze, were residents of York, Nebraska,
and Corey sued Taylor in the York County District Court for
damages as a result of the accident. The court concluded that
Nebraska’s guest statute barred Corey’s action and granted
summary judgment in favor of Taylor. Corey timely appealed.
The issue is whether Nebraska or Colorado law applies to the
accident above described.

SCOPE OF REVIEW
Hl When reviewing questions of law, an appellate court
has an obligation to resolve the questions independently of the
conclusions reached by the trial court. State ex rel. Wagner v.
Amwest Surety Ins. Co., ante p. 110, 738 N.W.2d 805 (2007).

FACTS

In December 2002, Corey and Taylor traveled to Colorado to
visit Taylor’s family. On December 22, Corey rode as a passen-
ger when Taylor drove her mother’s automobile to the Denver
airport to pick up other family members. She hit loose gravel on
the shoulder of an off ramp and lost control of the automobile,
which rolled into a ditch. Corey was ejected, and he sustained
injuries to his head, spine, spleen, and right wrist.

When Corey sued Taylor, he alleged that the laws of Colorado
applied because the accident occurred in the State of Colorado.
Taylor alleged that the action was barred by Nebraska’s guest
statute, Neb. Rev. Stat. § 25-21,237 (Reissue 1995), because
Corey and Taylor were married at the time of the accident. They
were divorced in December 2004.

The district court concluded that Nebraska law applied
because Nebraska had a more significant relationship to the
parties under the guest statute and was the jurisdiction in which
the relationship between the parties was centered. Thus, the
court determined that § 25-21,237 barred Corey’s claim. The

m7 “
district court found that there were no genuine issues of mate-
tial fact and that Taylor was entitled to judgment as a matter of

Jaw. It dismissed the cause with prejudice and taxed the costs
to Corey.

ASSIGNMENTS OF ERROR

Corey assigns the following errors: The district court erred
(1) in applying the law of Nebraska to an accident that occurred
in Colorado; (2) in ignoring Nebraska precedent and applying
the Restatement (Second) of Conflict of Laws in determining
that Colorado law did not apply to the facts of this case; (3) in
applying the Restatement (Second) of Conflict of Laws § 169
(1971); (4) in determining that Nebraska, rather than Colorado,
had more significant contacts with the occurrence and the par-
ties; and (5) in entering summary judgment in favor of Taylor
and dismissing Corey’s complaint.

ANALYSIS

The issue for our determination is whether Nebraska’s guest
statute should be applied to an accident involving Nebraska
residents that occurred in Colorado. The district court concluded
that Nebraska law should be applied and that our guest statute
barred Corey’s recovery.

HMM The first step in a conflict-of-law analysis is to deter-
mine whether there is an actual conflict between the legal rules
of different states. Johnson v. United States Fidelity & Guar.
Co., 269 Neb. 731, 696 N.W.2d 431 (2005). An actual conflict
exists when a legal issue is resolved differently under the law
of two states. Jd. A conflict-of-law issue is presented in this
case because Nebraska has a guest statute, § 25-21,237, and
Colorado has repealed its guest statute, see White v. Hansen,
837 P.2d 1229 (Colo. 1992).

The Nebraska guest statute provides in relevant part:

The owner or operator of a motor vehicle shall not be
liable for any damages to any passenger or person related
to such owner or operator as spouse or within the second
degree of consanguinity or affinity who is riding in such
motor vehicle as a guest or by invitation and not for hire,
unless such damage is caused by (1) the driver of such

|

598 Le

motor vehicle being under the influence of intoxicating
liquor or (2) the gross negligence of the owner or operator
in the operation of such motor vehicle.

§ 25-21,237.

Hl When there are no factual disputes regarding state con-
tacts, conflict-of-law issues present questions of law. Johnson,
supra. When reviewing questions of law, an appellate court
has an obligation to resolve the questions independently of the
conclusions reached by the trial court. State ex rel. Wagner v.
Amwest Surety Ins. Co., ante p. 110, 738 N.W.2d 805 (2007).
In this case, there are no factual disputes. The parties agree that
Corey and Taylor were residents of Nebraska, that the accident
occurred in Colorado, and that the automobile involved was
owned by a Colorado resident and licensed in Colorado.

This court has not specifically determined whether Nebraska’s
guest statute should be applied when a motor vehicle accident
has occurred in another state involving Nebraska residents who
are within the degree of consanguinity set forth in § 25-21,237.
We have, however, considered cases that raised a conflict-of-law
question in other contexts and in which the guest statute was
not implicated.

In Crossley v. Pacific Employers Ins. Co., 198 Neb. 26, 251
N.W.2d 383 (1977), disapproved on other grounds, Johnson,
supra, the passenger (a resident of Nebraska) brought an action
in Nebraska for personal injuries that resulted from an auto-
mobile accident which occurred in Colorado in an automobile
owned and driven by the passenger’s stepson. The passenger
argued that he should be entitled to recover from the Colorado
driver as though the tort liability law of Nebraska applied to
the accident in Colorado and that if he could not do so, then
he should be allowed to recover under the uninsured motorist
coverage of his own automobile insurance policy.

We cited the Restatement (Second) of Conflict of Laws § 146,
comment d. (1971), and stated that “in virtually all instances
where the conduct and the injury occur in the same state, that
state has the dominant interest in regulating that conduct and
in determining whether it is tortious in character, and whether
the interest affected is entitled to legal protection.” Crossley,
198 Neb. at 30, 251 N.W.2d at 386. The basis of the cause in

Crossley was an insurance contract rather than an action in tort.
This court was asked to determine which state’s laws would be
applied to determine insurance coverage.

In another insurance case, the action again arose from a
motor vehicle accident that occurred in Colorado involving a
Nebraska resident. Johnson v. United States Fidelity & Guar.
Co., 269 Neb. 731, 696 N.W.2d 431 (2005). The injured driver
sought additional benefits from his insurer and the insurer
of the car he was driving. In addressing the conflict of law
between Nebraska and Colorado relating to uninsured motorist
benefits, we reaffirmed the holding in Crossley that under the
Restatement, supra, § 146, Colorado’s no-fault law governed the
threshold issue of the tort-feasor’s liability.

The significance of Crossley and Johnson as they are applied
to the case at bar is that this court recognized the application of
§ 146 to resolve conflict of laws involving tort liability.

The Restatement provides:

In an action for a personal injury, the local law of the
state where the injury occurred determines the rights and
liabilities of the parties, unless, with respect to the particu-
lar issue, some other state has a more significant relation-
ship under the principles stated in § 6 to the occurrence
and the parties, in which event the local law of the other
state will be applied.

§ 146 at 430 (emphasis supplied).

Thus, under the Restatement, the law of the site of the injury
is usually applied to determine liability, except where another
state has a more significant relationship on a particular issue.
The fact that Nebraska has a guest statute provides this state
with a more significant relationship to the parties when they are
residents of Nebraska.

This court applied the Restatement’s more-significant-
relationship test to a tort case in Malena v. Marriott International,
264 Neb. 759, 651 N.W.2d 850 (2002). A hotel patron from
Nebraska was stuck by a needle in a California hotel room. An
action was brought in Nebraska by the Nebraska resident. The
defendant alleged the case was governed by the substantive law
of California. The action centered around parasitic damages for
fear of contracting a disease. The trial court determined that

600 a

any damage attributable to the fear of contracting a disease was
controlled by Nebraska law.

We stated: “In choice-of-law determinations for personal
injury claims, we have adopted Restatement (Second) of
Conflict of Laws § 146 (1971).” Malena, 264 Neb. at 766, 651
N.W.2d at 856. We noted that § 146 is the starting point for
any choice-of-law analysis and that under § 146, the presump-
tion is that the local law of the state where the injury occurred
determines the rights and liabilities of the parties unless some
other state has a more significant relationship to the parties
and the occurrence with respect to a particular issue. We con-
cluded that in that case, California had the more significant
relationship to the parties and the occurrence because the injury
occurred there, the conduct causing the injury occurred there,
the defendant’s place of business was there, and the relationship
between the parties was there. The only contact with Nebraska
was the domicile of the hotel patron. Again, the guest statute
was not implicated.

The Restatement (Second) of Conflict of Laws § 145 (1971)
sets forth the “‘most significant relationship’” test used for
determining the applicable law for specific tort claim issues. See
Malena, 264 Neb. at 767, 651 N.W.2d at 856.

Section 145 at 414 states:

(1) The rights and liabilities of the parties with respect
to an issue in tort are determined by the local law of the
state which, with respect to that issue, has the most signifi-
cant relationship to the occurrence and the parties under
the principles stated in § 6.

(2) Contacts to be taken into account in applying the
principles of § 6 to determine the law applicable to an
issue include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the
injury occurred,

(c) the domicil[e], residence, nationality, place of incorpo-
ration and place of business of the parties, and

(d) the place where the relationship, if any, between the
parties is centered.

These contacts are to be evaluated according to their
relative importance with respect to the particular issue.

The Restatement notes that in cases involving a guest passen-
get, the local law of the common domicile may be applied:

[T]he circumstances under which a guest passenger has
a right of action against the driver of an automobile for
injuries suffered as a result of the latter’s negligence
may be determined by the local law of their common
domicilfe], if at least this is the state from which they
departed on their trip and that to which they intended to
return, rather than by the local law of the state where the
injury occurred.
§ 145, comment d. at 418.

Following this approach, the record supports a conclusion
that Nebraska law should apply in this case. Corey and Taylor
were both residents of Nebraska at the time of the accident.
Their trip to Colorado began in Nebraska and was intended to
end in Nebraska. They lived and worked in Nebraska, and their
relationship was centered in Nebraska at the time. The parties
were married at the time of the accident. Thus, this state’s law
should govern whether Corey may recover for his injuries.

Although a guest statute is distinct from a statute provid-
ing immunity for family members, the Restatement (Second)
of Conflict of Laws § 169 at 506 (1971) provides additional
guidance: “(1) The law selected by application of the rule of
§ 145 determines whether one member of a family is immune
from tort liability to another member of the family. (2) The
applicable law will usually be the local law of the state of the
parties’ domicilf{e].”

The Restatement provides a rationale for cases involving
family members:

b. Rationale. An immunity from tort liability is com-
monly possessed in varying circumstances by one spouse
against the other spouse and by a parent against a minor
child. Reasons frequently advanced to explain the existence
of such immunity are the common law doctrine of the legal
identity of the spouses, the desire to foster and preserve
marital harmony and parental discipline, and the desire to
protect insurance companies from false claims. Whatever

602 Le

the true explanation, the state of the-parties’ domicil[e] will
almost always be the state of dominant interest, and, if so,
its local law should be applied to determine whether there
is immunity in the particular case.

§ 169, comment b. at 506-07.

Section 169 suggests that in cases involving family members,
the state where the parties are domiciled has a more significant
relationship to the action and will govern over the law of the
state where the tort occurred. We agree.

The. contacts identified in the Restatement (Second) of
Conflict of Laws § 145 (1971) include the place where the
injury occurred, the place where the conduct causing the injury
occurred, the domicile or residence of the parties, and the place
where the relationship, if any, between the parties is centered.
Section 145 advises that the contacts are to be evaluated accord-
ing to their relative importance. It does not suggest that each
contact should be weighed evenly.

The district court found that Nebraska law applied because
this state had a more significant relationship to the parties under
the guest statute and Nebraska was the jurisdiction in which the
relationship between the parties was centered. The court con-
cluded that under § 25-21,237, Corey’s claim was barred. By
enacting the guest statute, the Legislature evidenced a concern
about the possibility of fraud and collusion between related
parties involved in tort actions. See Le v, Lautrup, 271 Neb.
931, 716 N.W.2d 713 (2006). The law of the state where that
relationship is centered should govern the rights of the parties
in this case.

At the time of the accident resulting in Corey’s injuries, Corey
and Taylor were married and living in York, Nebraska. Their
common domicile was Nebraska at the time the lawsuit was
filed. The trip to Colorado began in Nebraska and was intended
to end in Nebraska. The relationship of the parties was centered
in Nebraska, and this state has the most significant relationship
to the parties. Nebraska’s guest statute should apply.

Hl The district court sustained Taylor’s motion for summary
judgment. Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose no genuine issue as
to any material fact or as to the ultimate inferences that may be

drawn from those facts and that the moving party is entitled to
judgment as a matter of law. Papillion Rural Fire Prot. Dist. v.
City of Bellevue, ante p. 214, 739 N.W.2d 162 (2007). The lower
court was correct in concluding that Corey’s negligence claim
against Taylor, his wife, was barred by the guest statute.

CONCLUSION

The judgment of the district court is affirmed.

AFFIRMED.

Gerrarb, J., concurring.

I continue to believe that the Nebraska guest statute, Neb.
Rev. Stat. § 25-21,237 (Reissue 1995), violates the equal pro-
tection clause of the Nebraska Constitution. See Le v. Lautrup,
271 Neb, 931, 716 N.W.2d 713 (2006) (Gerrard, J., dissenting).
But there has not been a constitutional question raised in this
case, and I agree with the majority’s analysis of the questions
presented. On that basis, I concur in the opinion of the court.

McCormack, J., joins in this concurrence.

Suewa K. BELLER, APPELLANT, Vv.
Deppié CROW ET AL., APPELLEES.
742 N.W.2d 230

Filed December 7, 2007. No. S-06-872.

604 Es

Gary D. McGuane for appellant.

Patrick M. Flood and Emily L. Jung, of Hotz, Weaver, Flood,
Breitkreutz & Grant, for appellees Mount Michael Benedictine
High School and Thomas Ridder.

HEavicaN, C.J., WRIGHT, CoNNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Connox.y, J.

Plaintiff Sheila K. Beller appealed the district court’s disqualifi-
cation of her counsel, Gary D. McGuane. Upon a motion filed by
two of the defendants, the court disqualified McGuane because
he had firsthand knowledge about the facts and issues of the
lawsuit, making his testimony at trial “essentially inevitable.”

The main issue is whether the district court correctly disquali-
fied McGuane, because of his personal relationship with Beller
and his firsthand knowledge of the relevant issues. Specifically,
we must determine whether McGuane is likely to be a neces-
sary witness at trial to justify his disqualification under Neb. Ct.
R. of Prof. Cond. 3.7 (rev. 2005). Because McGuane is likely
to be a necessary witness from his active participation in the
events leading to the filing of Beller’s complaint, we affirm.

BACKGROUND
Beller sued Debbie Crow, Alan Crow, Mount Michael
Benedictine High School, Thomas Ridder, Cindi Backes, Steve
Backes, and Theresa Gregg. Beller’s complaint consisted of
three counts: defamation, intentional infliction of emotional
distress, and alienation of affection. Beller’s complaint includes

| -
allegations that the defendants falsely and maliciously stated
that she was an abusive mother, that she neglected her minor
children, and that she was mentally unfit to care for her minor
children. She also claims that the defendants conspired to
destroy her relationship with her children and to remove them
from her custody, intentionally inflicting emotional distress on
her. Beller alleges that the defendants induced one of her sons
to run away from home, threatened to have her arrested, and
sought to prevent her from speaking to her children. The court
dismissed Beller’s claims for alienation of affection, and those
claims are not part of this appeal.

Beller’s counsel, McGuane, is an Illinois attorney who was
granted leave to appear pro hac vice. Three months after Beller
filed her complaint, Mount Michael Benedictine High School
and Thomas Ridder (collectively Mount Michael) moved to
disqualify McGuane. In its motion, Mount Michael argued
that McGuane “will likely be a necessary fact witness pur-
suant to Nebraska Rules of Professional Conduct Rule 3.7.”
Mount Michael asserted that McGuane was “privy to interac-
tions [Beller] had with many of the co-Defendants” and that
“McGuane is believed to possess factual information pertaining
to [Beller’s] alleged emotional distress and alleged damage to
reputation.” The court deferred the motion and granted Mount
Michael leave to submit McGuane’s deposition.

At his deposition, McGuane testified that he had been repre-
senting Beller for about 2% years. He met Beller in an Internet
“chat room,” where she first asked him a question about her
desire to go to college and maybe law school. He began giving
her legal advice when she asked about divorces and annulments
in the Catholic church. Although the record is not entirely clear,
it appears McGuane and Beller developed a friendship and
ultimately a close personal relationship. Attached to the deposi-
tion transcript is an exhibit that includes a Christmas card with
affectionate comments that McGuane sent Beller in 2003.

Mount Michael asked McGuane whether he had witnessed
any of the defamation or intentional infliction of emotional
distress claims. In response, McGuane stated he witnessed an
argument in February 2005 between Beller and defendant Gregg
at Beller’s home when Gregg tried to stop Beller from leaving

606 be

Omaha with her sons, who were present. McGuane explained
that he “observed [Gregg] causing [Beller] emotional distress”
and that the event “brought [Beller] almost to hysteria.”

McGuane also described his involvement in the incident with
Gregg. When Gregg refused to leave upon Beller’s request,
McGuane told Gregg to leave. When Gregg refused to move
from behind Beller’s car, McGuane let Beller take his car so
she could leave the scene. When Gregg tried to follow Beller
down the street, McGuane stood behind Gregg’s car to prevent
her from leaving the driveway.

McGuane also testified that he was present in April 2005
when defendant Ridder, Mount Michael Benedictine High
School’s principal, refused Beller permission to see her son at
the high school. McGuane had accompanied Beller to the school
so she could see her son. McGuane initially stayed in the car
while Beller went into the building. At some point, he called
the police to help Beller in gaining custody of her son, and he
entered the school once the police arrived. McGuane agreed that
the event with Ridder was relevant to Beller’s intentional inflic-
tion of emotional distress and defamation claims.

McGuane was also present for several telephone calls between
Beller and defendant Debbie Crow, but he was only able to
hear Beller’s end of the conversations. When asked whether
these conversations formed any basis of Beller’s complaint,
McGuane stated that he assumed the telephone calls contributed
to Beller’s stress.

McGuane also acknowledged that he had a chance to observe
Beller’s emotional state before January 2005. He believes she
has suffered emotional distress since then. He has seen her
upset and depressed. According to McGuane, her sons and
“everyone else near her” have observed Beller experience emo-
tional distress. When asked whether he had caused Beller any
emotional distress, McGuane responded, “I believe I have made
it easier for her, actually.”

After reviewing the deposition transcript, the court entered
an order disqualifying McGuane as “mandated under Rule 3.7
of the Nebraska Rules of Professional Conduct.” The court
noted that Beller had no intent to call McGuane as a fact wit-
ness at trial. But the court also explained that “the Defendants

Le “
indicated that McGuane’s knowledge of the events at issue in
this case make his testimony at trial essentially inevitable, if
only for credibility purposes.” The court further provided that
“elven if . .. McGuane were not to testify at trial, it would not
be feasible for the trier of fact to separate out his participation
in the trial as an advocate, as opposed to a fact witness giving
evidence in the course of his representation.” Beller appealed
McGuane’s disqualification.

: ASSIGNMENTS OF ERROR

Beller assigns, restated, that the court erred in disqualifying
McGuane because (1) Mount Michael failed to offer evidence
sufficient to establish that McGuane would be a necessary wit-
ness at trial and (2) the disqualification would work a substantial
hardship on her.

STANDARD OF REVIEW
Hi In an appeal from an order disqualifying counsel, we
review the trial court’s factual findings for clear error and ulti-
mately make our disqualification decision independent of the
trial court’s ruling.’

ANALYSIS
In 2005, the Nebraska Rules of Professional Conduct replaced
the Nebraska Code of Professional Responsibility. The Code
of Professional Responsibility remains effective for con-
duct occurring before September 1, 2005. Here, the relevant
conduct—McGuane’s testifying at trial—did not occur before
September 1, 2005, and, therefore, the Rules of Professional
Conduct apply.
Rule 3.7 provides in relevant part:
(a) A lawyer shall not act as advocate at a trial in which
the lawyer is likely to be a necessary witness unless:
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal
services rendered in the case; or
(3) disqualification of the lawyer would work substantial
hardship on the client.

? Mutual Group U.S. v. Higgins, 259 Neb. 616, 611 N.W.2d 404 (2000).

608 be

Although we have applied a predecessor to rule 3.7 under
the Code of Professional Responsibility,” this is our first case
addressing rule 3.7.

The official comments to rule 3.7 describe the policies
underlying the witness-advocate rule. Comment 1 explains that
“[c]ombining the roles of advocate and witness can prejudice
the tribunal and the opposing party and can also involve a
conflict of interest between the lawyer and client.” Comment 2
provides in part:

The opposing party has proper objection where the com-
bination of roles may prejudice that party’s rights in the
litigation. A witness is required to testify on the basis of
personal knowledge, while an advocate is expected to
explain and comment on evidence given by others. It may
not be clear whether a statement by an advocate-witness
should be taken as proof or as an analysis of the proof.

Hl Additional considerations are involved when a party
seeks to call an opposing attorney and thereby disqualify that
attorney. There are times when a court must disqualify counsel
because an adverse party intends to call counsel as a necessary
witness. But we recognize that a party may move to disqualify
opposing counsel for mere tactical or strategic reasons.’ Clearly,
such practice would conflict with the opposing litigant’s right to
counsel of its choice.* Therefore, the court must strike a balance
“between the potential for abuse and those instances where the
attorney’s testimony may be truly necessary to the opposing
party’s case.”>

McGuans Is “LIKELY TO BE A NECESSARY WITNESS”
The general rule in rule 3.7 states that “[a] lawyer shall not
act as advocate at a trial in which the lawyer is likely to be a

? See, Mutual Group U.S. v. Higgins, supra note 1; State ex rel. Line v. Rouse,
241 Neb. 784, 491 N.W.2d 320 (1992).

3 See, Security General Life Ins. v. Superior Court, 149 Ariz. 332, 718 P.2d
985 (1986); Smithson v. U.S. Fidelity & Guar. Co., 186 W. Va. 195, 411
S.E.2d 850 (1991),

4 See Security General Life Ins. v. Superior Court, supra note 3.

5 See Smithson v. U.S. Fidelity & Guar. Co., supra note 3, 186 W. Va. at 201,
411 S.E.2d at 856.

Le .
necessary witness ....” Beller contends that the court erred in
disqualifying McGuane because Mount Michael failed to estab-
lish that McGuane would be a necessary witness.

HM Mount Michael, as the party moving to disqualify oppos-
ing counsel, bears the burden of establishing that McGuane’s
testimony will be necessary.© A court cannot order disqualifi-
cation simply upon the moving party’s representation that the
lawyer it seeks to disqualify is a necessary witness; the key is
the evidence showing that the lawyer is a necessary witness.’

HI A party seeking to call opposing counsel can prove that
counsel is a necessary witness by showing that (1) the proposed
testimony is material and relevant to the determination of the
issues being litigated and (2) the evidence is unobtainable else-
where.* Here, Mount Michael has met both prongs.

First, McGuane’s proposed testimony is material and rele-
vant to the issues being litigated. At issue are the defendants’
alleged tortious acts and Beller’s resulting emotional distress.
Mount Michael has shown that not only was McGuane present
for events that help form the basis of Beller’s complaint, but he
also had the opportunity to observe how the defendants’ alleged
actions affected Beller’s emotional state. McGuane’s testimony
would be material and relevant for determining the claims
alleged in Beller’s complaint. Therefore, Mount Michael has
met the first prong.

Next, Mount Michael cannot obtain McGuane’s proposed
testimony elsewhere. McGuane witnessed relevant interactions
between Beller and the defendants. He also observed Beller’s
emotional state during relevant periods. We recognize that he
was not the only witness to these events: Beller’s sons observed
the altercation with Gregg; police officers were present at the
school during Beller’s disagreement with Ridder; and, accord-
ing to McGuane, Beller’s sons and “everyone else near her” has
witnessed her emotional distress. Nevertheless, we determine

6 See, McKenzie v. City of Omaha, 12 Neb. App. 109, 668 N.W.2d 264 (2003);
Eisenstadt v. Eisenstadt, 282 A.D.2d 570, 723 N.Y.S.2d 395 (2001).

7 See McKenzie v. City of Omaha, supra note 6.
8 See Security General Life Ins. v. Superior Court, supra note 3.

610 es

that these other witnesses are unable to provide the same evi-
dence McGuane could provide.

Significant to our decision is McGuane’s active participation
in relevant altercations between the parties. During the argument
between Beller and Gregg, McGuane asked Gregg to leave and
later blocked Gregg’s car so she could not leave the driveway
to follow Beller. When Ridder refused Beller permission to
see her son, McGuane involved himself by calling the police.
These incidents are relevant to the claims in Beller’s complaint.
Because of McGuane’s active participation and his apparent
close personal relationship with Beller, McGuane had a unique
perspective of the operational facts. Other witnesses cannot
duplicate this perspective. Therefore, Mount Michael has met
the second prong.

Because Mount Michael has met both prongs of the above
test, it has proved that McGuane is likely to be a necessary wit-
ness. Thus, the general rule in rule 3.7 provides that he should
not act as Beller’s advocate at trial.

McGuane’s Disqua.iFicaTion Witt Nor Work
SuBSTANTIAL HARDSHIP ON BELLER

Having decided that the general rule in rule 3.7 applies,
we must consider whether any of the three exceptions to the
general rule preclude McGuane’s disqualification. The first
two exceptions do not apply. The first exception applies when
“the testimony relates to an uncontested issue,” and the second
exception applies when “the testimony relates to the nature and
value of legal services rendered in the case.”® McGuane’s testi-
mony would relate to the defendants’ actions and their effect on
Beller’s emotional state—two contested issues unrelated to the
nature and value of McGuane’s legal services. Thus, we need
only consider the third exception, which applies when “dis-
qualification of the lawyer would work substantial hardship on
the client.”!°

Beller contends that the third exception applies because
McGuane’s disqualification would work a substantial hardship

° Rule 3.7(a)(1) and (2).
1 Rule 3.7(a)(3).

on her. Beller argues that McGuane’s knowledge of the case is
extensive. She asserts that the “sheer number of defendants, the
long standing series of conduct, [and] the various legal proceed-
ings that have been involved as a result, would all have to be
learned by a new attorney.”" She also states that although she
has local counsel, that counsel has only participated to the extent
necessary for McGuane—her “primary counsel”—to appear pro
hac vice.

Comment 4 to rule 3.7 recognizes that even when there is
a risk of prejudice to the opposing party, “due regard must be
given to the effect of disqualification on the lawyer’s client.”
We determine that the effects on Beller are not significant
enough to constitute “substantial hardship.” Therefore, we agree
with Mount Michael’s contention that McGuane’s disqualifica-
tion would not work a substantial hardship on Beller.

Hl As noted in comment 4 to rule 3.7, “that one or both
parties could reasonably foresee that the lawyer would prob-
ably be a witness” is relevant to whether the client will suffer
substantial hardship. Beller knew before filing her complaint
that McGuane had been personally involved in matters relevant
to her case. Therefore, she should have reasonably foreseen that
McGuane would probably be a witness at trial.

Also relevant is that Beller has alternative counsel. Beller
argues that a new attorney would have to learn the facts sur-
rounding the case. We note, however, that Beller has had local
counsel since she filed her complaint. Local counsel appeared
for Beller at the hearings on Mount Michael’s motion to dis-
qualify. He also appeared for her at McGuane’s deposition.
Because of his involvement to this point, he should be familiar
with this case’s background.

We note that other factors may be relevant when determining
whether a disqualification will work a substantial hardship on
the lawyer’s client. Here, however, we determine that these two
factors—the foreseeability of McGuane’s being a witness and
the presence of alternative counsel—establish that McGuane’s
disqualification would not work a substantial hardship on Beller.

11 Brief for appellant at 9.
12 Id. at 10.

612 be

We conclude that the third exception in rule 3.7 does not apply
under the facts of this case.

CONCLUSION

We conclude that the district court did not err in disquali-
fying McGuane. Because of his unique perspective on the
operational facts, McGuane is likely to be a necessary witness
at trial. None of the exceptions in rule 3.7 operate to prevent
his disqualification. We affirm the court’s disqualification of

McGuane under rule 3.7.
AFFIRMED.

BELLE TERRACE, APPELLEE, V. STATE OF NEBRASKA,
DEPARTMENT OF HEALTH AND HUMAN SERVICES
FINANCE AND SUPPORT, APPELLANT.

742. N.W.2d 237

Filed December 7, 2007. No. S-06-876.

Jon Bruning, Attorney General, John L. Jelkin, and, on brief,
Douglas D. Dexter for appellant.

Elise Meerkatz and Abbie J. Widger, of Johnson, Flodman,
Guenzel & Widger, for appellee.

Heavican, C.J., Wricut, CoNNoLty, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Wricut, J.

NATURE OF CASE

This appeal arises out of a dispute between Belle Terrace
and the Department of Health and Human Services Finance and
Support (Department) as to what expenses should be considered
by the Department in setting the Medicaid reimbursement rate
for Belle Terrace. At issue is the cost basis of buildings pur-
chased in 2000.

In June 2003, Belle Terrace submitted a cost report to the
Department, claiming the cost basis for its buildings should be
the cost of the buildings when they were purchased in 2000. The
Department adjusted Belle Terrace’s cost basis and requested.
that Belle Terrace report the 1972 cost of the buildings, which
the Department would use to calculate the basis for deprecia-
tion. Belle Terrace appealed the audit adjustments to the director
of the Department, and the director approved the adjustments.
Belle Terrace appealed to the district court, arguing the audit
adjustments were in error. The district court reversed the order
of the director, and the Department appeals.

SCOPE OF REVIEW

HUA judgment or final order rendered by a district court in
a judicial review pursuant to the Administrative Procedure Act
may be reversed, vacated, or modified by an appellate court for
errors appearing on the record. When reviewing an order of a
district court under the Administrative Procedure Act for errors
appearing on the record, the inquiry is whether the decision
conforms to the law, is supported by competent evidence, and
is neither arbitrary, capricious, nor unreasonable. Chase 3000,
Inc. v. Nebraska Pub. Serv. Comm., 273 Neb. 133, 728 N.W.2d
560 (2007); Wilson v. Nebraska Dept. of Health & Human
Servs., 272 Neb. 131, 718 N.W.2d 544 (2006); Zach v. Eacker,
271 Neb. 868, 716 N.W.2d 437 (2006); Mortgage Elec. Reg.

Sys. v. Nebraska Dept. of Banking, 270 Neb. 529, 704 N.W.2d
784 (2005).

FACTS

Belle Holdings, Inc., doing business as Belle Terrace, is a
skilled nursing facility located in Tecumseh, Nebraska. It was
constructed in 1972 by the Lynn-Shuey-Schutz Joint Venture,
which consisted of Gene Lynn, Keith Shuey, and John and
Virginia Schutz. The Lynn-Shuey-Schutz Joint Venture owned
the buildings and the real estate. Later, Lynn acquired the
Schutzes’ interest, giving Lynn a two-thirds interest and Shuey a
one-third interest in the Lynn-Shuey Joint Venture.

Belle Holdings, which consisted of David Fleisner, Robert
Shambora, and Sharon Colling, subsequently purchased the
business operations and the lease of the land and buildings from
an entity that had operated the nursing facility and had leased
the land and buildings from the Lynn-Shuey Joint Venture.

In 2000, Belle Investments, L.L.C., which was owned by
Fleisner, Shambora, Colling, and Shuey, purchased the land
and buildings from the Lynn-Shuey Joint Venture. The total
purchase price was $1,375,406.50. Belle Investments paid Lynn
$916,937.67 and Shuey $458,468.83.

On May 1, 2002, Belle Holdings purchased the land and
buildings from Belle Investments and, therefore, owned all the
assets of the nursing facility. This was the first time in the nurs-
ing facility’s history that the entity operating the facility and
being reimbursed by Medicare and Medicaid also owned the
land and buildings.

On its June 30, 2003, cost report, Belle Terrace listed the
land and buildings on its depreciation schedule and included the
interest payments and other costs associated with the Housing
and Urban Development loan it used to purchase the nursing
facility. Belle Terrace reported an adjusted land cost of $36,400
and an adjusted nursing home cost of $950,422. The Department
disallowed the depreciation figures and asked Belle Terrace to
provide information relating to the original cost of the build-
ings. When Belle Terrace failed to provide the requested infor-
mation, the Department disallowed all depreciation expenses in
Belle Terrace’s cost report. It also disallowed the expense for

interest on the loan for the purchase of the land and buildings,
the mortgage insurance protection required by the loan, and the
amortization bond expense. The Department found that these
were not allowable reimbursement costs based on the adjust-
ment to the depreciation expense.

Belle Terrace appealed the adjustments, and a hearing was
held in front of the director of the Department. The director
found that the action of the Department in making audit adjust-
ments to Belle Terrace’s June 30, 2003, cost report was proper.
It therefore affirmed the audit adjustments.

Pursuant to the Administrative Procedure Act, Neb. Rev. Stat.
§ 84-901 et seq. (Reissue 1999 & Cum. Supp. 2004), Belle
Terrace appealed to the district court for Lancaster County.
The issues presented to the district court were (1) whether the
director erred in affirming the audit adjustments that disallowed
Belle Terrace’s expenses and (2) whether the director erred in
applying the “related party rule” in order to disallow deprecia-
tion and interest expenses. The related party rule protects the
Department from paying artificially inflated costs that may be
generated from less than arm’s-length bargaining when a facil-
ity is purchased from an organization related to the purchaser by
common ownership or control.

The district court determined that the director erred in affirm-
ing the adjustments to Belle Terrace’s expenses and erred in
applying the related party rule in order to disallow the expenses
used to calculate Belle Terrace’s Medicaid reimbursement rate.
It ordered the matter remanded to the Department with direc-
tions to allow these expenses as submitted by Belle Terrace
on its June 30, 2003, cost report and to recalculate the nurs-
ing facility’s Medicaid reimbursement rate accordingly. The
Department appeals from the district court’s order.

ASSIGNMENTS OF ERROR
The Department assigns, restated and consolidated, that the
district court erred in finding that its audit adjustments were
in error.

ANALYSIS
The central issue in this case is the meaning of the term “in
existence” as it was used in 471 Neb. Admin. Code, ch. 12,

616 Es

§ 011.06H (1992). The resolution of this issue will determine
whether the 1972 cost or the 2000 cost of Belle Terrace’s build-
ings should be used as the cost basis to determine depreciation
and, in turn, other expenses.

The Department calculated Medicaid reimbursement payment
rates for nursing facilities based on required annual cost reports
submitted by the facilities and audited by the Department. See
471 Neb. Admin. Code, ch. 12, § 011.08B (2002). The Medicaid
reimbursement rates were based on each facility’s allowable
costs incurred and documented in the cost report. See 471 Neb.
Admin. Code, ch. 12, § 011.08D (2002). The Department then
determined the facility-specific prospective per diem rate sub-
ject to certain limitation provisions.

At all times relevant to this case, § 011.06H provided that the
fixed cost basis for facilities purchased as an ongoing operation
was the lesser of the following:

1. The acquisition cost of the asset to the new owner;
2. The acquisition cost which is approved by the
[Department] Certificate of Need process; or
3. For facilities purchased as an ongoing operation on or
after December 1, 1984, the allowable cost of the asset to
the owner of record as of December 1, 1984, or for assets
not in existence as of December 1, 1984, the first owner
of record thereafter.
(Emphasis supplied.) This section of the Nebraska Administrative
Code used language similar to a federal Medicare regulation.
See Medicare’s “Provider Reimbursement Manual,” part I,
§ 104.10(C). The federal Medicare regulations on depreciation
define an asset “not in existence” as “any asset that physically
existed, but was not owned by a hospital or [skilled nursing
facility] participating in the Medicare program as of July 18,
1984.” § 104.10(C)(1). The Nebraska Administrative Code did
not define. the term “in existence” but specifically stated that
the Nebraska Administrative Code “replaces Medicare regula-
tions on depreciation in their entirety.” 471 Neb. Admin. Code,
ch. 12, § 011.09 (2002).

The Department maintains that although the Nebraska
Administrative Code employs virtually the same language as
the federal Medicare regulation, Nebraska has not adopted the

federal Medicare definition of “in existence.” The Department
claims that “in existence” has a plain and ordinary meaning—
physical existence—and that the term should be afforded
such meaning. The Department further claims that the federal
Medicare definition of “in existence” found in the depreciation
section of the Medicare regulations does not apply because the
Nebraska Administrative Code “replaces Medicare regulations
on depreciation in their entirety,” except for a small exception
not applicable hereto. See § 011.09. The Department argues
that because the Belle Terrace buildings physically existed
on December 1, 1984, “the allowable cost of the asset to the
owner of record” as of that date should have been used to cal-
culate depreciation for purposes of Medicaid reimbursement.
See § 011.06H.

Belle Terrace relies on the federal Medicare definition in
arriving at its depreciation figures. Its position is that although
the buildings physically existed, the buildings were not “in
existence” for Medicaid purposes until they were owned by a
skilled nursing facility participating in the Medicaid program,
ie., when Belle Holdings purchased the property and brought
the property and operations under one ownership umbrella.
Belle Terrace argues that the federal Medicare definition of
“in existence” should be used because (1) the term “in exis-
tence” is ambiguous, (2) the term “in existence” has a peculiar
and appropriate meaning in the reimbursement industry, and
(3) federal authorities have not sanctioned the Department’s
definition of “in existence” because the Department failed to
provide the required notice.

The district court found that the Department’s regulations
had created an ambiguity between state and federal law. The
court stated that Nebraska had adopted into its administrative
code language similar to that used in a federal Medicare regu-
lation but that the Department was interpreting the term differ-
ently. The court noted that Nebraska had not adopted the federal
Medicare definition of “in existence,” yet no alternative defini-
tion was provided. Thus, according to the court, “Medicaid
providers are left to guess whether the term ‘in existence’
should be afforded the meaning provided by federal regulations
or the different definition argued for by the [Department].” The

618 Le

court further found that the federal Medicare definition of “in
existence” was commonly used in the Medicaid industry and
that Belle Terrace was reasonable in relying on that defini-
tion in preparing its annual cost report. The court stated that
if the Department “had intended to use a different meaning, it
should have specifically redefined the term in order to avoid
confusion.” The court concluded that Belle Terrace should be
reimbursed for depreciation of its nursing facility based on the
historical cost of the building in 2000 when the nursing home
was purchased by Belle Investments.

HEM In our review of the order of the district court, we
are guided by the following principles: It is a rule of statutory
interpretation that in the absence of anything to the contrary,
language contained in a rule or regulation is to be given its
plain and ordinary meaning. See, City of Alliance v. Box Butte
Cty. Bd. of Equal., 265 Neb. 262, 656 N.W.2d 439 (2003);
Utelcom, Inc. v. Egr, 264 Neb. 1004, 653 N.W.2d 846 (2002).
Deference is accorded to an agency’s interpretation of its own
regulations unless plainly erroneous or inconsistent. Sunrise
Country Manor y. Neb. Dept. of Soc. Servs., 246 Neb. 726,
523 N.W.2d 499 (1994); In re Application of Jantzen, 245
Neb. 81, 511 N.W.2d 504 (1994). The meaning of a statute is
a question of law, and a reviewing court is obligated to reach
its conclusions independent of the determination made by the
administrative agency. Sunrise Country Manor, supra; Central
Platte NRD v. State of Wyoming, 245 Neb. 439, 513 N.W.2d
847 (1994),

After considering these principles, we reach our own con-
clusion independent of that of the district court. We find that
the meaning of the term “in existence” is unambiguous; that
the plain, direct, and ordinary meaning of “in existence” is
physical existence; that the Department has consistently inter-
preted “in existence” to mean physical existence; and that the
Department’s regulations provided the proper notice.

The language of § 011.09 clearly states that the Nebraska
Administrative Code replaces the federal Medicare regulations
on depreciation except as provided within the code. Thus, the
term “in existence” must be given its plain and ordinary mean-
ing, which is clearly physical existence. Giving the term “in

existence” its plain and ordinary meaning, it is apparent that the
Belle Terrace facility was constructed in 1972 and, therefore,
was “in existence” in 1984.

The federal Medicare regulations relating to depreciation
have not been adopted by the State of Nebraska with regard to
Medicaid. More importantly, the record from the hearing before
the Department establishes that the Department does not use
Medicare’s definition of the term “in existence.’ The record
indicates that the Department has consistently applied the plain
meaning of the term “in existence” in determining depreciation
of nursing facilities for purposes of Medicaid reimbursement
and that there have been no deviations in the application of this
policy in the past. The Department’s exclusion of the federal
definition of “in existence” along with its consistent application
of the plain meaning of “in existence” placed Belle Terrace on
notice that “in existence” meant physical existence.

How an agency interprets its own regulations is a clear
indication of the meaning of a term that the agency uses in its
regulations. The Department’s senior auditor testified that the
Department has consistently interpreted § 011.06H to require
that for facilities physically in existence and purchased as an
ongoing operation after December 1, 1984, the cost basis is
the allowable cost of the asset to the owner of record as of
December 1, 1984. Therefore, because Belle Terrace has been
in existence since 1972, the 1972 cost must be used as the basis
for depreciation because the buildings physically existed on
December 1, 1984.

We therefore conclude that the order of the district court
directing that Belle Terrace should receive depreciation reim-
bursement based on the historical cost of the nursing home at
the time of the purchase of Belle Investments in 2000 was in
error in that it did not conform to the law and was not supported
by competent evidence.

Ii The Department also claims that the district court erred in
finding that the Lynn-Shuey Joint Venture and Belle Investments
were not related parties. Since we have decided the cause on the
issues raised above, we decline to consider this issue. An appel-
late court is not obligated to engage in an analysis which is not
needed to adjudicate the controversy before it. Papillion Rural

620 —

Fire Prot. Dist. v. City of Bellevue, ante p. 214, 739 N.W.2d
162 (2007).

CONCLUSION
We reverse the judgment of the district court for Lancaster
County and remand the cause with directions to reinstate the
director’s order.
REVERSED AND REMANDED WITH DIRECTIONS.

In RE INTEREST OF LAURANCE S., A CHILD UNDER 18 YEARS OF AGE.
Stare OF NEBRASKA, APPELLEE, V.
LauRANCE S., APPELLANT.

In RE INTEREST OF MICHAEL S., A CHILD UNDER 18 YEARS OF AGE.
STATE OF NEBRASKA, APPELLEE, V.
MIcuazt S., APPELLANT.
742 N.W.2d 484

Filed December 7, 2007. Nos. S-06-1439, S-06-1443.

Christina C. Boydston, of Register Law Office, for appellant
Laurance S.

Melissa Lang Schutt for appellant Michael S.

Jeri L. Grachek, Deputy Dodge County Attorney,
for appellee.

Heavican, C.J., Wricut, Connotly, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Mnrtier-Lerman, J.
NATURE OF CASE

These delinquency proceedings were brought under the
Nebraska Juvenile Code, Neb. Rev. Stat. §§ 43-245 to 43-2,129
(Reissue 2004 & Cum. Supp. 2006) against appellants Laurance
S., case No. S-06-1439, and Michael S., case No. S-06-1443.
‘We consolidate these cases for purposes of opinion and disposi-
tion. Juvenile proceedings were instituted in the county court
for Dodge County alleging that Laurance and Michael, who are
brothers, had committed felony criminal mischief. Based on
their pleas of no contest, each appellant was adjudicated under
§ 43-247(2). Following a dispositional hearing, appellants were
placed on indefinite probation with restrictions and ordered to
pay restitution. Appellants appeal from that portion of the dis-
positional order that required each of them to pay $29,059.96.
As discussed below, we conclude that an order of restitution
under § 43-286(1)(a) should serve the rehabilitative purposes of
the Nebraska Juvenile Code, and we further conclude that the
juvenile court erred when it failed to consider appellants’ finan-
cial ability to pay restitution in the amount ordered. We reverse
the orders in part and remand the causes for further proceedings
consistent with this opinion.

STATEMENT OF FACTS
There is essentially no dispute with regard to the material
facts. On August 18, 2006, appellants broke into Washington

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Elementary School in Fremont, Nebraska, where they proceeded
to damage five classrooms. Appellants set off fire extinguishers,
broke computer monitors, and splattered paint and glue on the
walls, ceilings, desks, books, computers, and carpets. Shortly
thereafter, appellants came forward to authorities and admitted
responsibility for the incident. On August 30, separate juvenile
petitions were filed in the county court for Dodge County,
alleging that appellants had committed the Class IV felony
of criminal mischief in violation of Neb. Rev. Stat. § 28-519
(Cum. Supp. 2006). Appellants each pled no contest to the alle-
gations in the petitions, and as a result, each was adjudicated a
child as defined in § 43-247(2) on September 19.

On November 20, 2006, a dispositional and restitution hear-
ing was held in both juvenile proceedings. Restitution is permit-
ted in juvenile cases under § 43-286(1)(a). Relative to the res-
titution issue, the State called four witnesses, including several
individuals from the Fremont Public School District, and offered
28 exhibits into evidence. The evidence showed that thé school
district had incurred expenses in order to replace or repair prop-
erty damaged by appellants in the total amount of $29,059.96.
On November 30, the court entered dispositional orders under
which it placed each appellant on indefinite probation with
restrictions and ordered each appellant to pay restitution, pre-
sumably to the school district, in the amount of $29,059.96.
Appellants appeal.

ASSIGNMENTS OF ERROR
On appeal, appellants assign several errors contesting only
the restitution portion of the dispositional order entered in their
respective case. The primary assignment of error, which we
restate and summarize, is a claim that the juvenile court erred
when it failed to consider appellants’ financial resources in
ordering restitution. Appellants assert additional assignments of
error challenging the method by which the juvenile court deter-

mined the amount of restitution that it ordered.

STANDARD OF REVIEW
Ty Juvenile cases are reviewed de novo on the record, and
an appellate court is required to reach a conclusion independent

Pe “
of the juvenile court’s findings. In re Interest of Jeffrey K., 273
Neb. 239, 728 N.W.2d 606 (2007).

ANALYSIS

Together, these appeals raise issues as to the propriety of the
juvenile court’s having ordered appellants to pay restitution in
the amount determined by the court and the proper approach
juvenile courts should use in setting a restitution amount under
§ 43-286(1)(a). More specifically, appellants claim that the
juvenile court failed to consider their ability to pay the restitu-
tion amount established by the court and that the amount deter-
mined was not reached in a reasonable manner.

In connection with their primary assignment of error regard-
ing ability to pay, appellants assert that before setting the resti-
tution amount, the juvenile court should have heard and consid-
ered evidence concerning appellants’ employment history and
their ability to work, as well as appellants’ financial resources.
In support of their arguments, appellants suggest that factors
similar to those considered in criminal restitution proceedings
should be considered by the court when ordering restitution in
juvenile cases.

Appellants refer this court to the criminal restitution statute,
Neb. Rev. Stat. § 29-2281 (Reissue 1995), which provides, in
pertinent part, as follows:

To determine the amount of restitution, the court may
hold a hearing at the time of sentencing. [In determin-
ing the amount of restitution the] court shall consider the
defendant’s earning ability, employment status, financial
resources, and family or other legal obligations and shall
balance such considerations against the obligation to the
victim. . . . The court may order that restitution be made
immediately, in specified installments, or within a specified.
period of time not to exceed five years after the date of
judgment or defendant’s final release date from imprison-
ment, whichever is later.

Although we have previously held that criminal restitution stat-
utes do not control in juvenile proceedings, see In re Interest
of Brandon M., 273 Neb. 47, 727 N.W.2d 230 (2007), we
agree with appellants that the factors listed in § 29-2281 may

624 |

serve as useful guidelines in setting restitution amounts in
juvenile proceedings.

We begin our analysis by reference to well-established prin-
ciples involving juvenile proceedings. As we stated in In re
Interest of Brandon M., 273 Neb. at 51, 727 N.W.2d at 234:

We have long recognized that a juvenile court proceeding
is not a prosecution for crime, but a special proceeding that
serves as an ameliorative alternative to a criminal pros-
ecution. [Citations omitted.] The purpose of our statutes
relating to the handling of youthful offenders is the educa-
tion, treatment, and rehabilitation of the child, rather than
retributive punishment. [Citations omitted.] The emphasis
on training and rehabilitation, rather than punishment, is
underscored by the declaration that juvenile proceedings
are civil, rather than criminal, in nature.
See, also, In re Interest of Brandy M. et al., 250 Neb. 510, 524,
550 N.W.2d 17, 26 (1996) (stating that “the foremost purpose
and objective of the Nebraska Juvenile Code is to promote and
protect the juvenile’s best interests”); In re Interest of A.M.H.,
233 Neb. 610, 614, 447 N.W.2d 40, 44 (1989) (quoting In re
T. D., 81 Ill. App. 3d 369, 401 N.E.2d 275, 36 Ill. Dec. 594
(1980)) (stating that primary purpose of juvenile code “‘is
remedial and preventive rather than punitive’”).

The Nebraska Juvenile Code authorizes a court to order “res-
titution of any property stolen or damaged” by a juvenile as a
term and condition of a dispositional order if it is “in the interest
of the juvenile’s reformation or rehabilitation.” § 43-286(1)(a).
See, also, Neb. Rev. Stat. § 43-246 (Reissue 2004) (allowing
restorative approach by providing “(4) . . . selected juveniles the
opportunity to take direct personal responsibility for their indi-
vidual actions by reconciling with the victims through juvenile
offender and victim mediation and fulfilling the terms of the
resulting agreement which may require restitution and commu-
nity service,” consistent with “the responsibility of the juvenile
court to act to preserve the public peace and security”).

Unlike the provisions in the juvenile codes or rules of other
states, § 43-286(1)(a) of the Nebraska Juvenile Code does
not prescribe any particular method by which to determine
whether restitution is appropriate or the amount of restitution

a “
to be awarded. See, e.g., In re R.T., No. 0408020557, 2005 WL
1420878 at *3 (Del. Fam. Feb. 28, 2005) (unreported decision)
(discussing Delaware Family Court Criminal Procedure Rule
outlining “guidelines” for awarding restitution); In re R.V.,
283 Ga. App. 355, 356, 641 S.E.2d 591, 592 (2007) (stating
that Georgia juvenile statute “requires the juvenile court to
conduct a hearing and consider multiple factors in determin-
ing the amount of restitution”); In re T.M.R., 334 Mont. 64,
144 P.3d 809 (2006) (stating that Montana juvenile statute lists
factors for court to consider in determining whether restitution
is appropriate).

Because Nebraska’s juvenile code does not provide guidelines
to courts entering restitution orders, there is a risk that an order
could be entered imposing a restitution amount that is unreason-
able and inconsistent with the purpose of the juvenile code.
Such an order could give rise to frustration that would negate
the juvenile code’s rehabilitative purpose. “‘“The result of such
[an order] would not be rehabilitation. Rather, it would give the
{juvenile] a sense of unfairness, injustice and bitterness towards
the system because the chance to reform would not be pres-
ent.” State v. Kristopher G., 201 W. Va. 703, 705, 500 S.E.2d
519, 521 (1997) (quoting State v. M.D.J., 169 W. Va. 568, 289
S.E.2d 191 (1982)). Moreover, a restitution order without spe-
cific requirements and time commitments as to when restitution
must be paid similarly fails to permit the juvenile to feel that
he or she is gainfully making amends for past transgressions.
See id. at 706, 500 S.E.2d at 522 (stating that “[a]ny restitution
award should . . . be set in an amount that is within the realistic
ability of the children to pay within a reasonable period of time,
so that they can complete a probationary period, put . . . events
behind them, and move forward”).

Finally, a restitution order “imposed . . . in an appropriate
manner serves the salutary purpose of making the offender
understand that he has harmed not merely society in the abstract
but also individual human beings, and that he has a responsibil-
ity to” the victim. In re Brian S., 130 Cal. App. 3d 523, 529,
181 Cal. Rptr. 778, 780 (1982). This “salutary purpose” would
be directly undermined by the imposition of a restitution order
that the juvenile is financially unable to pay.

626 Le

HB The interpretation of a statute is a question of law for an
appellate court, see In re Interest of DeWayne G. & Devon G.,
263 Neb. 43, 638 N.W.2d 510 (2002), and we read § 43-286(1)(a)
as being consistent with the overall purposes of the Nebraska
Juvenile Code. See Citizens for Eq. Ed. v. Lyons-Decatur Sch.
Dist., ante p. 278, 290, 739 N.W.2d 742, 754 (2007) (stating
that court’s “role, to the extent possible, is to give effect to
the statute’s entire language”). Section 43-2,128 provides that
the Nebraska Juvenile Code should be liberally construed to
the end that its purposes may be carried out. Sections 43-246
and 43-246(3) provide that the Nebraska Juvenile Code shall
be construed to reduce the possibility of juveniles committing
future law violations. We have observed in a delinquency case
that a juvenile proceeding is not a prosecution for a crime but
a special proceeding that serves as an ameliorative alternative
to a criminal prosecution and that the purpose of our statutes
relating to youthful offenders is the education, treatment, and
rehabilitation of the child. See In re Interest of Brandon M., 273
Neb. 47, 727 N.W.2d 230 (2007). We consider § 43-246(1)(a) to
be consistent with these purposes of the juvenile code, and we
believe it would be prudent that juvenile courts consider factors
similar to those utilized in the criminal restitution statute when
entering restitution orders during the dispositional phase of a
delinquency proceeding.

Hl Referring to the criminal restitution statute merely for
guidance, we determine that when a juvenile court enters an
order of restitution under § 43-286(1)(a), the court should
consider, among other factors, the juvenile’s earning ability,
employment status, financial resources, and other obligations.
Compare § 29-2281. In appropriate cases, it would be consistent
with these considerations and the purposes of the juvenile code
for the court to require that the juvenile obtain and maintain
employment in order to satisfy his or her restitution obligations
and his or her responsibility to repay the victim. Moreover, the
juvenile court should set a timetable for restitution payments
and may order that restitution be made immediately, in speci-
fied installments, or within a specified period of time.

In the instant cases, the record does not disclose information
regarding appellants’ ability to pay restitution, other than the fact

that appellants were deemed eligible for appointed counsel. The
record does not reflect that the juvenile court considered appel-
Jants’ ability to pay restitution when it entered its dispositional
orders requiring each appellant to pay $29,059.96. The juvenile
court erred in entering the restitution portions of its dispositional
orders, and we reverse those portions of the juvenile court’s
dispositional orders relating to restitution entered in these juve-
nile proceedings and remand the causes for further proceedings
consistent with this opinion. The remaining portions of the dis-
positional orders are not affected by our ruling.

Hl Although we have concluded that the restitution portions
of the juvenile court’s dispositional orders must be reversed and
the causes remanded for further proceedings, we briefly address
appellants’ assignment of error to the effect that the juvenile
court erred when it ordered restitution based upon the replace-
ment cost of the items damaged rather than on fair market value.
This issue is likely to recur on remand. An appellate court may,
at its discretion, discuss issues unnecessary to the disposition of
an appeal when those issues are likely to recur during further
proceedings. Papillion Rural Fire Prot. Dist. v. City of Bellevue,
ante p. 214, 739 N.W.2d 162 (2007).

Appellants claim on appeal that the evidence provided by
the school district was limited to the replacement value of the
property damaged by appellants and that the juvenile court
erred in ordering restitution based upon replacement value. We
note that there is some dispute among the parties as to whether
“replacement value” is an accurate term for certain of the valu-
ations provided by the school district. Given our discussion of
this assignment of error on appeal, it is not necessary for us to
resolve this dispute.

As noted above, § 43-286(1)(a) authorizes the juvenile court
to order a juvenile to pay “restitution of any property stolen or
damaged” as a dispositional term. We have previously stated
that “restitution encompasses the ‘[rJeturn or restoration of
some specific thing to its rightful owner’ or ‘[clompensation
for loss.’” In re Interest of Brandon M., 273 Neb. 47, 52, 727
N.W.2d 230, 235 (2007). In In re Interest of Brandon M., the
juvenile court stated that the dollar amount of the restitution
order was “‘plucked . . . out of the air,” and we reversed the

628 Es

restitution order because it lacked a basis in the record. 273
Neb. at 49, 727 N.W.2d at 233. We did not determine in In re
Interest of Brandon M., however, the valuation approach to be
used to determine a juvenile offender’s restitution obligation.
Instead, we stated that “[a]lthough strict rules of evidence do
not apply at dispositional hearings in juvenile cases, see In re
Interest of Rebecka P., 266 Neb. 869, 669 N.W.2d 658 (2003),
and § 43-283, the record must nevertheless support the court’s
action in imposing restitution.” In re Interest of Brandon M.,
273 Neb. at 52, 727 N.W.2d at 235.

Hil In the instant case, appellants urge us to adopt specific
rules regarding a valuation approach for restitution orders in
juvenile cases. In this regard, appellants discuss the relative
virtue of fair market value as compared to replacement value
in restitution orders. The juvenile statutes do not require us
to adopt one method, and we decline to do so. Instead, we
conclude that juvenile courts should have discretion to set the
amount of restitution based on the record presented and the
juvenile’s ability to pay and that the amount ordered be consis-
tent with the purposes of the Nebraska Juvenile Code. As we
stated in In re Interest of Brandon M., the record must support
the juvenile court’s restitution order. The juvenile courts may
use any rational method of fixing the amount of restitution, so
long as the amount is rationally related to the proofs offered
at the dispositional hearing, and the amount is consistent with
the purposes of education, treatment, rehabilitation, and the
juvenile’s ability to pay. Compare In re Dina V., 151 Cal. App.
4th 486, 59 Cal. Rptr. 3d 862 (2007).

We have considered appellants’ remaining arguments made
in connection with their assignments of error, and we conclude
they are without merit.

CONCLUSION
We conclude that the restitution orders entered under
§ 43-286(1)(a) in delinquency proceedings must be supported
by the record and that the amount ordered must be consistent
with the educational, treatment, and rehabilitative purposes of
the Nebraska Juvenile Code and the juvenile’s ability to pay.
On the record before us, we determine that the juvenile court

erred in these cases when it failed to consider whether appel-
Jants had the ability to pay restitution in the amount entered
in the dispositional orders. Accordingly, we reverse the portion
of each dispositional order that ordered each appellant to pay
$29,059.96 and we remand the causes for further proceedings
consistent with this opinion.

REVERSED AND REMANDED FOR

FURTHER PROCEEDINGS.

AuroRA RAMIREZ MASKA, APPELLANT, V.
Jot DEAN MASKA, APPELLEE.
742. N.W.2d 492

Filed December 7, 2007. No. S-07-187.

Kay E. Tracy, of Legal Aid of Nebraska, for appellant.

Kent A. Schroeder, of Ross, Schroeder & George, for
appellee.

HEAVICAN, C.J., WricHT, CONNOLLY, GERRARD, STEPHAN,
McCormack, and MiLter-Lerman, JJ.

Waricut, J.
NATURE OF CASE
The Buffalo County District Court entered a decree dis-
solving the marriage of Joel Dean Maska and Aurora Ramirez

630 —

Maska. The court awarded custody of the couple’s two minor
children to Joel. The order provided that Joel would have cus-
tody of the children during the school year and that Aurora
would have custody during the summer. The parties were
previously involved in a legal separation, and at the time of
the separation, their property was divided and their debts were
allocated. Neither party appeals the division of property or allo-
cation of debt. Aurora appeals the order involving custody of
the minor children.

SCOPE OF REVIEW
Hi Child custody determinations are matters initially entrusted
to the discretion of the trial court, and although reviewed de
novo on the record, the trial court’s determination will normally
be affirmed absent an abuse of discretion. Gress v. Gress, 271
Neb. 122, 710 N.W.2d 318 (2006).

FACTS

The parties were married on July 19, 2000, in Bogota,
Colombia, South America. Two children were born of the mar-
riage, the first on February 26, 2001, and the second on June
20, 2002. During the marriage, difficulties arose between the
parties and efforts to reconcile their differences were unsuccess-
ful. Because of the parties’ prior legal separation, the primary
issue presented in this case was the custody and support of the
minor children.

During the pendency of the divorce proceedings, a juvenile
petition was filed in the Buffalo County Court and allegations
were made by both parties concerning physical and emotional
abuse of the children. The children were placed in the legal
custody of the Department of Health and Human Services
(DHHS). On May 25, 2005, the juvenile court found that the
children’s best interests required that they continue in the
legal custody of DHHS. The juvenile court found that Aurora
was depressed for a variety of reasons, including separation
from members of her family left in Colombia, her inability to
fluently speak English, and the fact that she had been raised in
a very poor environment in Colombia and was likely to view
herself as unable to control her future. She was described by a
psychologist as being “volatile.”

Joel was described by the juvenile court as being outgoing,
confident, and balanced but also suffering from situational
depression. At that time, the juvenile court found that neither
parent was in a position to provide for the children if placed in
their individual custody.

On December 20, 2005, the juvenile court entered an order
dismissing the proceedings and terminating DHHS’ custody
of the children. A DHHS representative testified in the district
court that the dismissal was based upon a finding by DHHS that
the allegations of abuse were unfounded.

At the time of the divorce proceedings and during the
time that the juvenile court had jurisdiction of the children,
both parents participated in extensive counseling services and
completed parenting classes. The district court found that the
children had some adjustment problems but that, generally, the
children appeared to be relatively well-adjusted and raised no
parenting concerns as to either parent.

At trial, Dr. John Meidlinger, a licensed clinical psycholo-
gist, testified and opined as to the best interests of the children
concerning the issues of custody and visitation. He had been
involved with the family on an evaluation basis since the juve-
nile court proceedings. Meidlinger conducted a custody evalu-
ation of the parties and testified that neither parent was unfit
and that the children were remarkably well adjusted given the
volatility of the parental relationship. He stated that both parties
had tried to cut the other off from the children and that both had
anger and resentment issues concerning the other parent. He
testified that the children had important relationships with each
other but that the current parenting time schedule was not in the
children’s best interests because it required movement of the
children from one home to another on a frequent basis.

Meidlinger opined that Joel was the warmer and more sup-
portive parent and that Aurora exhibited dependency charac-
teristics tending to represent herself as helpless and in need of
various agency and private programs. Meidlinger recommended
that primary physical custody of the children be given to
Joel during the school year and to Aurora during the summer
months. He also stated that the court should retain legal custody
of the children for a 1-year period to ensure that the parties

632 Le

could properly adjust, parent, and discontinue the harmful
parental relationship.

The district court found that the parties had had a violent
and abusive relationship toward each other for at least 6 years
and had exhibited traits of physical violence toward each other.
After 18 months of intervention by DHHS, the parties’ relation-
ship had improved but not to the point where they could interact
civilly or jointly parent the children.

The district court concluded that the custody of the minor
children should be placed with Joel, subject to Aurora’s parent-
ing time as set forth in the decree. In the decree, the court stated
that Joel would be the primary custodial parent during the school
year and that Aurora would be the primary custodial parent dur-
ing the summer months. Specific times and dates were set forth
in the decree,

The order provided that each party was entitled to receive
educational information concerning the progress the children
were making in school and other daycare activities. Both parties
were entitled to communicate with the school and other daycare
personnel concerning the progress of the children and would
be entitled to receive the respective educational programs and
agency schedules of the children’s events. Both parties were
also allowed to receive information from all health care provid-
ers concerning the health status of the children, and each parent
was allowed to make medical decisions on an emergency basis
for the benefit of the children when the children were in his or
her physical custody.

Based upon the parenting time schedule set forth in the decree
and using the joint custody formula, the district court ordered
Joel to pay child support of $78 per month. The children were
receiving Social Security benefits of $555 per child per month,
and these benefits were appropriately proportioned between the
patties to ensure the care and well-being of the children while
they were in each parent’s physical custody. The court found
that Aurora should receive 46 percent and Joel 54 percent of
the Social Security benefits being paid for the benefit of the
children. Joel was ordered to pay 65 percent of the daycare
expenses necessary for employment and the same percentage of
any medical expenses not reimbursed by a third party.

ASSIGNMENTS OF ERROR

Aurora claims the district court erred by failing to make
specific findings of parental fitness and best interests of the
children; erred by not recognizing the evidence showed that Joel
was unable or unwilling to fulfill his primary obligation—to
promote and facilitate a relationship between the children and
Aurora, the noncustodial parent; and erred by using Aurora’s
national origin and language as a factor against her when evalu-
ating the best interests of the children.

ANALYSIS

Aurora claims the district court failed to make specific find-
ings regarding the fitness of the parents and the best interests
of the children. We conclude there is no merit to this argument.
Although the court did not specifically state what was in the
children’s best interests with regard to custody, such was implied.
in its custody order. The court recounted that Meidlinger had
given his opinion as to the children’s best interests concern-
ing custody and visitation and had recommended that primary
physical custody be given to Joel during the school year. Many
of the facts the court described went directly to the issue of
fitness. Meidlinger testified that neither parent was unfit. By
adopting Meidlinger’s findings concerning fitness and best inter-
ests, the court made its determination that both parties were fit
for custody.

HM The next issue was which parent should have physical
custody for a majority of the time. When custody of a minor
child is an issue in a proceeding to dissolve the marriage of the
child’s parents, child custody is determined by parental fitness
and the child’s best interests. Gress v. Gress, 271 Neb. 122,
710 N.W.2d 318 (2006). When both parents are found to be
fit, the inquiry for the court is the best interests of the children.
Id. Yn determining a child’s best interests under Neb. Rev. Stat.
§ 42-364 (Cum. Supp. 2006), courts may consider factors such
as general considerations of moral fitness of the child’s parents,
including the parents’ sexual conduct; respective environments
offered by each parent; the emotional relationship between child
and parents; the age, sex, and health of the child and the parents;
the effect on the child as the result of continuing or disrupting an

634 Es

existing relationship; the attitude and stability of each parent’s
character; parental capacity to provide physical care and satisfy
educational needs of the child; and many other factors relevant
to the general health, welfare, and well-being of the child. See
State on behalf of Pathammavong v. Pathammavong, 268 Neb. 1,
679 N.W.2d 749 (2004).

Hi Child custody determinations are matters initially entrusted
to the discretion of the trial court, and although reviewed de
novo on the record, the trial court’s determination will normally
be affirmed absent an abuse of discretion. Gress v. Gress, supra.
A judicial abuse of discretion requires that the reasons or rul-
ings of a trial judge be clearly untenable, unfairly depriving
a litigant of a substantial right and a just result. Marcovitz v.
Rogers, 267 Neb. 456, 675 N.W.2d 132 (2004).

In the case at bar, Aurora argues the evidence showed that
Joel. was either unfit or did not promote the children’s best
interests because he was either unable or unwilling to fulfill
what she deemed the primary obligation of all custodial par-
ents, that is, to promote and facilitate a relationship with the
noncustodial parent. We disagree. The record does not establish
that either parent was unfit, although it was clear that the parties
had had a “violent and abusive relationship towards each other
for at least 6 years.”

Aurora has not stated any proposition of law specifically
requiring that in order to be granted custody, the custodial par-
ent must promote and facilitate a relationship with the noncus-
todial parent. She relies on two cases from the Nebraska Court
of Appeals: Smith v. Smith, 9 Neb. App. 975, 623 N.W.2d 705
(2001), and Kay v. Ludwig, 12 Neb. App. 868, 686 N.W.2d 619
(2004). It is true that these cases mention the promotion and
facilitation of a relationship with the noncustodial parent, but
they do not state that this was a completely determinative factor
in the decision of whom to award custody. While the promotion
and facilitation of a relationship with the noncustodial parent is
a factor that may be considered, it is not the only factor nor is it
a completely determinative factor.

In its findings, the district court noted that both parties had
tried to cut the other off from the children and that both parties
had anger and resentment issues concerning the other parent.

However, the court specifically noted that Meidlinger, the child
psychologist who had been involved with the parties during
the juvenile court proceedings and during the dissolution, testi-
fied that neither parent was unfit. There was no evidence that
described Joel as unfit, and there was evidence in the record
that Joel was and had been the children’s primary caregiver.
Joel was described as a warmer and more supportive parent,
while Aurora tended to represent herself as helpless. Meidlinger
reported that Joel would be the better parent to have primary
physical custody during the school year and that Aurora needed
to demonstrate the ability to support a relationship between the
children and Joel.

There is evidence in the record that supports the district
court’s determination that Joel is a fit parent and promotes the
best interests of the children. We therefore conclude there is no
merit to this argument.

Aurora’s final argument is that the district court abused its
discretion by using her national origin and language as a factor
against her when evaluating the best interests of the children.
Her argument has no merit. The court’s decree does not state
that it used Aurora’s national origin or language as a factor.
Meidlinger recommended to the court that the primary physical
custody of the children be given to Joel during the school year
and to Aurora during the summer months. That is the recom-
mendation the court adopted, and we find no abuse of discretion
in the court’s decision.

CONCLUSION
For the reasons set forth above, we conclude that the dis-
trict court did not abuse its discretion in the award of custody
that was entered. We therefore affirm the judgment of the
district court.
AFFIRMED.

636 Le

State oF NEBRASKA, APPELLEE, V.
Rosert D. McCuLLocu, APPELLANT.
742. N.W2d 727

Filed December 14, 2007. No. S-06-275.

Matthew M. Munderloh, of Johnson & Mock, for appellant.

Jon Bruning, Attorney General, and George R. Love
for appellee.

Heavican, C.J., Wricut, CoNNoLLy, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Mitter-Lerman, J.
NATURE OF CASE

Robert D. McCulloch appealed his conviction for first degree
sexual assault to the Nebraska Court of Appeals. The Court of
Appeals determined that McCulloch had received ineffective
assistance of counsel at trial and reversed his conviction. The
Court of Appeals concluded that “all the evidence presented
by the State” at trial was insufficient to support a conviction

and remanded the cause to the district court for Burt County
with directions to dismiss the charges against McCulloch. State
v. McCulloch, 15 Neb. App. 616, 623, 733 N.W.2d 586, 592
(2007). We granted the State’s petition for further review.
We reverse the decision of the Court of Appeals and remand
the cause to the Court of Appeals with instructions to affirm
McCulloch’s conviction and sentence.

STATEMENT OF FACTS

The State charged McCulloch with first degree sexual assault,
alleging that he subjected his 13-year-old niece, P.M., to sexual
penetration at a time when he was 19 years of age or older. See
Neb. Rev. Stat. § 28-319(1)(c) (Reissue 1995). McCulloch’s
age at the time of the alleged crime is an element under
§ 28-319(1)(c). A jury found McCulloch guilty, and the court
sentenced him to 8 to 15 years’ imprisonment. No direct appeal
was taken. McCulloch filed a postconviction action alleging
that counsel was ineffective for failing to take a direct appeal,
and the court granted relief in the form of the right to file the
present direct appeal.

On appeal to the Court of Appeals, McCulloch asserted,
inter alia, that he had received ineffective assistance of counsel
because defense counsel elicited the only evidence at trial that
proved that he was 19 years of age or older at the time of the
incident. The Court of Appeals initially rejected this assignment
of error. State v. McCulloch, 15 Neb. App. 381, 727 N.W.2d 717
(2007) (McCulloch I). In McCulloch I, the Court of Appeals
concluded that regardless of whether counsel’s performance
was deficient, McCulloch was not prejudiced by such perform-
ance because the State had adduced sufficient circumstantial
evidence to allow the trier of fact to infer that McCulloch was
at least 19 at the time of the crime. The Court of Appeals noted
that McCulloch was present in court, was identified by wit-
nesses, and testified in his own behalf and that therefore, his
physical appearance was open to view by the jury. The Court
of Appeals stated that a defendant’s physical appearance may
be considered by the jury in determining his or her age. The
Court of Appeals noted that there was other circumstantial evi-
dence of McCulloch’s age, which in itself was insufficient to

638 Es

prove his age but which combined with the observation of his
physical appearance allowed the jury to reasonably infer that
he was at least 19. Such circumstantial evidence noted by the
Court of Appeals in McCulloch I consisted of P.M.’s references
to McCulloch as her father’s brother or her uncle and evidence
that McCulloch had a sexual relationship with P.M.’s mother 3
years prior to the incident with P.M.

After McCulloch I was released, McCulloch moved the Court
of Appeals for rehearing. He argued, inter alia, that testimony
regarding his sexual relationship with P.M.’s mother was elicited
by his own counsel rather than by the State and that therefore,
to the extent such evidence supported a finding that he was 19
or older, such fact did not support a finding of no prejudice
but instead supported his claim that counsel was ineffective
for putting on such evidence. The Court of Appeals granted
a rehearing. On rehearing, the Court of Appeals withdrew its
opinion in McCulloch I and concluded that trial counsel per-
formed in a deficient manner by eliciting the only evidence of
McCulloch’s age. State v. McCulloch, 15 Neb. App. 616, 733
N.W.2d 586 (2007) (hereinafter McCulloch I).

In McCulloch II, the Court of Appeals referred to State v.
Lauritsen, 199 Neb. 816, 261 N.W.2d 755 (1978), in which
this court held that a jury may consider the defendant’s physi-
cal appearance to determine his or her age if there is other cir-
cumstantial evidence to support an inference that the defendant
is of sufficient age. The Court of Appeals again determined
that McCulloch’s physical appearance was open to view by
the jury, because he was present in court and P.M. pointed
him out during her testimony. However, the Court of Appeals
concluded that the State had not adduced sufficient evidence
in addition to physical appearance from which the jury could
infer that McCulloch was at least 19 years old. The Court of
Appeals noted that the only evidence adduced by the State
arguably relevant to McCulloch’s age was P.M.’s testimony
that McCulloch was her uncle. The Court of Appeals contrasted
this evidence to evidence in Lauritsen where the defendant had
bought alcohol. The Court of Appeals noted that in Lauritsen,
based on evidence that the defendant bought alcohol, a jury

could reasonably have inferred that the defendant was of legal
age to buy alcohol and therefore was of sufficient age under the
statute then at issue, Neb. Rev. Stat. § 28-408.03(1)(c) (Reissue
1975). In contrast, in the present case, the Court of Appeals
determined that evidence that McCulloch was the 13-year-old
victim’s uncle did not give rise to a logical inference that he
was necessarily at least 19 years old.

The Court of Appeals stated in McCulloch II that the
State adduced no further circumstantial or other evidence of
McCulloch’s age and that the only other evidence from which
the jury could have inferred that he was at least 19 was adduced
by defense counsel. The Court of Appeals noted that during
cross-examination of a witness in the State’s case in chief,
defense counsel elicited testimony that McCulloch had had a
sexual relationship with P.M.’s mother 3 years prior to the inci-
dent with P.M. and that P.M.’s mother was older than 19 at the
time of that relationship. Later in the trial during the case pre-
sented by McCulloch, defense counsel elicited testimony during
the direct examination of McCulloch’s sister that McCulloch
was 6 years older than the witness and that the witness had chil-
dren who were 12 and 13 years old at the time of trial. Because
such evidence elicited by defense counsel was the only circum-
stantial evidence which, when combined with an observation
of McCulloch’s physical appearance, could have allowed the
jury to determine that McCulloch was at least 19 years old, the
Court of Appeals determined that defense counsel performed
in a deficient manner. The Court of Appeals concluded that
because such deficient performance prejudiced McCulloch, he
had received ineffective assistance of counsel.

The Court of Appeals further concluded that “all the evidence
presented by the State” was insufficient to support a conviction
and that therefore, under Lockhart v. Nelson, 488 U.S. 33, 109
S. Ct. 285, 102 L. Ed. 2d 265 (1988), the Double Jeopardy
Clause forbade retrial. McCulloch IT, 15 Neb. App. at 623, 733
N.W.2d at 592. The Court of Appeals reversed McCulloch’s
conviction and remanded the cause with directions to dismiss.

We granted the State’s petition for further review of
McCulloch II.

640 be

ASSIGNMENT OF ERROR
On further review, the State asserts that the Court of Appeals
erred in concluding that McCulloch received ineffective assis-
tance of counsel.

STANDARD OF REVIEW
Hi On a question of law, an appellate court is obligated to
reach a conclusion independent of the determination reached by
the court below. State v. Tompkins, 272 Neb. 547, 723 N.W.2d
344 (2006).

ANALYSIS
The Record Is Not Sufficient for the Court of Appeals
to Determine That McCulloch Received Ineffective
Assistance of Counsel.

The State asserts on further review that the Court of Appeals
erred in concluding that McCulloch received ineffective assis-
tance of counsel. The State argues that the Court of Appeals’
reasoning was based on a hindsight review of the trial and that
the Court of Appeals’ analysis presumes that in formulating
trial strategy, defense counsel should have been required to
assume that the State would fail to prove the age element of
the crime. We conclude that the record on direct appeal was not
sufficient to determine whether McCulloch received ineffective
assistance of counsel and that therefore, the Court of Appeals
erred in concluding that he did.

The Court of Appeals determined that McCulloch received
ineffective assistance of counsel because defense counsel elic-
ited the only evidence which, when combined with observation
of his physical appearance, would have allowed the jury to
determine that he was over 19 years old at the time of the inci-
dent with P.M. The Court of Appeals cited State v. Lauritsen,
199 Neb. 816, 261 N.W.2d 755 (1978). Under Lauritsen, the
defendant’s physical appearance alone is not sufficient to prove
the defendant is of a certain age, but it may be considered
as evidence of age when combined with other circumstantial
evidence to support an inference that the defendant is of a suf-
ficient age. The Court of Appeals noted that the circumstantial
evidence in the present case included: (1) testimony presented

| “
by the State that McCulloch was the 13-year-old victim’s
uncle; (2) testimony adduced by defense counsel on cross-
examination during the State’s case in chief that McCulloch
had a sexual relationship with the victim’s mother 3 years prior
to the incident with the victim; and (3) testimony adduced by
defense counsel during presentation of the defense’s case that
McCulloch was 6 years older than his sister and that the sister
had children who were 12 and 13 years old at the time of trial.
The Court of Appeals determined that the evidence presented
by the State was not sufficient to support an inference that
McCulloch was over 19 and that only the circumstantial evi-
dence adduced by defense counsel was sufficient to support
such an inference. The Court of Appeals therefore concluded,
based on the record on direct appeal, that defense counsel’s
performance was deficient.

The Court of Appeals was correct to note that under Lauritsen,
McCulloch’s physical appearance alone was not sufficient to
prove his age. We note that the evidence of age required under
Lauritsen in addition to physical appearance need not be con-
clusive direct evidence of age, but, rather, may be circumstan-
tial evidence from which a jury might reasonably infer that the
defendant is of a sufficient age.

It is not necessary to our resolution of this case to decide
whether the Court of Appeals was correct in its determina-
tions that the State’s evidence was not sufficient circumstantial
evidence to support an inference of McCulloch’s age and that
the only sufficient circumstantial evidence to support an infer-
ence that McCulloch was over 19 was the testimony elicited
by defense counsel. For purposes of analysis, we assume that
the Court of Appeals was correct in its determination that the
State’s evidence was not sufficient to prove McCulloch’s age
and that such element was proved with the addition of circum-
stantial evidence adduced by defense counsel.

HMB A claim of ineffective assistance of counsel need not
be dismissed merely because it is made on direct appeal. The
determining factor is whether the record is sufficient to ade-
quately review the question. State v. Walker, 272 Neb. 725, 724
N.W.2d 552 (2006). If a matter has not been raised or ruled on

642 —

at the trial level and requires an evidentiary hearing, an appel-
late court will not address the matter on direct appeal. Id.

The alleged ineffectiveness of counsel in this case was not
raised or ruled on at the trial level. We determine that in this
case, an evaluation of defense counsel’s actions would require
an evaluation of trial strategy and of matters not contained in
the record. Although the record on appeal shows that defense
counsel elicited the arguably strongest circumstantial evidence
regarding McCulloch’s age during the defense’s case, it does
not indicate the reason defense counsel elicited such evidence
and it does not appear that counsel presented such evidence
in a deliberate attempt to establish McCulloch’s age. Defense
counsel may have had other, reasonable strategic reasons for
presenting such evidence.

In this regard, the State argues that defense counsel had a
reasonable strategy which included presenting evidence regard-
ing McCulloch’s sexual relationship with P.M.’s mother, which
relationship might have given P.M. a motive to lie about the
sexual assault. The State also notes that McCulloch moved for
a directed verdict at the close of the State’s case. The State
argues that after the motion for directed verdict was denied,
defense counsel had the option to decline to present a defense
and rely on the State’s purported failure to prove McCulloch’s
age. Instead, defense counsel made a reasonable strategic choice
to present a full defense which included the testimony of
McCulloch’s sister. McCulloch argues in response that the State
mischaracterizes trial counsel’s defense strategy and that even if
counsel had a reasonable defense strategy, as the State claimed,
there was no reason for counsel to elicit evidence regarding the
relative ages of McCulloch and his sister.

We do not, and cannot, determine on direct appeal whether
defense counsel elicited the evidence at issue pursuant to a
reasonable defense strategy because there has been no eviden-
tiary hearing to present evidence regarding defense counsel’s
strategy or lack thereof. While in hindsight it appears that
defense counsel may have helped the State prove an element
that the State may have failed to adequately prove, without an
evidentiary hearing to explore defense counsel’s strategy, we
cannot determine based solely on the record on direct appeal

Te “

that defense counsel’s performance was deficient. Such a deter-
mination would require consideration of whether defense coun-
sel’s actions were reasonable in the context of the trial.

We conclude that the record on appeal is not sufficient to
review McCulloch’s claim of ineffective assistance of counsel
and that therefore, the Court of Appeals erred in concluding in
this direct appeal that McCulloch received ineffective assistance
of counsel. We therefore reverse the decision of the Court of
Appeals in McCulloch II and remand the cause to the Court of
Appeals with directions to affirm McCulloch’s conviction.

The Court of Appeals Misapplied the Lockhart Standard.

Because we conclude that McCulloch’s conviction should be
affirmed, we need not consider whether a retrial would violate
the Double Jeopardy Clause. However, we take this opportunity
to comment on the Court of Appeals’ resolution of the Double
Jeopardy issue.

After the Court of Appeals determined in McCulloch II that
McCulloch’s conviction should be reversed because of inef-
fective assistance of counsel, the Court of Appeals considered
whether the cause should be remanded for a new trial or whether
the Double Jeopardy Clause barred retrial. In considering the
Double Jeopardy issue, the Court of Appeals cited Lockhart v.
Nelson, 488 U.S. 33, 109 S. Ct. 285, 102 L. Ed. 2d 265 (1988),
for the proposition that “the Double Jeopardy Clause does not
forbid retrial so long as the sum of the evidence offered by
the state and admitted by the trial court, whether erroneously
or not, would have been sufficient to sustain a guilty verdict.”
McCulloch IT, 15 Neb. App. at 622, 733 N.W.2d at 591 (empha-
sis in original). The Court of Appeals read Lockhart to provide
that only evidence offered by the State should be considered in
determining whether there was sufficient evidence to sustain a
guilty verdict. The Court of Appeals determined that although
there was sufficient evidence to sustain the conviction in the
present case if all the evidence, including evidence presented.
by the defense, was considered, there was not sufficient evi-
dence if only the evidence presented by the State was consid-
ered. Based on its reading of Lockhart, the Court of Appeals
concluded that the Double Jeopardy Clause prohibited the State

from retrying McCulloch. As discussed below, because a proper
Lockhart analysis considers all the evidence admitted at trial,
not just that offered by the State, the reasoning of the Court of
Appeals, although understandable, was flawed.

We acknowledge that in a line of cases beginning with State
v. Anderson, 258 Neb. 627, 605 N.W.2d 124 (2000), this court
has sometimes stated, referring to Lockhart, that the Double
Jeopardy Clause does not forbid a retrial so long as the sum
of the evidence offered by the State and admitted by a trial
court, whether erroneously or not, would have been sufficient
to sustain a guilty verdict. We also note that in the introductory
paragraph of Lockhart, the U.S. Supreme Court stated, “where
the evidence offered by the State and admitted by the trial
court — whether erroneously or not — would have been suf-
ficient to sustain a guilty verdict, the Double Jeopardy Clause
does not preclude retrial.” 488 U.S. at 34. However, a reading
of the entire Lockhart opinion indicates that the Court did not
intend to limit Double Jeopardy analysis to a consideration of
only the evidence offered by the State. In Lockhart, the Court
stated that “a reviewing court must consider all of the evidence
admitted by the trial court in deciding whether retrial is per-
missible under the Double Jeopardy Clause.” 488 U.S. at 41.
The Court analogized the Double Jeopardy analysis to consid-
eration of a motion for judgment of acquittal at the close of all
the evidence and noted that a “trial court in passing on such
a motion considers all of the evidence it has admitted, and to
make the analogy complete it must be this same quantum of
evidence that is considered by the reviewing court.” 488 U.S.
at 41-42.

Although the specific issue in Lockhart was whether errone-
ously admitted evidence should be considered and not whether
evidence presented by the defense should be considered, a cor-
rect reading of Lockhart indicates that all evidence admitted
by the trial court, including evidence offered by the defense,
should be considered in determining whether there was suffi-
cient evidence to permit retrial. This reading is consistent with
the reading of Lockhart this court made in State v. Palmer, 257
Neb. 702, 600 N.W.2d 756 (1999), wherein we stated that in our
evaluation of the sufficiency of the evidence, we consider all of

the evidence admitted at the trial to determine whether there was
sufficient evidence to sustain the conviction.

Tl We have referred to “evidence offered by the State and
admitted by the court” in Anderson, supra, and in other cases
including State v. Morrow, 273 Neb. 592, 731 N.W.2d 558
(2007), State v. Floyd, 272 Neb. 898, 725 N.W.2d 817 (2007),
State v. Barfield, 272 Neb. 502, 723 N.W.2d 303 (2006), State
v. Beeder, 270 Neb. 799, 707 N.W.2d 790 (2006), State v. Allen,
269 Neb. 69, 690 N.W.2d 582 (2005), State v. Faust, 265 Neb.
845, 660 N.W.2d 844 (2003), State v. Haltom, 263 Neb. 767,
642 N.W.2d 807 (2002), and State v. Sheets, 260 Neb. 325,
618 N.W.2d 117 (2000). To the extent such cases may be read
as limiting Double Jeopardy consideration to only evidence
offered by the State, they are disapproved. Instead, the proper
standard is as follows: The Double Jeopardy Clause does not
forbid a retrial so long as the sum of all the evidence admitted
by a trial court, whether erroneously or not, would have been
sufficient to sustain a guilty verdict.

CONCLUSION

On further review of McCulloch II, we conclude that the
record in this direct appeal was not sufficient to determine
whether McCulloch received ineffective assistance of counsel
and that therefore, the Court of Appeals erred in determining
that he had received ineffective assistance of counsel at trial.
We reverse the decision of the Court of Appeals in McCulloch II
and remand the cause to the Court of Appeals with directions to

affirm McCulloch’s conviction and sentence.
REVERSED AND REMANDED WITH DIRECTIONS.

646 Es

S.L., A MINOR, BY HER NEXT FRIEND, GUARDIAN AND MOTHER,
Susan L., APPELLANT, V.
Steven L., APPELLEE.
742 N24 734

Filed December 14, 2007. No. S-06-563.

Joel Bacon, of Keating, O’Gara, Nedved & Peter, P.C., L.L.O.,
and Richard Ducote for appellant. ©

Elise Meerkatz and Christopher A. Furches, of Johnson,
Flodman, Guenzel & Widger, for appellee.

Heavican, C.J., Wricut, CoNNoity, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Srepuan, J.

In Susan L. v. Steven L.,‘ we held that pursuant to the
Uniform Custody Jurisdiction and Enforcement Act, Neb. Rev.
Stat. §§ 43-1226 to 43-1266 (Reissue 2004), Canadian courts
had exclusive continuing jurisdiction over a custody dispute
between Steven L., a resident and citizen of Canada, and
Susan L., who resides with the parties’ minor daughter, S.L., in
Nebraska. The same parties are before us in this appeal from
the dismissal of an intentional tort action filed in the district
court for Lancaster County by Susan, on S.L.’s behalf, against
Steven. Susan alleged that on multiple occasions, Steven trans-
ported S.L. from Nebraska to Canada for court-ordered visita-
tion, during which visitation he intentionally abused her, and
that such abuse resulted in injuries for which S.L. is entitled
to recover compensatory damages. The question presented in
this appeal is whether the district court erred in dismissing
the action on the ground that it lacked personal jurisdiction
over Steven.

BACKGROUND

PARTIES
S.L. was born in Canada on March 19, 1998, to Susan and
Steven, who both resided in Canada at the time. On October
18, 2000, the Supreme Court of British Columbia, Vancouver,
Canada, issued an “Interim Order” awarding custody of S.L.

1 Susan L. v. Steven L., 273 Neb. 24, 729 N.W.2d 35 (2007).

to Susan and providing parenting time to Steven. The order
contemplated that Susan and S.L. would relocate to Nebraska,
which they did in October 2000. S.L. has resided in Nebraska
since moving here with Susan, except for visits with Steven in
Canada for the court-ordered parenting time.

Steven is a permanent resident of British Columbia and
has never resided, owned property, or conducted any type of
business in Nebraska. Since October 2000, he has traveled to
Nebraska 12 to 14 times to pick up S.L. and transport her to
British Columbia for court-ordered parenting time. In November
2004, a British Columbia court entered an order preventing
Steven from transporting S.L., but the court did not suspend his
visitation rights. After that order was entered, Steven’s mother
traveled to Nebraska to transport S.L. to British Columbia for
two visits with Steven. The British Columbia court retains juris-
diction in the ongoing custody and visitation dispute between
Susan and Steven.

Districr Court PRocEEDINGS

Acting as the next friend, guardian, and mother of S.L., Susan
commenced this action against Steven in the district court for
Lancaster County. In the complaint, Susan alleged that Steven
committed repeated acts of battery and sexual abuse against
S.L. during five visits in British Columbia from 2003 through
2005. Susan further alleged that in an effort to coerce silence
or recantation, Steven withheld food from S.L. for long periods
of time and threatened to prevent any future contact with Susan
and other family members.

The complaint was served on Steven in British Columbia. In
response, he filed a motion to dismiss pursuant to Neb. Ct. R. of
Pldg. in Civ. Actions 12(b)(2) (rev. 2003) on the ground that the
Nebraska court lacked jurisdiction over his person. The motion
was submitted on the pleadings, as well as affidavits and exhib-
its submitted by the parties and received by the court. No oral
testimony was heard.

The district court determined that it did not have personal
jurisdiction over Steven and granted his motion to dismiss. The
court noted that Steven’s limited contacts with Nebraska for the
purposes of transporting S.L. for court-ordered visitation were

insufficient to subject him to the jurisdiction of Nebraska courts.
The court also found that Canada, not Nebraska, was the focal
point of the harm alleged and that there was no showing Steven
foresaw or reasonably should have foreseen that his alleged con-
duct in Canada would have any effect in Nebraska. Susan moved
to alter or amend the order of dismissal, which was denied by
the district court. Susan then filed this timely appeal, and we
granted her petition to bypass.”

ASSIGNMENTS OF ERROR
Susan assigns that the district court erred (1) in concluding
that Nebraska lacked personal jurisdiction over Steven and (2)
in failing to give S.L. the benefit of all reasonable inferences
deducible from the pleadings and affidavits.

STANDARD OF REVIEW

HM When a jurisdictional question does not involve a factual
dispute, the issue is a matter of law. An appellate court reviews
questions of law independently of the lower court’s conclusion.
When reviewing an order dismissing a party from a case for
lack of personal jurisdiction under rule 12(b)(2), an appellate
court examines the question of whether the nonmoving party
has established a prima facie case of personal jurisdiction de
novo.‘ An appellate court reviews a lower court’s determination
regarding personal jurisdiction based on written submissions in
the light most favorable to the nonmoving party.’ If the lower
court does not hold a hearing and instead relies on the pleadings
and affidavits, then an appellate court must look at the facts in

? See Neb. Rev. Stat. § 24-1106(3) (Reissue 1995).

3 Erickson v. U-Haul Internat, ante p. 236, 738 N.W.2d 453 (2007);
Brunkhardt v. Mountain West Farm Bureau Mut. Ins., 269 Neb. 222, 691
N.W.2d 147 (2005).

4 Ameritas Invest. Corp. v. McKinney, 269 Neb. 564, 694 N.W.2d 191 (2005).
See, Stanton v. St. Jude Medical, Inc., 340 F.3d 690 (8th Cir. 2003); Epps v.
Stewart Information Services Corp., 327 F.3d 642 (8th Cir. 2003).

5 Ameritas Invest. Corp. v. McKinney, supra note 4. See Stanton v. St. Jude
Medical, Inc., supra note 4.

the light most favorable to the nonmoving party and resolve all
factual conflicts in favor of that party.®

ANALYSIS

HB Personal jurisdiction is the power of a tribunal to sub-
ject and bind a particular entity to its decisions.’ Before a court
can exercise personal jurisdiction over a nonresident defendant,
the court must determine, first, whether the long-arm statute
is satisfied and, if the long-arm statute is satisfied, second,
whether minimum contacts exist between the defendant and the
forum state for personal jurisdiction over the defendant without
offending due process.*

Lonc-Arm STATUTE
Hl Nebraska’s long-arm statute, Neb. Rev. Stat. § 25-536
(Reissue 1995), extends Nebraska’s jurisdiction over nonresi-
dents having any contact with or maintaining any relation to
this state as far as the U.S. Constitution permits.? Thus, we need
only consider whether a Nebraska court’s exercise of jurisdic-
tion over Steven would be consistent with due process.

Minimum Contracts
HE fn analyzing personal jurisdiction, we consider the
quality and type of the defendant’s activities to decide whether
the defendant has the necessary minimum contacts with the
forum state to satisfy due process." In this context, due process
requires that a defendant’s minimum contacts with the forum
state be such that “‘maintenance of the suit does not offend

© Ameritas Invest. Corp. v. McKinney, supra note 4. See Epps v. Stewart
Information Services Corp., supra note 4.

7 In re Petition of SID No. 1, 270 Neb. 856, 708 N.W.2d 809 (2006);
Diversified Telecom Servs. v. Clevinger, 268 Neb. 388, 683 N.W.2d 338
(2004).

8 Brunkhardt v. Mountain West Farm Bureau Mut. Ins., supra note 3.

° Erickson v. U-Haul Internat. supra note 3; Brunkhardt v. Mountain West
Farm Bureau Mut. Ins., supra note 3.

0 Erickson vy. U-Haul Internat., supra note 3.

652 Le

“traditional notions ‘of fair play and substantial justice.”’”"'
Two types of personal jurisdiction may be exercised depending
upon the facts and circumstances of the case: general personal
jurisdiction or specific personal jurisdiction.” In the exercise
of general personal jurisdiction, the plaintiff’s claim does not
have to arise directly out of the defendant’s contacts with the
forum state, if the defendant has engaged in “‘“continuous and
systematic general business contacts”’” with the forum state.'
‘Tf the defendant’s contacts are neither substantial nor continu-
ous and systematic, but the cause of action arises out of or is
related to the defendant’s contact with the forum, a court may
assert specific jurisdiction over the defendant, depending on the
quality and nature of such contact." In this case, there is no
allegation that Steven had substantial, continuous, or systematic
contacts with Nebraska. Rather, Susan alleged that Steven came
into the state on several occasions for the specific purpose of
transporting S.L. to Canada for court-ordered visitation, during
which visitation he committed intentional acts of abuse. We
must determine whether these specific acts by Steven estab-
lish the necessary minimum contacts which would permit a
Nebraska court to exercise jurisdiction over his person without
violating his right to due process.

HR The benchmark for determining whether the exercise
of personal jurisdiction satisfies due process is whether the
defendant’s minimum contacts with the forum state are such
that the defendant should reasonably anticipate being haled

1 Quality Pork Internat. v. Rupari Food Servs., 267 Neb. 474, 481, 675

__N.W.2d 642, 649 (2004), quoting Internat. Shoe Co. v. Washington, 326
USS. 310, 66 S. Ct. 154, 90 L. Bd. 95 (1945).

2 Brunkhardt v. Mountain West Farm Bureau Mut. Ins., supra note 3.

3 Brunkhardt v. Mountain West Farm Bureau Mut. Ins., supra note 3, 269 Neb.
at 226, 691 N.W.2d at 152, quoting Quality Pork Internat. v. Rupari Food
Servs., supra note 11. Accord Helicopteros Nacionales de Colombia v. Hall,
466 U.S. 408, 104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984).

4 Brunkhardt v. Mountain West Farm Bureau Mut. Ins., supra note 3; Quality
Pork Internat. v. Rupari Food Servs., supra note 11.

‘5 See, Brunkhardt v. Mountain West Farm Bureau Mut. Ins., supra note 3;
Diversified Telecom Servs. v. Clevinger, supra note 7.

into court there.’* Whether a forum state court has personal
jurisdiction over a nonresident defendant depends on whether
the defendant has acted in a manner which creates substantial
connections with the forum state, resulting in the defendant’s
purposeful availment of the benefits and protections of the law
of the forum state.!” The “‘purposeful availment’” requirement
“ensures that a defendant will not be haled into a jurisdiction
solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ con-
tacts ... or of the ‘unilateral activity of another party or a third
person.’”!® “Jurisdiction is proper, however, where the contacts
proximately result from actions by the defendant himself that
create a ‘substantial connection’ with the forum State.”!?
Applying the principle that personal jurisdiction cannot be
premised on the unilateral activity of another, several courts
have held that a noncustodial parent’s exercise of visitation
rights or other routine communication with children in a state
to which the custodial parent has relocated is not a sufficient
contact with that state to subject the noncustodial parent to
the jurisdiction of its courts. For example, in Miller v. Kite,”
the custodial parent moved to North Carolina after the par-
ties’ divorce and commenced an action there to modify a child
support award. The noncustodial parent, who was domiciled
in California and resided in Japan, had never resided in North
Carolina. The North Carolina Supreme Court held that neither
the child’s presence in that state nor the noncustodial parent’s
periodic exercise of his visitation rights and mailing of child
support payments there provided the constitutionally required
minimum contacts to justify in personam jurisdiction over the
noncustodial parent. The court noted that the child’s presence

16 Ameritas Invest. Corp. v. McKinney, supra note 4; Brunkhardt v. Mountain
West Farm Bureau Mut. Ins., supra note 3.

” Brunkhardt v. Mountain West Farm Bureau Mut. Ins., supra note 3. See
Diversified Telecom Servs. v. Clevinger, supra note 7.

© Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S. Ct. 2174, 85 L.
Ed, 2d 528 (1985) (citations omitted). See, also, Quality Pork Internat. v.
Rupari Food Servs., supra note 11.

1 Burger King Corp. v. Rudzewicz, supra note 18, 471 U.S. at 475.

20 Miller v, Kite, 313 N.C. 474, 329 S.E.2d 663 (1985).

654 Le

in North Carolina was solely the result of the custodial parent’s
decision to reside there and that the visitations were tempo-
rary and unrelated to the action. Similarly, in In re Marriage
of Bushelman v. Bushelman,” the Wisconsin Court of Appeals
held that a noncustodial parent’s acquiescence in his children’s
residence in Wisconsin with the custodial parent, and his letters,
telephone calls, and visits with the children in that state, did not
satisfy the minimum contacts requirement which would permit
a Wisconsin court to exercise personal jurisdiction over him in
a divorce proceeding.

Both Miller and In re Marriage of Bushelman rely in part
on the reasoning of Kulko v. California Superior Court.” In
that case, the parties resided with their children in New York
until they separated. Their separation agreement provided that
their children would reside with the father in New York dur-
ing the school year, but would spend vacation periods with the
mother, who moved to California. One of the children later
expressed a desire to live with her mother in California, and the
father acquiesced. The other child moved to California without
the father’s prior knowledge or acquiescence, and the mother
then commenced a proceeding in California to modify custody
and support obligations which had been in effect under the
separation agreement. In reversing a decision of the California
Supreme Court’s affirmance of a lower court’s finding that it
had personal jurisdiction over the father, the U.S. Supreme
Court noted that there was no claim that the father had “visited
physical injury on either property or persons within the State
of California” and that the single act of the father’s acquies-
cence in the stated preference of one of his children to reside in
California with her mother afforded “no basis on which it can
be said that [the father] could reasonably have anticipated being
‘haled before a [California] court.’”?>

2 In re Marriage of Bushelman v. Bushelman, 246 Wis. 2d 317, 629 N.W.24
795 (Wis. App. 2001).

2 Kulko v. California Superior Court, 436 U.S. 84, 98 S. Ct. 1690, 56 L. Ed.
2d 132 (1978).

% Id., 436 US. at 96-98, citing and quoting Shaffer v. Heitner, 433 U.S. 186,
97'S. Ct. 2569, 53 L. Ed. 2d 683 (197).

Le “

In this case, however, Steven’s contacts with Nebraska are
alleged to involve something much different than the lawful
exercise of visitation rights. Susan alleges that during five
of these visitations, including three when Steven personally
transported S.L. between Nebraska and British Columbia and
two when he directed his mother to do so, Steven committed
repeated intentional acts of abuse while S.L. was with him in
Canada. Although Steven states in his affidavit that the allega-
tions of abuse have been fully investigated in Canada, he does
not disclose the results of those investigations, nor does he spe-
cifically deny the conduct alleged by Susan. Viewing the allega-
tions of the complaint and the factual statements contained in
the parties’ affidavits in a light most favorable to Susan in her
capacity as next friend, guardian, and mother of S.L., as our
standard of review requires, the question is whether a nonresi-
dent who repeatedly transports a child residing in Nebraska to
another jurisdiction where he commits intentional acts of abuse
before returning the child to Nebraska could reasonably expect
to be required to defend an intentional tort action | brought on
the child’s behalf in a Nebraska court.

In Calder v. Jones,* the U.S. Supreme Court addressed an
analogous issue involving an intentional tort allegedly commit-
ted by residents of one state against a resident of another. In that
case, two Florida residents participated in the publication of an
article about a California resident, who brought a libel action in
California. One of the Florida defendants, a reporter, researched
the article through telephone conversations with sources in
California and. made several business trips to that state. The
other Florida defendant, who was the president and editor of the
publication, had traveled to California on two occasions, both
unrelated to the article in question. Both defendants asserted
that as Florida residents, they were not subject to the jurisdic-
tion of the California court in which the libel action was filed.
Rejecting their contention, the Court noted that the defendants
were “not charged with mere untargeted negligence. Rather,
their intentional, and allegedly tortious, actions were expressly

4 Calder v. Jones, 465 U.S. 783, 104 S. Ct. 1482, 79 L. Ed. 2d 804 (1984).

656 a

aimed at California.”* The Court held that the defendants were
“primary participants in an alleged wrongdoing intentionally
directed at a California resident, and jurisdiction over them is
proper on that basis.”

Employing slightly different reasoning, the court in Hughs on
Behalf of Praul v. Cole” held that a Minnesota court could exer-
cise personal jurisdiction over a noncustodial parent residing in
Pennsylvania who had allegedly abused the child, a Minnesota
resident, during summer visitations in Pennsylvania. The non-
custodial parent had never resided in or visited Minnesota. The
court reasoned that while his contacts with the state were not
numerous, they were significant in that they included a continu-
ing relationship with the child and repeated telephone calls to
the home in Minnesota where the child resided with his mother.
The court further noted that the noncustodial parent could rea-
sonably foresee that consequences from the abuse could arise in
Minnesota, which had a strong interest in enabling the custodial
parent’s efforts to protect her child from abuse by seeking a
protective order against the noncustodial parent.

Based upon Susan’s allegations and affidavit, which
we must accept as true for purposes of the jurisdictional issue
before us, we conclude that Steven’s contacts with Nebraska are
sufficient to subject him to specific personal jurisdiction of a
Nebraska court. The record supports an inference that Steven’s
undisputed travels to Nebraska for the purpose of transport-
ing S.L. to and from British Columbia were an integral part of
the intentional abuse alleged by Susan to have occurred there.
As such, Steven’s presence in Nebraska would not be random,
fortuitous, or attenuated, but, rather, would constitute a means
to facilitate intentional harm inflicted upon a Nebraska resident
after she was physically removed from the state and before she
was returned. An intent to inflict injury can be inferred as a
matter of law in cases of sexual abuse,” and thus, any abuse

25 Id., 465 US. at 789.

6 Id., 465 US. at 790.

2 Hughs on Behalf of Praul v. Cole, 572 N.W.24 747 (Minn. App. 1997).

28 State Farm Fire & Cas. Co. v. van Gorder, 235 Neb. 355, 455 N.W.2d 543
(1990).

inflicted upon S.L. in Canada would have foreseeable conse-
quences on the child when she was returned to Nebraska. There
are also allegations that during at least some of the visitations,
Steven made threats intended to prevent S.L. from reporting
the abuse to Susan and Nebraska authorities. It is not simply
Steven’s presence in Nebraska to exercise visitation rights with
a Nebraska resident, but, rather, the alleged intentional misuse
of such rights as a means of inflicting intentional harm upon
S.L., as alleged by Susan, which constitutes the “substan-
tial connection” between Steven and Nebraska. Due process
requires that individuals have “‘fair warning’” that their con-
duct may subject them to the jurisdiction of a state in which
they do not reside.”

Where a forum seeks to assert specific jurisdiction
over an out-of-state defendant who has not consented to
suit there, this “fair warning” requirement is satisfied if
the defendant has “purposefully directed” his activities
at residents of the forum . . . and the litigation results
from alleged injuries that “arise out of ot relate to”
those activities.*°

We conclude that one who removes a minor child from her
Nebraska home under the guise of exercising a visitation right in
another jurisdiction, and then intentionally subjects the child to
harm before returning her to this state, could reasonably expect
to be haled into a Nebraska court to answer for such conduct in
a civil action brought on behalf of the child.

Fair Play AND SUBSTANTIAL JUSTICE
HE Once it has been decided that a defendant purpose-
fully established minimum contacts within the forum state,
these contacts may be considered in light of other factors to
determine whether the assertion of personal jurisdiction would

29 See, Burger King Corp. v. Rudzewicz, supra note 18, 471 U.S. at 472.
Accord, Shaffer v. Heitner, supra note 23 (Stevens, J., concurring in judg-
ment); Quality Pork Internat. v. Rupari Food Servs., supra note 11.

39 Burger King Corp. v. Rudzewicz, supra note 18, 471 U.S. at 472 (citations
omitted).

658 —

comport with fair play and substantial justice! These consider-
ations include (1) the burden on the defendant, (2) the forum
state’s interest in adjudicating the dispute, (3) the plaintiff’s
interest in obtaining convenient and effective relief, (4) the
interstate judicial system’s interest in obtaining the most effi-
cient resolution of controversies, and (5) the shared interest of
the several states in furthering fundamental substantive social
policies.” Such considerations sometimes serve to establish the
reasonableness of jurisdiction upon a lesser showing of mini-
mum contacts than would otherwise be required.

The fact that Steven is a resident of Canada is an important
factor to be considered in this analysis. The U.S. Supreme Court
has stated that “[t]he unique burdens placed upon one who must
defend oneself in a foreign legal system should have significant
weight in assessing the reasonableness of stretching the long
arm of personal jurisdiction over national borders.”3+

However, the record reflects that Steven has previously
participated in Nebraska legal proceedings involving S.L. by
requesting the district court for. Lancaster County to enforce
certain orders entered by a Canadian court. Traveling from
his home in Canada to Nebraska for court proceedings should
be‘no more burdensome to Steven than the same journey to
exercise . visitation rights. Although Steven claims that there
are witnesses in Canada upon whose testimony he would rely,
there is no showing that he could not preserve their testimony
for presentation in a Nebraska court. The record reflects that
one such witness, Steven’s mother, has previously testified

3! Burger King Corp. v. Rudzewicz, supra note 18; Internat. Shoe Co. v.
Washington, supra note 11; Diversified Telecom Servs. v. Clevinger, supra
note 7.

® Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 107 S. Ct. 1026,
94 L, Ed. 2d 92 (1987); Burger King Corp. v. Rudzewicz, supra note 18;
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S. Ct. 559,
62 L. Ed. 2d 490 (1980); Diversified Telecom Servs. v. Clevinger, supra
note 7.

% See, Burger King Corp. v. Rudzewicz, supra note 18; Diversified Telecom
Servs. v. Clevinger, supra note 7.

4 Asahi Metal Industry Co. v. Superior Court, supra note 32, 480 U.S.
at 114.

on his behalf in a Nebraska proceeding involving S.L. Other
witnesses, including law enforcement personnel and medical
professionals who would testify on behalf of S.L., are located
in Nebraska.

HH Nebraska has a significant interest in adjudicating the
dispute, inasmuch as a state “generally has a ‘manifest inter-
est’ in providing its residents with a convenient forum for
redressing injuries inflicted by out-of-state actors.”> And the
interest of the minor child in obtaining convenient and effective
relief is better served in Nebraska, where she resides, than in
Canada. Although Canada has an interest in a fair and efficient
resolution of the controversy, its interest does not outweigh that
of Nebraska.

Considering all relevant factors, we conclude that Nebraska’s
exercise of specific personal jurisdiction over Steven in this action
would not offend notions of fair play and substantial justice.

CONCLUSION
Based upon our independent review of the complaint and
affidavits, viewed in a light most favorable to Susan in her
representative capacity as the next friend, guardian, and mother
of S.L., we conclude that the district court for Lancaster
County has specific personal jurisdiction over Steven and
that it erred in granting his motion to dismiss. Accordingly,
we reverse the order of dismissal and remand the cause for
further proceedings.
REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.

% Burger King Corp. v. Rudzewicz, supra note 18, 471 US. at 473.

State OF NEBRASKA, APPELLEE, V.
Eric T. McGuEE, APPELLANT.
742. N.W.2d 497

Filed December 14, 2007. No. S-06-1332.

Thomas C. Riley, Douglas County Public Defender, and
Timothy P. Burns for appellant.

Jon Bruning, Attorney General, and James D. Smith
for appellee.

Heavican, C.J., Wricut, ConNoLty, GERRARD, STEPHAN,
McCormack, and Minier-Lerman, JJ.

Heavican, C.J.
INTRODUCTION
Eric T. McGhee was convicted of first degree murder and
use of a weapon to commit a felony. On appeal, McGhee con-
tends there was insufficient evidence to support a conviction for
first degree murder and that he was not responsible by reason
of insanity.

FACTS
Procedural Background.

On March 11, 2003, McGhee was charged with first degree
murder and use of a weapon to commit a felony in the death of
Ezra Lowry. That same day, McGhee’s counsel filed a motion to
determine competency. Following a mental competency evalu-
ation at the Lincoln Regional Center, McGhee was found not
competent to stand trial. Periodic reviews were held with regard
to McGhee’s status, and on February 10, 2006, the court found
that McGhee’s competency had returned. On May 15, McGhee
notified the court that he intended to plead not responsible by
reason of insanity.

A jury trial was held from August 14 to 17, 2006. At trial,
McGhee did not contest that he shot Lowry; rather, his theory
of defense was that his actions did not amount to first degree

662 a

murder. Thus, McGhee contended that a conviction for second
degree murder would be more appropriate and that in any case,
he was not responsible by reason of insanity. The jury rejected
these claims and found McGhee guilty of first degree murder
and use of a weapon to commit a felony. On October 25, the
district court denied McGhee’s motion for a new trial and sen-
tenced him to life imprisonment for first degree murder and
5 to 10 years’ imprisonment for use of a weapon to commit
a felony.

Events of January 29 and 30, 2003.

The events surrounding Lowry’s death were presented pri-
marily through the testimony of Jermaine Dunn and Nadeena
Washington. McGhee, Dunn, Lowry, and Washington were
good friends who frequently socialized together. From the
testimony presented at trial, all smoked marijuana and drank
alcohol. In addition, both Dunn and McGhee had a history of
smoking “wet,” a marijuana cigarette dipped in formaldehyde
that has been cut with a drug known as PCP.

During the daylight hours of January 29, 2003, the four, along
with Lowry’s uncle and McGhee’s cousin, were at McGhee’s
home in Omaha drinking and smoking marijuana. Washington
testified that she and Lowry had been invited over by McGhee
and that when they arrived with Dunn and Lowry’s uncle,
McGhee seemed upset. The party broke up approximately 30
to 45 minutes later.

Later that evening, Lowry and Washington, along with their
4-year-old son, picked up Dunn and returned to McGhee’s
home. Upon arrival, they observed McGhee involved in a
physical altercation with his girlfriend. Though the evidence
is not definitive, it appears that Lowry broke up the fight, the
girlfriend left, and the others went inside. Washington testified
that the girlfriend continued to telephone McGhee at his home

" throughout the evening.

The party went on for 2 to 3 hours before McGhee and
Washington left to purchase alcohol. According to Washington’s
testimony, in the 15 minutes she and McGhee were out, they had
a conversation in which McGhee implied that he was God.

Upon their return, McGhee and Washington resumed a game
of dominoes they had been playing, while Dunn and Lowry
played pool. All were drinking and smoking marijuana, and at
one point, another acquaintance stopped by for a brief visit.
Washington and Dunn testified that there had been no argu-
ments or disagreements between McGhee and Lowry that eve-
ning, though Dunn indicated that Lowry had initially expressed
displeasure that Washington was going with McGhee to pur-
chase alcohol. Both Washington and Dunn also testified that
McGhee had been acting strange recently, including during
the course of that evening. In particular, Dunn testified that
about 5 minutes before Lowry was shot, McGhee had acted
“bizarre,” pacing around and briefly going outside. Both Dunn
and Washington blamed McGhee’s general behavior on smok-
ing “wet,” although there is no evidence that he was smoking
“wet” on this particular evening. In addition, both Dunn and
Washington testified that prior to the shooting, neither had seen
a gun that evening.

At some point before Lowry was shot, Washington fell asleep
on the couch. Lowry ultimately woke her so the couple and
their son could leave, but McGhee talked them out of leaving by
producing a large bag of marijuana, and Washington went back
to sleep. According to Dunn, McGhee tried to get Washington
to roll him a “blunt,” but she was still sleeping. McGhee refused
to let Lowry do it, so Dunn left the room to do it instead.

Dunn testified that he was in the back room when the music
suddenly got “concert loud.” Dunn then heard a gunshot. Upon
returning to the main room, Dunn saw McGhee pointing a gun
at him and Lowry lying on the floor.

At about this time, Washington was awakened by her son,
who told her that McGhee had hit Lowry with a pool stick
and that Lowry was bleeding. McGhee then pointed the gun
between Dunn and Washington. While McGhee indicated that
he would not shoot them, he nevertheless chased Dunn around
the house.

Dunn escaped through the front door, which he and
Washington both testified was locked, though it had not been
locked earlier in the evening. As he escaped out the front door,
Dunn testified he heard another gunshot. Washington testified

that this gunshot was McGhee’s shooting Lowry a second time.
She also testified that after McGhee shot Lowry the second
time, he turned to Washington and said, “I saved you.”

Dunn testified that after he left the house, he saw McGhee
walk out onto the front porch of the home, but that McGhee did
not appear to see Dunn. Dunn then used a nearby pay telephone
to call the 911 emergency dispatch service. Dunn waited for
police, directing them to McGhee’s home upon their arrival.

When McGhee left the house to look for Dunn, Washington
locked the front door behind. him. Washington testified that she
attempted to call 911 using McGhee’s telephone, but found that
it had been unplugged. Washington then found Lowry’s cellular
telephone in his pocket and called 911. Meanwhile, McGhee
kicked the door in and reentered the house. He took the tele-
phone from Washington, then pointed the gun at Washington and
demanded her car keys, which Washington could not find.

McGhee then forced Washington and her son out of the front
door of the house and around to the back alley. McGhee then
Jed them on what Washington described as a “zig-zag” path
for about a mile. During this time, McGhee stopped to hide
when he heard police sirens and kept saying that the victim
was “bad” and “not pure” and that he should have killed Dunn
as well. Washington also testified that McGhee kept asking her
questions about her son, implying that he, McGhee, was the
child’s father and that he and Washington had been involved in
a sexual relationship. Washington testified that this was not true.
At one point, McGhee disposed of Dunn’s and Lowry’s cellular
telephones, but soon after retrieved Lowry’s telephone. He then
used the telephone to call someone to tell him or her that they
were coming. Throughout this walk, McGhee had the gun with
him and often insisted on carrying Washington’s son.

Eventually, the three arrived at McGhee’s aunt’s home.
McGhee again turned the music up, but allowed Washington to
use Lowry’s cellular telephone to call for a ride. At some point,
McGhee’s aunt came downstairs. According to Washington, she
told the aunt that McGhee had killed Lowry, which McGhee
then denied. In contrast, the aunt testified that Washington
simply told her that she and her son were waiting for a ride.
In any event, the ride arrived and Washington and her son left.

According to Washington, they left the aunt’s home sometime
between 2 and 3 a.m. on January 30, 2003.

After Washington and her son left, McGhee indicated that he
was also leaving. He returned to the aunt’s home at about 6 a.m.
and went to sleep. Eventually, the police determined his where-
abouts, surrounded the home, and took McGhee into custody.
The weapon used to kill Lowry was never recovered.

Testimony With Regard to McGhee’s Mental State.

Dr. Bruce Gutnik testified for McGhee. Gutnik testified that
he evaluated McGhee for approximately 1% hours and diagnosed
him with paranoid schizophrenia with a history of alcohol and
cannabis abuse and possible dementia. Gutnik testified that in
his opinion, McGhee did not know the difference between right
and wrong at the time McGhee shot Lowry. Gutnik addition-
ally testified that he thought McGhee probably did understand
that by pointing a gun at Lowry’s head and pulling the trigger,
Lowry would be severely injured and probably killed, but that
McGhee believed he was acting in self-defense. Gutnick also
testified that McGhee’s actions in evading police, disposing of
evidence, and denying responsibility were not inconsistent with
the conclusion that McGhee did not know right from wrong.
Gutnik reasoned that McGhee had been psychotic and that one
should not read too much into McGhee’s thought process, as it
was not likely to be logical or rational.

Gutnik testified about allegations that McGhee might have
been malingering, or faking his symptoms, in order to delay or
prevent his return to competency and later for purposes of the
insanity defense. According to his testimony, Gutnik did not
believe that McGhee was malingering. Gutnik also testified that
smoking “wet” could cause delusions and hallucinations, but
that those effects should wear off within 6 to 8 hours.

Dr. Louis Martin, a psychiatrist with the Lincoln Regional
Center, testified for the State. Martin had been McGhee’s
treating psychiatrist for at least 2 years during the time when
McGhee had been committed pending his return to competency.
Martin’s initial diagnosis of McGhee was that McGhee suffered
from schizophrenia with a history of substance abuse.

666 Es

In contrast to Gutnik, Martin testified that at the time McGhee
shot Lowry, McGhee understood both what he was doing and
the nature of his act, and that in spite of McGhee’s mental ill-
ness, Martin felt McGhee had a basic understanding that what
he had done was wrong. Martin felt that McGhee’s behavior
after the commission of the murder was not “indifferent” and
suggested that McGhee was aware that his earlier actions
were wrong. ,

In addition, Martin testified that both he and his staff had
had concerns about malingering, notably based upon instances
where McGhee would appear closed and noncommunicative
when. dealing with staff, but perfectly communicative when
interacting with other patients. Martin acknowledged that it
was difficult to determine where malingering ends and mental
illness begins.

; ASSIGNMENTS OF ERROR
McGhee assigns that the district court erred in concluding (1)
that there was sufficient evidence to support his conviction for
first degree murder and (2) that he was sane at the time of the
commission of the murdér.

STANDARD OF REVIEW

Hl Regardless of whether the evidence is direct, circumstap-
tial, or a combination thereof, and regardless of whether the
issue is labeled as a failure to direct a verdict, insufficiency of
the evidence, or failure to prove a prima facie case, the standard
is the same: In reviewing a criminal conviction, an appellate
court does not resolve conflicts in the evidence, pass on the
credibility of witnesses, or reweigh the evidence; such matters
are for the finder of fact, and a conviction will be affirmed, in
the absence of prejudicial error, if the evidence admitted at trial,
viewed and construed most favorably to the State, is sufficient to
support the conviction.

' State v. White, 272 Neb. 421, 722 N.W.2d 343 (2006).

Hl The verdict of the finder of fact on the issue of insanity
will not be disturbed unless there is insufficient evidence to
support such a finding.”

ANALYSIS
Sufficiency of Evidence.

Hl McGhee first argues that the district court erred in con-
cluding there was sufficient evidence to support his conviction
for first degree murder. The elements of first degree murder are
listed in Neb. Rev. Stat. § 28-303 (Cum. Supp. 2006), which
states that a person commits murder in the first degree if he
or she kills another person purposely and with deliberate and
premeditated malice. McGhee argues the evidence does not
support a finding that the killing was done with deliberate and
premeditated malice.

HH Deliberate means not suddenly, not rashly, and requires
that the defendant considered the probable consequences of his
or her act before doing the act.> The term “premeditated” means
to have formed a design to commit an act before it is done.*
One kills with premeditated malice if, before the act causing the
death occurs, one has formed the intent or determined to kill the
victim without legal justification.> No particular length of time
for premeditation is required, provided that the intent to kill is
formed before the act is committed and not simultaneously with
the act that caused the death.® The time required to establish
premeditation may be of the shortest possible duration and may
be so short that it is instantaneous, and the design or purpose
to kill may be formed upon premeditation and deliberation at
any moment before the homicide is committed.” A question of
premeditation is for the jury to decide.®

2 State v. Harms, 263 Neb. 814, 643 N.W.2d 359 (2002).
3 State v. Robinson, 272 Neb. 582, 724 N.W.2d 35 (2006).
4d.

5 id,

5 Id,

1 Ia.

8 Ta.

668 Ee

It is apparent that the evidence, viewed in a light most favor-
able to the State, supports the jury’s finding that McGhee had
acted “purposely and with deliberate and premeditated mal-
ice”? There was evidence presented that McGhee had invited
Washington and Lowry over to his house earlier in the day and
seemed upset that they brought others with them.

McGhee later invited the couple over again and persuaded
them to stay when they indicated a desire to go home. McGhee
then refused to allow Lowry to roll him a “blunt” and instead
had Dunn leave the room to do so. This could have been seen
as an attempt to get one witness out of the room, and with
Washington asleep, the only remaining witness would have
been Washington’s and Lowry’s 4-year-old son.

After getting Dunn to leave the room, McGhee turned the
music “concert loud,” perhaps to mask the sound of gunshots.
Then, in the aftermath of the shooting, Washington attempted to
place a telephone call, yet found the telephone to be unplugged.
However, according to Washington, the telephone had been
ringing throughout the evening.

In addition, both Dunn and Washington testified that the front
door was locked, though it had apparently not been locked ear-
lier in the evening and several persons, including Washington
and McGhee, had been outside. In fact, according to Dunn,
McGhee had been outside only minutes prior to the shooting.
Finally, there was testimony by both Dunn and Washington that
neither had seen a gun all evening until McGhee produced one
and shot Lowry.

In short, when the record is viewed in the light most favor-
able to the State, there is sufficient evidence to support the
conclusion that McGhee committed the killing with deliberate
and premeditated malice. As such, McGhee’s conviction for first
degree murder is supported by the record and his first assign-
ment of error is without merit.

Jury Finding Regarding Sanity.
In his second assignment of error, McGhee argues
the district court erred in finding that he was sane at the time

> § 28-303.

| °
he killed Lowry. Nebraska follows the M’Naghten rule as to
the defense of insanity. The test of responsibility for crime is a
defendant’s capacity to understand the nature of the act alleged
to be criminal and the ability to distinguish between right and
wrong with respect to the act. For an insanity defense, the
insanity must be in existence at the time of the alleged criminal
act.!! A defendant who pleads that he or she is not responsible
by reason of insanity has the burden to prove the defense by a
preponderance of the evidence.” The verdict of the finder of
fact on the issue of insanity will not be disturbed unless there
is insufficient evidence to support such a finding."*

Gutnik testified that in his opinion, McGhee did not know
the difference between right and wrong and thought that in
killing Lowry, he had done a “good deed and expected people
to pat him on the back and say way to go.” Gutnik further
testified that while McGhee understood that putting a gun to
Lowry’s head and pulling the trigger would likely result in
injury or death to Lowry, McGhee nevertheless thought he was
acting in self-defense. Martin, on the other hand, testified that
he believed McGhee knew his actions were wrong and that
such was evidenced by the fact that McGhee to some extent
attempted to cover up his actions.

HH An appellate court does not resolve conflicts in evi-
dence, pass on credibility of witnesses, evaluate explanations,
or reweigh evidence presented, which are within a fact finder’s
province for disposition.“ By rejecting McGhee’s insan-
ity defense, the jury clearly believed Martin’s testimony that
McGhee knew that his actions were wrong. This court will not
revisit that finding.

The record contains sufficient admissible evidence for the
jury to conclude that McGhee was not insane at the time he
shot Lowry. As such, McGhee’s second assignment of error is
without merit.

10 State v. Harms, supra note 2.

u 1g,

12 Id, See, also, Neb. Rev. Stat. § 29-2203 (Reissue 1995).
"3 State v. Harms, supra note 2.

4 See id.

670 a

CONCLUSION
There was sufficient evidence in the record to support both
McGhee’s conviction for first degree murder and the jury’s
finding that McGhee was not insane at the time he shot Lowry.
As such, the judgment of the district court is affirmed.
AFFIRMED.

SHayNeE Murray, APPELLANT, V.
Crry oF GRAND ISLAND, APPELLEE.
742. N.W.2d 506

Filed December 14, 2007. No, S-07-087.

ee
Mandy L. Strigenz, of Sibbernsen & Strigenz, PC.,
for appellant.

James D. Hamilton, of Baylor, Evnen, Curtiss, Grimit & Witt,
L.L.P., for EMC Insurance Companies on behalf of appellee
City of Grand Island.

Patrick B. Donahue and Dennis R. Riekenberg, of Cassem,
Tierney, Adams, Gotch & Douglas, for Travelers Insurance
Company on behalf of appellee City of Grand Island.

Paul F. Prentiss and Benjamin E. Maxell, of Timmermier,
Gross & Prentiss, for London GI Program on behalf of appellee
City of Grand Island.

Heavican, C.J., Wricut, ConNoity, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Waricut, J.
NATURE OF CASE

Shayne Murphy began working as a firefighter and emer-
gency medical technician (EMT) for the City of Grand Island
(City) in 1982. In 2002, he tested positive for hepatitis C, and he
commenced an action against the City in the Nebraska Workers’
Compensation Court. A single judge of the compensation court
dismissed Murphy’s claim, citing insufficient evidence of causa-
tion that the hepatitis C arose out of and in the course of his
employment. A three-judge review panel of the compensation
court affirmed the trial court’s decision. Murphy appeals. The
issue is whether there was sufficient evidence to establish that
Murphy contracted hepatitis C in the scope and course of his
employment with the City.

SCOPE OF REVIEW
Hl On appellate review, the findings of fact made by the trial
judge of the Workers’ Compensation Court have the effect of
a jury verdict and will not be disturbed unless clearly wrong.
Olivotto v. DeMarco Bros. Co., 273 Neb. 672, 732 N.W.2d
354 (2007).

672 Es

FACTS

As part of Murphy’s employment as a firefighter and EMT,
he assisted ambulances on emergency response calls. He per-
formed CPR, applied bandages, administered oxygen, and pro-
vided other medical services.

Murphy received additional EMT training in 1984 and 1985
and, thereafter, spent 70 percent of his time serving as an EMT.
He often had direct contact with patients, estimating that he
came into physical contact with at least 1 patient on each work
shift and sometimes as many as 10. Murphy testified he remem-
bered times he was exposed to bodily fluids.

The City implemented its current safety procedures and pro-
tocol for emergency personnel in approximately 1990. These
procedures, commonly referred to as “universal precautions,”
require EMT personnel to wear latex gloves and sometimes
goggles to prevent exposure to the bodily fluids of a patient.
When the City implemented the precautions, it also began
requiring emergency personnel to prepare incident reports,
which described when personnel were exposed to a patient’s
bodily fluids.

Murphy submitted three separate incident reports. The first
occurred on September 13, 1990, when a patient was combative
and began vomiting and spitting on the ambulance crew. Blood
was mixed with the saliva, and the patient’s mouth and tongue
were bleeding. The incident report showed that Murphy washed
his hands and arms with soap and Clorox and that he was wear-
ing latex gloves, but that the patient’s bodily fluids may have
come into contact with his eyes. Murphy did not remember
specifically getting blood in his eyes, nose, or mouth, and his
skin was intact at the time of the incident. Murphy did not know
if the patient was infected with hepatitis C.

The second incident occurred on May 18, 1991, while Murphy
was treating a patient who was gurgling and exhaling blood.
Blood got onto Murphy’s face, hands, and forearms. He washed
his hands with “Clorox water” and was wearing gloves during
the exposure, although one glove had a hole in it. The patient’s
bodily fluids possibly came in contact with Murphy’s eyes. He
did not know if the patient was infected with hepatitis C.

The third incident occurred September 11, 1992. Murphy
was treating a surgical patient whose sutures had broken loose,
causing the patient to bleed profusely from her femoral artery.
Blood spattered onto Murphy’s face, under his gloves, and on
his arms, but his skin was intact. He washed his hands with
“ER blood spill solution.” He did not know if the patient was
infected with hepatitis C.

In 2002, Murphy tested positive for hepatitis C. He initiated
this lawsuit against the City in the Workers’ Compensation
Court, claiming that his contraction of hepatitis C arose out of
and in the course of his employment with the City.

At trial, evidence was presented that Murphy had engaged
in a number of activities over the course of his life that might
have exposed him to hepatitis C. These activities included his
participation in “Golden Gloves” boxing and football. Murphy
was frequently exposed to blood, saliva, and other fluids of his
boxing opponents and his teammates. Murphy also underwent
arthroscopic surgery to repair a knee following a football-
related injury. He was unsure whether he had received a blood
transfusion during the surgery.

Murphy offered medical evidence from Drs. Michael F.
Sorrell and John A. Wagoner, Jr. Sorrell opined that Murphy’s
hepatitis C was the result of his employment as an EMT with
the City. Sorrell’s opinion was based on the assumption that
Murphy did not have any risk factors for hepatitis C other than
his work. The facts considered by Sorrell were that Murphy
was in a monogamous relationship with his wife and she tested
negative for hepatitis C and that Murphy had never used intra-
venous drugs, had never been tattooed or pierced, had normal
renal function, had never had dialysis, and had never received a
blood transfusion.

Murphy also offered medical evidence from Wagoner in the
form of a medical record in which Wagoner noted that Murphy’s
hepatitis C dated to an incident which was documented in
1990, where he experienced a “blood splash/spill and exposure.”
‘Wagoner did not provide a basis for his statement except to note
that he had had a “lengthy discussion” with Murphy.

The City offered a report from Dr. Marvin J. Bittner, who
stated that he could not conclude with a reasonable degree of

674 Ee

medical certainty that Murphy had acquired hepatitis C as the
result of his work as an EMT. Bittner was also of the opinion
that no other doctor could conclude that Murphy’s hepatitis C
was caused by his employment. Bittner opined that many risk
factors could not be eliminated. The evidence showed that
Murphy had engaged in high-risk activities, described above,
that may have exposed him to hepatitis C, and Murphy could
not say that patients he came into contact with were infected
with hepatitis C.

After reviewing the evidence, the trial judge found that the evi-
dence was insufficient to prove that Murphy had acquired hepa-
titis C during the scope and course of his employment. Murphy
appealed to a three-judge review panel, which affirmed the trial
court’s decision, and Murphy now appeals to this court.

ASSIGNMENTS OF ERROR
Murphy assigns two errors: (1) The Workers’ Compensation
Court erred in ruling that causation should be decided in favor
of the City and dismissing his action and (2) the compensation
court erred in relying on the medical testimony of Bittner.

ANALYSIS

We must determine whether the Workers’ Compensation
Court was clearly wrong in finding that Murphy failed to prove
that he contracted hepatitis C during the scope and course of his
employment with the City.

HMM Pursuant to Neb. Rev. Stat. § 48-185 (Reissue 2004),
an appellate court may modify, reverse, or set aside a Workers’
Compensation Court decision only when (1) the compensation
court acted without or in excess of its powers; (2) the judgment,
order, or award was procured by fraud; (3) there is not sufficient
competent evidence in the record to warrant the making of the
order, judgment, or award; or (4) the findings of fact by the
compensation court do not support the order or award. Olivotto
v. DeMarco Bros. Co., 273 Neb. 672, 732 N.W.2d 354 (2007).
In determining whether to affirm, modify, reverse, or set aside
a judgment of the Workers’ Compensation Court review panel,
a higher appellate court reviews the findings of the trial judge
who conducted the original hearing. Id.

The trial court’s opinion addressed the arguments that Murphy
now makes on appeal. It was undisputed that Murphy had tested
positive for hepatitis C, and it was known that hepatitis C could
be contracted through various means and sources. According
to the Centers for Disease Control and Prevention, the possible
sources included intravenous drug use, 60 percent; sexual con-
tact, 15 percent; blood transfusion, 10 percent; occupational, 4
percent; other, 1 percent; and unknown, 10 percent.

The court stated that Murphy had failed to establish that he
was ever exposed to a patient who was infected with hepatitis C.
‘When Murphy was exposed to blood or bodily fluids during his
employment, there was no evidence of piercing of his skin by a
sharp object, nor was there any persuasive evidence that blood
was splashed onto a portion of his skin which was broken, cut,
or otherwise presented an open entry point. The court noted
that the incident reports submitted by Murphy indicated that his
skin was intact and that he was possibly exposed via his natural
body openings (nose, eyes, or mouth). However, Murphy could
not affirmatively state that such was in fact the case. The court
concluded that although Murphy. was engaged in an occupation
which obviously provided a:risk for exposure, he was unable
to provide any evidence whatsoever that he came in contact
with the blood. or bodily fluids of an individual infected with
hepatitis C. The court noted that Murphy’s case was further
complicated by the fact that he had other significant risk factors
outside his employment in which he was possibly exposed.

The court relied upon the opinion. of Bittner, who stated that
he could not reach a conclusion with a reasonable degree of
medical certainty that Murphy had acquired hepatitis C as the
result of his work as an EMT for the City and that he did not
believe any other physician could reach that conclusion with a
requisite degree of certitude.

The court opined that in the end, the case came down to a
matter of proof and persuasion. Murphy had offered proof on
the issue of causation in-the form of an opinion by Sorrell, but
the court was not ultimately persuaded. It could not dismiss
the fact that there was no evidence that Murphy had ever been
exposed on the job to the blood or bodily fluids of an indi-
vidual who was infected with hepatitis C. The court stated that

676 De

Murphy’s “occupational exposures” did not indicate that blood
touched anything but intact skin and only “‘possibly’” came
into contact with his mucous membranes. The court concluded
that at best, Murphy’s evidence established he was in an occupa-
tion involving a higher exposure risk to hepatitis C than other
jobs and that this proof was not enough.

Murphy argues that his occupation as an EMT placed him
at greater risk of contracting hepatitis C. In support, Murphy
relies upon Neb. Rev. Stat. § 71-514.01 (Reissue 2003), which
provides in part: “The Legislature hereby finds that health
care providers are at risk of significant exposure to the blood
and other body fluids of patients as a result of their work.”
According to Murphy, this statute implies the Legislature has
recognized that health care workers are at greater risk for
infectious disease and, thus, hepatitis C should be considered
an occupational disease. Murphy claims that such an adjudica-
tion would change the burden of proof placed upon him and he
would not be required to prove the exact date and time that he
contracted hepatitis C.

However, Murphy’s argument fails to recognize that the
problem was not that he failed to prove the date and time he
contracted hepatitis C but that he failed to prove it was more
likely than not that he contracted hepatitis C during the scope
and course of his employment with the City. This was a fact
that Murphy was required to prove, and the trial court found
that he did not.

I In order to recover under the Nebraska Workers’
Compensation Act, a claimant has the burden of proving by a
preponderance of the evidence that an accident or occupational
disease arising out of and occurring in the course of employ-
ment proximately caused an injury which resulted in disability
compensable under the act. Sweeney v. Kerstens & Lee, Inc.,
268 Neb. 752, 688 N.W.2d 350 (2004).

HMM Whether an injury arose out of and in the course of
employment must be determined from the facts of each case.
Misek v. CNG Financial, 265 Neb. 837, 660 N.W.2d 495
(2003). In testing the sufficiency of the evidence to support the
findings of fact made by the Workers’ Compensation Court,
the evidence must be considered in the light most favorable to

the successful party, and the factual findings by the compensa-
tion court have the same force and effect as a jury verdict in
a civil case. Worline v. ABB/Alstom Power Int. CE Servs., 272
Neb. 797, 725 N.W.2d 148 (2006). See, also, Vega v. Iowa Beef
Processors, 270 Neb. 255, 699 N.W.2d 407 (2005).

In the case at bar, both sides presented evidence of how
they believed Murphy contracted hepatitis C. It was within
the trial court’s discretion to determine which evidence was
more persuasive.

Murphy next argues that the court erred in relying on the
testimony of Bittner over that of Sorrell and Wagoner. Bittner’s
opinion stated that he could not conclude with a reasonable
degree of medical certainty that Murphy had acquired hepatitis C
as the result of his work for the City. Evidence from Sorrell and
Wagoner stated that Murphy contracted hepatitis C as a result of
his employment with the City.

It is Murphy’s position that the evidence of Sorrell and
Wagoner established to a reasonable degree of medical certainty
that Murphy’s hepatitis C was the result of his employment as
an EMT for the City. However, Sorrell’s opinion was based
on the belief that Murphy had no risk factors for hepatitis C
other than his work. The trial court noted that Murphy had
many risk factors for hepatitis C other than his work, includ-
ing contact with blood while engaged in football and boxing.
Furthermore, Wagoner’s notation was based on nothing more
than a “lengthy discussion” with Murphy and was merely found
within a medical record. :

I When the record in a workers’ compensation case pre-
sents conflicting medical testimony, an appellate court will
not substitute its judgment for that of the compensation court.
Worline v. ABB/Alstom Power Int. CE Servs., supra. It was
within the discretion of the trial court to have concluded that
Sorrell’s and Wagoner’s opinions were based upon faulty or
incomplete information and to therefore decline to accept their
conclusions. Bittner’s opinion stated that he could not conclude
with a reasonable degree of medical certainty that Murphy had
contracted hepatitis C as the result of his work as an EMT.
Bittner based his opinion on the fact that many risk factors
could not be eliminated. The court pointed out that all the

678 Le

experts were eminently qualified, but it was entirely within the
court’s authority to determine that Bittner’s opinion was more
credible. We decline to substitute our judgment for that of the
trial court in accepting Bittner’s opinion over that of Sorrell
and Wagoner.

CONCLUSION
For the reasons set forth above, we conclude that the Workers’
Compensation Court did not err in finding insufficient evidence
of causation. We therefore affirm the judgment of the Workers’
Compensation Court review panel, which affirmed the judgment
of the trial court.
AFFIRMED.

IN RE INTEREST OF KEVIN K., A CHILD UNDER 18 YEARS OF AGE.
Sratre oF NEBRASKA, APPELLANT, V. Kevin K.
AND NEBRASKA DEPARTMENT OF HEALTH
AND HUMAN SERVICES, APPELLEES.
742. N.W.2d 767

Filed December 21, 2007. No. S-06-447.

Kara E. Mickle and Alicia B. Henderson, Deputy Lancaster
County Attorneys, for appellant.

Dennis R. Keefe, Lancaster County Public Defender, and
Elizabeth Elliott, for appellee Kevin K.

Jon Bruning, Attorney General, and B. Gail Steen, Special
Assistant Attorney General, for appellee Nebraska Department
of Health and Human Services.

Heavican, C.J., Wricht, CoNNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Srepuan, J.

Applying a best interests test, a divided panel of the Nebraska
Court of Appeals held in this case that the separate juvenile
court of Lancaster County erred in terminating its jurisdiction
of a juvenile previously adjudicated for habitual truancy.' After
the juvenile reached the age of 16, his mother authorized dis-
continuance of his enrollment in school pursuant to Neb. Rev.
Stat. § 79-201 (Cum. Supp. 2006). On further review, we con-
clude that because the lawful discontinuation of school enroll-
ment necessarily ended the juvenile’s status as a truant, which
was the sole basis for his adjudication, the juvenile court did not
err in concluding that it was no longer necessary or appropriate
to exercise its jurisdiction.

BACKGROUND

The State of Nebraska, through the Lancaster County Attorney,
commenced this juvenile proceeding by filing a truancy petition
in the separate juvenile court on March 22, 2005. The State
alleged that Kevin K. had been truant from school on various
dates in January and February 2005. Kevin, born on August 21,
1989, was 15 years old when the action was commenced. He
resided with his mother in Lincoln, Nebraska.

At an adjudication hearing on April 22, 2005, Kevin admit-
ted the allegations of truancy in his mother’s presence and with
her consent. He was adjudicated pursuant to Neb. Rev. Stat.

1 In re Interest of Kevin K., 15 Neb. App. 641, 735 N.W.2d 812 (2007).

680 Le

§ 43-247(3)(b) (Reissue 2004) based upon a finding by the
juvenile court that he had been habitually truant from school as
alleged in the petition. The juvenile court placed Kevin in the
temporary legal custody of the Nebraska Department of Health
and Human Services (DHHS) and ordered that he participate
in a summer school program if it could be arranged by DHHS
and that he cooperate with any evaluations arranged by DHHS.
Following a disposition hearing at which it received and consid-
ered a report and evaluation submitted by DHHS, the juvenile
court entered an order on July 14, 2005, in which it concluded
that “returning legal custody to the parent would be contrary to
the welfare of the child at this time due to the need to monitor
Kevin’s school attendance and to provide supportive services
to Kevin to assist him in correcting his truancy problem while
residing in his parent’s home.” The court ordered Kevin to con-
tinue in the temporary legal custody of DHHS “for placement,
treatment and care” while remaining in the physical custody
of his mother. The order further provided that Kevin was to
“attend all scheduled classes without any truancies or tardies”
and that “[a]ny illnesses shall be verified through a medical pro-
vider, school nurse or health paraprofessional.” Kevin’s mother
was ordered not to “excuse Kevin . . . from school without prior
approval” of DHHS.

On November 21, 2005, Kevin filed a motion to termi-
nate jurisdiction. He alleged that after he reached the age
of 16 on August 21, his mother signed a release pursuant to
§ 79-201(3)(d) which discontinued his enrollment in school
effective November 3. At a hearing on the motion, the DHHS
caseworker assigned to Kevin’s case requested that “the case
be closed” because Kevin was no longer in school and there
were no further services which DHHS could provide to him.
The caseworker testified that Kevin’s mother discussed the
release with the caseworker before signing it, explaining that
she wanted to give Kevin a fresh start by allowing him to enroll
in a GED program or find a job. At the time of the hearing,
Kevin had done neither. The caseworker testified that he tried
to discourage Kevin’s mother from authorizing discontinuation
of Kevin’s school enrollment because he believed that remain-
ing in school would be in Kevin’s best interests; but he told

her that if she decided to do so, DHHS would ask the juvenile
court to terminate jurisdiction. The caseworker testified that
Kevin’s mother did not need DHHS’ permission to authorize
discontinuation of Kevin’s school enrollment when he reached
the age of 16.

Kevin’s mother testified that she decided to withdraw Kevin
from school so that he could “explore his other options.” She
confirmed that despite her urging, Kevin had not enrolled
in a GED program or obtained employment. Kevin testified
that he planned to get a job, but had not been “in a hurry” to
find one.

The juvenile court found that Kevin’s best interests would
not be served by a termination of jurisdiction because he “has
no daily program, is not enrolled in a GED program, is not
employed and indeed has no significant work history whatso-
ever.” Referring to one of the purposes of the Nebraska Juvenile
Code, the court noted that Kevin’s situation “does not bode well
for his ‘development of his capacity for a healthy personality,
physical well-being, and useful citizenship and to protect the
public interest.’”?

However, the court concluded that a best interests standard
did not apply to the termination of its jurisdiction in this case
because the provision of § 79-201(3)(d) permitting a par-
ent or custodian to authorize discontinuation of enrollment
in school at the age of 16 “in effect negates his or her status
or definition as a ‘habitually truant’ juvenile over whom the
court should exercise jurisdiction under Neb. Rev. Stat. Section
43-247 (3)(b).” The court noted that this provision of the com-
pulsory education statute made no exception for juveniles under
the jurisdiction of the juvenile court and used broad language in
authorizing a “parent or legal guardian” to discontinue school
enrollment when the child reached the age of 16. The juvenile
court concluded:

[W]hen a youth, by virtue of a parent’s exercise of a right
granted by the State of Nebraska, has been lawfully with-
drawn from school and is no longer legally required to be
enrolled in school, it is no longer necessary nor appropriate

2 See Neb. Rev. Stat. § 43-246(1) (Reissue 2004).

682 |

for the Court to exercise jurisdiction in a case based solely

upon the youth’s truancy.
The State, through the Lancaster County Attorney, appealed this
decision to the Nebraska Court of Appeals. DHHS appeared as
an appellee and argued that the decision of the juvenile court
was correct and should be affirmed. In its majority opinion
reversing the juvenile court’s decision, the Court of Appeals
reasoned that the Nebraska Juvenile Code “does not set forth
that the factual basis justifying the juvenile court’s acquisition
of jurisdiction must continue to exist throughout the duration of
the juvenile court’s exercise of that jurisdiction.”? Noting that
Kevin remained a minor, and relying in part on an Illinois Court
of Appeals’ decision,‘ the majority reasoned that a best interests
test should be applied. Adopting the findings of the juvenile
court in its de novo review, the majority concluded that termina-
tion of jurisdiction was not in Kevin’s best interests. It reversed,
and remanded to the juvenile court for further proceedings.

A dissenting judge noted that the decision of the majority
had the effect of placing a limitation on the statutory right of
a parent to authorize discontinuance of a 16-year-old child’s
school enrollment “by excluding children who are under the
jurisdiction of the juvenile court.”> The dissent reasoned that
while such a limitation may be appropriate, “it is for the
Legislature, and not the courts, to make this decision.’”® The
dissent concluded that because Kevin’s mother had authorized
discontinuation of his school enrollment, Kevin could no longer
be considered truant, and that the sole basis for the exercise of
the juvenile court’s jurisdiction had ceased to exist.

We granted a petition for further review filed jointly by Kevin
and DHHS.

3 Inve Interest of Kevin K., supra note 1, 15 Neb. App. at 645, 735 N.W.2d at
816.

+ In Interest of C.W., 292 Ill. App. 3d 201, 684 N.E.2d 1076, 226 Ill. Dec. 80
(1997).

5 In re Interest of Kevin K., supra note 1, 15 Neb. App. at 647, 735 N.W.2d at
817 (Moore, Judge, dissenting).

6 Id.

ASSIGNMENT OF ERROR
Kevin and DHHS contend, restated, that the Nebraska Court
of Appeals erred in concluding that § 43-247 requires a juvenile
court to retain jurisdiction over a minor who has been adjudi-
cated as habitually truant from school, but is subsequently with-
drawn from school by a parent pursuant to § 79-201(3)(d).

STANDARD OF REVIEW
Tl Juvenile cases are reviewed de novo on the record, and an
appellate court is required to reach a conclusion independent of
the juvenile court’s findings.’
I Statutory interpretation is a question of law, which an
appellate court resolves independently of the trial court.$

ANALYSIS

Like any juvenile truancy case, this appeal involves the
interplay between the Nebraska Juvenile Code and Nebraska’s
compulsory education statutes. Under the code, a juvenile court
may exercise jurisdiction over a juvenile who is “habitually
truant from . . . school,’? but neither the code nor the com-
pulsory education statutes define the term “truant.” In In re
Interest of K.S.,'° this court held that “the mere fact that the
child is not complying with the compulsory education laws
without being first excused by school authorities establishes
truancy” and, accordingly, jurisdiction under the truancy provi-
sions of the Nebraska Juvenile Code. We further noted in that
case that under the compulsory attendance law then in effect,
only school authorities had authority to grant permission to be
absent, and that thus, parental consent to an absence of a child
who was legally required to attend school did not alter the fact
of truancy.

Due to a subsequent amendment in the compulsory school
attendance statutes, this principle no longer applies in the
case of certain children who have not reached the mandatory

7 In re Interest of Jeffrey K., 273 Neb. 239, 728 N.W.2d 606 (2007).

8 Jones v. Shelter Mut. Ins. Cos., ante p. 186, 738 N.W.2d 840 (2007).

° § 43-247(3)(b).

% In re Interest of K.S., 216 Neb. 926, 931, 346 N.W.2d 417, 420 (1984).

684 be

attendance age. Prior to 2004, Nebraska law made school
attendance mandatory for any child “who is not less than seven
years of age and not more than sixteen years of age.”!! In 2004,
the compulsory attendance law was amended to make school
attendance mandatory for children between the ages of 6 and
18 who have not obtained a high school diploma or completed
a program of instruction in certain schools, subject to a parental
right to withdraw a child from school when he or she reaches
the age of 16.” The law now provides that school attendance is
not mandatory where a child “[h]as reached the age of sixteen
years and such child’s parent or guardian has signed a notarized
release discontinuing the enrollment of the child on a form
provided by the school.” There is no statutory restriction on
the right of a parent or guardian to authorize discontinuance of
school enrollment for children who have reached the age of 16,
and the statute makes no specific reference to children who are
subject to the jurisdiction of a juvenile court when they reach
that age. In its present form, the compulsory education statute
can be said to articulate two related principles of public policy:
(1) that it is generally in the best interest of children who have
not graduated from high school or completed a program of
instruction to remain in school until they reach the age of 18
and (2) that parents and guardians have an unqualified right to
determine whether this general principle should apply to their
16- and 17-year-old children.

By adjudicating Kevin as a habitual truant, the juvenile court
obtained jurisdiction over his mother as well. Although the
court ordered her not to excuse Kevin from school without prior
approval of DHHS, we do not read this provision of the dis-
positional order as prohibiting Kevin’s mother from exercising
her statutory right to discontinue his school enrollment when he
reached the age of 16, and we do not reach the issue of whether
a juvenile court could lawfully impose such a restriction. The
record reflects no judicial determination that Kevin’s mother

1 § 79-201 (Reissue 2003).

® 2004 Neb, Laws, L.B. 868, § 1.
8g 79-201(3)(d) (Cum. Supp. 2006).
™ See § 43-247(5).

was unfit or legally incompetent at the time she executed the
release authorizing the discontinuance of Kevin’s enrollment in
school. On the effective date of the release, Kevin was no longer
subject to the compulsory school attendance-statutes, and as a
matter of law, he was no longer truant.

Truancy is not a crime, and juveniles who are adjudicated as
habitually truant under § 43-247(3)(b) are considered “[s]tatus
offenders” under the Nebraska Juvenile Code.'> Kevin’s status
changed when his mother lawfully authorized discontinuation
of his enrollment in school. Although he was still a juvenile
within the meaning of the code, he was not and could: never
again be truant, because he was no longer subject to the com-
pulsory education statutes. The Nebraska Juvenile Code pro-
vides that a juvenile court’s jurisdiction over an adjudicated
individual “shall continue until the individual reaches the age of
majority or the court otherwise discharges the individual from
its jurisdiction.” There is no statutory requirement that in all
cases, termination of jurisdiction must be shown to be in the
best interests of the juvenile.

Hi We hold that where a juvenile is adjudicated solely on the
basis of habitual truancy from school pursuant to § 43-247(3)(b),
and the status of truancy is subsequently terminated by the law-
ful execution of a parental release authorizing discontinuation
of school enrollment pursuant to § 79-201(3)(d), a juvenile
court may terminate its jurisdiction without a finding that such
termination is in the best interests of the juvenile. We agree
with the determination of the juvenile court that under the cir-
cumstances presented in this case; it is-neither necessary nor
appropriate to continue to exercise its jurisdiction.

CONCLUSION
For the foregoing reasons, the judgment of the Court of
Appeals is reversed, and this matter is remanded to that court
with directions to affirm the judgment of the juvenile court ter-
minating its jurisdiction in this case.
REVERSED AND REMANDED WITH DIRECTIONS.

15 Neb. Rev. Stat. § 43-245(15) (Reissue 2004).
16 § 43-247.

PAMELA JOANN GRESS, APPELLEE AND CROSS-APPELLANT, V.
Patrick RAYMOND GRESS, APPELLANT AND CROSS-APPELLEE.
743 N.W.2d 67

Filed December 21, 2007. No. S-06-607.

Louie M. Ligouri, of Ligouri Law Office, for appellant.

Stefanie S. Flodman and Steven J. Flodman, of Johnson,
Flodman, Guenzel & Widger, for appellee.

Heavican, C.J., Wricut, CoNNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Heavican, C.J.
I. INTRODUCTION

This action originated as a petition for dissolution of mar-
tiage between Pamela Joann Gress and Patrick Raymond Gress.
The district court dissolved the marriage between the parties,
divided their assets, and ordered Patrick to make monthly child
and spousal support payments. Patrick appealed, citing an error
in the district court’s calculation of child support and alimony.
On appeal, we concluded the district court improperly calcu-
lated child support. We therefore remanded the cause for further

688 Es

proceedings, instructing the court to recalculate Patrick’s share
of child support and to make any necessary changes to the ali-
mony award.!

On remand, the district court made a slight reduction in
Patrick’s child support obligation and reinstated its order that
Patrick pay alimony of $1,000 per month for 60 months. Patrick
now appeals, once again arguing that the district court erred in
setting the amount of his child and spousal support obligations.
Pamela: cross-appeals, contending the district court erred by
limiting alimony to a period of 60 months. For reasons devel-
oped in detail below, we affirm the district court’s child support
order and the duration of the alimony award, but reverse the
court’s order with regard to the amount of alimony.

I. BACKGROUND

Because a more thorough statement of facts can be found
in our prior .opinion,? we recount only facts relevant to this
appeal. During the marriage, Pamela was a stay-at-home
mother while Patrick, a lifelong farmer, worked the family’s
farm. In September .2003, Painela petitioned for a divorce.
Patrick and Pamela have four children ranging in age from
5 to 17. The youngest of the Gress children was born with
Down syndrome.

On December 15, 2004, the district court entered an order
which’ dissolved thie marriage, divided the couple’s assets and
liabilities, and ordered Patrick to pay child support and alimony.
Specifically, Patrick was ordered to pay, among other things,
child support of $1,285 per month and alimony of $1,000 per
month for 60 months. As noted above, Patrick appealed to this
court, and after identifying an error in the district court’s cal-
culation of depreciation in Patrick’s income, we remanded the
cause for further proceedings, instructing the court to adjust the
amount of Patrick’s child support responsibilities. On remand,
the court reduced Patrick’s child support obligation to $1,224
per month and reinstated its order that Patrick pay Pamela
alimony of ‘$1, 000 per month for 60 months. Patrick was also

' Gress v. Gress, 271 Neb. 122, 710 N.W.2d 318 (2006).
? See id.

ordered to pay an “80.5 %” share of any daycare costs. Both
parties now appeal.

If. ASSIGNMENTS OF ERROR

Patrick assigns, restated and renumbered, that the district
court erred in calculating Patrick’s child support obligation
by (1) basing the calculation on an average of his incomes
from 2001 through 2003, (2) disregarding paragraph Q of the
Nebraska Child Support Guidelines, (3) violating paragraph
R of the Nebraska Child Support Guidelines, and (4) failing
to take the youngest child’s Social Security benefits into con-
sideration. Additionally, Patrick assigns that the district court
erred in (5) awarding an unreasonable amount of alimony
to Pamela.

In her cross-appeal, Pamela assigns that the district court
erred by limiting Patrick’s alimony obligation to 60 months.

IV. STANDARD OF REVIEW

HMM Domestic matters such as child custody, division of
property, child support, and alimony are entrusted to the discre-
tion of trial courts.’ A trial court’s determinations on such issues
are reviewed “de novo on the record to determine whether there
has been an abuse of discretion by the trial judge.”* Under this ©
standard, an appellate court conducts its “own appraisal of the
record” to determine whether the trial court’s judgments “are
untenable such as to have denied justice.”*

I Finally, we note that interpretation of the Nebraska Child
Support Guidelines presents a question of law, regarding which
an appellate court is obligated to reach a conclusion independent
of the determination reached by the court below.®

V. ANALYSIS
Hl Taken together, the parties’ assignments of error concern
either the amount of Patrick’s child support obligation or the

3 See Robb v. Robb, 268 Neb. 694, 687 N.W.2d 195 (2004).

* Gress, supra note 1, 271 Neb. at 124, 710 N.W.2d at 323, See, also, Robb,
supra note 3.

5 Guggenmos v. Guggenmos, 218 Neb. 746, 748, 359 N.W.2d 87, 90 (1984).
© Workman v. Workman, 262 Neb. 373, 632 N.W.2d 286 (2001).

690 Le

amount and duration of Patrick’s spousal support obligation.
The Nebraska Child Support Guidelines (hereinafter NCSG)
instruct that a party’s alimony obligation is to be set according
to the income he or she has available after his or her child sup-
port obligations, if any, have been accounted for.’ Accordingly,
we begin with an analysis of the district court’s child support
determination, then the alimony award.

1. Camp Support

Patrick argues that the trial court erred in ordering him to pay
$1,224 per month in child support. He offers four distinct rea-
sons why this figure is erroneous. First, Patrick argues that the
court erred in averaging his incomes from 2001 through 2003.
Patrick contends the court should have used an 8-year aver-
age instead or, at the very least, should have included Patrick’s
income from 2004 in its average. Second, Patrick argues that the
district court erred by disregarding paragraph Q of the NCSG in
setting child support. Third, Patrick argues that the district court
erred by ordering an amount of child support which allegedly
violates paragraph R of the NCSG. Finally, Patrick argues that
the district court incorrectly ignored the Social Security allow-
ance in setting Patrick’s child support obligation. We address
each argument in turn in the sections that follow.

(a) Income Averaging

; | In his ‘primary argument, Patrick asserts that the district
court erred in averaging his annual income for the purpose
of calculating his monthly child support obligation. Before
determining an individual’s child support obligation, the trial
court must identify the monthly incomes for both the custodial
and noncustodial parents.* As a self-employed farmer, Patrick’s
income is prone to fluctuations from year to year. The NCSG
anticipates this contingency and provides that “[iJn the event of
substantial fluctuations of annual earnings of either party during

7 Nebraska Child Support Guidelines, paragraph M. See, also, Gress, supra
note 1.

8 See Gress, supra note 1 (citing Gangwish v. Gangwish, 267 Neb. 901, 678
N.W.2d 503 (2004).

the immediate past 3 years, the income may be averaged to
determine the percent of contribution of each parent... .”°

In 2001, Patrick’s annual income was $51,654. In 2002,
this figure increased to $61,059, only to plummet to $28,400
in 2003. These figures translate to an approximate 18-percent
increase from 2001 to 2002, then a 54-percent drop from 2002
to 2003. This is the sort of substantial fluctuation that the
NCSG contemplates. Therefore, it was entirely proper for the
district court to use income averaging to calculate Patrick’s
income for child support purposes. Patrick contends, however,
that the district court erred by (1) using a 3-year average instead
of an 8-year average or, alternatively, (2) not including Patrick’s
income from 2004 in its average.

(i) 8-Year Average

Per Pamela’s suggestion, the district court averaged Patrick’s
annual income from 2001 through 2003 to identify Patrick’s
income for child support purposes. Averaging these figures
gave Patrick an estimated gross income of $47,037 per year,
or $3,920 per month. Patrick argues that the court should have
used an 8-year average rather than a 3-year average to estimate
his income. Using the figures Patrick supplies in his brief for
the additional 5 years, an 8-year average would result in an
income of $34,065 per year, or $2,839 per month.

In support of his claim that the court should have used an
8-year average, Patrick cites testimony by his tax preparer,
Gerald Siefken, a farm tax expert. Siefken testified that farm-
ers’ incomes are inherently unpredictable and that it was his
practice to use an 8- or 10-year average to calculate farmers’
taxes. Patrick emphasizes that his incomes from 2001 and
2002 are some of the highest incomes he has had in recent his-
tory. Patrick argues that using those 2 years as two-thirds of
the average misrepresents his actual level of income. Relying
on Siefken’s testimony, Patrick suggests that only an 8-year
average will accurately reflect his present level of income. The
question, then, is whether the district court abused its discretion
by using a 3-year average instead of an 8-year average.

° Nebraska Child Support Guidelines, worksheet 1 (fourth footnote).

692 De

We have not yet had occasion to consider the number of
years a court should—or must—use when averaging an income
pursuant to the NCSG. As stated above, the NCSG provides that
in the event of a fluctuation within “the immediate past 3 years,
the income may be averaged.”!° This language could be read
as indicating that a fluctuation within the prior 3 years should
trigger an average of the incomes only from those prior 3 years.
On the other hand, it is entirely possible to read this language
as standing for the proposition that a fluctuation in the prior 3
years triggers some form of averaging, be it 3 years, 8 years, or
some other number.

This was apparently the reading the Nebraska Court of
Appeals adopted in Wagoner v. Tracy.!' In Wagoner, the court
acknowledged that the NCSG “refer[s] to a 3-year average,”
but nonetheless permitted a 5-year average." The court rea-
soned that such an average “result{ed] in a more fair repre-
sentation of [the husband’s] income” than a 3-year average.
Similarly, the Court of Appeals had allowed a 4-year average in
Hughes v. Hughes.

Although we previously discussed income averaging in Peter
v. Peter,” that case dealt solely with the threshold question of
when averaging is appropriate and did not describe how to actu-
ally conduct the average. It is perhaps worth noting, however,
that the average at issue in Peter was a 3-year average.'® In fact,
Wagoner and Hughes aside, it appears that income averaging
is almost always discussed with reference to a 3-year average
in Nebraska.”

1g,

4 Wagoner v. Tracy, No. A-05-301, 2006 WL 3487649 (Neb. App. Dec. 5,
2006) (not designated for permanent publication).

” Id, at *7.

2 Id,

4 Hughes v. Hughes, 14 Neb. App. 229, 706 N.W.2d 569 (2005).

'S Peter v. Peter, 262 Neb. 1017, 637 N.W.2d 865 (2002).

6 Id,

1 See, e.g., Gase v. Gase, 266 Neb. 975, 671 N.W.2d 223 (2003); Willcock v.
Willcock, 12 Neb. App. 422, 675 N.W.2d 721 (2004); Coffey v. Coffey, 11
Neb. App. 788, 661 N.W.2d 327 (2003).

A survey of decisions from other jurisdictions reveals a
similar pattern. Indiana’s child support guidelines expressly
recommend a 2- or 3-year average.'® A number of other courts
use 3- or 4-year averages when calculating an obligor’s income
for child support purposes." It seems that only a few states go
as high as a 5-year average. North Dakota expressly allows up
to a 5-year average by law,” and courts in Iowa and Minnesota
have used 5-year averages.”

The Iowa Supreme Court’s willingness to use a 5-year aver-
age is particularly relevant. Similar to Patrick’s arguments in
this case, a farmer argued before the Iowa Supreme Court that
he deserved a 5-year average of his income for child support
purposes due to fluctuations inherent in farming incomes. The
court agreed.” Not all courts go beyond 3 years when faced
with highly unpredictable forms of self-employment, however.
For example, in In re Marriage of Nelson,” the Illinois Court of
Appeals used a 3-year average for a farmer. Similarly, in Zimin
v. Zimin,* an Alaskan fisherman insisted that only a 10-year
average could fairly assess his highly unpredictable income for
child support purposes. The Alaska Supreme Court disagreed,
concluding that a “three-year average . . . provide[s] an accurate
estimate of a parent’s current earning capacity when a parent’s
income is subject to yearly fluctuations.”

18 See Lloyd v. Lloyd, 755 N.B.2d 1165 (Ind. App. 2001).

1 See, e.g., In re Marriage of Garrett, 336 Il. App. 3d 1018, 785 N.E.2d
172, 271 Ill. Dec. 521 (2003) (3-year average); Roberts v. Roberts, 924
So. 2d 550 (Miss. App. 2005) (same); Alexander v. Alexander, 34 S.W.3d
456 (Tenn. App. 2000) (4-year average); Fleenor v. Fleenor, 992 P.2d 1065
(Wyo. 1999) (3-year average).

20 NLD. Admin. Code 75-02-04.1-05 (2003).

2! See, In re Marriage of Robbins, 510 N.W.2d 844 (lowa 1994); Tipler v.
Edson, No. A05-1518, 2006 WL 1390439 (Minn. App. May 23, 2006)
(unpublished opinion).

2 In re Marriage of Robbins, supra note 21.

%3 In re Marriage of Nelson, 297 Il. App. 3d 651, 698 N.E.2d 1084, 232 Ill.
Dec, 654 (1998).

4 Zimin v. Zimin, 837 P.2d 118 (Alaska 1992).

%S Id. at 123 n.9.

694 be

The foregoing compels several conclusions. First, it appears
that both here and elsewhere, a 3-year average tends to be the
most common approach in cases where a parent’s income tends
to fluctuate. Second, even among the jurisdictions which per-
mit an average of more than 3 years, courts appear reluctant to
use more than a 5-year average. Therefore, even assuming that
income averaging under the NCSG is not limited to a 3-year
average, the authority from both Nebraska and elsewhere sug-
gests that the district court did not abuse its discretion by declin-
ing to use an 8-year average.

It is theoretically possible that the district court could have
reached a more accurate assessment of Patrick’s current earning
capacity by including additional years in its average. However,
we believe that the use of a 3-year average in this instance is
not so “clearly untenable” that it “unfairly deprives [Patrick] of
a substantial right” or denies him “a just result.”

(ii) Annual Income From 2004

Patrick next argues that the district court erred in failing to
include his income from 2004 either in addition to the 3 years
the district court selected for its average or as a replacement for
one of those years.

Hl As a general matter, in the determination of child sup-
port, income from a self-employed individual is determined
by looking to that person’s tax returns.”’ At trial, tax returns
showing Patrick’s incomes for 2001 through 2003 were offered
and admitted into evidence. It appears that a tax return for 2004
was never offered. This is not surprising, given that the trial was
held during 2004.

In addition, we recognize that a party undergoing a divorce
may have both the motive and the opportunity to underreport
his or her own income.”* Indeed, Siefken, Patrick’s tax preparer,
testified that a farmer can easily, and legally, manipulate his or

26 See State v. Anglemyer, 269 Neb. 237, 242, 691 N.W.2d 153, 159 (2005).

27 See, Rhoades v. Rhoades, 258 Neb. 721, 605 N.W.2d 454 (2000) (citing
Marr y. Marr, 245 Neb. 655, 515 N.W.2d 118 (1994), and Nebraska Child
Support Guidelines, paragraph D).

28 See Ferguson v. Ferguson, 357 N.W.2d 104 (Minn. App. 1984).

her income simply by harvesting crops and storing them until
the following year. As it turns out, Patrick had unsold grain in
his possession while the divorce was pending.

All of the above is not to suggest that Patrick himself has
engaged in any intentional efforts to underreport his income.
The point is that even if Patrick had supplied information about
his income for 2004, the district court had ample justification to
view such information with skepticism. Accordingly, the district
court did not abuse its discretion by excluding 2004 from its
average of Patrick’s income.

(b) Paragraph Q

Patrick next argues that the district court erred when it failed
to consider paragraph Q of the NCSG. Paragraph Q provides
the following:

Modification. Application of the child support guidelines
which would result in a variation by 10 percent or more,
but not less than $25, upward or downward, of the current
child support obligation, child care obligation, or health
care obligation, due to financial circumstances which have
lasted 3 months and can reasonably be expected to last for
an additional 6 months, establishes a rebuttable presump-
tion of a material change of circumstances.
Patrick quotes a portion of this language in his brief, but fails
to explain what difference it makes in his legal position. This
likely stems from the fact that paragraph Q is unrelated to the
present case.

HMM Under Nebraska law, a party can modify a prior child
support order by showing there has been a material change in
circumstances since the court’s prior order.” Restated, para-
graph Q explains that a material change is presumed if a
parent’s recalculated child support obligation—using current
financial information—would result in a deviation of at least
10 percent over the parent’s old obligation, provided the current
financial information has been accurate for the prior 3 months
and will stay accurate for the next 6 months. As construed by
the Court of Appeals, a party who seeks to have a prior child

© See Rauch v. Rauch, 256 Neb. 257, 590 N.W.2d 170 (1999).

696 Es

support order modified can prove that a modification is war-
tanted simply by a showing of the conditions described in
paragraph Q.°°

We do not see, and Patrick fails to explain, how the presump-
tion created by paragraph Q is relevant. First, this case did not
originate as a petition to modify a prior child support order; it
is actually the district court’s attempt to establish an initial child
support order. Second, and relatedly, neither party contends that
there has been a material change in circumstances. Accordingly,
we see no merit in Patrick’s assignment of error involving
paragraph Q.

(c) Paragraph R

Patrick next argues the district court erred by ordering a child
support obligation which pushes his income below the poverty
line. If true, it would contravene paragraph R of the NCSG. In
its current form, paragraph R states:

Basic Subsistence Limitation. A parent’s support, child
care, and health care obligation shall not reduce his or her
net income below the minimum of $851 net monthly for
one person, or the poverty guidelines updated annually in
the Federal Register by the U.S. Department of Health and
Human Services under authority of 42 U.S.C. § 9902(2),
except minimum support may be ordered as defined in
paragraph I above.
This language makes clear that any child support obligation
which reduces a parent’s net monthly income below $851—the
basic subsistence limitation—violates the NCSG, except that a
parent may be ordered to pay the greater of $50 or 10 percent
of his or her net income per month.

HEM As a general matter, child support obligations should
be set according to the provisions of the NCSG.*! A court may
deviate from the guidelines, but only if it specifically finds
that a deviation is warranted based on the evidence.” Absent a
cleatly articulated justification, any deviation from the NCSG is

3° See Sneckenberg v. Sneckenberg, 9 Neb. App. 609, 616 N.W.2d 68 (2000).
31 See Sears v. Larson, 259 Neb. 760, 612 N.W.2d 474 (2000).
® See id.

| “
an abuse of discretion.* The district court never indicated that a
deviation from paragraph R was warranted. Therefore, the court
abused its discretion if its child support order drives Patrick’s
income below the poverty line set forth in paragraph R.

Based on the income figures supplied for 2001 through
2003, the district court found Patrick’s current gross income
was $47,037 per year, or $3,920 per month. After taxes, this
leaves Patrick with a net monthly income of $2,657.85. From
this amount, Patrick was ordered to pay $1,224 per month in
child support. That leaves Patrick with $1,433.85 per month, an
amount well above the current poverty line.

This is not the end of the inquiry, however, because the
district court burdened Patrick with other potential child sup-
port obligations in addition to his monthly support payments.
Pursuant to paragraph O of the NCSG, Patrick was ordered
to pay “80.5 %” of any daycare costs for the children. This
daycare obligation is also subject to paragraph R’s basic
subsistence limitation.

At the outset, we note our suspicion that the district court
meant to order Patrick to pay 79.75 percent of future child sup-
port costs, rather than 80.5 percent. Our belief is predicated
on the fact that 80.5 percent is roughly the amount of child
support Patrick was responsible for under the district court’s
original order that we reversed on appeal. Pursuant to our
remand, Patrick’s recalculated child support responsibility is
79.75 percent. As a result, we believe the district court intended
to require Patrick to pay 79.75 percent, not 80.5 percent, of any
daycare costs.

Regardless of the precise proportion, there is nothing in the
record to help identify what these costs will be in actual dol-
lars. Although it is certainly possible that paying his share of
daycare will reduce Patrick’s income below the poverty line, the
lack of concrete numbers makes it difficult, if not impossible, to

3 See Gress, supra note 1. See, also, In re Marriage of Mellott, 32 Kan. App.
2d 1031, 93 P.3d 1219 (2004).

4 Nebraska Child Support Guidelines, paragraph R. See, also, Henke v.
Guerrero, 13 Neb. App. 337, 692 N.W.2d 762 (2005) (citing Kearney v.
Kearney, 11 Neb. App. 88, 644 N.W.2d 171 (2002)).

698 Es

say for sure. The speculative nature of Patrick’s daycare obliga-
tions renders it unnecessary for us to comment on whether the
court’s order violates paragraph R.

We have previously held that a “court’s findings
regarding [an individual’s] level of income should not be based
on the inclusion of income that is entirely speculative in nature.”*>
This principle works equally well in reverse, such that a court’s
findings regarding the propriety of child support obligations
should not be based on costs that are entirely speculative. In the
absence of concrete facts, we decline to consider at this junc-
ture whether Patrick’s obligation to pay a sizable portion of his
children’s daycare costs violates paragraph R.

Of course, our decision does not mean that Patrick
must suffer daycare costs that exceed his earning capacity.
This is because “changes in the financial position of the parent
obligated to pay support” often warrant a modification of the
support order.*° Ordinarily, such changes arise when the obli-
gor’s income is increased or decreased substantially. Obviously,
increased financial obligations, like decreased income, also
qualify as a change in one’s financial position. As a result,
if, Patrick is ever forced to pay for daycare and his income is
reduced below the poverty line as a result, Patrick may seek
a modification of the court’s. child: support order. But until the
daycare costs materialize, Patrick’s claim that such expenses
will drive his income below the poverty line is too speculative
to adjudicate.

Patrick advances another paragraph R argument with regard
to his duty to pay 80.5 percent of the children’s medical, opthal-
mological, and orthodontic/dental care costs which are.not cov-
ered by insurance and exceed $480 per year. As with daycare
costs, such health care costs are also subject to paragraph R.7”

In responding to Patrick’s argument, we first note that
Pattick’s medical care obligation was mentioned only in the
district court’s original order of December 15, 2004. The

% Stuczynski v. Stuczynski, 238 Neb. 368, 374, 471 N.W.2d 122, 126 (1991).
6 Rauch, supra note 29, 256 Neb. at 261, 590 N.W.2d at 174.

37 See, Nebraska Child Support Guidelines, paragraph R; Kearney, supra note
34,

court’s subsequent order, issued in response to our remand,
mysteriously lacks any such obligation. Further, the new order
expressly states that the December 15 order is to remain in full
effect “except for child support and alimony as redetermined
herein.” In our view, this means Patrick is not obligated to
pay a proportional share of the children’s health care costs, a
result we believe may have been accidental. Nevertheless, we
conclude that even if Patrick was obligated to pay for such
health care costs, these costs, like the costs for daycare, are
entirely speculative. It is therefore inappropriate for this court
to determine whether the imposition of such costs would violate
paragraph R at this time.

In sum, Patrick’s monthly child support responsibility of
$1,224 does not, by itself, violate paragraph R of the NCSG.
Patrick’s additional obligations—daycare and, potentially, health
care—may drive his income below the poverty line. Because
the costs associated with those obligations are speculative at
this point, we hold that the district court’s child support order
was not an abuse of discretion.

(d) Social Security Benefits

Patrick next argues the district court erred in disregarding
Social Security benefits paid on behalf of the youngest of the
Gress children when calculating Patrick’s child support obliga-
tion. To refresh, the youngest of the Gress children was born
with Down syndrome. As a result, the child receives $564 per
month in Social Security benefits from the federal govern-
ment. Citing the Nebraska Court of Appeals’ opinion in Ward v.
Ward,** Patrick argues that his child support obligation should
be reduced in light of the Social Security benefits.

In Ward, a child began receiving Social Security benefits after
her adoptive mother passed away. The child’s adoptive father
remarried, and his second wife also adopted the child. At issue
in Ward was whether the child’s Social Security benefits should
offset some of the money each parent owed in child support.
The Court of Appeals held that it should offset child support,
and it reduced the amount of each parent’s obligation by a

38 Ward v. Ward, 7 Neb. App. 821, 585 N.W.2d 551 (1998).

700 Ee

proportion of the Social Security payment equal to that parent’s
share of the child support needs.*®

Patrick’s suggestion that the same be done in this case would
substantially reduce his obligation. The district court found the
total support obligation of the Gress children to be $1,535 per
month. Patrick, based on his income, is responsible for 79.75
percent of that sum, or $1,224. If the $564 in Social Security
benefits is taken into account, the total support obligation for
the Gress children would be reduced from $1,535 to $971.
Patrick’s 79.75-percent share would be $774.

In response to Patrick’s request that we apply Ward to these
facts, Pamela urges us to overrule that decision. We choose
neither option. Instead, we hold that whatever merit Ward may
have in other contexts, the case is not applicable here. For one,
we note that Ward involved a single child. It seems fat less
appropriate to offset support obligations for four children in
light of one child’s Social Security benefits.

HM Second, and more important, it is well established that
children with actual disabilities like Down syndrome have spe-
cial needs above and beyond the needs of most children.” All
children have support needs, but special-needs children require
additional financial support to overcome developmental, cogni-
tive, or physiological problems. With this in mind, the federal
government provides Social Security to such children with the
intent that it will “supplement other income, not substitute for
it’! In contrast, the money allocated to the youngest child
under the NCSG is meant to provide for the basic needs all
children have. To construe one source of money as satisfying
both needs would leave either his basic or his special needs
unfulfilled.

Ward, in contrast, did not present such a situation. Unlike a
child with a disability, a child who loses a parent at a young
age does not necessarily have special needs that will lead to
increased support costs. In that context, Social Security benefits

39 Id.

40 HR. Rep. No. 92-231 (1971), 92d Cong., 2d Sess., reprinted in 1972
US.C.CAN, 4989.

4 Kyle v. Kyle, 582 N.E.2d 842, 846 (Ind. App. 1991).

are intended to account for the fact that the child has lost a
source of support for his or her basic needs. Using Social
Security benefits to offset a portion of child support costs is
not necessarily a problem under the circumstances presented
by Ward. However, it is not appropriate to offset child support
costs where, as here, the Social Security benefits are intended
to mitigate the additional costs that accompany disabilities. As
a result, the district court did not abuse its discretion when it
disregarded the Social Security benefits.

2. ALIMONY
The remaining assignments of error concern the propriety
of the district court’s order that Patrick pay Pamela alimony of
$1,000 per month for 60 months. Patrick questions the reason-
ableness of the amount, while Pamela agrees with the amount
but argues that alimony should continue beyond 60 months.

(a) Amount

In his final assignment of error, Patrick contends the district
court erred in awarding Pamela an unreasonable amount of
alimony. His primary contention is that the alimony amount
is unreasonable because paying alimony and child support
would drive his income below the basic subsistence limitation
expressed in paragraph R of the NCSG. Alternatively, Patrick
argues that the district court’s award is unreasonable under
the circumstances.

HH Ordinarily, the test for the propriety of an alimony
award is whether it is reasonable in light of the parties’ circum-
stances.” Patrick suggests that the amount of an alimony award
should be regarded as presumptively unreasonable if it would
drive a party’s income below the poverty line. We agree.

Although paragraph R of the NCSG speaks only to child
support, we are persuaded that the basic subsistence limitation
in that paragraph should apply with equal force in the alimony
context. As a purely logical matter, this conclusion is buttressed
by the structure of the NCGS itself. As noted above, paragraph
M of the NCSG mandates that alimony be drawn from whatever

#2 Neb. Rev. Stat. § 42-365 (Reissue 2004).

702 Le

income is left after child support obligations have been deter-
mined." Prioritizing child support over alimony indicates that
of the two, child support is the more important support interest.
So if child support cannot drive an obligor’s income below the
poverty line unless specifically warranted,“ then a fortiori, ali-
mony should also not be allowed to drive an obligor’s income
below the poverty line unless specifically warranted.

The idea that an alimony award may be regarded as unreason-
ably high if it impoverishes the obligor spouse finds some sup-
port from courts outside Nebraska. Moreover, West Virginia
has a statute discouraging alimony awards which, when com-
bined with child support and other similar obligations, drive a
party’s income below the federal poverty line.“* We read these
authorities as providing some support for our conclusion that
an alimony award which drives the obligor’s income below
the basic subsistence limitation set forth in paragraph R of
the NCSG is an abuse of judicial discretion unless the court
specifically finds that such an award is warranted based on
the evidence.

HM To be clear, our holding on alimony should be read as
a mirror of our holding on child support under paragraph R. As
such,.we believe an alimony award which drives an obligor’s net
income below the basic subsistence limitation of paragraph R is
presumptively an abuse of judicial discretion unless the court
specifically finds that conformity with paragraph R would work
an “unjust or inappropriate” result in that particular case.”

Of course, the parallel between child support and alimony
awards means that an obligor’s “income” available for alimony
purposes is not necessarily synonymous with taxable income.**
As such, a deviation from the limitation in paragraph R may

* Nebraska Child Support Guidelines, paragraph M.
44 Sears, supra note 31.

45 See, e.g., Moore v. Moore, 242 Mich. App. 652, 619 N.W.2d 723 (2000) (per
curiam); Quick v. Quick, 305 N.C. 446, 290 S.E.2d 653 (1982).

46 W. Va. Code Ann. § 48-13-702(b)(8) (LexisNexis 2004).
47 Nebraska Child Support Guidelines, paragraph C(5).
48 Gress, supra note 1.

be warranted in cases where the obligor spouse’s gross income
could support the court’s preferred alimony award even if his
or her taxable income would not. In sum, if the combination
of child support and alimony obligations would reduce an
obligor’s net income below the basic subsistence limitation in
paragraph R, the trial court must make specific findings of fact
that the obligor is capable of paying that amount despite his
reported income on tax returns. If such findings are made, the
court may award alimony in excess of what would otherwise be
allowed under the limit in paragraph R. This, of course, is but
one example of a way in which the application of paragraph R’s
limitation may be inappropriate in a particular case.

After accounting for his monthly child support obligation,
Patrick is left with a net income of $1,433.85 per month. The
district court’s alimony award of $1,000 per month leaves Patrick
with a net income of $433.85. This figure is $417.15 below the
current poverty line in paragraph R. The district court’s order,
however, lacks a specific explanation of why an alimony award
that goes beyond the limit set in paragraph R is warranted.
Therefore, under our holding today, the district court’s alimony
award would appear to be an abuse of discretion.

Of course, the district court could not have anticipated our
decision. As such, the lack of a specific declaration that an
alimony award of $1,000 is warranted despite its conflict with
the limit in paragraph R does not necessarily mean it is not
warranted. It may simply mean that the district court did not
make such a finding express because, at the time of its order, it
was not necessary to do so. Accordingly, we think it prudent to
remand this cause back to the trial court so that it may have the
opportunity to determine whether an alimony award beyond the
limit set forth in paragraph R is warranted. If not, the district
court should award Pamela no more than $582.85 per month
in alimony.

Because the district court may have abused its discretion by
ordering an alimony award that contravenes the basic subsis-
tence limitation of paragraph R, we need not address Patrick’s
alternative argument that the alimony award is unreasonable
under the circumstances.

704 be

(b) Duration

HR In. her cross-appeal, Pamela argues that the district
court erred in terminating her alimony award after 60 months.
The primary purpose of alimony is to.assist an ex-spouse for
a period of time necessary for that individual to secure his or
her own means of support.” Above all else, the duration of an
alimony award must be reasonable in light of this purpose.”

It would be difficult to say on this record, however, that
the district court abused its discretion when it concluded that
Pamela will be able to secure sufficient employment after 5
years. Although Pamela disputes that conclusion, she fails to
articulate any reason why it is false.

Indeed, in the section of her brief dedicated to a discussion
of the alimony award’s duration,. Pamela merely advances argu-
ments concerning the amount of alimony. Pamela never points
to evidence in the record which supports the idea that 5 years
will not provide sufficient time for her to establish gainful
employment. As a result, Pamela has failed to carry her burden
to show that limiting alimony to a period of 5 years was an
abuse of the district court’s discretion.

VI. CONCLUSION

‘We conclude that the district court did not abuse its discre-
tion in ordering Patrick to pay $1,224 per month in child sup-
port. Specifically, it was not an abuse of discretion to use a
3-year average to calculate Patrick’s income for child support
purposes. Moreover, the district court did not abuse its discre-
tion when it excluded Patrick’s income from 2004 in its income
average. Although Patrick’s additional child support obligations
may eventually cause his income to drop below the poverty line
of paragraph R, we cannot say that such obligations violate that
provision at this juncture. Finally, it was not an abuse of discre-
tion to disregard the youngest child’s Social Security benefits
when calculating Patrick’s child support obligation.

With regard to the court’s alimony award, the district court
did not abuse its discretion when it limited Pamela’s alimony

® Kimbrough v. Kimbrough, 228 Neb. 358, 422 N.W.2d 556 (1988).
5 See Bowers v. Lens, 264 Neb. 465, 648 N.W.2d 294 (2002).

award to a period of 60 months. It appears, however, that it
was a potential abuse of discretion to order Patrick to pay ali-
mony which will drive his net income below the current basic
subsistence limitation set forth in paragraph R of the NCSG.
To resolve that potential, we remand the cause back to the trial
court so that it may determine whether such an alimony award
is specifically warranted by the evidence.

As a result, we reverse the district court’s alimony award and
remand the cause with directions to enter a monthly alimony
award of $582.85 per month for 60 months unless the evidence
warrants an upward deviation. On remand, the district court
should also clarify (1) whether Patrick’s actual share of day-
care is 79.75 percent or 80.5 percent and (2) whether Patrick
is accountable for the same proportion—79.75 percent—of the
children’s health care costs not covered by insurance and which
exceed $480.

AFFIRMED IN PART, AND IN PART REVERSED
AND REMANDED WITH DIRECTIONS.

Nanci A. MEISTER, APPELLEE, AND KEVIN V. SCHLENDER,
APPELLANT, V. JOHN C, MEISTER, APPELLEE.
742. N.W.2d 746

Filed December 21, 2007. No, S-06-873,

706 —

Kevin V. Schlender, pro se. . -
Bruce E. Stephens for appellee Nanci A. Meister.

Heavican, C.J., Wricut, CoNNoLly, GERRARD, STEPHAN,
McCormack, and Miter-Lerman, JJ.

Connoity, J.

Kevin V. Schlender appeals the district court’s order that his
attorney’s lien was unenforceable under Neb. Rev. Stat. § 7-108
(Reissue 1997). Schlender represented Nanci A. Meister in
her divorce from John C. Meister. After John appealed the
court’s divorce decree, Nanci discharged Schlender and hired
new counsel. A month later, Schlender filed notice of his
attorney’s lien.

After the appeal, John paid money into the district court to
satisfy the judgment against him, and the court held a hearing on
Schlender’s attorney’s lien. Nanci objected to the lien because
she had dismissed Schlender before he filed notice of the lien.
The court determined that Schlender’s lien was unenforceable.
We reverse, because Schlender’s failure to file his lien before his
discharge did not affect the enforceability of the lien.

BACKGROUND

The district court entered the Meisters’ divorce decree
on September 12, 2003. An amended decree awarded Nanci
$38,153.42 as judgment to equalize the property division.
Schlender withdrew from the case on November 7, and on
December 15, he filed notice of his attorney’s lien with the dis-
trict court. He sent a copy of the notice to both Nanci and John.
The notice provided that the lien was for $9,115.25, “which
is the unpaid balance of compensation due from [Nanci] to
[Schlender] for representation in the [divorce] action.”

The Court of Appeals modified the judgment, reducing it to
$32,348.94.! John satisfied the $32,348.94 judgment in part by
paying $12,348.94 into the district court on April 21, 2006. On
April 24, the court scheduled a May 1 hearing to address the
attorney’s lien. On April 27, Nanci filed an objection to the lien,
arguing that she had dismissed Schlender and hired new counsel
before Schlender filed his attorney’s lien.

At the hearing, the court received an exhibit that included
Schlender’s affidavit and an attached statement for services.
The statement showed that the amount owed was $9,115.25.
The court took judicial notice of trial procedures in the underly-
ing dissolution case, the exhibit list in that case, and the notice
of the attorney’s lien. Schlender argued that the attorney’s lien
statute did not require him to file the lien while he was repre-
senting Nanci. He asked the court to direct the clerk to pay him
the balance due for his services.

On May 15, 2006, the court declared the attorney’s lien
“unenforceable under the lien statute.” On May 23, Schlender
moved to intervene “to determine the disposition of the settle-
ment proceeds paid into the Court by [John] which are subject
to the attorney’s lien.” The same day, Schlender also moved
for new trial. After a hearing on July 10, the court overruled
Schlender’s motion for new trial. The court denied intervention
on July 19. Schlender filed a notice of appeal on August 8.

ASSIGNMENT OF ERROR .
Schlender assigns, restated, that the court erred in deciding
the attorney’s lien was unenforceable under the lien statute.

STANDARD OF REVIEW
HM Under Nebraska law, the proper method for enforcing
an attorney’s charging lien is by resort to equity, because such a
lien is equitable in nature? On appeal from an equity action, we
decide factual questions de novo on the record. For questions of

' Meister v. Meister, No. A-03-1157, 2005 WL 625888 (Neb. App. Mar. 1,
2005) (not designated for permanent publication).

? Kleager v. Schaneman, 212 Neb. 333, 322 N.W.2d 659 (1982).

708 be

both fact and law, we determine the issues independently of the
trial court’s determination.>

ANALYSIS

JURISDICTIONAL QUESTION :

HB Nanci contends that Schiender did not timely file his
appeal. To vest an appellate court with jurisdiction, a party
must timely file a notice of appeal.* A party must file a notice
of appeal within 30 days of the judgment, decree, or final order
from which the party is appealing.> A motion for a new trial,
however, terminates the time in which a notice of appeal must
be filed.° And, if the court denies the motion, the party has 30
days from the entry of the order denying the motion to file a
notice of appeal.”

The district court declared the attorney’s lien unenforceable
on May 15, 2006. Schlender moved for new trial on May 23,
and the court overruled the motion on July 10. Schlender filed
his notice of appeal on August 8. Nanci argues that because
there was no trial regarding the attorney’s lien, the motion for
new trial was “spurious” and that therefore, the motion did not
terminate the time for filing notice of appeal.*

“Trial” is defined as “a judicial examination of the issues,
whether of law or of fact in an action.”® The court’s hearing on
May 1, 2006, constituted a “trial” on the issue of Schlender’s
attorney’s lien. The court received evidence, heard arguments
by the parties, and, on May 15, resolved the issue by declaring
‘the lien unenforceable. Because there was a trial, Schlender

3 See County of Sarpy v. City of Gretna, 273 Neb. 92, 727 N.W.2d 690
(2007).

4* See DeBose v. State, 267 Neb. 116, 672 N.W.2d 426 (2003).

5 Neb. Rev. Stat, § 25-1912(1) (Cum. Supp. 2006).

6 § 25-1912(3). .

7 Strong v. Omaha Constr. Indus. Pension Plan, 270 Neb. 1, 701 N.W.2d 320
(2005). :

8 Brief for appellee Nanci Meister at 4.

° Neb. Rev. Stat. § 25-1103 (Reissue 1995).

a ”
properly moved for new trial within 10 days, terminating the
time for filing a notice of appeal. Nanci’s argument fails.

ScHLENDER’S FaAILurE TO FILE Notice oF THE Lien
Berore His DiscHArce Dip Nor AFFECT
THE ENFORCEABILITY OF THE Lien

Nebraska’s attorney’s lien statute, § 7-108, provides:

An attorney has a lien for a general balance of compen-

* sation upon any papers of his client which have come into

his possession in the course of his professional employ-

ment; and upon money in, his hands belonging to his cli-

ent, and in the hands of the adverse party in an action or

proceeding in which the attorney was employed from the
time of giving notice of the lien to that party.

Before the hearing on Schlender’s attorney’s lien, Nanci
objected to the lien because she dismissed Schlender before he
filed his notice of the lien. Apparently based on Nanci’s objec-
tion, the district court declared Schlender’s lien unenforceable.

Schlender contends that the court erred in finding that his
attorney’s lien was unenforceable because he did not file it
with the court before his discharge. He argues that the statute
does not mandate that an attorney file the attorney’s lien before
discharge by his client. Nanci argues that Schlender’s lien was
unenforceable because he filed his notice of the lien after he had
been discharged and because Nanci objected to the lien.

Nanci relies on Gordon v. Hennings." In Gordon, an attorney
represented a plaintiff in an action against a city. While in the
course of his representation, the attorney acquired possession
of warrants payable by the city to the plaintiff for $1,600. After
obtaining possession of the warrants, the attorney asserted a lien
for $1,400, which he claimed was for legal services rendered
in the litigation. The plaintiff later discharged the attorney and
specifically instructed him not to collect the warrants from
the city. Nevertheless, the attorney proceeded to redeem the

"© § 7-108 (emphasis supplied).
" Gordon v. Hennings, 89 Neb. 252, 131 N.W. 228 (1911).

710 Es

warrants and collected the money from the city treasurer. The

Gordon court explained that the attorney’s discharge
did not dissolve the lien which the law gave [the attorney]
upon the money in the city’s possession, [or] destroy his
equitable right to so much of the fund as might be nec-
essary to satisfy that lien, but [the discharge] withdrew
the attorney’s authority to collect the money over his
client’s objection.”

Hi Contrary to Nanci’s assertion, Gordon does not hold that
once a client discharges an attorney, the attorney is no longer
entitled to a lien absent his client’s approval. Instead, the court
expressly recognized that the attorney’s discharge did not dis-
solve the lien or destroy his right to money that would satisfy
the lien. The discharge simply withdrew his authority to collect
on warrants that were drawn to the plaintiff’s order. In other
words, once the plaintiff discharged the attorney, the attorney
no longer had authority to act on the plaintiff’s behalf to “cash
in’ the warrants over the plaintiff’s objections; however, he
still had a right to the money satisfying the lien. The Gordon
court did not hold that an attorney must file an attorney’s lien
before the attorney’s discharge. The rule Nanci suggests would
encourage improper discharge to avoid paying attorney fees.
Therefore, Schlender’s failure to file notice of the lien before
his discharge did not affect the lien’s enforceability. The court
erred in declaring his lien unenforceable.

Egurry Excusrs SCHLENDER’S FAILURE
TO INTERVENE BEFORE THE HEARING

Nanci contends that Schlender did not use the proper pro-
cedure for preserving the lien. She argues that to enforce
his lien, Schlender had to file a petition to intervene. Nanci
claims that by arguing his lien on May 1, 2006, and only later
moving to intervene on May 23—after the court declared the
lien unenforceable—Schlender put the “proverbial cart before
the horse.”!

"2 Jd, at 255, 131 N.W. at 229.
3 Brief for appellee Nanci Meister at 5.

HMMM The proper method of enforcing an attorney’s lien in
the original action is by intervention.’* Neb. Rev. Stat. § 25-328
(Cum. Supp. 2006) provides that a person who has an interest in
the matter may intervene “before the trial commences.” We have
stated that to be filed as a matter of right, a petition in interven-
tion under § 25-328 must be filed before the trial.1* Here, the
court held a hearing on the attorney’s lien on May 1, 2006, and
declared the lien unenforceable on May 15. Schlender did not
move to intervene until May 23. Arguably, he did not follow the
proper procedure to enforce his lien.

Hl Despite Schlender’s failure to properly intervene before
the hearing, this failure did not destroy any entitlement he
may have had to the lien. We have stated that “‘“[iJntervention
under [§ 25-328] is a matter of right, but does not prevent a
court of equity in the interests of justice from allowing a proper
party to intervene after the trial has begun... .” .. ”!° We
further stated:

“<“TLeave to intervene after the entry of a final decree is
not allowable as a matter of right and should seldom be
granted, but equity sometimes requires a departure from
the general rule. . . . ‘Applications for leave to intervene
after entry of a final decree are unusual, and generally
have been denied. There are instances, however, where
petitions for leave to intervene have been filed and granted
after decree”. ..”.. 717

As noted above, the proper method for enforcing an attor-
ney’s charging lien under Nebraska law is by resort to equity.!®
In the present case, equity requires a departure from the general
tule that intervention cannot occur after entry of a final decree.
Or, stated another way, equity requires a finding that Schlender

™ See, Barber v. Barber, 207 Neb. 101, 296 N.W.2d 463 (1980); Tuttle v.
Wyman, 149 Neb. 769, 32 N.W.2d 742 (1948).

5 Kirchner v. Gast, 169 Neb. 404, 100 N.W.2d 65 (1959).

'S State ex rel. City of Grand Island v, Tillman, 174 Neb. 23, 27, 115 N.W.2d
796, 199 (1962) (quoting Kitchen Bros. Hotel Co. v. Omaha Safe Deposit
Co., 126 Neb. 744, 254 N.W. 507 (1934)).

17 Id. (citations omitted).
18 See Kleager v. Schaneman, supra note 2.

712 —

could intervene after the hearing, and his failure to intervene
before the hearing did not destroy any right he may-have had
to the lien.

Equity requires such a result because of the small window
of time in which Schlender had to intervene before the hearing.
John made his payment to the court on April 21, 2006, a Friday.
The following Monday, April 24, the court ordered a show cause
hearing for May 1. Recently, in Stover v. County of Lancaster,°
we noted that once a judgment debtor paid funds to the court,
the clerk should have notified the parties claiming an interest in
the funds, and “intervention by [the attorney} at that point. . .
would have been appropriate.” Here, the court apparently gave
Schlender notice of John’s payment on April 24 when it ordered
the hearing for May 1. This gave Schlender exactly 1 week—5
business days—to intervene before the hearing. Given this
small window, equity permits Schlender to intervene after the
court’s disposition of the matter, which Schlender tried to do on
May 23, 8 days after the court declared his lien unenforceable.
Therefore, contrary to Nanci’s argument, Schlender’s failure to
intervene before arguing his lien at the hearing did not destroy
any entitlement he may have had to the lien.

CONCLUSION

Schlender’s filing of the lien after his discharge did not affect
the enforceability of the lien. Therefore, the district court erred
in declaring Schlender’s lien unenforceable. And although inter-
vention is the proper method of enforcing an attorney’s lien in
an original action, equity excuses Schlender’s failure to inter-
vene before the trial. On remand, we leave it to the district court
to decide whether Schlender attached and perfected his lien. If
so, the court should then determine the amount of the lien. We

reverse, and remand.
REVERSED AND REMANDED.

1 Stover v. County of Lancaster, 271 Neb. 107, 115, 710 N.W.2d 84, 90
(2006).

IN RE INTEREST OF Destiny A. ET AL., CHILDREN
UNDER 18 YEARS OF AGE.
Stare OF NEBRASKA, APPELLEE, V.
Wenpy A., APPELLANT.
742. N.W.2d 758

Filed December 21, 2007. No. S-06-1380.

13

Thomas C. Riley, Douglas County Public Defender, and
Mona L. Burton for appellant.

Eric Strovers, Deputy Douglas County Attorney, for
appellee.

Thomas G. Incontro and Shawntal M. Smith, of Thomas G.
Incontro, P.C., L.L.O., guardians ad litem.

Heavican, C.J., Wricut, CoNNOoLLy, GERRARD, STEPHAN,
McCormack, and MiLter-Lerman, JJ.

Conno Ly, J.

We granted Wendy A.’s petition for further review of a
Nebraska Court of Appeals’ memorandum opinion and judg-
ment on appeal filed on May 24, 2007. The Court of Appeals
affirmed the separate juvenile court’s decision terminating
Wendy’s parental rights to her three children under Neb. Rev.
Stat. § 43-292 (Reissue 2004). We granted Wendy’s petition
to clarify an inconsistency between case law and Neb. Rev.
Stat. § 43-292.02(2) (Reissue 2004). That statute states that a
court deciding whether to terminate parental rights should not
consider that an adoptive family has been identified. We con-
clude that under § 43-292.02(2), a juvenile court, in terminating
parental rights, cannot consider whether an adoptive family has
been identified. Although the juvenile court erroneously consid-
ered the foster parents’ willingness to adopt, we disregard that
evidence in our de novo review. We conclude the guardian ad
litem presented other clear and convincing evidence that termi-
nating Wendy’s parental rights is in the children’s best interests.
We affirm.

BACKGROUND
‘Wendy is the natural mother of the following minor chil-
dren: Vincent R., Jr., born July 6, 1998; Destiny A., born
March 19, 2002; and Antonio A., born January 21, 2003. The
court removed all three children from Wendy’s care and placed

them in the custody of the Nebraska Department of Health and
Human Services (DHHS).

The day after Destiny’s birth, the court placed her in DHHS’
custody. An affidavit attached to the motion for temporary
custody stated Wendy tested positive for drugs at Destiny’s
delivery and had admitted to using marijuana weekly during
her pregnancy. Destiny has remained in out-of-home place-
ment since the day of her birth. About 3 weeks later, on April
10, 2002, the court determined that she was a child in need of
special supervision. .

On January 8, 2003, the State moved for temporary custody
of Vincent. An affidavit stated that Wendy had admitted to
using methamphetamine and marijuana while pregnant with
Destiny; she had admitted to using marijuana since Destiny’s
removal; she had not complied with the court’s orders relating to
Destiny’s case; she had tested positive for methamphetamine on
two separate occasions since Destiny’s removal; and she contin-
ued to use illegal drugs even though she was 7 months pregnant.
The court issued an order for immediate custody. Vincent has
remained in out-of-home placement since then.

Antonio has been in out-of-home custody since January 22,
2003, the day after his birth. An affidavit attached to the motion
for temporary custody stated that Wendy’s maternal drug screen
tested positive for amphetamines, barbiturates, cocaine, and
cannabinoids. On April 17, the court determined that Antonio
and Vincent were children in need of special supervision.

‘Wenpy’s PARENTAL Ricuts ARE TERMINATED

In November 2004, the State moved to terminate Wendy’s
parental rights. In May 2005, however, the State moved to dis-
miss the motion for termination. The court granted the motion
to dismiss and dismissed the State’s motion with prejudice.

However, in May 2006, the children’s guardian ad litem
moved to terminate Wendy’s parental rights. The guardian ad
litem alleged that the court should terminate Wendy’s parental
rights under § 43-292(2), (3), (6), and (7), and that it was in the
children’s best interests.

716 be

The guardian ad litem called each child’s current foster
mother to testify. Destiny’s foster mother testified, over Wendy’s
objection, that Destiny usually stated she did not want to attend
scheduled visits with Wendy. The court also overruled Wendy’s
objection when Destiny’s foster mother testified that if Destiny
became free for adoption, she would be willing to provide care
and support for her. The court also allowed Antonio’s foster
mother to testify that Antonio tells her he does not want to go
on visits with Wendy. Wendy also objected when Antonio’s fos-
ter mother testified that she and her husband would be willing
to provide Antonio a loving home if he became available for
adoption. The court overruled Wendy’s objection. ~

The director of Destiny and Antonio’s daycare testified that
she sometimes observed Destiny right before a visitation with
Wendy and that Destiny was usually withdrawn. Destiny would
cling to the daycare personnel and say she did not want to go
on the visit. The daycare director stated this was’ the same for
Antonio. The case nianager testified that when she observed
visits between Wendy and the children, she noticed Destiny and
Antonio did not seem excited to be there.

Other testimony ‘showed Wendy had generally complied
with the case plan and continued to make progress. Witnesses
reported that during visits with the children, Wendy was affec-
tionate and nurturing. The family’s case manager from June
2004 through February 2006 testified that Wendy had submit-
ted to random urinalysis screenings, which were negative. She
further stated she had no concerns that Wendy was using drugs
or alcohol during that time.

But evidence established that Wendy’s April 26, 2006, uri-
nalysis was positive for methamphetamine. After the positive
test, a case manager sent Wendy two letters, the first requesting
she complete a urinalysis on May 25, and the second requesting
two more urinalysis screenings in June. Wendy did not comply
with these requests.

Evidence also showed Wendy missed individual therapy ses-
sions at about the same time. She attended six sessions from
March to May 2006, but she missed the next six sessions.
Although she gave the therapist reasons for missing three of the
sessions, the other three missed sessions were “no-shows.”

— nT
Le

On November 6, 2006, the juvenile court terminated Wendy’s
parental rights. The court found by clear and convincing evi-
dence that grounds existed under § 43-292(2), (3), (6), and (7)
for termination. The .court also decided that termination was
in the children’s best interests and denied Wendy’s motion for
continued visitation.

Courr oF AppEALs’ DECISION.

Wendy appealed the juvenile court’s decision to the Court
of Appeals, Wendy assigned 13 errors. Wendy made the fol-
lowing claims: (1) the court erred in overruling her relevance
objections to testimony that the foster parents were willing to
adopt Destiny and Antonio, (2) the court erred in overruling her
objections to the foster mothers’ testimony that the children did
not want to attend visits with Wendy, and (3) the court erred in
finding that terminating Wendy’s parental rights was in the best
interests of the children.

Wendy claimed that under § 43-292.02, testimony that foster
parents are willing to adopt the child should have no bearing in
a termination of parental rights hearing. The Court of Appeals
decided the lower court did not err in overruling Wendy’s objec-
tions to the foster parents’ testimony. The Court of Appeals
concluded that “[s]uch evidence is necessary to show that ter-
mination of a parent’s rights is in the children’s best interests,
specifically that the children would be provided with more
permanency than they would have otherwise.”

Wendy also argued the court violated her due process rights
when it overruled her hearsay objections and allowed the fos-
ter mothers to testify that Destiny and Antonio stated they
did not want to go on visits. The Court of Appeals noted that
Wendy’s counsel cross-examined both foster mothers and that
other evidence showed the children’s reactions to visitation.
The court concluded the totality of the record showed Wendy
was afforded due process regarding the testimony about the
children’s statements.

Finally, Wendy argued that termination was not in the chil-
dren’s best interests because Wendy and the children had a
“positive relationship” and because she complied with the

718 |

rehabilitation plan.! Wendy claimed that she had made “great
strides in turning her life around, remaining drug free and plac-
ing herself in a position to parent her children”? The Court of
Appeals concluded that the lower court did not err in finding that
the termination of Wendy’s parental rights was in the children’s
best interests. The Court of Appeals relied on evidence that the
children had not returned to Wendy’s care since their removal;
that Wendy tested positive for drugs in April 2006; that her
visitation and therapy attendance became more sporadic around
that time; that the children have been in stable, loving foster
homes; and that two of the children will likely be adopted by
their foster families.

The Court of Appeals concluded there existed clear and
convincing evidence to support a finding that Wendy’s parental
rights should be terminated under § 43-292(7) and that termina-
tion was in the children’s best interests. The court affirmed the
order terminating Wendy’s parental rights. We granted Wendy’s
petition for further review.

ASSIGNMENTS OF ERROR

Wendy assigns, restated, that the Court of Appeals erred in
(1) deciding the juvenile court properly allowed the foster moth-
ers’ testimony regarding their willingness to adopt the children,
(2) determining that Wendy’s due process rights were suffi-
ciently protected even though the foster mothers were allowed
to testify about the children’s statements regarding visitation,
and (3) deciding that the termination of Wendy’s parental rights
is in the children’s best interests.

STANDARD OF REVIEW
HMM Statutory interpretation presents a question of law.
When we review questions of law, we resolve the questions
independently of the lower court’s conclusions.*

| Brief for appellant at 40.

2 Td. at 42.

3 Zach v. Eacker, 271 Neb. 868, 716 N.W.2d 437 (2006).
4 See id.

HH Juvenile cases are reviewed de novo on the record, and we
review the issues independently of the lower court’s findings.°

ANALYSIS

Tue Court or APPEALS Errep In Decipinc Tuar TESTIMONY
REGARDING THE FosTER PARENTS’ WILLINGNESS TO
AbopT THE CHILDREN Was ADMISSIBLE

Section 43-292,02(2) provides, in part, “The fact that a quali-
fied family for an adoption of the juvenile has been identified,
recruited, processed, and approved shall have no bearing on
whether parental rights shall be terminated.” Wendy argued to
the Court of Appeals that under § 43-292.02(2), the juvenile
court erred in allowing the foster mothers to testify that they
were willing to adopt the children.

HHMI In interpreting § 43-292.02, we look to the statute’s leg-
islative history. For a court to inquire into a statute’s legislative
history, the statute in question must be open to construction. A
statute is open to construction when its terms require interpre-
tation or may reasonably be considered ambiguous.‘ A statute
is ambiguous when the language used cannot be adequately
understood either from the plain meaning of the statute or when
considered in pati materia with any related statutes.’

The relevant provision in § 43-292.02(2) is ambiguous. Section
43-292.02 addresses the State’s duty to file a petition to termi-
nate parental rights. Subsection (1) identifies cases in which the
State has a duty to file a petition. Subsection (2) provides:

A petition shall not be filed on behalf of the state to ter-
minate the parental rights of the juvenile’s parents or, if
such a petition has been filed by another party, the state
shall not join as a party to the petition if the sole factual
basis for the petition is that (a) the parent or parents of
the juvenile are financially unable to provide health care
for the juvenile or (b) the parent or parents of the juve-
nile are incarcerated. The fact that a qualified family for

5 See In re Interest of Xavier H., ante p. 331, 740 N.W.2d 13 (2007).
® Zach v. Eacker, supra note 3.
7 Id.

720 Es

an adoption of the juvenile has been identified, recruited,
processed, and approved shall have no bearing on whether
parental rights shall be terminated.
The inclusion of the second sentence in subsection (2) creates
an ambiguity. When considering the statute as a whole, it is
unclear whether the relevant Janguage applies only in those
cases identified in the first sentence of subsection (2), or
whether it applies in all parental rights termination cases. Here,
the petition’s factual basis is not one of those identified in
subsection (2). Thus, the relevant language is inapplicable if it
applies only in cases falling within subsection (2). Because the
provision is ambiguous, the statute is open to construction.
The Legislature enacted § 43-292.02 through 1998 Neb.
Laws, L.B. 1041. The legislative history for L.B. 1041 sug-
gests the relevant provision appears in subsection (2) because
all the provisions now appearing in subsection (2) were added
by a single amendment to the bill.* We do not believe the
provision’s application is limited to those cases in subsec-
tion (2). The amendment’s introducer explained the purpose of
the. provision:
And then the third matter that’s covered by this amendment
is that the fact that an adoptive family has been identified
or recruited should not be a fact considered by the court
in determining whether parental rights are terminated. And
that really is clear to any judge, I think, that you .. . the
court has to make a determination on parental rights based
upon the-facts of that case, not whether somebody is will-
ing to ‘adopt-the child or not. That’s the second step. First
you deal with the criteria of law in determining whether
parental rights should be terminated. After that has been
- treated, if parental rights are terminated, then you go to
the next step and you proceed with the adoption.®
This explanation does not limit the provision’s application to
only those cases appearing in the first sentence of subsection (2).
Instead, the provision applies in all parental rights termination
cases, including the one currently before us.

8 Floor Debate, 95th Leg., 2d Sess. 13122 (Mar. 10, 1998).
9 Td. at 13122-23.

THM Section 43-292.02(2) expressly provides that when
deciding whether to terminate parental rights, a court should
not consider that an adoptive family has been identified. The
Court of Appeals erroneously decided the juvenile court did not
err in allowing the foster mothers to testify about their willing-
ness to adopt the children. The Court of Appeals further erred
in considering this evidence when it decided that terminating
Wendy’s parental rights was in the best interests of the children.
The court’s error, however, is not a reversible error because
Wendy properly objected at trial, and we will not consider this
testimony in our de novo review of the best interests issue.!°

In the recent case of In re Interest of Phoenix L.,'! although
the appellant did not raise the issue, in determining that termi-
nation of parental rights was in the children’s best interests, we
noted that the children’s foster family wished to adopt the chil-
dren. To the extent we relied on this evidence, we disapprove
of that language.

Tue Courr oF AppEALS Dip Nor Err in Decipinc WENDy’s
Due Process Ricuts Were SUFFICIENTLY PROTECTED

The juvenile court allowed Destiny’s and Antonio’s foster
mothers to testify that the children had stated they did not want
to go on visits with Wendy. Wendy contends that the Court
of Appeals erred in determining that her due process rights
were sufficiently protected when the juvenile court allowed
this testimony. She argues the statements were hearsay. The
Court of Appeals decided, based on the totality of the record,
that Wendy was afforded due process regarding the receipt of
the foster mothers’ testimony. The court noted that Wendy’s
counsel cross-examined both foster mothers. The court also
noted that other witnesses provided evidence of the children’s
reactions to visitation and that Wendy did not assign as error
their testimony.

HM The Nebraska Evidence Rules do not apply in cases
involving the termination of parental rights.” Instead, due

1 See In re Interest of D.S. and T.S., 236 Neb. 413, 461 N.W.2d 415 (1990).
" In re Interest of Phoenix L., 270 Neb. 870, 708 N.W.2d 786 (2006).
” In re Interest of Rebecka P., 266 Neb. 869, 669 N.W.2d 658 (2003).

Ta Le

process controls and requires that the State use fundamentally
fair procedures before a court terminates parental rights.!? In
determining whether admission or exclusion of particular evi-
dence would violate fundamental due process, the Nebraska
Evidence Rules serve as a guidepost.!

But even if we were to determine that the foster mothers’
testimony was inadmissible hearsay, any error on the part of
the juvenile court was harmless. The director for Destiny and
Antonio’s daycare and the family’s DHHS case manager both
testified about Destiny’s and Antonio’s reactions to visitation.
Wendy did not assign as-error the admission of their testimony.
As we stated in In re Interest of Gloria F.,'6 “‘[A]ny error in
teceiving the [testimony] was not fatal to the juvenile court’s
determination [because] [t]he court had before it other evidence,
in the form of testimony and exhibits . . . sufficient to sustain
the order of termination.’” Even if the court had excluded the
foster mothers’ testimony, the court still would have been aware
of the children’s reactions to visitation. Therefore, we need not
determine whether the testimony was inadmissible. The Court
of Appeals did not err in deciding Wendy’s due process rights
were sufficiently protected.

Tue.Courr oF AppeaLs Dip Nor Err IN DETERMINING THAT
-THE TERMINATION OF WENDY’S PARENTAL RIGHTS
Was IN THE CHILDREN’S Best INTERESTS

Wendy contends the Court of Appeals erred in deciding that
terminating her parental rights was in the children’s best inter-
ests. Wendy argues that “[t]ermination of parental rights is only
appropriate. as a last resort, not simply because there appears
to be a more attractive alternative for the children or because
the court reasonably believes that some other person could

8 Ia, .

¥ See, In re Interest of Kassara M., 258 Neb, 90, 601 N.W.2d 917 (1999); In
re Interest of Floyd B., 254 Neb. 443, 577 N.W.2d 535 (1998).

'S See In re Interest of Gloria F., 254 Neb. 531, 577 N.W.2d 296 (1998).

'6 Id. at 538, 577 N.W.2d at 302 (quoting In re Interest of R.A., 226 Neb. 160,
410 N.W.2d 110 (1987), overruled on other grounds, In re Interest of JS.
A.C, and C.S., 227 Neb. 251, 417 N.W.2d 147 (1987).

better provide for the child.”!” Wendy asserts that the Court of
Appeals incorrectly relied on the relationship between the chil-
dren and their foster parents as a reason to affirm the juvenile
court’s decision. She claims that she and the children have a
“positive relationship” and that she has complied with the plan
of rehabilitation.

HE Before parental rights may be terminated, the evi-
dence must clearly and convincingly establish one or more of
the statutory grounds permitting termination and that termi-
nation is in the juvenile’s best interests.'* We have held that
where a parent is unable or unwilling to rehabilitate himself or
herself within a reasonable time, the best interests of the child
require termination of the parental rights."° The State removed
the children from Wendy’s care because of her illegal drug use.
Therefore, her testing positive for methamphetamine in April
2006 is particularly worrisome. Also, we cannot ignore that
a case manager sent Wendy letters requesting she complete
three additional drug tests after the April test, but Wendy failed
to comply with the requests. About the same time, Wendy
missed three therapy sessions without giving a reason for
her absences.

HM Wendy correctly asserts that termination of parental
rights should be a last resort.”° Yet, the system has run out of
options. It has extended a helping hand. But by testing positive
for methamphetamine in April 2006, missing three subsequent
drug tests, and failing to appear for her therapy sessions, she
has shown that she is unwilling or unable to rehabilitate herself.
When the court terminated Wendy’s parental rights, Vincent
had been in foster care for 3 years. Destiny and Antonio had
spent their entire lives, 4 years and 3 years, in foster care. The
system cannot and should not allow children to languish in

™ Memorandum brief for appellant in support of petition for further review at
6.

18 See In re Interest of Xavier H., supra note 5.

In re Interest of DeWayne G. & Devon G., 263 Neb. 43, 638 N.W.2d 510
(2002).

20 See In re Interest of Xavier H., supra note 5.

724 be

foster care waiting to see if the parent will mature.”! After a de

* novo review of the record, we conclude there exists clear and
convincing evidence that terminating Wendy’s parental rights is
in the children’s best interests. The Court of Appeals did not err
in affirming the lower court’s decision.

CONCLUSION

The Court of Appeals erroneously decided the juvenile court
did not err in allowing the foster parents to testify about their
willingness to adopt the children. Section 43-292.02(2) provides
that such evidence shall have no bearing on whether a court
should terminate parental rights. But the Court of Appeals’ error
is not a reversible error because we did not consider this testi-
mony in our de novo review of the best interests issue.

The Court of Appeals did not err in deciding Wendy’s due
process rights were sufficiently protected when the juvenile
court allowed the foster mothers to testify about the children’s
statements regarding visitation. Any error by the juvenile court
in admitting the testimony was harmless error.

The Court of Appeals did not err in determining that the
termination of Wendy’s parental rights is in the children’s best
interests. Given that Wendy tested positive for methamphet-
amine in April 2006 and other evidence on the record, we con-
clude there exits clear and convincing evidence that terminating
Wendy’s parental rights is in the best interests of the children.
We affirm,

AFFIRMED.

21 In re Interest of DeWayne G. & Devon G., supra note 19.

STATE OF NEBRASKA, APPELLEE, V.
Rgaina A. JACKSON, APPELLANT.
742. N.W.24 751

Filed December 21, 2007. No. S-07-084.

Thomas C. Riley, Douglas County Public Defender, and Mark
A. Mendenhall for appellant.

Paul D. Kratz, Omaha City Attorney, Martin J. Conboy II,
Omaha City Prosecutor, and J. Michael Tesar for appellee.

Heavican, C.J., Wricut, CoNNoLty, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

726 Le

Srepuan, J.

The question presented in this appeal is whether a mistrial
resulting from. the recusal of the trial judge during a bench trial
bars retrial under the double jeopardy provisions of the state
and federal Constitutions. The issue turns on whether the record
reflects a “manifest necessity” for terminating the trial. We con-
clude that it does not.

BACKGROUND

Regina A. Jackson was charged in the county court for
Douglas County with assault and battery, disorderly conduct,
and driving under the influence, all misdemeanor offenses
defined by the Omaha Municipal Code. She entered pleas of not
guilty to each charge, and the case was scheduled for trial.

At the beginning of the bench trial, immediately after both
counsel had entered their appearances, the trial judge stated:
“Before we go any further on this I want everybody here to
know that I’ve seen [Jackson] working in the clerk’s office. I
don’t know her in anyway [sic]. I mean I just see her and say
hi. You want me to recuse myself?” Jackson responded in the
negative, and neither counsel requested recusal. The prosecutor
indicated that she was willing to proceed.

The first witness was the victim of the alleged assault. After
her testimony was concluded, the judge asked to see counsel in
chambers, where he stated:

The more I think about this case the more I feel it would
be appropriate to appoint . . . an outside judge. I mean I
should recuse myself from hearing any further evidence in
this matter. We are going to check with the presiding judge
and see when we could get an outside judge to come in
and hear this case and we will schedule it. We will let you
know this afternoon.
Later the same day, counsel and Jackson appeared before the
judge, who noted for the record that he had recused himself “in
the middle of the trial” and that he would enter a mistrial on
his own motion. The prosecutor responded, “Manifest neces-
sity,” and the judge said, “Manifest necessity and continue this
matter until this afternoon and declare a mistrial.” At that point,
Jackson’s counsel objected, noting that a witness had testified

and jeopardy had attached and that Jackson was present and
prepared to proceed. The judge noted the objection, but stated,
“Due to manifest necessity this matter is declared a mistrial.”
The court entered a written order to this effect on the same day,
and the trial was rescheduled.

Jackson subsequently filed a plea in bar, asserting that retrial
would violate her constitutional right not to be subjected to dou-
ble jeopardy. The plea in bar was denied, and Jackson appealed
to the district court for Douglas County, which affirmed the
judgment of the county court. Jackson perfected this timely
appeal, which we moved to our docket pursuant to our statu-
tory authority to regulate the caseloads of the appellate courts
of this state.’

ASSIGNMENT OF ERROR
Jackson assigns that the district court erred in affirming the
denial of her plea in bar.

STANDARD OF REVIEW
HMB The overruling of a plea in bar raising a double jeop-
ardy claim is a final order from which an appeal may be taken.”
Issues regarding the grant or denial of a plea in bar are ques-
tions of law.? On a question of law, an appellate court is obli-
gated to reach a conclusion independent .of the determination
reached by the court below.*

ANALYSIS :
HB The Fifth Amendment to the U.S. Constitution and arti-
cle I, § 12, of the Nebraska Constitution protect an individual
from being subjected to the hazards of trial and possible con-
viction more than once for an alleged offense.> The protection

' See Neb. Rev. Stat. § 24-1106(3) (Reissue 1995).

2 See, State v. Woodfork, 239 Neb. 720, 478°N.W.2d 248 (1991), overruled
on other grounds, State v. Williams, 243 Neb. 959, 503 N.W.2d 561 (1993);
State v. Smith, 3 Neb. App. 564, 529 N.W.2d 116 (1995).

3 State v. Humbert, 272 Neb. 428, 722 N.W.2d 71 (2006).
4d,

5 See, State v. Marshall, 269 Neb. 56, 690 N.W.2d 593 (2005); State v. Rhea,
262 Neb. 886, 636 N.W.2d 364 (2001).

728 Ee

provided by Nebraska’s double jeopardy clause is coextensive
with that provided by the U.S. Constitution.* Jeopardy attaches
(1) in a case tried to a jury, when the jury is impaneled and
sworn; (2) when a judge, hearing a case without a jury, begins
to hear evidence as to the guilt of the defendant; or (3) at
the time the trial court accepts the defendant’s guilty plea.”
However, the constitutional protection against double jeop-
ardy does not mean that every time a defendant is put to trial
before a competent tribunal, he is entitled to go free if the trial
fails to end in a final judgment.* Where jeopardy has attached
in a prior criminal proceeding which does not result in final
judgment and the State subsequently seeks to retry the defen-
dant on the same charge, the constitutional protection against
double jeopardy bars the retrial only if the prior proceeding
terminated jeopardy.”

In this case, jeopardy attached when the court heard
testimony. The mistrial declared on the court’s own motion
over Jackson’s objection prevented a final judgment. However,
a mistrial does not automatically terminate jeopardy, because “a
trial can be discontinued when particular circumstances mani-
fest a necessity for doing so, and when failure to discontinue
would defeat the ends of justice.”"° Double jeopardy does not
arise if the State can demonstrate manifest necessity for a mis-
trial declared over the objection of the defendant."

The U.S. Supreme Court has held that while “[t]he words
‘manifest necessity’ appropriately characterize the magnitude
of the prosecutor’s burden[,] . . . those words do not describe a
standard that can be applied mechanically or without attention

State v. Marshall, supra note 5; State v. Winkler, 266 Neb. 155, 663 N.W.2d
102 (2003); State v. Nelson, 262 Neb. 896, 636 N.W.2d 620 (2001).

7 State v. Vasquez, 271 Neb. 906, 716 N.W.2d 443 (2006).

8 Wade v. Hunter, 336 U.S. 684, 69 S. Ct. 834, 93 L. Ed. 974 (1949); State v.
Marshall, supra note 5; State v. Bostwick, 222 Neb. 631, 385 N.W.2d 906
(1986).

° State v. Marshall, supra note 5. See State v. Bostwick, supra note 8.

© Wade v. Hunter, supra note 8, 336 U.S. at 690.

"| Arizona v. Washington, 434 U.S. 497, 98 8. Ct. 824, 54 L. Ed. 2d 717
(1978); State v. Marshall, supra note 5.

es 729
Le)
to the particular problem confronting the trial judge.””? The
Court has also recognized that “there are degrees of necessity
and we require a ‘high degree’ before concluding that a mistrial
is appropriate.”"* The Court noted that “the strictest scrutiny is
appropriate when the basis for the mistrial is the unavailability
of critical prosecution evidence, or when there is reason to
believe that the prosecutor is using the superior resources of
the State to harass or to achieve a tactical advantage over the
accused.”"* Conversely, “[a]t the other extreme is the mistrial
premised upon the trial judge’s belief that the jury is unable to
teach a verdict, long considered the classic basis for a proper:
mistrial.”'> In order to protect the interest of a criminal defen-
dant in not being subjected to double jeopardy, “reviewing
courts have an obligation to satisfy themselves that . . . the trial ©
judge exercised ‘sound discretion’ in declaring a mistrial.”'*
This court has held that manifest necessity for a mistrial was
established in cases where the potential bias of a juror is discov-
ered during trial.” However, we have hot previously. addressed,
the question of whether manifest necessity for a mistrial is
established by the recusal of a judge during a bench trial. Some
courts have held that a mistrial was manifestly necessary when -
a judge declared an inability to disregard evidence which had
been ruled inadmissible in the bench trial."* Manifest necessity
for a mistrial has also been found where the judge conducting
a bench trial recognizes and admits having a bias which would
affect his or her objectivity.” As one court noted: “When judges
doubt their own ability to adjudicate impartially, they should

? Arizona v. Washington, supra note 11, 434 U. S. at 505-06.

13 Id., 434 U.S. at 506

™ Id., 434 U.S. at 508.

'S Id, 434 U.S. at 509.

16 Id., 434 U.S, at 514.

17 State v. Marshall, supra note 5; State v. Clifford, 204 Neb. 41, 281 N.W.2d
223 (1979).

'8 Com. v. Morris, 773 A.2d 192 (Pa. Super. 2001); Bailey v. State, 219 Ga.
App. 258, 465 S.E.2d 284 (1995).

© Com. v. Leister, 712 A.2d 332 (Pa. Super. 1998); Com. v. Smith, 321 Pa.
Super. 51, 467 A.2d 888 (1983). .

730 be

recuse themselves. . . . Such an inability to be objective creates
a manifest necessity for the declaration of a mistrial, particu-
larly when a judge must exert the broad discretion that a bench
trial demands.” Another court held that manifest necessity
exists for a mistrial where, during a bench trial, “the judge cor-
rectly decides he must recuse himself, and there is no evidence
of bad faith conduct by the judge.”

Tn Arizona v. Washington,” the Court held that a specific find-
ing of “manifest necessity” is not necessary to prevent termina-
tion of jeopardy if the record provides sufficient justification for
the mistrial ruling. By the same reasoning, a specific finding of
“manifest necessity” by the trial judge will not prevent termina-
tion of jeopardy unless the facts and circumstances upon which
the finding is based are apparent from the record.

The record in this case is insufficient for us to determine
whether or not the mistrial was justified by manifest necessity.
Although the trial judge did not refer to any specific provision
of the Nebraska Code of Judicial Conduct as the basis for his
recusal, canon 3 of the code governs judicial disqualification. It
provides that a judge “shall not participate in any proceeding in
which the judge’s impartiality reasonably might be questioned,
including but not limited to instances where . . . [t]he judge
has a personal bias or prejudice concerning a party or a party’s
lawyer, or personal knowledge of disputed evidentiary facts
concerning the proceeding.”” In this case, the trial judge did not
specifically state that he had formed a personal bias or preju-
dice, or that he had knowledge of any disputed evidentiary facts
concerning the proceeding. The judge stated only that he had
“seen [Jackson] working in the clerk’s office” and that he had
greeted her by saying “hi.” The record does not disclose when
or how frequently this occurred. It is not clear from the record
whether Jackson was a court employee; the county judge who
heard the plea in bar noted that he knew her as “an employee

2 Com. v. Leister, supra note 19, 712 A.2d at 335 (citations omitted).

21 State v. Graham, 91 Wash. App. 663, 665, 960 P.2d 457, 458 (1998).
Arizona v. Washington, supra note 11.

% Neb. Code of Jud. Cond., Canon 3E(1) (rev. 2000) (emphasis supplied).

of the Douglas county clerk’s office.” The trial judge did not
explain why, after making his initial disclosure and beginning
the trial with the consent of both parties, he concluded that “it
would be appropriate to appoint . . . an outside judge” to hear
the case. Without a more complete factual record, we cannot
make a determination of whether the trial judge’s impartiality
might be questioned on the basis of his personal acquaintance
with Jackson prior to the trial.

We have no reason to doubt that the trial judge gave careful
consideration to his decision to recuse himself and declare a
mistrial. The difficulty lies in the fact that we cannot determine
whether he exercised sound discretion in doing so because of
the inadequacy of the record as to the underlying reasons for the
decision. Because of the constitutional implications, the State
bears the burden of demonstrating the manifest necessity of a
mistrial declared over the objection of the defendant in a crimi-
nal case.™ The State cannot meet this burden by simply request-
ing the court to make a general finding of manifest necessity,
as it did here, without a factual record to support the finding.
Where the reason for a mistrial is not clear from the record, the
uncertainty with respect to manifest necessity must be resolved
in favor of the defendant.”

CONCLUSION

For these reasons, we conclude that the State did not meet its
burden of demonstrating the manifest necessity of the mistrial
and that therefore, the declaration of the mistrial terminated
jeopardy. Retrial would violate Jackson’s constitutional right
not to be placed twice in jeopardy, and, accordingly, her plea in
bar should have been sustained. We therefore reverse the judg-
ment of the district court and remand the cause to that court
with directions to reverse the order of the county court’s over-
tuling Jackson’s plea in bar and remand the matter to the county

court with directions to dismiss.
REVERSED AND REMANDED WITH DIRECTIONS.

4 Arizona v. Washington, supra note 11.

5 See, West Valley City v. Patten, 981 P.2d 420 (Utah App. 1999); Allen v.
State, 656 S.W.2d 592 (Tex. App. 1983).

Rosert Lowe, APPELLEE, V. DRIVERS
MANAGEMENT, INC., APPELLANT.

Filed December 21, 2007. No. S-07-428.

SCS
Daniel R. Fridrich, of Werner Enterprises, Inc., for appellant.

Timothy S. Dowd, of Dowd, Howard & Corrigan, L.L.C.,
for appellee.

Heavican, C.J., Wricut, CoNNoLty, GERRARD, STEPHAN,
McCormack, and Miter-Lerman, JJ.

Miiter-Lerman, J.

NATURE OF CASE

In 2004, appellee Robert Lowe received a workers’ com-
pensation award that included permanent partial disability and
vocational rehabilitation benefits as a result of an injury he
sustained while employed by appellant Drivers Management,
Inc. (DMI). The present appeal involves an application filed by
Lowe in 2005 to modify that initial award. Following a hearing,
the trial judge of the Nebraska Workers’ Compensation Court
sustained Lowe’s application. The trial judge determined that
Lowe was permanently and totally disabled and awarded Lowe
permanent total disability benefits. However, pursuant to Neb.
Rey. Stat. § 48-162.01(7) (Cum. Supp. 2006), the judge ordered
that Lowe’s disability benefits be reduced for a period of time
prior to the modification proceedings due to Lowe’s failure to
participate in vocational rehabilitation services.

Both DMI and Lowe appealed to the Nebraska Workers’
Compensation Court three-judge review panel. The review panel
affirmed that part of the trial judge’s order that determined Lowe
was entitled to permanent total disability benefits but reversed.
that portion of the order that had reduced Lowe’s benefits for
failing to participate in vocational rehabilitation services. DMI
appeals. Because there was competent evidence to support the
reduction, we reverse that portion of the review panel’s order
that reversed the trial judge’s order reducing Lowe’s workers’
compensation benefits pursuant to § 48-162.01(7). In all other
respects, the review panel’s order is affirmed.

734 Le

STATEMENT OF FACTS

In 2001, Lowe sustained an injury arising out of and in the
course of his employment with DMI. The injury resulted in
neck and radicular arm pain. Lowe filed a petition with the
Nebraska Workers’ Compensation Court. In an order filed
February 11, 2004, he was awarded workers’ compensation
disability benefits (the initial award). The initial award pro-
vided that Lowe receive permanent partial disability benefits
based upon a 70-percent loss of earning capacity. The court
also approved a vocational rehabilitation plan calling for job
placement services. Specifically, the court determined that a
vocational rehabilitation plan had “been approved by a voca-
tional rehabilitation specialist, and so [Lowe] should participate
in this plan.”

It is undisputed that Lowe failed to participate in the plan.
The record reflects that the vocational rehabilitation counselor
who was to assist Lowe with job placement services “left sev-
eral [telephone] messages for [Lowe] and sent him a letter dated
3/12/04 asking him to contact [her] but [she] never heard back
from him.” After the counselor failed to receive a response from
Lowe, she “submitted a case closure report form to the Nebraska
Workers’ Compensation Court dated 4/20/04 with the status -of
‘Closed Not Working—Not Interested in VR Services.’”

Jn July 2004, as a result of “gradually increasing pain in his
neck, left shoulder, and left arm,’ Lowe began treating with
Dr. Gerard H. Dericks. On October 4, 2005, Lowe filed an
application to modify the initial award, claiming that he was
totally disabled. On April 14, 2006, a modification hearing was
held before a trial judge of the workers’ compensation court on
Lowe’s application: A total of 66 exhibits were received into
evidence, including Dericks’ medical reports and deposition.
Lowe appeared and testified during the hearing.

On August 22, 2006, the trial judge entered his “Further
Award.” The judge found that Lowe had failed to participate
in court-ordered vocational rehabilitation services and that he
did not have reasonable cause for failing to participate in those
services during a period immediately after those services had
been awarded. As a result, pursuant to § 48-162.01(7), the
judge ordered a partial reduction in the amount of the disability

benefits awarded to Lowe prior to the modification proceedings.
In his further award, the trial judge also determined that there
had been a material and substantial change in Lowe’s condition,
necessitating a reassessment of Lowe’s loss of earning capacity.
The judge determined that Lowe was permanently and totally
disabled and awarded Lowe disability benefits based upon his
permanent and total disability. With respect to Lowe’s failure to
participate in vocational rehabilitation, the judge did not reduce
compensation for Lowe’s permanent and total disability going
forward, stating “there is reasonable cause not to participate [in
vocational rehabilitation] because [Lowe] is totally disabled.”
For the sake of completeness, we are aware of certain internal
inconsistencies in the reasoning of the trial judge’s opinion, but
the existence of these matters is not relevant to the resolution of
the legal issues presented in this appeal.

DMI filed for review of the trial judge’s further award before
the workers’ compensation review panel. Lowe also filed for
review of that portion of the trial judge’s further award that
reduced his benefits for failure to participate in the vocational
rehabilitation plan. A hearing was held before the review panel
on February 6, 2007, and on March 16, the review panel entered
its “Order of Affirmance in Part on Review and Reversal in
Part on Review.” The review panel determined that the trial
judge was not clearly wrong when he found that Lowe was
permanently and totally disabled, and therefore, it affirmed that
portion of the trial judge’s further award. However, the review
panel determined that the trial judge erred in reducing Lowe’s
workers’ compensation benefits pursuant to § 48-162.01(7),
and it reversed that part of the trial judge’s further award.
DMI appeals.

ASSIGNMENTS OF ERROR

On appeal, DMI assigns numerous errors that can be restated
as two. DMI claims that the Workers’ Compensation Court
review panel erred (1) in reversing that portion of the trial
judge’s further award that reduced the amount of disability
benefits owed to Lowe due to his failure to participate in voca-
tional rehabilitation services immediately after those services
had been awarded and (2) in affirming the trial judge’s further

736 |

award that modified Lowe’s initial award and that determined
Lowe was permanently totally disabled.

STANDARDS OF REVIEW

Hl Pursuant to Neb. Rev. Stat. § 48-185 (Reissue 2004), an
appellate court may modify, reverse, or set aside a Workers’
Compensation Court decision only when (1) the compensation
court acted without or in excess of its powers; (2) the judgment,
order, or award was procured by fraud; (3) there is not sufficient
competent evidence in the record to warrant the making of the
order, judgment, or award; or (4) the findings of fact by the
compensation court do not support the order or award. Olivotto
y. DeMarco Bros. Co., 273 Neb. 672, 732 N.W.2d 354 (2007).

HMMM Jn determining whether to affirm, modify, reverse,
or set aside a judgment of the Workers’ Compensation Court
review panel, a higher appellate court reviews the findings of
the trial judge who conducted the original hearing. Id. On appel-
late review, the findings of fact made by the trial judge of the
compensation court have the effect of a jury verdict and will
not be disturbed unless clearly wrong. Jd. An appellate court is
obligated in workers’ compensation cases to make its own deter-
minations as to questions of law. Sheldon-Zimbelman v. Bryan
Memorial Hosp., 258 Neb. 568, 604 N.W.2d 396 (2000).

ANALYSIS
As its first assignment of error, DMI claims that the review
panel erred when it reversed that portion of the trial judge’s
further award that had reduced the amount of disability benefits
owed to Lowe due to his failure to participate in vocational
rehabilitation. The statute at issue with respect to this claim is
§ 48-162.01(7), which currently provides, in pertinent part, as
follows:
If the injured employee without reasonable cause refuses
to undertake or fails to cooperate with a physical, medi-
cal, or vocational rehabilitation program determined by the
compensation court or judge thereof to be suitable for him
or her . . . the compensation court or judge thereof may
suspend, reduce, or limit the compensation otherwise pay-
able under the Nebraska Workers’ Compensation Act.

DMI asserts that this statute establishes a two-part test to
determine whether benefits should be suspended, reduced, or
limited. First, the employee must either refuse to undertake
or fail to cooperate with a court-ordered physical, medical,
or vocational rehabilitation program. Second, the employee’s
refusal must be without reasonable cause.

HH We agree with DMI’s assertion that § 48-162.01(7)
establishes a two-part test. We further note that it has been held
that both parts of this two-part test present factual questions to
be determined by the trial judge based upon the evidence. See
Warburton v. M & D Construction Co., 1 Neb. App. 498, 498
N.W.2d 611 (1993).

In his decision, the trial judge found that Lowe did not
participate in the job placement services he was ordered to
participate in under the initial award, a fact that neither party
disputes. Further, as we read his order, the trial judge found that
during the period from the initial award up to the modification
proceedings, Lowe’s failure to participate in vocational reha-
bilitation was without reasonable cause. The record contains
evidence supporting this finding of fact. Specifically, the record
contains evidence to the effect that immediately following the
entry of the February 11, 2004, initial award, Lowe failed to
respond to the vocational rehabilitation counselor’s efforts to
contact him with regard to these services, thereby causing her
to submit a case closure report form dated April 20, 2004, to
the Nebraska Workers’ Compensation Court with the status of
“Closed Not Working—Not Interested in VR Services.” Thus,
the record indicates that Lowe took no steps to participate
in vocational rehabilitation despite an award and efforts to
provide services.

In determining whether to affirm, modify, reverse, or set
aside a judgment of the workers’ compensation court review
panel, a higher appellate court reviews the findings of the trial
judge who conducted the hearing. Olivotto v. DeMarco Bros.
Co., 273 Neb. 672, 732 N.W.2d 354 (2007). Upon appellate
review, the findings of fact made by the trial judge of the com-
pensation court have the effect of a jury verdict and will not be
disturbed unless clearly wrong. Jd. The record contains evidence
supporting the trial judge’s findings of fact to the effect that

Lowe refused to cooperate in vocational rehabilitation without
reasonable cause during the time period immediately after the
initial award. As a result, the trial judge was not clearly wrong
when he ordered a reduction in Lowe’s disability benefits for
the period of time prior to the modification proceedings and the
review panel erred in reversing this portion of the trial judge’s
further award.

For its second assignment of error, DMI claims that the
review panel erred in affirming the trial judge’s further award
that modified Lowe’s initial award and that awarded Lowe per-
manent total disability benefits. In this regard, DMI argues that
the medical evidence does not support an award of permanent
total disability benefits and that even if such status is now war-
ranted, because of Lowe’s failure to avail himself of vocational
rehabilitation services, his situation worsened and Lowe’s ben-
efits should be reduced.

Hl The modification of an earlier workers’ compensation
award is governed by Neb. Rev. Stat. § 48-141 (Reissue 2004),
which provides, inter alia, that “at any time after six months
from the date of the . . . award, an application [for modifica-
tion] may be made by either party on the ground of increase
or decrease of incapacity due solely to the injury.” We have
previously stated that to obtain a modification of a prior award,
“[t}he applicant must prove there exists a material and substan-
tial change for the better or worse in the condition—a change in
circumstances that justifies a modification, distinct and different
from the condition for which the adjudication had previously
been made.” Hagelstein v. Swift-Eckrich, 261 Neb. 305, 308,
622 N.W.2d 663, 667 (2001).

In support of its assignment of error objecting to the award
of permanent total disability benefits, DMI argues that the trial
judge erred in relying upon the medical reports and opinions of
Dericks because Dericks had not treated Lowe prior to July 2004.
Instead, DMI argues that the trial judge should have accepted
the opinions of DMI’s expert who examined Lowe prior to the
initial award and also prior to the modification hearing.

HM We have previously stated that when the record in a
workers’ compensation case presents conflicting medical tes-
timony, an appellate court will not substitute its judgment for

that of the compensation court. Worline v. ABB/Alstom Power
Int. CE Servs., 272 Neb. 797, 725 N.W.2d 148 (2006). The
trial judge is entitled to accept the opinion of one expert over
another. Id.

The record from the modification hearing contains evidence
that beginning sometime in July 2004, Lowe began treating with
Dericks for “gradually increasing pain in his neck, left shoulder,
and left arm.” Dericks’ medical report dated October 19, 2005,
indicates that an MRI of Lowe’s cervical spine was performed
in September 2004, and when he compared it to an MRI con-
ducted in 2001, prior to the initial award, Dericks determined
that “it was quite obvious that there was substantially increased
posterior herniation of disk material behind the body of C6.
That is to say, it appears that the disk has progressed causing
further deformation of the spinal canal behind the vertebral
body of the C6.” Moreover, the record contains a medical ques-
tionnaire dated December 23, 2005, in which Dericks answered
“Yes” when effectively asked whether Lowe’s physical condi-
tion noted by Dericks in his October 19 report was “due solely
to the injury he sustained as the result of his work accident
while employed with” DMI.

In this case, it is apparent that the trial judge found Dericks’
opinion to be credible and persuasive. Because we do not
substitute our judgment regarding the credibility of expert
witnesses for that of the compensation court, see Worline v.
ABB/Alstom Power Int. CE Servs., supra, the issue before us is
whether Dericks’ opinion supports the trial judge’s determina-
tion that there had been a material and substantial change for
the worse in Lowe’s condition. It was within the trial judge’s
authority to credit Dericks’ opinion, and the opinion supports
the award. Given our standard of review and the evidence in
the record, we cannot say that the review panel erred in affirm-
ing the trial judge’s further award modifying Lowe’s initial
award due to a material and substantial change for the worse
in Lowe’s condition and finding Lowe to be permanently and
totally disabled.

Notwithstanding evidence that Lowe was permanently and
totally disabled, DMI argues in its brief that under the job
placement plan approved by the Workers’ Compensation Court

740 |

in the initial award, there were jobs available to Lowe, and thus
“had [Lowe] participated in the plan [he] would have found a
job. Had [Lowe] been working at the time of [the modification
hearing], it would have been difficult for [Lowe] to argue he
was totally disabled.” Brief for appellant at 34. At the modifica-
tion hearing, DMI offered no evidence to support its assertion
on appeal that participation in vocational rehabilitation ser-
vices would have forestalled or prevented Lowe from becom-
ing permanently and totally disabled and that Lowe’s failure to
participate in vocational rehabilitation was unreasonable as it
bore on the issue of permanent and total disability. Rather than
referring to evidence in support of its assertion, DMI relies on
argument and the provisions of § 48-162.01(7). DMI claims that
going forward, the review panel should have reduced Lowe’s
permanent total disability benefits otherwise payable due to his
failure to participate in the court-ordered vocational rehabilita-
tion services during the period between the initial award and the
modification proceedings.

. We have not previously determined which party bears the
burden of proof to establish the two-part test set forth under
§ 48-162.01(7). However, we have discussed such burden under
another provision in the Nebraska Workers’ Compensation
Act, Neb. Rev. Stat. § 48-120(2)(c) (Supp. 2007), which pro-
vision contains language similar to § 48-162.01(7). Section
48-120(2)(c) currently provides that if an injured employee
“anreasonably refuses or neglects to avail himself or herself of
medical or surgical treatment furnished by the employer . . . the
compensation court or judge thereof may suspend, reduce, or
limit: the compensation otherwise payable under the Nebraska
Workers’ Compensation Act.” When considering this language,
we have stated that “[t]he unreasonableness of the refusal of
an injured employee to permit an operation to be performed ~
is a question of fact to be determined by the evidence, and
the burden of proof . . . is upon the employer.” Simmerman v.
Felthauser, 125 Neb. 795, 798, 251 N.W. 831, 833 (1934).

HI The language used in § 48-120(2)(c) is comparable
to the language used in § 48-162.01(7) now under consider-
ation. Thus, it logically follows that under the provisions of
§ 48-162.01(7), the employer bears the burden of proof to

demonstrate that an injured employee has refused to undertake
or failed to cooperate with-a physical, medical, or vocational
rehabilitation program and that such refusal or failure is without
reasonable cause such that the compensation court or judge may
properly rely on such evidence to suspend, reduce, or limit the
compensation otherwise payable under the Nebraska Workers’
Compensation Act.

We have reviewed the record to determine whether DMI
has carried its burden of proof. DMI has not directed us to
evidence, and we have not located evidence in the record that
supports DMI’s arguments urging a reduction of benefits for
the period after the modification proceedings. The record from
the modification hearing contains a “Revised Loss of Earning
Power Analysis,” dated January 9, 2006, and prepared by a
vocational rehabilitation counselor mutually agreed to by Lowe
and DMI. In that report, the counselor stated that based upon
Dericks’ medical reports, “Lowe is not capable of obtaining
a job on a full-time or a part-time basis” and that as a result,
Lowe had “sustained a loss of earning power of 100% as the
result of his February, 2001 work injury.” It appears the trial
judge relied upon this evidence when, in his consideration of
Lowe’s claim of permanent and total disability, he stated “there
is reasonable cause not to participate [in vocational rehabilita-
tion] because [Lowe] is totally disabled.” The record supports
this determination.

Earlier in this opinion, we have agreed with DMI and the trial
judge that the evidence showed that Lowe lacked reasonable
cause for his failure to participate in vocational rehabilitation
immediately after the initial award, and we have approved of
a reduction of benefits therefore. However, with respect to the
period commencing with these modification proceedings, with-
out evidence, this court “will not speculate as to what might”
have ensued relative to Lowe’s permanent and total disability
claim had Lowe participated in the court-approved vocational
rehabilitation plan. See Simmerman v. Felthauser, 125 Neb. at
800, 251 N.W. at 833. As to the later timeframe, DMI failed
to demonstrate that Lowe refused to participate in vocational
rehabilitation without reasonable cause and that had he par-
ticipated in the court-ordered job placement services, he would

742 Es

have been employed at the time of the modification hearing.
The employer did not offer evidence upon which a trial judge
should “suspend, reduce, or limit the compensation otherwise
payable.” § 48-162.01(7). The trial judge did not err, and the
review panel did not err in affirming the trial judge’s award of
permanent total disability benefits. We find no merit to DMI’s
second assignment of error challenging the award of permanent
total disability benefits.

We have considered DMI’s remaining arguments made in
connection with his assignments of error, and we conclude they
are without merit.

CONCLUSION
For the reasons discussed, we conclude that the Workers’

Compensation Court review panel erred when it reversed the
trial judge’s finding that Lowe, without reasonable cause,
refused to participate in court-ordered vocational rehabilitation
services immediately after those services had been awarded.
In all other respects, the review panel’s order is affirmed.
Accordingly, we reverse that portion of the review panel’s order
that reversed the trial judge’s further award that reduced Lowe’s
workers’ compensation benefits for a period of time pursuant to
§ 48-162.01(7) and remand the cause to the review panel with
directions to affirm the further award entered by the trial judge
in its entirety.

AFFIRMED IN PART, AND IN PART REVERSED

AND REMANDED WITH DIRECTIONS.

Maurice FoKKen, APPELLEE, V. JoHN P. STEICHEN, APPELLEE,
AND Corgcis INSURANCE ComPANY, INC.,
GARNISHEE-APPELLANT.

DEANNA WriGHT MILLER, APPELLEE, V. JOHN P. STEICHEN,
APPELLEE, AND CorgGIs INSURANCE CoMPANY, INC.,
GARNISHEE-APPELLANT.

144 NW.2d 34

Filed January 4, 2008. Nos. S-06-614, S-06-615.

Gerald L. Friedrichsen and Joshua W. Weir, of Fitzgerald,
Schorr, Barmettler & Brennan, P.C., L.L.O., and Jeffrey A.
Goldwater, Michelle M. Bracke, and Robert A. Chaney, of
Bollinger, Ruberry & Garvey, for garnishee-appellant.

James E. Harris, Britany S. Shotkoski, and Michaela
Skogerboe, of Harris Kuhn Law Firm, L.L.P., for appellees.

Heavican, C.J., Wricut, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

McCormack, J.
NATURE OF CASE

Judgment was entered against John P. Steichen and in favor
of Maurice Fokken and Deanna Wright Miller (collectively the
appellees) in separate legal malpractice actions brought against
Steichen. The appellees then instituted separate garnishment
proceedings against Coregis Insurance Company, Inc. (Coregis).
Coregis had issued Steichen’s law firm a lawyers professional
liability insurance policy (the Policy) which the appellees allege
provides coverage for their claims against Steichen. After con-
solidating the appellees’ cases, the district court for Douglas
County entered summary judgment in favor of the appellees and
against Coregis. In an amended final order, the court awarded
postjudgment interest in favor of the appellees from the date
judgment was entered against Steichen in the appellees’ separate
legal malpractice claims. In this appeal, Coregis contends that
it is not obligated to indemnify Steichen. Coregis further con-
tends that postjudgment interest should not have been entered
as of the date judgments were entered against Steichen and
that additional attorney fees should not have been awarded to
the appellees.

BACKGROUND

(1) Deanna WricuT MILLER
In June 1989, Miller was involved in a motor vehicle acci-
dent. Miller was ultimately represented by Steichen in litigation

related to that accident. In January 1999, Miller filed a profes-
sional liability action against Steichen. Miller alleged that with-
out consulting her and without her authority, Steichen accepted
a settlement offer in the amount of $30,000 which was not
adequate to compensate her for her injuries and would have
been rejected by her. Miller alleged that Steichen stipulated to
the dismissal with prejudice of her lawsuit and that because
the statute of limitations had run on her claim, she was barred
from any further action. Miller further alleged that without her
authority, Steichen signed Miller’s name on a release agreement
and on the back of a settlement check, endorsing that check.
Miller alleged that she had not received any proceeds from
the settlement.

The district court entered a judgment in favor of Miller in
the amount of $325,000, which the court concluded was the fair
and reasonable settlement value or jury verdict of Miller’s claim
had it been prosecuted in the absence of professional negligence.
The court explained that Miller alleged that the following acts
by Steichen constituted legal malpractice: (1) his failure to com-
municate to Miller all settlement offers, (2) his acceptance of
a settlement offer on Miller’s behalf without Miller’s approval
or consent, (3) his placement of Miller’s signature on a release
and his endorsement of the settlement check without Miller’s
consent, (4) his allowance of the dismissal of Miller’s law-
suit with prejudice after the statute of limitations had expired,
and (5) his breach of professional and fiduciary duties to act
in the best interests of his client. After judgment was entered
in Miller’s favor, Miller instituted garnishment proceedings
against Coregis, which issued a professional liability policy that
is alleged to provide coverage for Miller’s legal malpractice
claim against Steichen. Miller served a summons and order of
garnishment and interrogatories in aid of execution on Coregis.
The summons was sent to “Sally Ann Hawk,” who was listed in
Coregis’ 2000 annual statements as the chairperson, president,
and chief executive officer. Coregis did not respond, and follow-
ing a hearing on the matter, the district court entered a default
judgment against Coregis.

Thereafter, Coregis filed a special appearance, arguing that
it did not receive proper and sufficient service of summons, the

746 —

affidavit and praecipe for summons were improperly issued,
and there was no merit to Miller’s contention that Coregis was
indebted to Steichen under the Policy. The district court over-
tuled Coregis’ special appearance. Coregis then filed a motion
to vacate the default judgment, which was also overruled by
the district court. In Miller v. Steichen,' this court reversed the
judgment of the district court and remanded the cause with
directions to the district court to vacate the default judgment
and give Coregis reasonable time in which to file an appropriate
responsive pleading.

(2) Maurice FOKKEN

Fokken was involved in a motor vehicle accident in December
1991. Fokken ultimately retained Steichen to represent him in
the litigation pertaining to that accident. In December 1997,
Fokken filed a professional liability action against Steichen.
Fokken alleged that without Fokken’s authority, Steichen
accepted a settlement offer in the amount of $8,627.57 and
stipulated to the dismissal with prejudice of Fokken’s lawsuit
after the statute of limitations had run on Fokken’s claim.
Fokken further alleged that without Fokken’s knowledge or
consent, Steichen signed Fokken’s name and the name of his
ex-wife on a release agreement and on the back of a settlement
check, endorsing that check, and that Fokken had not received
the proceeds of the settlement check.

The district court granted summary judgment in favor of
Fokken on the issue of liability and on the issue of damages
against Steichen. The court entered judgment against Steichen
in the amount of $50,000. That amount included $40,000,
which the court concluded to be the fair and reasonable settle-
ment value or jury verdict of Fokken’s claim had it been pros-
ecuted in the absence of professional malpractice, and $10,000
in attorney fees. The court explained that Fokken alleged that
the following acts by Steichen constituted legal malpractice: (1)
his failure to communicate with Fokken all settlement offers,
(2) his acceptance of a settlement offer on Fokken’s behalf
without approval or consent by Fokken, (3) his allowance of

' Miller v. Steichen, 268 Neb. 328, 682 N.W.2d 702 (2004),

Fokken’s lawsuit to be dismissed with prejudice after the statute
of limitations had expired, and (4) his breach of his professional
fiduciary duty to act in Fokken’s best interest. The court entered
judgment in favor of Fokken in the amount of $50,000. After
judgment was entered in Fokken’s favor, Fokken instituted
garnishment proceedings against Coregis. Like Miller, Fokken
alleged that the Policy issued by Coregis provided coverage for
Fokken’s claims against Steichen.

(3) CONSOLIDATION OF FOKKEN’S AND MILLER’s Cases

The district court consolidated the appellees’ cases against
Coregis. Thereafter, Coregis filed an amended answer to gar-
nishment interrogatories alleging the Policy did not provide cov-
erage for the claims made by the appellees. The appellees then
filed an amended application to determine Coregis’ liability.

All parties moved the district court for summary judgment.
In its motion, Coregis asserted that it had no obligation to
indemnify Steichen because Steichen executed a policyholder
release in favor of Coregis. Coregis asserted before the district
court that in exchange for Coregis’ agreement to relinquish
its rights to defend, investigate, and negotiate with regard to
Fokken’s claim under the Policy, Steichen executed a poli-
cyholder release wherein Steichen and his law firm released
Coregis from any and all liability based upon, arising out
of, or relating in any manner to Fokken’s lawsuit against
Steichen. Coregis further asserted that it had no obligation to
indemnify Steichen because exclusions A and L of the Policy
precluded coverage for the judgments obtained by the appel-
lees. Exclusion A of the Policy provides that the Policy does
not apply to “any CLAIM that results in a final adjudication
against any INSURED that an INSURED has committed any
criminal, dishonest, fraudulent or malicious acts, errors, omis-
sions or PERSONAL INJURIES.” Exclusion L of the Policy
provides that the Policy does not apply to “any CLAIM arising
out of conversion, misappropriation or improper commingling
of funds.”

The district court denied Coregis’ motion for summary judg-
ment, but granted the appellees’ motion for summary judgment.
The court found that exclusion A does not preclude coverage

748 be

because the summary judgments entered against Steichen did
not adjudge him to have committed criminal, dishonest, or
fraudulent conduct. The court also found that Steichen’s dis-
barment by this court was not dispositive. The district court
explained that exclusion A applies to claims and that the defi-
nitions section of the Policy “provides a separate definition for
‘disciplinary proceeding’, which does not include any mention
of the word ‘claim.’” The court also found that exclusion L
does not preclude coverage. The court explained that Coregis
incorrectly argued the genesis of the appellees’ malpractice
claims against Steichen because he wrongly kept, or converted,
the proceeds from settlements he failed to disclose to the appel-
lees. The court instead found that the appellees’ malpractice
claims stemmed from Steichen’s failing to communicate settle-
ment offers and Steichen’s agreeing to the dismissal of the
appellees’ claims after the statute of limitations had run without
the appellees’ knowledge. The court further found that the poli-
cyholder release is void as against public policy and unenforce-
able. The court stated that Coregis and Steichen contracted for
legal malpractice insurance and that upon receipt of notice of
Fokken’s legal malpractice claim against Steichen, Coregis had
a duty, not a right, to defend Steichen. The district court further
stated that permitting Steichen to release Coregis after a claim
had been filed and received by both parties is against public
policy and unlawfully deprives Fokken of the ability to pursue
financial redress against Steichen. The district court entered
judgment in favor of Fokken and against-Coregis in the amount
of $50,058. The court entered judgment in favor of Miller and
against Coregis in the amount of $325,058.

The appellees filed a motion requesting the district court to
enter a final order taxing costs, including a reasonable attorney
fee, and computing the amount of interest owing on the under-
lying original judgments entered against Steichen, in order
to determine the specific dollar amount of judgment against
Coregis. On April 12, 2006, the district court entered an order
in which it determined in part that the appellees are entitled
to postjudgment interest from the date of the district court’s
January 25 judgment. The appellees filed a motion requesting
the court to reconsider its calculation of the court’s postjudgment

interest. In an amended final order, the district court determined
that the appellees are entitled to postjudgment interest from the
dates of their original judgments against Steichen. For Fokken,
that date is October 24, 2001, and for Miller, that date is June
28, 2001. The court awarded Fokken interest in the amount of
$12,269.24 and Miller intérest in the amount of $85,427.12. In
addition, the court corrected the judgment amount entered in
Miller’s favor to $360,058. Coregis now appeals.

ASSIGNMENTS OF ERROR,

Coregis asserts the following assignments of error on appeal:
The district court erred in (1) denying Coregis’ motion for
summary judgment and in granting the appellees’ motion for
summary judgment; (2) failing to find that exclusion L of the
Policy precludes coverage for the judgments entered in favor
of the appellees and against Steichen; (3) failing to find that
exclusion A of the Policy precludes coverage for the judgments
entered in favor of the appellees and against Steichen; (4) fail-
ing to enter an adjudication in connection with exclusion A
that Steichen committed dishonest and fraudulent acts in the
course of his representation of the appellees; (5) failing to find
that the release signed by Steichen precludes coverage under
the Policy for the judgment entered in fayor of. Fokken and
against Steichen; (6) finding that the release signed by Steichen
is unenforceable on the basis that it violates Nebraska public
policy; (7) finding that the appellees are entitled to postjudg-
ment interest from the date of the entry of the judgments in
favor of the appellees and against Steichen, instead of from the
date that judgment was entered against Coregis; and (8) award-
ing additional attorney fees to the appellees.

STANDARD OF REVIEW
HM Summary judgment is proper when the pleadings and
evidence admitted at the hearing disclose that there is no genu-
ine issue as to any material fact or as to the ultimate inferences
that may be drawn from those facts and that the moving party
is entitled to judgment as a matter of law.? In reviewing a

2 Peterson v. Ohio Casualty Group, 272 Neb, 700, 724 N.W.2d 765 (2006).

750 Es

summary judgment, an appellate court views the evidence in a
light most favorable to the party against whom the judgment is
granted and gives such party the benefit of all reasonable infer-
ences deducible from the evidence.?

HB The interpretation of an insurance policy is a question
of law.* When reviewing questions of law, an appellate court
has an obligation to resolve the questions independently of the
conclusion reached by the trial court.5

ANALYSIS

Motions FoR SUMMARY JUDGMENT

Coregis contends that the district court erred in denying
its motion for summary judgment and in granting the appel-
lees’ motion for summary judgment. Coregis asserts that sum-
mary judgment should have been entered in its favor because
exclusions A and L of the Policy preclude coverage for the
appellees’ claims.

Hl The question of whether Coregis has funds belonging
to Steichen which the appellees now seek to garnish depends
on whether coverage under the Policy was precluded by any
policy exclusions. The claim of a judgment creditor garnishor
against a garnishee can rise no higher than the claim of the
garnishor’s judgment debtor against the garnishee. If Coregis
does not owe a duty to indemnify Steichen under the Policy,
there are no funds in the hands of Coregis to be garnished by
the appellees.

Before we address Coregis’ claim that coverage is precluded
under the Policy based upon exclusions A and L, we must first
determine whether Coregis may challenge coverage based on
those exclusions. The appellees contend that under Metcalf v.
Hartford Acc. & Ind, Co.,’ Coregis may not now allege that

3 Id.

4 Jones v. Shelter Mut. Ins. Cos., ante p. 186, 738 N.W.2d 840 (2007).

> See id. |

6 Spaghetti Ltd. Partnership v. Wolfe, 264 Neb. 365, 647 N.W.2d 615 (2002).

7 Metcalf v. Hartford Acc. & Ind. Co., 176 Neb. 468, 126 N.W.2d 471
(1964).

coverage is precluded under the Policy exclusions. In Metcalf,
we stated that where an insurance company is notified of a
pending suit against an insured and has a full opportunity to
defend the action, the judgment against the insured, if obtained
without fraud or collusion, will be conclusive against the insur-
ance company.

Coregis is not attacking the judgments obtained by the appel-
lees against Steichen. Rather, it is asserting that it is not liable
to pay those judgments because its coverage is excluded under
the terms of the Policy. Because Coregis’ liability under the
terms of the Policy was not litigated in the appellees’ separate
actions against Steichen, we determine that the appellees’ argu-
ment is without merit.

Hl An insurance policy is a contract between an insurance
company and an insured, and as such, the insurance company
has the right to limit its liability by including limitations in the
policy definitions.* If the definitions in the policy are clearly
stated and unambiguous, the insurance company is entitled to
have such terms enforced.?

HE Insurance contracts, like other contracts, are to be
construed according to the sense and meaning of the- terms
which the parties have used. If the terms of.the contract are
clear and unambiguous, they are to be taken and understood in
their plain, ordinary, and popular sense.'° An ambiguity exists
only when the policy can be interpreted to. have two or more
reasonable meanings.!' The language of an insurance policy
should be read to avoid ambiguities,. if. possible, and the lan-
guage should not be tortured to create them. 1 We explained in
O'Toole v. Brown:

“ “[Tyhe parties to an insurance contract may make the
contract in any legal form they desire, and . . . insurance

8 Jones v, Shelter Mut. Ins. Cos., supra note 4.
9 Ta.

10 Safeco Ins. Co. of America v. Husker Aviation, Inc., 211 Neb. 21, 317
N.W.2d 745 (1982).

" O'Toole v. Brown, 228 Neb. 321, 422 N.W.2d 350 (1988).

"2 Hillabrand v, American Fam. Mut. Ins. Co., 271 Neb. 585, 713 N.W.2d 494
(2006).

152 De

companies have the same right as individuals to limit
their liability and to impose whatever conditions they
please upon their obligations, not inconsistent with public
policy. If plainly expressed, insurers are entitléd to have
such exceptions and limitations construed and enforced as
expressed.”?”"!3

The burden to prove that.an exclusionary clause in a policy’

applies rests on the insurer.

Exclusion L unambiguously provides that coverage under
the Policy is excluded for “any CLAIM arising out of conver-
sion, misappropriation or improper commingling of funds.” A
claim is defined as “a demand made upon any INSURED for
DAMAGES, including, but not limited to, service of suit or
institution of arbitration proceedings against any INSURED.”
The question presented here is whether the appellees’ claims
arise out of conversion, misappropriation, or the improper com-
mingling of funds.

The: appellees argue that their claims against Steichen are
based on Steichen’s failure to communicate settlement offers and
his dismissal of their lawsuits outside the statute of limitations,
thereby preventing them from obtaining fair compensation for
their injuries. The appellees argue that although Steichen may
have committed acts of conversion, misappropriation, and/or the
commingling of funds, these acts were not the proximate cause
of the appellees’ damages.

In O’Toole,"* this court was asked to determine whether the
phrase “‘arising out of the actions of any horses’” required
more than a.causal connection between the actions of the horses
and the accident or injury. Noting that the court was rendering
an opinion on the theoretical meaning of a phrase in ani insur-
ance policy under the facts presented, this court concluded that
“arising out of” does not require more than a causal connection
between the accident and injury.’ Thus, in this case, the phrase

8 O'Toole v. Brown, supra note 11, 228 Neb. at 326, 422 N.W.2d at 353.
™ Peterson v. Ohio Casualty Group, supra note 2.

'S O'Toole v. Brown, supra note 11, 228 Neb. at 323, 422 N.W.2d at 352.
1 See id.

“any CLAIM arising out of conversion, misappropriation or
improper commingling of funds” does not require more than
the existence of a causal connection between the claim and any
alleged conversion, misappropriation, or improper commingling
of funds by Steichen.

The appellees each made a claim against Steichen for legal
malpractice. In the district court’s order granting summary
judgment in favor of Miller, the court found that Miller had
alleged Steichen endorsed Miller’s settlement check, which
amounted to $30,000, without Miller’s authority. In the district
court’s order granting summary judgment in favor of Fokken,
the court found that Fokken had alleged Steichen endorsed
Fokken’s settlement check, which amounted to $8,627.57, with-
out Fokken’s knowledge or consent. In the separate answers
filed by Steichen in each of these cases, Steichen admits that he
did not pay to either Miller or Fokken her or his share of the
settlement proceeds.

Steichen’s endorsement of Miller’s and Fokken’s names on
the settlement checks and his retention of the settlement pro-
ceeds constituted conversion, misappropriation, and improper
commingling of funds. These are exactly the activities excluded
under exclusion L of the Policy.

Although Steichen’s withholding of the settlement proceeds
may not be the sole basis for the appellees’ claims, those
actions were causally connected. Because coverage under the
Policy is precluded under exclusion L, we determine that cover-
age for the amounts converted, misappropriated, and improperly
commingled are not covered under the Policy. In Miller’s case,
that amount is $30,000, and in Fokken’s case, that amount is
$8,627.57. We must further determine, however, whether the
balance of the judgments against Steichen are precluded under
the provisions of the Policy.

Exclusion A of the Policy unambiguously provides that cover-
age under the Policy is excluded for “any CLAIM that results
in a final adjudication against any INSURED that an INSURED
has committed any criminal, dishonest, fraudulent or mali-
cious acts, errors, omissions or PERSONAL INJURIES.” The
appellees argue that although Steichen’s acts of forgery and his

. conversion of settlement funds to his own use may be criminal,

754 es

dishonest, fraudulent, or malicious, it was not those acts upon
which they obtained their judgments against Steichen.

In its order granting Fokken’s motion for summary judgment,
the district court stated the following:

[Fokken] alleges in his Petition and . . . Steichen admits in
his Answer previously filed herein that . . . Steichen accepted
a settlement offer from State Farm Automobile Insurance
Company without [Fokken’s] authority and stipulated to
. a dismissal of his lawsuit, Steichen signed a Release and
endorsed a settlement check without [Fokken’s] knowledge
or consent, which act [Fokken] claims herein constitute
legal malpractice on the part of . . . Steichen, including, but
not limited to . . . Steichen’s: a) failure to communicate to
[Fokken] all settlement offers; b) in accepting a settlement
- offer on [Fokken’s] behalf without approval or consent of
[Fokken]; c) in allowing a lawsuit to be dismissed with
prejudice after the statute of limitations would bar any fur-
ther action; and d) in breaching his professional fiduciary

- duty to-act in the best interest of his client. The Court

specifically recognizes all of the above allegations to be
well-accepted theories of recovery under legal malpractice
.or professional negligence and constituting a departure
below the generally.accepted standard of care for attorneys
practicing in Omaha, Douglas County, Nebraska, or similar
communities. :

Without further explanation, the district court went on to enter

judgment against Steichen on the issue of liability.

In paragraph 3 of its order granting Miller’s motion for sum-
mary judgment, the district court noted that the acts by Steichen
allegedly constituting legal malpractice included, but were not
limited to,

Steichen’s (a) failure to communicate to [Miller] all settle-
ment offers; (b) in accepting a settlement offer on [Miller’s]
behalf without the approval or consent of [Miller]; (c) in
placing [Miller’s] signature on the Release and. endorsing
the settlement check without [Miller’s] authority; (d) in
allowing the lawsuit to be dismissed with prejudice after
the statute of limitations would bar any further claims; and

(e) in breaching his professional and fiduciary duties to act
in the best interests of his client.
The district court went on to find that Miller’s motion for sum-
mary judgment on the issue of liability “should be granted
in its entirety on the basis plead [sic] and set forth above in
paragraph 3(a-e).”

With regard to Fokken, we read the district court’s order as
finding that the allegations that Steichen signed Fokken’s name
on the release and settlement check without Fokken’s authoriza-
tion were among those allegations constituting legal malpractice
and, therefore, adjudicating Steichen of those actions. With
regard to Miller, the court found that Steichen’s unauthor-
ized signature of Miller’s name, among other acts, constituted
legal malpractice. Thus, Steichen was adjudicated of those acts
in Miller’s case as well. Steichen’s unauthorized endorsement
of Miller’s and Fokken’s names constituted a dishonest act.
Because the district court in both Fokken’s and Miller’s cases
adjudicated Steichen of committing those dishonest acts, cover-
age is precluded under exclusion A of the Policy for the balance
of the appellees’ judgments against Steichen.

REMAINING ASSIGNMENTS OF ERROR
HM Because we have determined that coverage under the
Policy is precluded under exclusions A and L, we do not
address Coregis’ remaining assignments of error. An appellate
court is not obligated to engage in an analysis that is not needed
to adjudicate the controversy before it.!”

CONCLUSION
For the reasons discussed above, we determine that the district
court erred in granting the appellees’ motion for summary judg-
ment and in denying Coregis’ motion for summary judgment.
Accordingly, we reverse, and remand with directions to. the dis-
trict court to grant Coregis’ motion for summary judgment.
REVERSED AND REMANDED WITH DIRECTIONS.

1 State v. Sommer, 273 Neb. 587, 731 N.W.2d 566 (2007).

156 Le

State oF NEBRASKA, APPELLEE, V.
‘Norma E. Lopez, APPELLANT.
743 N.W.2d 351

Filed January 4, 2008. No. S-06-1251.

James R. Mowbray and Robert W. Kortus, of Nebraska
Commission on Public Advocacy, for appellant.

Jon Bruning, Attorney General, and Erin E. Leuenberger
for appellee.

Heavican, C.J., Wricot, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Heavican, C.J.
INTRODUCTION :
Norma E. Lopez was convicted of first degree murder and
use of a weapon to commit a felony. Her convictions and sen-
tences were affirmed by this court in State v. Lopez.' Lopez filed
a verified motion for postconviction relief which was denied
after an evidentiary hearing. Lopez appeals.

FACTS

The facts surrounding Lopez’ convictions were set forth in
Lopez. We supplement those facts as necessary.

On March 25, 1994, the defendant had a party in her
trailer home. During the course of the party, the defendant
and a guest, Sotero Gandarilla, started to argue. The argu-
ment continued while the defendant and Gandarilla went
into a bedroom in the defendant’s home. The defendant’s
daughter was sitting in the bedroom, and the defendant
asked the daughter to find the bullets for her gun. The
daughter told the defendant that she did not know where
the bullets were and then went to a neighbor’s house
for help.

Upon returning to the home of the defendant, the
daughter heard a gunshot. Upon entering the bedroom,
witnesses saw Gandarilla’s body on the floor and the
defendant holding a gun.”

At this point, the witnesses who saw Lopez standing over
Sotero Gandarilla left Lopez’ home. Lopez’ daughter then
returned with the neighbor. The neighbor testified that she asked
Lopez “‘[w]hy did you do it?’” Lopez responded that Gandarilla
had told her that “she was not . . . the woman for [him].” The

1 State v. Lopez, 249 Neb. 634, 544 N.W.2d 845 (1996),
2 Id. at 637, 544 N.W.2d at 850.

158 De

neighbor then helped Lopez and four of Lopez’ children get
back to the neighbor’s home, where Lopez attempted to call
relatives. According to the neighbor, Lopez was not able to dial
the telephone, nor was Lopez able to provide to the neighbor
the correct telephone number so that the neighbor could place
the call for Lopez. The neighbor testified that Lopez then left
the neighbor’s home, apparently to retrieve a fifth daughter who
remained in Lopez’ home.
At about the same time, the record establishes that

[t]he police [had] responded to a call of someone hear-
ing a gunshot. An officer went to the defendant’s home.
The officer knocked and the defendant appeared. The
officer asked if he could enter, and the defendant replied
that he could not and that she would check the trailer
for him. Soon after, the defendant returned to the front
door of the trailer and stated to the officer, “He’s dead;
he’s been shot.” She initially refused to give the name of
the victim.

The officer asked, “Can I come in and check?” to which
the defendant answered, “Yes, you can.” The officer found
the body. The officer asked her the identity of the indi-
vidual on the floor and the defendant’s name and her date
of birth, to which the defendant responded, “What? Do you
think I shot him?” At that point, the officer informed the
defendant of her Miranda rights. The officer asked if the
defendant waived her rights and wanted to talk to him, to
which she replied, “Yeah.” It appeared to the officer that
the defendant had been drinking and had apparently uri-
nated on herself, but that she understood the questions and
the situation. Several times during the preliminary investi-
gation, the defendant told the officer, “Why don’t you just
go ahead and shoot me?” ...

At that point, Lt. Rodger L. Williams arrived to take
over the investigation. A high-powered rifle with one spent
round in its chamber was found in the bedroom.

The defendant was jailed. An interview of the defendant
by Williams took place the next morning at 8 o’clock at
the jail at the defendant’s request. The defendant signed
a Miranda rights waiver. During the interview, Williams

asked if the defendant knew why the shooting had occurred,
to which the defendant stated, “Yes, because I shot him for
no goddamn reason. Just for . . . being drunk and stupid I
know.” In response to a question as to whether the events
of the previous evening occurred because the defendant
had been drinking, she responded, “Oh, no, no, no. I have
been that drunk before and never pulled a gun on my old
man.” The ammunition for the gun was found following a
search pursuant to a search warrant.

Jt was later determined that “[t]he death of Sotero
Gandarilla [was] due to a perforating gunshot wound to the
neck, which caused a marked destruction of the soft tissue
of the neck, severed the internal carotid artery, severed
the internal and external jugular veins and, also, severed
the larynx.”?

At trial, Lopez was represented by two attorneys with the
Hall County public defender’s office. That office also rep-
resented Lopez on direct appeal. This court affirmed
Lopez’ convictions.

On April 1, 2003, Lopez filed a verified motion for postcon-
viction relief. An amended motion was filed on March 5, 2004.
That motion alleged ineffective assistance of counsel in several
particulars. The district court granted an evidentiary hearing. At
the hearing, depositions of Lopez and both trial counsel were
introduced into evidence. In addition, Lopez and lead counsel
testified. On October 17, 2006, Lopez’ motion was denied. In
its order, the district court specifically addressed Lopez’ con-
tention that a plea agreement was not communicated to her,
finding that Lopez suffered no prejudice from trial counsel’s
deficiencies. As to Lopez’ other allegations, the district court
generally concluded that it could not “find from the evidence
that counsel’s performance was deficient and that any deficient
performance prejudiced the defense.”

ASSIGNMENTS OF ERROR
On appeal, Lopez argues that the district court erred in deny-
ing her motion for postconviction relief. In particular, Lopez

3 Td. at 637-38, 544 N.W.2d at 850-51. -

760 De

contends, restated and renumbered, that the district court erred
by not finding that her trial counsel was ineffective in (1) failing
to adequately inform her of plea offers and in failing to pursue
plea offers on her behalf, (2) failing to object to the State’s
reliance of Lopez’ invocation of her right to remain silent, (3)
failing to challenge the State’s contention that Lopez had ani-
mosity or malice against Gandarilla, (4) failing to adequately
present opening statements, (5) failing to properly challenge
the testimony of the State’s fingerprint evidence expert and in
failing to present expert testimony to counter the State’s expert,
and (6) failing to adequately advise Lopez of her right to testify
in her own behalf. ~

STANDARD OF REVIEW

Hl Appellate review of a claim of ineffective assistance of
counsel is a mixed question of law and fact.4 When review-
ing a claim of ineffective assistance of counsel, an appellate
court reviews the factual findings of the lower court for clear
error.> With regard to the questions of counsel’s performance
or prejudice to the defendant as part of the two-pronged test
articulated in Strickland v. Washington,® an appellate court
reviews such legal determinations independently of the lower
court’s decision.”

ANALYSIS

HB On appeal, Lopez assigns as error that the district court
failed to find that her trial counsel was ineffective in several
particulars. In order to establish a right to postconviction relief
based on a claim of ineffective assistance of counsel at trial or
on direct appeal, the defendant has the burden, in accordance
with Strickland,’ to show that counsel’s performance was defi-
cient; that is, counsel’s performance did not equal that of a

4 State v. Sims, 272 Neb. 811, 725 N.W.2d 175 (2006).

5 Id.

6 Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674
(1984).

7 State v. Sims, supra note 4.

8 Strickland v. Washington, supra note 6.

lawyer with ordinary training and skill in criminal law in the
area.? Next, the defendant must show that counsel’s deficient
performance prejudiced the defense in his or her case. In ordet
to show prejudice, the defendant must demonstrate a reason-
able probability that but for counsel’s deficient performance,
the result of the proceeding would have been different.!! The
two prongs of this test, deficient performance and prejudice,
may be addressed in either order. This standard also applies to
guilty pleas based on ineffective assistance of counsel’ and in
cases involving the alleged failure to communicate the offer of
a plea agreement.’*

HMB In determining whether a trial counsel’s performance
was deficient, there is a strong presumption that such coun-
sel acted reasonably." When reviewing a claim of ineffective
assistance of counsel, an appellate court will not second-guess
reasonable strategic decisions by counsel.

Failure to Communicate Plea Agreement.

Lopez first argues that she received ineffective assistance
of trial counsel with respect to plea negotiations. In particular,
Lopez contends that a plea agreement for second degree murder
was not communicated to her.

At the postconviction evidentiary hearing, the parties stipu-
lated that an offer of second degree murder and use of a weapon
had been communicated to defense counsel prior to trial. In
overruling Lopez’ motion with respect to this allegation, the
district court, in keeping with this stipulation, found that Lopez’
trial counsel failed to convey that agreement to Lopez. However,

® State v. Sims, supra note 7.
1 Id.
"Id.

” Hill v, Lockhart, 474 U.S. 52, 106 S. Ct. 366, 88 L. Ed. 2d 203 (1985). See,
also, State v. Malcom, 12 Neb. App. 432, 675 N.W.2d 728 (2004).

8 Magana y, Hofbauer, 263 F.3d 542 (6th Cir. 2001); Engelen v. U.S., 68 R3d
238 (8th Cir. 1995); Toro v, Fairman, 940 2d 1065 (7th Cir. 1991); Dew v.
State, 843 N.E.2d 556 (Ind. App. 2006).

™ State v. Miner, 273 Neb. 837, 733 N.W.2d 891 (2007).
18 State v. Canbaz, 270 Neb. 559, 705 N.W.2d 221 (2005).

762, a

the district court concluded that Lopez was not prejudiced by
this failure, as Lopez had not demonstrated that she would have
accepted the offer.

At the evidentiary hearing, lead counsel testified that he
recalled the State’s making one plea offer for first degree mur-
der in which the State would decline to pursue the death penalty.
Lead counsel indicated he did not believe this offer was a good
offer, as he found it unlikely that Lopez would be sentenced to
death, but he brought the offer to Lopez. He recalled that Lopez
thought about the offer for a few days, but indicated that Lopez
was “adamant” about rejecting the offer. Second chair counsel,
in his deposition, echoed this, testifying that Lopez wanted to
go to trial because she did not remember what happened at the
time of the shooting. According to lead counsel, he and second
chair counsel suggested later that Lopez offer to plead guilty
to manslaughter and use of a weapon, but Lopez refused to let
counsel make this offer to the State and insisted upon going
to trial.

Both counsel also testified that Lopez seemed to generally
understand what was going on in connection with the charges
filed against her. Lead counsel testified that he attempted to
discuss with Lopez the events surrounding the murder, but that
Lopez always indicated she did not remember what had hap-
pened. Lead counsel indicated that he met with Lopez once or
twice a week for about an hour each time. It is not clear from
the record, but it appears these meetings occurred over a some-
what lengthy period of time prior to trial. Lead counsel also
testified that he went over police reports with Lopez; provided
to Lopez copies of depositions taken in the case; and, as a mat-
ter of course, would have discussed the State’s evidence and
witnesses against Lopez in general terms, including forensic
evidence. Lead counsel also indicated it was his recollection that
Lopez was present at the formal hearings held in the case, which
included a suppression motion.

Lopez testified that only one offer, which involved serving
between 20 and 40 years in prison, was communicated to her.
Lopez specifically testified that no offer to plead guilty to sec-
ond degree murder was ever communicated to her and that if
such had been offered, she would have accepted.

Lopez generally testified that she had expressed a desire to
know what had happened at the time of Gandarilla’s death, but
that if she could have found out without going to trial, that would
have been acceptable. Lopez testified that she received no copies
of police reports or depositions and did not recall attending any
hearings in the case. Lopez also indicated that even at the time
of the postconviction evidentiary hearing, she was uncertain as
to the difference between no contest and guilty pleas, and that
had she understood the difference before trial, she would have
pled no contest or guilty.

As an initial matter, we conclude that the district court’s
finding that Lopez’ counsel failed to communicate the plea
agreement in question to Lopez was not clearly erroneous. We
further conclude that such failure was deficient as a matter of
Jaw. However, we also agree with the district court that Lopez
has not demonstrated that she would have accepted the plea
agreement for second degree murder. As such, Lopez cannot
show she was prejudiced by counsel’s failure to communicate
the plea agreement.

The prejudice inquiry in cases involving plea agreements
focuses upon whether counsel’s ineffective performance affected.
the outcome of the plea process.'* Various standards exist
for determining whether a defendant has made a showing of
prejudice. For example, in the Eighth Circuit, “[t]o establish
prejudice . . . the movant must show that, but for his counsel’s
advice, he would have accepted the plea. To command an evi-
dentiary hearing, the movant must present some credible, non-
conclusory evidence that he would have pled guilty had he been
properly advised.”!”

However, the Seventh Circuit, citing Strickland, requires a
defendant to “establish through objective evidence that there
is a reasonable probability that, but for counsel’s advice, he
would have accepted the plea.”"* The Sixth Circuit largely con-
curs with the Seventh Circuit’s standard, except it notes that

16 See Hill v. Lockhart, supra note 12.
1 Engelen v. U.S., supra note 13, 68 F.3d at 241.
18 Toro v. Fairman, supra note 13, 940 F.2d at 1068.

764 a

“Strickland . . . only requires that a defendant demonstrate that
there is a ‘reasonable probability’ that the result of the proceed-
ing would have been different. The Supreme Court has imposed
no fequirement that the defendant meet his burden of proof
through objective evidence.”

Hi We concur with the Sixth Circuit’s reading of Strickland
and hold that the defendant must demonstrate a “reasonable
probability” that, but for counsel’s deficiency, he or she would
have accepted the plea. We conclude, however, that Lopez can-
not meet this standard.

A teview of the record reveals that Lopez testified she did
not understand the difference between guilty and no contest
pleas. Lopez contends that had she understood that difference,
she would have pled guilty or no contest to the plea agreement
for second degree murder offered by the State. Lopez stated
during her testimony that she did not remember the shooting
and thought trial was the only way to find out what happened.
Lopez claimed that trial counsel did not share any of the
State’s case with her and that had they done so, she would have
accepted that version of events and not gone to trial.

However, evidence was introduced by the State that contra-
dicts Lopez’ assertion that she would have pled guilty to second
degree murder. Both counsel testified that Lopez rejected one
plea agreement and refused to let them approach the State with
another suggested agreement—this one for manslaughter. They
both testified that Lopez wanted to go to trial, with lead counsel
testifying that she was “adamant” about it.

Moreover, Lopez’ contention that she was not informed as
to the State’s case against her is contradicted by lead counsel’s
testimony. He testified that he met with Lopez, provided to her
copies of the depositions taken in the case, and outlined the
State’s case and evidence against her. He further testified that
Lopez was present at the formal hearings in her case, a fact
confirmed by a review of the various bills of exceptions from
those hearings.

9 Magana v. Hofbauer, supra note 13, 263 F.3d at 547 n.1. See, also, Dew v.
State, supra note 13.

The district court found Lopez’ contention that she would
have pled guilty to be not credible. We conclude that this find-
ing of fact was not clearly erroneous. Lopez did not meet her
burden—she has not shown there was a reasonable probability
that she would have accepted the second degree murder plea
agreement offered by the State. As such, Lopez’ first assign-
ment of error is without merit.

Right to Remain Silent.

Lopez next argues that the State improperly relied upon her
invocation of her right to remain silent and that her counsel was
ineffective for failing to object accordingly. Lopez argues that
the State’s actions violated Doyle v. Ohio.»

In Doyle, the U.S. Supreme Court held that the State may not
“seek to impeach a defendant’s exculpatory story, told for the
first time at trial, by cross-examining the defendant about his
failure to have told the story after receiving Miranda warnings
at the time of his arrest’! In discussing Doyle, this court has
noted also that Doyle stands for the proposition that “a defen-
dant’s postarrest, post-Miranda silence is ‘insolubly ambiguous’
as to whether the defendant is guilty or merely exercising his
tights in accordance with the implicit assurance in the Miranda
warnings that ‘silence will carry no penalty.”

The State, in its closing arguments, made the following com-
ments of which Lopez now complains:

‘When Sergeant Ochsner reads her her Miranda rights, she
says, “I understand them.” No evidence to the contrary.

When she gets to the jail, if you’ll remember testi-
mony of the Corrections Officer Gorman and Lieutenant
Castleberry, Corrections Officer Gorman tells you that
when they are trying to ask a question and she won’t
answer, what does she do, in fact? If Castleberry asks
her a question, she turns around and faces Gorman and
vice versa.

9 Doyle v. Ohio, 426 U.S. 610, 96 S. Ct. 2240, 49 L. Ed. 2d 91 (1976).
 Id., 426 U.S. at 611.
” State v. Harms, 263 Neb. 814, 822-23, 643 N.W.2d 359, 369 (2002).

166 Le

She knows she doesn’t have to answer questions, and
she won’t....

The State contends that these statements in closing argu-
ments were simply a proper comment on Sgt. Ronald Gorman’s
testimony at trial that when Lopez “‘was originally brought in,
she would not answer any questions’” and “‘[iJf you did ask
her [a] question, she would just turn away from you and not
talk””3 The State argues that this testimony was not objected
to at trial and such is not raised now, thus Lopez has waived
any error. Alternatively, the State contends that the statement in
closing was not a Doyle violation or that any error which may
have occurred was harmless.

As an initial matter, we disagree that the statements in closing
were simply a proper comment on the evidence. To the extent
that the prosecutor noted the content of the testimony of Lt.
James Castleberry and corrections officer Cynthia Gorman, the
statements can be considered a proper comment on the evidence.
However, the prosecutor also noted that Lopez “knows she
doesn’t have to answer questions, and she won’t.” This state-
ment could be read as inviting the jury to speculate as to the
reasons behind Lopez’ silence.

We also disagree with the State that the prosecutor’s com-
ment in closing was not a Doyle violation. The apparent basis
for the State’s argument is that in Doyle, the defendant’s silence
was not admissible to impeach the defendant’s testimony at
trial. However, in this case, Lopez’ silence was not used to
impeach her testimony at trial, since she did not testify.

Though Doyle did involve the impeachment of a defendant’s
trial testimony, we do not believe it is limited to such citcum-
stances. In Wainwright v. Greenfield*“—a case in which the
defendant did not testify—the prosecution was prohibited from
relying on a defendant’s postarrest, post-Miranda silence as
substantive evidence of the defendant’s sanity. Moreover, the
reasoning behind both Doyle and Wainwright is the fundamental
unfairness implicit in promising a defendant his or her silence

23 Brief for appellee at 35.

4 Wainwright v. Greenfield, 474 U.S. 284, 106 S. Ct. 634, 88 L. Ed. 2d 623
(1986).

will not be used against him or her, then essentially using that
silence against the defendant. We conclude that the State’s com-
ments in closing were a violation of Doyle.

Assuming that Lopez’ counsel was deficient in failing to
object to the State’s violation of Doyle, Lopez still cannot show
a reasonable probability that but for counsel’s deficient perform-
ance, the result of the proceeding would have been different.
Evidence beyond a reasonable doubt was presented at trial
showing that Lopez was guilty of first degree murder. There was
testimony that Lopez and Gandarilla had been arguing before
the shooting. Lopez’ daughter testified that she was asked by
her mother to “find the bullets.” Lopez herself made certain
statements suggesting her guilt and informed her neighbor that
she shot Gandarilla because he told her that she was “not the
woman for [him].” In addition, police testified that Lopez indi-
cated she shot Gandarilla for “no good reason,” but because
she was “drunk and stupid.” Lopez further indicated that she
had “been that drunk before” but had “never pulled a gun on
[her] old man.” Lopez has not shown that she was prejudiced
by any deficiency by counsel in failing to object to any Doyle
violation made by the State. As such, Lopez cannot show that
counsel was ineffective. Lopez’ second assignment of error is
without merit.

Remaining Assignments of Error.

Lopez makes several other contentions regarding the alleged
ineffectiveness of counsel. We have reviewed the record and
conclude those allegations are also without merit. We therefore
reject Lopez’ third through sixth assignments of error.

CONCLUSION
For the reasons stated above, we conclude that Lopez’ coun-
sel was not ineffective and, accordingly, affirm the district
court’s denial of postconviction relief.
AFFIRMED.

x

68 be

STATE OF NEBRASKA, APPELLEE, V.
JouHN PIEPER, APPELLANT.
743 N.W.2d 360

Filed January 4, 2008. No. S-07-057.

Jessica L. Milburn for appellant.

Jon Bruning, Attorney General, and Kimberly A. Klein
for appellee.

Heavican, C.J., Wricur, CoNNoLty, GERRARD, STEPHAN,
McCormack, and Miter-Lerman, JJ.

Mier-Lerman, J.
NATURE OF CASE
John Pieper was convicted in the district court for Lancaster
County of first degree assault and false imprisonment in the
first degree. Pieper appeals his convictions and his sentencing
as a habitual criminal. We affirm.

STATEMENT OF FACTS

The State charged Pieper with first degree assault, first degree
sexual assault, and false imprisonment in the first degree. The
State amended the information to charge Pieper as a habitual
criminal. The charges arose out of incidents that occurred on
July 11 and 12, 2004, and involved Pieper; a codefendant,
Jeremiah Croghan; and the victims, Vernon French and A.N.
Pieper, Croghan, French, and A.N. testified at trial and gave
accounts of the incidents which varied in certain respects.
There is no claim that the evidence is insufficient, and taking
the evidence favorably to the State, we summarize the evidence
as follows.

In July 2004, French was living with his girlfriend, A.N.
They were in their apartment on the night of July 11, listening
to music. Late that night, Croghan and Pieper came to the door
of the apartment and told French and A.N. that they had heard
the music and wanted to introduce themselves. Croghan had
recently moved into an apartment down the hall.

Accounts vary regarding which persons drank whiskey or
beer, took Xanax, or smoked marijuana that night. At some
point in the evening, arguments ensued and French was beaten.
French was hospitalized for 5 to 7 days with injuries from the
assault. Pieper was convicted of the assault in this case. There
‘was testimony that at one point, Pieper held a knife to A.N.’s
throat and took her to Croghan’s apartment. Pieper was con-
victed of false imprisonment with respect to A.N. There was
also testimony that A.N. was sexually assaulted. Pieper was
found not guilty of this charge.

710 —

A tape recording of an interview French gave to a police
officer was entered into evidence during the officer’s testimony,
but no portion of the tape recording was played to the jury. A
transcription of the tape recording of another police officer’s
interview with French was also entered into evidence during
that police officer’s testimony, but no part of the transcription
was read to the jury. Pieper’s counsel did not object to admis-
sion of the tape or the transcription.

A tape recording of an interview A.N. gave to a police offi-
cer was marked as an exhibit, but there is no indication in the
record that the tape was offered or admitted into evidence. No
portion of the tape recording was played to the jury.

Croghan testified at Pieper’s trial in a manner which was
generally unfavorable to Pieper. Included in that testimony
was a description of Pieper’s hitting French and threatening
French with a knife. In his initial statements to police on July
14, 2004, Croghan’s recounting of events was generally similar
to his trial testimony. In contrast to the trial testimony, on May
2, 2005, Croghan gave a deposition which was more favor-
able to Pieper and painted a picture in which French had been
an aggressor and Croghan had kicked French. Weeks before
Pieper’s trial, on February 22, 2006, the prosecutor in this case
asked a police officer to contact Croghan to ask how he would
testify at trial. Prior to the conversation, the officer thought
that Croghan “was going-to claim all responsibility of wrong
doing [sic] in this case.” However, Croghan told the officer that
he had lied in his deposition because he was being threatened
by Pieper’s associates. Croghan told the officer that at trial, he
planned to tell the truth, which more closely tracked his origi-
nal statement to police in which Croghan stated that Pieper had
assaulted French. The officer called the prosecutor on February
22 to orally report on the conversation, but the officer did not
prepare a written report of the conversation until April 11, after
Pieper’s trial had begun. On April 12, the third day of Pieper’s
trial, and prior to Croghan’s testimony, Pieper moved to dis-
miss based on prosecutorial misconduct because he had not
been provided a copy of the officer’s report of the February 22
conversation with Croghan until that day. The court overruled

the motion to dismiss. Pieper then made a motion for mistrial,
which the court also overruled.

Pieper testified in his own defense. In his testimony, Pieper
stated that French had been an aggressor and that it was Croghan
who had hit French. Pieper denied that he ever punched, kicked,
or stomped on French.

The jury returned a verdict on April 18, 2006, finding Pieper
guilty of first degree assault and false imprisonment but not
guilty of sexual assault. On April 21, Pieper filed a motion for
new trial based on general allegations of irregularities and mis-
conduct. On May 3, Pieper filed a'‘pro se amended motion for
new trial in which he made more specific allegations, including
allegations of prosecutorial misconduct and ineffective assis-
tance of counsel. Pieper also filed a pro se motion to dismiss
counsel and appoint new counsel. The court sustained Pieper’s
motion for new counsel and appointed new counsel on May 12.
On May 25, Pieper filed a third amended motion for new trial,
asserting irregularities, misconduct, and ineffective assistance
of counsel. Hearings were held, and on November 27, the court
overruled the motion for new trial.

An enhancement hearing ‘based on the habitual criminal
allegation was held December 12, 2006. At the enhancement
hearing, Pieper objected on the basis that “notwithstanding
Nebraska Supreme Court precedent,” enhancement pursuant to
the habitual criminal statute, Neb. Rev. Stat. § 29-2221 (Cum.
Supp. 2006), violated the Double Jeopardy Clauses of the
Nebraska and federal Constitutions. The court overruled the
objection and found Pieper to be a habitual criminal. The court
sentenced Pieper to imprisonment for 10 to 20 years on each of
the two convictions, with the sentences to be served consecutive
to one another.

Pieper appeals..

ASSIGNMENTS OF ERROR
Pieper asserts that the district court erred in (1) failing to
grant his motion for new trial on the basis that the State failed to
timely disclose to the defense Croghan’s statement on February
22, 2006, that his testimony at trial would be consistent with his
original statement to the police and contrary to his deposition,

772 Ee

(2) admitting tape recordings and transcriptions of the victims’
statements into evidence without playing the tapes during trial
and without restricting jury access to the tapes and transcrip-
tions during deliberations, (3) failing to grant his motion for
new trial on the basis that he received ineffective assistance of
trial counsel, (4) failing to conclude that the habitual criminal
statute violates the Double Jeopardy Clause, and (5) imposing
excessive sentences.

STANDARDS OF REVIEW

Hi 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.
State v. Archie, 273 Neb. 612, 733 N.W.2d 513 (2007).

I Statutory interpretation presents a question of law, for
which an appellate court has an obligation to reach an inde-
pendent conclusion irrespective of the determination made by
the court below. State v. Gozzola, 273 Neb. 309, 729 N.W.2d
87 (2007).

Hl The constitutionality of a statute is a question of law,
regarding which the Nebraska Supreme Court is obligated to
teach a conclusion independent of the determination reached by
the trial court. State v. Archie, supra.

IIA sentence imposed within statutory limits will not be
disturbed on appeal absent an abuse of discretion by the trial
court. Id.

ANALYSIS
The District Court Did Not Err in Overruling Pieper’s Motion
for New Trial Because the Prosecution Did Not Have an
Obligation to Disclose a Nonexculpatory Pretrial
Conversation With a Witness.

As his first assignment of error, Pieper asserts that the trial
court erred when it overruled his motion for new trial in which
he claimed that the State failed to timely disclose to the defense
the officer’s February 22, 2006, conversation with Croghan. We
determine that the State had no obligation to disclose the con-
versation in this case and that therefore, the court did not abuse
its discretion when it did not grant a new ttial on such basis.

Hl We note initially that under Brady y. Maryland, 373
US. 83, 83 S. Ct. 1194, 10 L. Ed. 2d 215 (1963), due proc-
ess requires the State to disclose exculpatory evidence to a
defendant. See State v. Lykens, 271 Neb. 240, 710 N.W.2d 844
(2006). However, the State is not under a constitutional duty
to disclose all information that might affect the jury’s verdict,
State v. Phelps, 241 Neb. 707, 490 N.W.2d 676 (1992), and dis-
covery in a criminal case is, in the absence of a constitutional
requirement, controlled by either-a statute or a court rule, id.
At issue here is Croghan’s verbal statement to a police officer
that he intended to testify in a manner unfavorable to Pieper.
Such statement was not exculpatory to Pieper. Nevertheless,
Pieper claims that the State had an obligation to disclose its
knowledge regarding Croghan’s intentions and that such obliga-
tion stemmed from discovery statutes and the court’s discovery
order. We determine that neither the statute nor the court’s dis-
covery order support Pieper’s claim.

Pieper filed a motion for discovery on December 23, 2004.
It did not specifically request the type of police witness inquiry
at issue here. The court granted the motion in an order in which
it stated, “Discovery is granted to all parties to [the] extent
allowed by statute.” Discovery statute Neb. Rev. Stat. § 29-1912
(Reissue 1995) controls our analysis. Section 29-1912 provides
in part:

(1) When a defendant is charged with a felony or when
a defendant is charged with a misdemeanor or a violation
of a city or village ordinance for which imprisonment is
a possible penalty, he or she. may request the court where
the case is to be tried, at any time after the filing of the
indictment, information, or complaint to order the pros-
ecuting attorney to permit the defendant to inspect and
copy or photograph:

(a) The defendant’s statement, if any... .

(b) The defendant’s prior criminal record, if any;

(c) The defendant’s recorded testimony before a
grand jury;

(d) The names and addresses of witnesses on whose
evidence the charge is based;

774 De

(e) The results and reports of physical or mental exami-
nations, and of scientific tests, or experiments made in con-
nection with the particular case, or copies thereof; and

( Documents, papers, books, accounts, letters, photo-
graphs, objects, or other tangible things of whatsoever kind
or nature which could be used as evidence by the prosecut-
ing authority.

Pieper does not claim that the February 22, 2006, interview
of Croghan fits any particular category listed in § 29-1912,
although he does suggest knowledge of it would have been “use-
ful” to the defense. Brief for appellant at 36. He further suggests
that the reference to “information within the possession, cus-
tody, or control of the state” found in another discovery statute,
Neb. Rev. Stat. § 29-1914 (Reissue 1995), expands the listings
found in § 29-1912 to include “information” in general. We
reject this argument. By its terms, § 29-1914 limits rather than
expands the scope of discovery orders issued under § 29-1912
to “items or information within the possession, custody, or con-
trol of the state.” Section 29-1914 does not add a new category,
to wit “information,” subject to discovery but instead serves to
circumscribe the discovery obligation of the State. Given the
discovery request and the court’s discovery order in this case,
which granted discovery to the extent allowed by statute, the
State was not obligated to disclose its conversation with a wit-
ness in preparation for trial.

Pieper moved for a new trial on the additional basis that the
State’s providing the report of the February 22, 2006, conversa-
tion on the third day of trial was untimely. We conclude that
the court did not abuse its discretion in overruling the new
trial motion on such basis. With respect to the timeliness of
the production of the officer’s report, we note that the written
report was not prepared until the second day of trial and that
the State provided the report to the defense the next day, prior
to Croghan’s testimony at trial. After receiving the report, Pieper
moved to dismiss and for a mistrial. When the motions were
overruled, Pieper did not move for a continuance.

It is apparent from the record that prior to trial, Pieper was
aware that Croghan had given conflicting accounts of the events
at issue and that one version was more favorable than the other.

Given this knowledge of disparate versions, the possibility that
Croghan’s trial testimony could be consistent with his original
statement was apparent to defense counsel.

We determine that given the discovery request, the discov-
ery order, the discovery statutes, and Pieper’s knowledge that
Croghan had already given conflicting versions of events, the
State was not obligated to provide to the defense its under-
standing of the officer’s February 22, 2006, conversation with
Croghan. We therefore conclude that the court did not abuse
its discretion by overruling Pieper’s motion for new trial on
this basis.

Pieper Did Not Object to the Admission of Tape Recordings
and Transcriptions of the Victims’ Statements to Police
and Did Not Preserve the Issue for Appeal.

As his second assignment of error, Pieper asserts that the
court erred in admitting tape recordings and transcriptions of
tape recordings of police interviews with the victims, French
and A.N. We conclude that because Pieper failed to object to
admission of these items, he has failed to preserve this issue
for appeal.

A tape recording of a police interview with French and the
transcription of a tape recording of another police interview
with French were admitted into evidence. The tape recording
was not played to the jury, and the transcription was not read
to the jury. Although there is no indication in the record that
the jury listened to the tape recording or read the transcription
during deliberations, it appears that both pieces of evidence
were available to the jury. For completeness, we note that in his
appellate argument, Pieper also references a tape recording of a
police interview of A.N. that was marked as an exhibit; however,
there is no indication in the record that the A.N. tape recording
was offered or admitted into evidence.

HH A party who fails to make a timely objection to evi-
dence waives the right on appeal to assert prejudicial error con-
cerning the evidence received without objection. State v. Cook,
266 Neb. 465, 667 N.W.2d 201 (2003). 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

776 Le

issue never presented and submitted to it for disposition. State v.
Dockery, 273 Neb. 330, 729 N.W.2d 320 (2007). Pieper did not
object to the admission of the tape recording and the transcrip-
tion and did not present the issue to the trial court. We therefore
reject Pieper’s second assignment of error.

Claims of Ineffective Assistance of Counsel May
Not Be Raised in a Motion for New Trial.

As his third assignment of error, Pieper asserts that the court
erred in overruling his motion for new trial in which, through
substitute counsel, Pieper claimed his initial trial counsel had
provided ineffective assistance. The State argues that ineffec-
tive assistance of counsel is not a proper statutory ground for
a motion for new trial. We agree with the State and conclude
that the court did not err in overruling the motion for new trial
on such basis.

The statute governing motions for new trial, Neb. Rev. Stat.
§ 29-2101 (Cum. Supp. 2006), provides as follows:

A new trial, after a verdict of conviction, may be
granted, on the application of the defendant, for any of the
following grounds affecting materially his or her substan-
tial rights: (1) Inregularity in the proceedings of the court,
of the prosecuting attorney, or of the witnesses for the
state or in any order of the court or abuse of discretion by
which the defendant was prevented from having a fair trial;
(2) misconduct of the jury, of the prosecuting attorney,
or of the witnesses for the state; (3) accident or surprise
which ordinary prudence could not have guarded against;
(4) the verdict is not sustained by sufficient evidence or is
contrary to law; (5) newly discovered evidence material
for the defendant which he or she could not with reason-
able diligence have discovered and produced at the trial;
(6) newly discovered exculpatory DNA or similar forensic
testing evidence obtained under the DNA Testing Act; or
(7) error of law occurring at the trial.

We note that ineffective assistance of counsel is not one of the
enumerated grounds upon which a defendant may move for a
new trial under § 29-2101.

| ”

I Pieper argues on appeal that the procedure of raising
claims of ineffective assistance of counsel in a motion for new
trial was “allowed” by this court in earlier cases and should
be permitted in the instant case. Reply brief for appellant at
3, Pieper cites Hawk v. Olson, 146 Neb. 875, 22 N.W.2d 136
(1946), and State v. Whiteley, 234 Neb. 693, 452 N.W.2d 290
(1990). In Hawk, this court held that due process issues, includ-
ing a claim that the defendant had been deprived of effective
assistance of counsel, were “issues which are not justiciable in
a habeas corpus proceeding in this state.” 146 Neb. at 881, 22
N.W.2d at 140. In reaching such conclusion, this court stated in
dicta that the issues “could have been presented and determined
by the trial court, in the first instance, on a motion for a new
trial.” Id. In Whiteley, this court held that the trial court did not
abuse its discretion in overruling a motion for new trial which
raised issues of ineffective assistance of counsel. However, this
court did not, in either Hawk or Whiteley, cite to § 29-2101 or
analyze the propriety or prudence of raising a claim of ineffec-
tive assistance in a motion for new trial made under § 29-2101.
Because we conclude that ineffective assistance of counsel is not
a ground upon which a defendant may move for new trial under
§ 29-2101, to the extent that Hawk and Whiteley imply that an
ineffective counsel claim can be raised on a motion for new trial,
they are disapproved.

We believe that in addition to the fact that a claim of ineffec-
tive counsel is not an enumerated basis for a new trial motion
under § 29-2101, such claim is not suited to a motion for new
trial. Due to the absence of a record relating to issues such as
defense counsel’s trial strategy, a separate evidentiary hearing
would be required on the ineffectiveness claim, thus postpon-
ing entry of judgment. A defendant exploring ineffectiveness of
trial counsel immediately after the trial could run the risk of a
procedural bar if not all ineffectiveness claims were raised and
developed. Defendants are not without remedies. Claims of inef-
fective assistance of counsel are available on direct appeal and
in postconviction proceedings. See, State v. York, 273 Neb. 660,
731 N.W.2d 597 (2007); Neb. Rev. Stat. § 29-3001 (Reissue
1995). However, they are neither authorized nor suited to the
immediate aftermath of a trial in a motion for new trial.

718 a

Because ineffective assistance of counsel is not a proper
ground for a motion for new trial under § 29-2101, we conclude
that the court did not abuse its discretion by overruling the
motion for new trial on such basis.

Nebraska’s Habitual Criminal Statute Does Not
Violate the Double Jeopardy Clause.

As his fourth assignment of error, Pieper asserts that the
court erred in rejecting his assertion that the habitual criminal
statute, § 29-2221, violates the Double Jeopardy Clauses of the
federal and Nebraska Constitutions. We conclude that the court
did not err in rejecting such assertion.

Hl In raising the constitutional challenge to the habitual
criminal statute at the enhancement hearing, Pieper’s counsel
acknowledged that the challenge was made “notwithstanding
Nebraska Supreme Court precedent stating double jeopardy
principles do not apply.’ This court has previously rejected
double jeopardy challenges to Nebraska’s habitual criminal
statute and has long held that the statute does not violate the
Double Jeopardy Clause because “an enhanced sentence under
the provisions of the habitual criminal laws is not a new jeop-
ardy or additional penalty for the same crime. It is simply a
stiffened penalty for the latest crime which is considered to be
an aggravated offense because it is a repetitive one.” Addison v.
Parratt, 208 Neb. 459, 462, 303 N.W.2d 785, 787 (1981). See,
also, State v. Goodloe, 197 Neb. 632, 250 N.W.2d 606 (1977),
disapproved on other grounds, State v. Clifford, 204 Neb. 41,
281 N.W.2d 223 (1979).

Pieper makes no new argument that would cause us to
reconsider such precedent. The district court therefore did not
err in rejecting Pieper’s constitutional challenge to the habitual
criminal statute.

District Court Did Not Impose Excessive Sentences.

As his final assignment of error, Pieper asserts that the court
imposed excessive sentences. The sentences were within statu-
tory limits, and we conclude that the court did not abuse its
discretion in the sentences it imposed.

A sentence imposed within statutory limits will not be dis-
turbed on appeal absent an abuse of discretion by the trial court.
State v. Archie, 273 Neb. 612, 733 N.W.2d 513 (2007). Pieper was
convicted of first degree assault under Neb. Rev. Stat. § 28-308
(Reissue 1995) and false imprisonment in the first degree under
Neb. Rev. Stat. § 28-314 (Cum. Supp. 2006). First degree assault
is a Class III felony, § 28-308(2), and false imprisonment is
a Class IMA felony, § 28-314(2). The maximum sentence of
imprisonment is 20 years for a Class [II felony and 5 years for
a Class IIIA felony. Neb. Rev. Stat. § 28-105(1) (Cum. Supp.
2006). However, due to prior felony convictions, Pieper was
found to be a habitual criminal, and under § 29-2221, one found
to be a habitual criminal is to be punished by imprisonment for
a mandatory minimum term of 10 years and a maximum term of
not more than 60 years for each felony conviction. Pieper was
sentenced to imprisonment for 10 to 20 years on each count with
the sentences to be served consecutive to one another. Therefore,
Pieper’s sentences were within statutory limits.

Pieper’s main argument is that the court erroneously ordered
that his sentences be served consecutive to one another because
the court mistakenly thought it was required to do so. Pieper
notes that when defense counsel urged that the sentences be
ordered to be served concurrently, the court stated, “while
some might think that I have a lot of discretion in this matter,
I really don’t think I do.” We do not read the court’s com-
ments to indicate that the court thought it was mandatory that
the sentences be served consecutive to one another. The court
continued by stating, “while it would be tempting to make the
sentences concurrent, because they do arise perhaps out of the
same event, what I have are two separate victims and really two
very separate crimes, at least as the jury determined them.” The
court then “decline[d] that invitation” to order the sentences to
be served concurrently. We read the court’s comments to indi-
cate that the court knew it had discretion to order the sentences
to be served concurrently but decided that consecutive sentences
were appropriate under the circumstances.

Although Pieper argues that he did not have a history of
violence, we note that Pieper had a significant criminal history,
including felony convictions for burglary and theft. We also

780 De

note that the victims in this case suffered severe physical and
emotional injuries as a result of the crimes and that French’s
injuries in particular were life threatening. We finally note that
the sentences were at the lower end of the range mandated by
the habitual criminal statute. We therefore conclude that the
court did not abuse its discretion in imposing consecutive sen-
tences of 10 to 20 years’ imprisonment on each count.

CONCLUSION
Having considered and rejected each of Pieper’s assignments
of error, we affirm his convictions and sentences for first degree
assault and false imprisonment in the first degree.
AFFIRMED.

Srare OF NEBRASKA, APPELLEE, V.
Jessica M. REID, APPELLANT.
743 N.W.2d 370

Filed January 4, 2008. No. S-07-303.

Thomas J. Olsen, of Troia & Olsen, for appellant.

Jon Bruning, Attorney General, George R. Love, and Andy
Maca, Senior Certified Law Student, for appellee.

Heavican, C.J., Wricut, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Conno ty, J.

Under a plea agreement, Jessica M. Reid pled guilty to two
counts of second degree murder for the deaths of Wayne and
Sharmon Stock. The district court sentenced Reid to not less
than life imprisonment nor more than life imprisonment for
each murder. The court ordered Reid to serve the sentences
consecutively. Reid appeals, assigning that her sentences are
excessive. We affirm.

BACKGROUND

Before embarking on this crime spree, Reid and her codefen-
dant and boyfriend, Gregory D. Fester II, were living together
in Horicon, Wisconsin. On April 15, 2006, they left Wisconsin.
After stealing and abandoning two vehicles, they stole money,
a 12 gauge shotgun, ammunition, and another vehicle from a
Wisconsin home. They then drove to Iowa, planning to rob a
few houses on their way to Arizona. They broke into two more
houses in Iowa. They vandalized the first house and stole a .410
shotgun and ammunition and stole about $300 from the second
house. Later that night, they decided to burglarize the Stocks’
rural home in Cass County, Nebraska.

Fester entered the first floor through a window and opened
a door for Reid. Fester carried the 12 gauge shotgun, and Reid
carried the .410 shotgun. Reid stated to law enforcement that
they did not stay on the first floor long before heading upstairs.
She heard snoring coming from upstairs and removed her coat
so she would not make any noise. She then followed Fester
upstairs. According to Reid’s account, Fester turned on the
Stocks’ bedroom light and then came back into the hallway
and asked her what to do. She replied, “do something.” Fester
then ran back into the room and shot Wayne Stock in the leg
while he was in bed or getting out of bed. Wayne Stock then
struggled with Fester over the 12 gauge shotgun. While they
were struggling, Reid shot Wayne Stock with the .410 shotgun.

782 a

She stated that Wayne Stock looked her directly in the eyes
and that she then pulled the trigger. She further stated she shot
Wayne Stock above his right eye and he fell forward. After
Wayne Stock fell, Fester jumped over his body and shot him in
the back of the head with the 12 gauge shotgun and then shot
Sharmon Stock in the face. According to Reid, she and Fester
immediately ran from the house and left in the stolen vehicle,
which they later abandoned.

On April 23 and 24, 2006, police arrested Fester and Reid in
Wisconsin for vehicle theft. Reid had left an inscribed ring in
the Stocks’ home that she and Fester had earlier stolen from the
Wisconsin vehicle or home. The ring ultimately connected Reid
and Fester to the murders. :

During the investigation, law enforcement officers recovered
evidence from Reid’s home. On April 22, 2006, 5 days after
the murders, Reid wrote in her journal: “I killed someone. He
was older. I loved it. I wish I could do it all the time. If [Fester]
doesn’t watch it I am going to just leave one day and go do
it myself.” Also, at some point while Fester was in jail, Reid
wrote a letter to him and left it at the home, apparently for him
to retrieve after authorities released Fester on the Wisconsin
charges. The letter was left in a cigarette box, which also con-
tained a spent 12 gauge shell casing from the murders. In the
letter, she wrote: “And this bullet well bunny it’s the only thing
left. And I loved it, but that’s something we will talk about one
day. But it’s here also beuz [sic] that was something I did for
you, me and for you to love me as much as I love you.”

On June 10, 2006, a Wisconsin detective interviewed Reid
about the murders. During the interview, Reid denied that she
shot Sharmon Stock but admitted that she shot Wayne Stock.
On August 28, the State filed an information charging Reid
with two counts of first degree murder in the Stocks’ deaths. In
exchange for her guilty pleas and agreement to testify against
Fester, the State agreed to amend the information to two counts
of second degree murder.

ASSIGNMENT OF ERROR
Reid assigns that the district court abused its discretion by
imposing excessive sentences.

STANDARD OF REVIEW
HBA sentence imposed within statutory limits will not be
disturbed on appeal absent an abuse of discretion by the trial
court.’ An abuse of discretion occurs when a trial court’s deci-
sion is based upon reasons that are untenable or unreasonable
or if its action is clearly against justice or conscience, reason,
and evidence.?

ANALYSIS

Reid was convicted of two counts of second degree murder,
a Class 1B felony.> Second degree murder is punishable by a
minimum of 20 years’ imprisonment and a maximum of life
imprisonment.* Thus, the district court’s sentences were within
the statutory limits.

Reid, however, contends that the district court abused its dis-
cretion because she did not have a history of serious criminal
conduct and because Fester committed the two murders. She
argues that her culpability for the murders was much less than
Fester’s, yet she was not given any credit for cooperating with
Jaw enforcement or for making statements that exonerated two
other suspects. Finally, she argues that although the district
court emphasized her letter to Fester and journal entry, she has
since changed and shown great remorse over her involvement in
the murders.

HM 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) moti-
vation for the offense, as well as (7) the nature of the offense,
and (8) the violence involved in the commission of the crime.*
In imposing a sentence, the sentencing court is not limited to
any mathematically applied set of factors.® The appropriateness

| State v. Archie, 273 Neb. 612, 733 N.W.2d 513 (2007).
2 State v. Walker, 272 Neb. 725, 724 N.W.2d 552. (2006).
3 Neb. Rev. Stat. § 28-304 (Reissue 1995).

4 Neb. Rev. Stat. § 28-105 (Cum. Supp. 2006).
> See Archie, supra note 1.
6 State v. Lassek, 272 Neb. 523, 723 N.W.2d 320 (2006).

784 a

of a sentence is necessarily a subjective judgment and includes
the sentencing judge’s observation of the defendant’s demeanor
and attitude and all the facts and circumstances surrounding the
defendant’s life.”

The presentence report revealed that Reid was 17 years old
at the time the Stocks were murdered and had dropped out of
school in the 10th grade. She had been an honor roll student
before her mother and stepfather separated when she was about
13. Over the next 2 years, she attended several new schools. She
began using drugs and staying away from home for extended
periods and missing a substantial amount of school. In 2004,
she was placed on juvenile probation for theft. The Wisconsin
Department of Social Services placed her in detention twice for
parole violations. Because of the violations, authorities placed
her in the juvenile intensive sanctions program. Between June
2005 and February 2006, authorities placed her in custody six
times for violations of the program, including theft, criminal
damage to property, and possession of drug paraphernalia. She
did not comply with drug and alcohol treatment services or pay
restitution. Her juvenile caseworker described her as “extremely
dishonest when dealing with anybody in authority” and intent
on disregarding restrictions and sanctions. After she was extra-
dited to Nebraska, Wisconsin dismissed pending felony charges
against her. A probation officer assessed she was a high risk
for rearrest.

At the sentencing hearing, the court recognized that Reid was
17 when the murders were committed. It found that she was
of “normal to above average intelligence” but had dropped out
of school because of drug use and her involvement with “the
wrong crowd.” It further found that her history of drug use was
a contributing factor in the crime. Finally, the court recognized
that her trouble with the law began around the time that her
mother and stepfather divorced. But the court concluded that her
role in the Stocks’ deaths was significant. The court stated that
if Reid had not intervened when Wayne Stock was struggling
with Fester over the gun, it was possible neither death would
have occurred. Reid’s journal and letter troubled the court. The
court concluded:

7 Id.

The offenses involved here were brutal, senseless
crimes. By all accounts, the victims were wonderful peo-
ple, respected by members of their community and church
and loved very much by their family. They experienced
fear and horror which is hard to imagine. They were bru-
tally murdered in the sanctity of their own bedroom, their
own home.

... It’s hard, in this case, to consider anything less than
life sentences.

We agree. We have reviewed Reid’s statements to law
enforcement regarding the murders. Contrary to Reid’s argu-
ments on appeal, the record shows that in police interviews,
Reid specifically stated that she knew she had shot Wayne
Stock directly above his right eye with the .410 shotgun and
that she believed she had killed him before Fester shot him.
Her initial statements to law enforcement about her role in
shooting Wayne Stock were made to rebut the suspicion that
she had shot Sharmon Stock. Many of her later statements that
she might have missed while shooting at Wayne Stock were a
smokescreen to minimize her role in the murders. Similarly,
the statements that she claims helped to exonerate two other
suspects were made after she had implicated the suspects.
Apparently, the statements were motivated in part by her desire
to show that she had not participated in a planned, hired kill-
ing. Finally, we believe her journal entry is the most compelling
evidence of her culpability and callousness. It keeps whisper-
ing, “I killed someone. . . . I loved it. I wish I could do it all the
time.” As we stated in State v. Fester,5 “{w]ithout provocation
or justification, two innocent people were callously murdered
in the solitude and sanctity of their own home. Any lesser sen-
tence under these circumstances, even when considering the

mitigating factors . . . would diminish the seriousness of this
crime and promote disrespect for the law.”
CONCLUSION

The district court did not err in sentencing Reid to two con-
secutive life sentences. The judgment of the court is affirmed.
AFFIRMED.

® State v. Fester, post p. 786, 789-90, 743 N.W.2d 380, 383 (2007).

786 De

STATE OF NEBRASKA, APPELLEE, V.
Grecory D. Faster II, APPELLANT.
743 N.W.2d 380

Filed January 4, 2008. No. $-07-336.

Alan G. Stoler, of Law Office of Alan G. Stoler, P.C., L.L.O.,
for appellant.

Jon Bruning, Attorney General, George R. Love, and Andy
Maca, Senior Certified Law Student, for appellee.

Heavican, C.J., WrichT, CONNOLLY, GBRRARD, STEPHAN,
McCormack, and Mitier-Lerman, JJ.

GERRARD, J. . .
: NATURE OF CASE

Gregory D. Fester II pled guilty to two counts of second
degree murder and one count of use’ of a firearm in the com-
mission of a felony in the April 17, 2006, deaths of Wayne and
Sharmon Stock in Murdock, Nebraska. Fester was sentenced
to a term of not less than life imprisonment nor more than life
imprisonment for each count of murder in the second degree,
and a term of 10 to 20 years’ imprisonment for use of a firearm
to commit a felony. The sentences were to be served consecu-
tively. Fester claims the sentences were excessive. For the fol-
lowing reasons, we affirm the judgment of the district court.

STATEMENT OF FACTS .

Fester lived with his girlfriend, Jessica Reid, in Horicon,
Wisconsin. Fester and Reid left their apartment in Wisconsin on
April 15, 2006, and arrived in Nebraska on April 17. Along the
way, Fester‘and Reid participated in a crime spree that involved,
among other things, stealing two cars and burning another,
breaking into several homes, and stealing a 12 gauge shotgun
and ammunition.

On the night of April 17, 2006, Fester and Reid arrived in
Murdock, Nebraska, and, armed with a 12 gauge shotgun and a
.410 shotgun, broke into the home of the Stocks with the intent
to burglarize the home. The Stocks’ home had been randomly
selected. After entering the house, Fester heard snoring coming
from upstairs. Fester and Reid went up the stairs toward the
Stocks’ bedroom.

It is not entirely clear what happened when Fester and Reid
reached the Stocks’ bedroom. But according to the uncontested
recitation of the facts offered by the State at the sentencing
hearing, Wayne Stock attempted to confront Fester and Reid,
and Fester fired a shot that hit Wayne Stock in the knee. A
struggle ensued between Fester and Wayne Stock. Apparently,
while Fester and Wayne Stock were allegedly fighting over the
weapon, Fester told Reid to “do something,” and Reid fired her
.410 shotgun in the direction of Wayne Stock. Fester then shot
Wayne Stock in the back of the head with his shotgun, killing
him. Then, Fester entered the bedroom and shot Sharmon Stock
in the face, killing her.

Pursuant to a plea agreement, Fester was eventually charged
in an amended information with two counts of murder in the
second degree’ and one count of use of a firearm in the com-
mission of a felony.” Fester pled guilty to all three counts of the
amended information.

The presentence investigation report revealed that Fester was
19 years of age at the time the Stocks were killed and that at
the time of sentencing, he had a 2-year-old child. Fester had a
lengthy history of substance abuse, including the use of alcohol,

' See Neb. Rev. Stat. § 28-304 (Reissue 1995).
2 See Neb. Rev. Stat. § 28-1205 (Reissue 1995).

788 Le

marijuana, cocaine, heroin, and dextromethorphan. Fester also
has an extensive history of criminal activity. Fester’s prior
criminal activity included, among other things, trespass to land,
shoplifting, disorderly conduct, theft from a motor vehicle,
criminal damage to property, and sexual assault. The presen-
tence investigation report also revealed that during Fester’s life,
he had been under various degrees of psychiatric care and had
taken a variety of psychotropic medications.

Following a sentencing hearing, the district court sentenced
Fester to a term of not less than life imprisonment nor more
than life imprisonment for each count of murder in the second
degree and a term of 10 to 20 years’ imprisonment for use of
a firearm to commit a felony. The sentences were to be served
consecutively. Fester appealed.

ASSIGNMENT OF ERROR
" Fester assigns, consolidated and restated, that the district
court erred in imposing excessive sentences.

STANDARD OF REVIEW
Il A sentence imposed within statutory limits will not
be disturbed on appeal absent an abuse of discretion by the
trial court.

ANALYSIS

-.Fester was convicted of two counts of second degree murder
and one count of use of a firearm to commit a felony. Second
degree murder is a Class IB felony,’ punishable by a minimum of
20 years’ imprisonment and a maximum of life imprisonment.
Use of a deadly weapon which is a firearm to commit a felony
is a Class II felony® and is punishable by a minimum of 1 year’s
imprisonment and a maximum of 50 years’ imprisonment.’ The
sentences imposed on Fester were within the statutory limits.

3 State v. Archie, 273 Neb. 612, 733 N.W.2d 513 (2007).
4 § 28-304.

5 Neb. Rev. Stat. § 28-105 (Cum. Supp. 2006).

© § 28-1205.

7 § 28-105.

ee! 789
J

Fester nonetheless argues that his sentences were excessive.
Fester contends that the district court failed to properly con-
sider, as a mitigating factor, his acceptance of responsibility
for the crime and his admission of guilt. Fester also claims that
the court erred in failing to adequately weigh certain mitigating
circumstances including his age, his history of mental illness,
his use of drugs before the commission of the crime, and the
fact that he has a 2-year-old child.

HM 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) moti-
vation 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.* We have further held that, in considering a sentence
to be imposed, the sentencing court is not limited in its discre-
tion to any mathematically applied set of factors. Obviously,
depending on the circumstances of a particular case, not all
factors are placed on a scale and weighed in equal proportion.
The appropriateness of a sentence is necessarily a subjective
judgment and includes the sentencing judge’s observation of
the defendant’s demeanor and attitude and all facts and circum-
stances surrounding the crime and the defendant's life.°

The presentence investigation report reveals that Fester has
an extensive criminal record, a significant history of drug use
and distribution, and a history of violence. The record also
plainly establishes that the killing of the Stocks was depraved,
violent, and senseless. In discussing the killings, Fester admit-
ted to the presentence investigative probation officer that he and
Reid “‘really didn’t need any money, we were just there for the
thrill I guess.’”

At sentencing, the district court considered both the mitigat-
ing and aggravating factors and explained that Fester’s “pos-
sibility of rehabilitation is remote and is far outweighed in this
case by the necessity and need for the protection of society.”
We agree. Without provocation or justification, two innocent

8 State v. Archie, supra note 3. .
° See State v. Aldaco, 271 Neb. 160, 710 N.W.2d 101 (2006).

790 Le

people were callously murdered in the solitude and sanctity of
their own home. Any lesser sentence under these circumstances,
éven whén considering the mitigating factors urged by Fester,
would diminish the seriousness of this crime and promote dis-
respect for the law.

CONCLUSION
We have reviewed the record and considered Fester’s argu-
ments. Based on our review of the record, and the foregoing
reasoning, we conclude that the district court did not abuse its
discretion .in sentencing -Fester. The judgment. of the district

court is affirmed.

. STATE OF NEBRASKA, APPELLANT, V.
TERRENCE D, Moore, APPELLEE.
743 N.W.2d 375

Filed January 4, 2008. No. S-07-370.

AFFIRMED.

Donald W. Kleine, Douglas County Attorney, and Jennifer
Meckna for appellant.

Thomas C. Riley, Douglas County Public Defender, and Scott
C. Sladek for appellee.

Heavican, C.J., Wricut, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Miier-Lerman, J.
NATURE OF CASE

Terrence D. Moore pled guilty ‘to two counts of second
degree murder and two counts of use of a firearm to commit a
felony. The district court for Douglas County sentenced Moore
to imprisonment for 30 to 45 years on each count of second
degree murder and for 10 to 10 years on each firearm count.
The two sentences for'second degree murder were ordered to be
served concurrently to one another, and the two sentences for
the firearm counts were ordered to be served consecutively to
one another and to the sentences for-second degree murder. The
State appeals Moore’s sentences as being ‘excessively lenient.
We conclude that Moore’s sentences were excessively lenient,
and we therefore vacate Moore’s sentences and remand the
cause with directions for resentencing by a different judge.

STATEMENT OF FACTS

In the early morning hours of February 25, 2005, Moore
went to the apartment of Terry Jasper and Diane Caveye.
Moore was angry over events that had occurred the previous
day. According to Moore, Jasper had “punked” him by failing
to pay approximately $30 that he owed Moore for drugs. When
Moore went to Jasper and Caveye’s apartment, Moore was
armed with a 9mm-handgun. Jasper’s nephew, Jackie Payne,
was present at the apartment when Moore arrived.

792 Es

An argument ensued between Moore and Jaspet. At one
point, Moore and Payne went into the bathroom to talk. Moore
told. Payne he was angry with Jasper because’ Jasper owed
Moore money and had left Moore waiting at an arranged. meet-
ing place the prior day. Moore showed Payne his gun and told
Payne he felt like “unloading” the gun. Payne thought that
Moore had calmed down after they talked in- the bathroom;
however, shortly after exiting the bathroom, Moore shot Jasper
three times. Jasper was sitting in a chair when Moore fired the
first two shots, and Moore fired the third shot into Jasper’s back
after he fell to the ground. Caveye was lying on a couch with a
blanket over herself. After shooting Jasper, Moore shot Caveye
three times. Payne was present and witnessed the shootings.
Jasper and Caveye died from the gunshot wounds.

Moore fled the scene after shooting Jasper and Caveye.
Moore was arrested on March 9, 2005, and confessed to the
shootings. He said that he was angry with Jasper because Jasper
had “punked” him, that he shot Jasper because he was scared,
and that after firing the first two shots at Jasper, he fired the
third shot because he was afraid Jasper would identify Moore
as thé perpetrator. Moore said that he shot Caveye because he
was scared that if he did not she would tell someone that he had
shot Jasper. Moore was originally charged with two counts of
first degree murder and two counts of use of a firearm to com-
mit a felony. Pursuant to a plea agreement, Moore pled guilty
to two counts of second degree murder and two counts of use
of a firearm to commit a felony.

Moore, was originally sentenced. on May 23, 2006. Moore
appealed to this court on the basis that the written ordér of
commitment contained sentencing terms inconsistent with the
sentence imposed by the court’s oral pronouncement. Without
reaching Moore’s’ assigned error, this court, in a memoran-
dum opinion: dated January 4, 2007, vacated the sentences
and remanded the cause for resentencing on the basis that the
district court had erred as a matter of law when it ordered that
the sentence for at least one of the firearm counts be served
concurrently to one of the sentences for second degree murder.
Under Neb. Rev. Stat. § 28-1205(3) (Reissue 1995), a sentence

for use of a weapon must be served consecutive to any other
sentence imposed.

Upon remand, Moore was resentenced, and the new sentence
gives rise to this appeal. On March 20, 2007, the district court
sentenced Moore to imprisonment for 30 to 45 years on each
count of second degree murder and for 10 to 10 years on each
firearm count. The two sentences for second degree murder
were ordered to be served concurrently to one another, and the
two sentences for the firearm counts were ordered to be served
consecutively to one another and to each of the sentences for
second degree murder.

The State requested and received the Attorney General’s
approval to appeal the sentences as excessively lenient pursuant
to Neb. Rev. Stat. §§ 29-2320 and 29-2321 (Cum. Supp. 2006).

ASSIGNMENT OF ERROR
The State claims that the district court abused its discretion
by imposing excessively lenient sentences.

STANDARDS OF REVIEW

Whether an appellate court is reviewing a sentence
for its leniency or its excessiveness, a sentence imposed by a
district court that is within the statutorily prescribed limits will
not be disturbed on appeal unless there appears to be an abuse
of the trial court’s discretion. State v. Rice, 269 Neb. 717, 695
N.W.2d 418 (2005). A judicial abuse of discretion exists only
when the reasons or rulings of a trial judge are clearly unten-
able, unfairly depriving a litigant of a substantial right and
denying a just result in matters submitted for disposition. Id.

ANALYSIS

Pursuant to a plea agreement, Moore was convicted of
two counts of second degree murder and two counts of use
of a firearm to commit a felony. Second degree murder is a
Class IB felony, punishable by imprisonment for 20 years to
life. Neb. Rev. Stat. §§ 28-304(2) (Reissue 1995) and 28-105
(Cum. Supp. 2006). Use of a firearm to commit a felony is a
Class II felony, punishable by imprisonment for 1 to 50 years.
§§ 28-1205(2)(b) and 28-105. Section 28-1205(3) provides that
the sentence imposed for use of a firearm to commit a felony

794 Es

“shall be consecutive to any: other sentence imposed.” Although
Moore’s sentences were within statutory limits, we determine
that the trial court abused its discretion by imposing excessively
lenient sentences. .

HMM When the State challenges a sentence as excessively
lenient, the appellate court should consider:

(1) The nature and circumstances of the offense;

(2) The history and characteristics of the defendant;

(3) The need for the sentence imposed:

(a) To afford adequate deterrence to criminal conduct;

(b) To protect the public from further crimes of the
defendant;

(c) To reflect the seriousness of the offense, to promote
respect for the law, and to provide just punishment for the
offense; and

(d) To provide the defendant with needed educational
or vocational training, medical care, or other correctional
treatment in the most effective manner; and

(4) Any other matters, appearing in the record which the
appellate court deems pertinent. :

Neb. Rev. Stat. § 29-2322 (Reissue 1995). Accord State v. Rice,
supra. A sentencing court is not limited in its discretion to any
mathematically applied set of factors. The appropriateness of a
sentence is necessarily, a subjective judgment and includes the
sentencing judge’s observation of the defendant’s demeanor
and attitude and all the facts and circumstances surrounding
the defendant’s life. State v. Rice, supra. But there also must
be some reasonable factual basis for imposing a particular
sentence. Id.

Moore killed one person because he was angry over an unpaid
drug debt of approximately $30 and killed a second person in
order to prevent her from being a witness to the first killing.
We note that Moore’s guilty plea resulted from an agreement
which reduced the homicide charges to second degree murder
from the original charges of first degree murder, ‘a Class IA
felony punishable by imprisonment for life without parole, or
a Class I felony punishable by death. Neb. Rev. Stat. § 28-303
(Cum. Supp. 2006) and § 28-105. Moore admitted that he killed
both Jasper and Caveye in the same incident and that he shot

Caveye in order to prevent her from telling anyone that he had
shot Jasper. Were this a first degree murder case, we note that
under Neb. Rev. Stat. § 29-2523 (Cum. Supp. 2006), among the
aggravating circumstances that would make a defendant eligible
for the death penalty are that “[a]t the time the murder was
committed, the offender also committed another murder” and
that the “murder was committed in an effort to conceal the com-
mission of a crime, or to conceal the identity of the perpetrator
of such crime.” Because two circumstances were present in this
case which are comparable to first degree aggravators, it is clear
that Moore’s crimes were of the type that the Legislature has
deemed to be the most serious in this state. We agree.

Moore points to his lack of an extensive history of crimi-
nal violence, his clear expression of remorse, and his lack of
chemical or alcohol dependency issues as factors indicating that
his sentences were not excessively lenient. Although Moore’s
criminal history is arguably not “extensive,” it is significant and
includes a drug conviction and an assault conviction and indi-
cates an increasing involvement in criminal activity.

We note that Moore was shown a degree of leniency by the
State when it entered into a plea agreement under which the
homicide charges were reduced from first to second degree
murder and that Moore was thereby spared the possibility of
sentences of either life without parole or death. The crimes in
this case were of the type deemed to be the most serious in this
state, and the mitigating factors noted by Moore are not suffi-
cient to justify the lenience granted by the trial court in'impos-
ing sentences that were at the lower erid of the range of possible
sentences and in ordering the sentences for the, two murder
charges be served concurrently to one another. We conclude that
considering the facts’ and the nature of the offenses committed
by Moore, the sentences given in this case do not adequately
reflect the seriousness of the offenses, do not promote réspect
for the Jaw, and do not provide just Punishment,

CONCLUSION”
Considering the very serious nature of the offenses commit-
ted by Moore, we conclude that the district court abused its
discretion by imposing excessively lenient sentences. In this

796 Le

circumstance, Neb. Rev. Stat. § 29-2323 (Reissue 1995) permits
ari appellate court to set aside the sentence and either (1) remand
the cause for imposition of a greater sentence, (2) remand the
cause for further sentencing proceedings, or (3) impose a greater
sentence. We deem the first option to be appropriate in this case
and, therefore, vacate the sentences and remarid the cause to the
district court with instructions to impose greater sentences. The
sentences should be imposed by a different district court judge
than.the original sentencing judge. See State v. Fields, 268 Neb.
850, 688 N.W.2d 878 (2004).

SENTENCES VACATED, AND CAUSE

REMANDED WITH DIRECTIONS.

as
Larry COFFEY, APPELLANT AND CROSS-APPELLEE, V. COUNTY OF
Oroz, NEBRASKA, AND THE BOARD OF ADJUSTMENT OF OTOR

County, NEBRASKA, APPELLEES AND CROSS-APPELLANTS,
AND Kent AND SUE KREIFELS, INTERVENORS-APPELLEES

AND CROSS~APPELLANTS.

743 N.W.2d 632
Filed January 11, 2008. No. S-06-921.

William G. Blake, of Pierson, Fitchett, Hunzeker, Blake &
Katt, for appellant.

Jeffrey J. Funke, Otoe County Attorney, and David J. Partsch,
for appellees County of Otoe and Board of Adjustment of Otoe
County.

Joseph F. Bachmann and Shawn P. Dontigney, of Perry,
Guthery, Haase & Gessford, P.C., L.L.O., for appellees Kent and
Sue Kreifels.

Heavican, C.J., WRIGHT, GERRARD, STEPHAN, McCormack, and
Miter-Lerman, JJ.

GERRARD, J. :
NATURE OF CASE

Otoe County enacted a zoning regulation that prohibits,
among other things, the construction of single-family dwell-
ings within a one-half-mile radius of certain animal feeding and
waste handling facilities, unless the owner of the single-family
dwelling grants an-impact easement to the owner of the facil-
ity and the owner of the facility agrees to the easement. The
primary issue presented in this appeal is whether the regula-
tion, requiring that the granting of the easement be “mutual,”
constitutes an unauthorized delegation of legislative authority to
private citizens.

STATEMENT OF FACTS
Kent Kreifels began operating a hog confinement facility
on his property in Otoe County, Nebraska, in 1990. As part of

798 Ee

his hog confinement operation, Kreifels disposes of the waste
produced by the pigs by spreading the waste on various parts of
his property. On the occasions when the waste is spread upon
Kreifels’ property, the dust, noise, and odor can be bothersome
for neighboring property owners.

Beginning in March 2000, Otoe County held several public
meetings to discuss and consider regulations for a compre-
hensive zoning plan for the county. In April 2001, before the
zoning regulations had been adopted, Larry Coffey purchased
approximately 195 acres of land adjacent to the land owned by
Kreifels in Otoe County. At the time Coffey purchased the land,
it was zoned as agricultural. It was Coffey’s intent to divide
the land into smaller parcels and sell the lots for residential
development. The comprehensive zoning plan and regulations
were adopted by the county on April 9, 2002, and were later
amended on September 23, 2003. For purposes of this case, the
amendments made to the regulations in 2003 are not substantive
and thus, we will use this current version.

Under the new zoning regulations, both Kreifels’ and Coffey’s
properties are located in the “General Agricultural’ District.”
The following regulations, designed to promote and facilitate
agriculture, are relevant to this case:

501.01 INTENT: The intent of [the general agricul-
tural] district is to promote and facilitate agricultural
crop production, livestock production, which is in bal-
ance with the natural environment, and other and new
forms of agricultural production which are compatible
with existing agricultural uses and-the environmental limi-
tations of the County. The-intent is also to encourage soil
and water conservation, to prevent contamination of the
natural..environment within the County and to preserve
-and protect land best suited for agricultural uses by pre-
venting or regulating the introduction, encroachment and
location of commercial uses, industrial uses and other
non-agricultural uses, including non-farm residential uses,
which would be or could become incompatible with the
agricultural character ‘and occasional generation of dust,
odors; and other similar events produced agricultural uses,
or which could result in contamination of the air, soils and

water, or which could negatively impact the use, value and
enjoyment of property, and the culture and way of life in
Otoe County.

501.03 PERMITTED PRINCIPAL USES AND
STRUCTURES: The following uses and structures shall be
permitted uses, but shall require the issuance of a zoning /
building permit and / or certificate-of zoning compliance:

9. Single-Family dwellings . . . provided such dwellings
comply with all of the following conditions.

A. Such dwellings, if not on the same lot with and not
of the same ownership as any existing confined animal
feeding use . . . shall be separated from such use by the
minimum distance specified in Table 501.05, MINIMUM
SEPARATION DISTANCES FOR CONFINED AND
INTENSIVE ANIMAL FEEDING USES for the size
of the animal feeding use and the type of waste han-
dling facility in existence, provided that if one or more
impact easement(s), as defined in Section 303.53 of this
Resolution, is/are granted by the owner of the dwelling
unit to the owner of a confined or intensive animal feeding
use or waste handling facility, any dwelling unit(s) associ-
ated with the land on which any such easement has been
granted shall not be included in the minimum distance
measurements herein specified.

Pursuant to table 501.05, the required minimum distance in
this case between Kreifels’ operation and a neighboring resi-
dence would be one-half mile. The record éstablishes that of the
195 acres of land owned by Coffey, approximately 192 acres fall
within one-half mile of Kreifels’ hog confinement operation.

Section 303.53 defines an “Impact Easement” as

[a]n easement or deed restriction, recorded in the office of
the Otoe County Registrar of Deeds, which runs with the
land, which is granted to the owner of an industrial use, a
confined or intensive animal feeding use, a waste handling
facility use or other use for the period of time that such
use shall exist, by the owners of adjoining or neighbor-
ing real property in which it is mutually agreed that the

800 De

grantor shall hold the grantee harmless from odor, smoke,
dust, or other legal impacts associated with such use on
the grantor’s property when such use is operated in accor-
dance with the terms of such easement or deed restriction.
{Emphasis supplied.)]

After the zoning regulations had been adopted, Coffey had
his property surveyed. On August 29, 2002, Coffey filed with
the Otoe County register of deeds a subdivision plat dividing
his property into five tracts. On March 4, 2003, the zoning
administrator for Otoe County sent Coffey’s real estate agent a
copy of the Otoe County zoning regulations and informed the
agent that an impact easement would be needed from Kreifels
before a building permit could be issued for Coffey’s lots.

In October 2004, Coffey entered into an agreeinent to sell
one of his parcels of land to Ray and Connie O’Connor. In
the agreement, the O’Connors acknowledged the presence of
Kreifels’ hog confinement facility and the need to obtain an
impact easement. The agreement also provided that the sale of
the land was subject to the acquisition of a building permit. On
December 2, Coffey, through his attorney, prepared an impact
easement and sent it to Kreifels. The impact easement was
attached to a letter requesting that Kreifels sign the impact ease-
ment and return it to Coffey’s attorney within 7 days. Kreifels
did not sign or return the impact easement.

Without having acquired an impact easement, the O’Connors
requested a building permit. On December 30, 2004, the zon-
ing administrator sent a letter to the O’Connors, explaining that
pursuant to the zoning regulations, the zoning administrator
could not issue a building permit within one-half mile of where
Kreifels deposits liquid manure products unless the O’Connors
obtained an impact easement signed by Kreifels.

Coffey then filed an application for a conditional use permit
with the Otoe County Planning Commission to allow resi-
dential construction on his property. Following a hearing, the
Otoe County Planning Commission denied Coffey’s request
on February 17, 2005. Coffey then applied to the Otoe County
Board of Adjustment for a variance from the application of the
zoning regulations. On April 21, the Otoe County Board of

Adjustment denied Coffey’s request for a variance. The present
action was then filed in the district court for Otoe County.

In his complaint, Coffey appealed the Otoe County Board of
Adjustment’s denial of his request for a variance. Coffey also
sought declaratory and injunctive relief, claiming, among other
things, that § 501.03, subsection (9)(A), and § 303.52 (now
§ 303.53 with the 2003 amendments) of the zoning regulations
are unlawful because these sections constitute “an unlawful
delegation of the county’s governmental regulatory power to
private individuals.” Kreifels and his wife filed a motion to
intervene, which was granted.

There was testimony presented at trial that Kreifels’ hog
confinement operation attracts a large number of flies and also
generates odor, noise, and dust. Kreifels explained that, among
other things, he is concerned that if he signed the easement and
continued to operate his hog confinement facility, he would
continually be involved in litigation regarding the validity of the
easement and in potential future litigation relating to the health
of the property owners within a one-half-mile radius.

The evidence presented at trial also indicated that although
Kreifels refused to sign Coffey’s impact easement, Kreifels had
signed two impact easements in the past for other property own-
ers whose land was adjacent to his. Kreifels testified, however,
that he signed the prior impact easements because, at the time,
it was his understanding that he was required to do so.

Following a bench trial, the district court affirmed the denial
of Coffey’s request for a variance, concluding that Coffey had
failed to show that the decision of the Board of Adjustment was
not supported by the evidence, or was arbitrary and unreason-
able, or clearly wrong. The court also determined that the por-
tion of § 501.03(9)(A) of the zoning regulations which provided
for a mutual impact easement exception to the one-half-mile
building prohibition was an unlawful delegation of the county’s
legislative authority and a violation of Coffey’s rights to due
process and equal protection of the law.

However, the court found that while the “impact easement”
exception in § 501.03(9)(A) was invalid, the remainder of
§ 501.03(9)(A), as well as the other provisions in the zon-
ing regulations, are still enforceable. The court explained

802 Es

that “[s]triking the ‘impact easement’ exception portion of
§ 501.03(9)(A) results in the first part of-§ 501.03(9)(A) remain-
ing intact, meaning that a building [sic] is strictly prohibited
from building residential dwellings within the [one-half-]mile
halo, the minimum distance requirement set in Table 501.05 of
the Otoe County [z]oning [rJegulations.”

Coffey filed a motion for new trial, which was overruled.
Coffey appeals, and Otoe County and the Otoe County Board
of Adjustment (hereinafter collectively Otoe County), and the
Kreifelses cross-appeal.

ASSIGNMENT OF ERROR

Coffey assigns, consolidated and restated, that the district
court erred in severing only the impact easement language
from § 501.03(9)(A) and enforcing the remainder of that sec-
tion. Coffey asserts that the court should have either (1) found
§ 501.03(9)(A) void in its entirety or (2) left § 501.03(9)(A)
intact and removed the language from § 303.53 requiring that
the impact easement be mutually agreed to.

On cross-appeal, the Kreifelses and Otoe County assign,
restated, that the district court erred in’ determining that the
mutual impact easement language in the zoning regulations con-
stituted an unconstitutional delegation of legislative authority.

STANDARD OF REVIEW
HMM The constitutionality of a statute or an ordinance is a
question of law.! When reviewing quéstions of law, an appellate
court has an obligation to resolve the questions independently
of the conclusions reached by the trial court.”

ANALYSIS

COonsTITUTIONALITY OF § 501.03(9)(A)
We first address the argument raised by the Kreifelses and
Otoe County in their.cross-appeal, as our resolution of this issue
is dispositive of this appeal. On cross-appeal, the Kreifelses and

' State v. Champoux, 252 Neb. 769, 566 N.W.2d 763 (1997).
2 Coral Prod. Corp. v. Central Resources, 273 Neb. 379, 730 N.W.2d 357
(2007).

Otoe County contend that the district court erred in finding
that the mutual impact easement language in § 501.03(9)(A)
of the zoning regulations was an improper delegation of
legislative authority.

HMB The validity of a zoning ordinance will be presumed in
the absence of clear and satisfactory evidence to the contrary.?
The burden of demonstrating. the constitutional defect rests
with the challenger.‘ To successfully challenge the validity of
a zoning ordinance, the party challenging must prove that the
conditions imposed by the city in adopting the zoning ordi-
nance were unreasonable, discriminatory, or arbitrary, and that
the regulation bears no relationship to the purpose sought to be
accomplished by the ordinance.*

Coffey contends that the district court correctly determined
that the mutual impact easement requirement in the zoning
regulations constituted an unconstitutional delegation of legis-
lative authority. In general, Coffey claims that the provision in
question violates due process because it gives owners of animal
feeding and waste handling facilities the ability to arbitrarily
and capriciously refuse the granting of an impact easement and,
as a result, restrict Coffey’s ability to use his land.

The starting points for analysis of this issue are the U.S.
Supreme Court’s opinions in Eubank v. Richmond® and Cusack
Co. v. City of Chicago.’ In Eubank, an ordinance was enacted
that required the city’s building committee to establish set-
back lines for a given piece of property whenever requested
to do so by two-thirds of the adjacent property owners. The
Court ruled that this ordinance was void. The Court stated that
under the ordinance, “[o]ne set of owners determine[s] not
only the extent of use but the kind of use which another set

3 Premium Farms v. County of Holt, 263 Neb. 415, 640 N.W.2d 633 (2002);
Gas ’N Shop v. City of Kearney, 248 Neb. 747, 539 N.W.2d 423 (1995).

4 Maxon v. City of Grand Island, 273 Neb. 647, 731 N.W.2d 882 (2007).

5 Gas ’N Shop v. City of Kearney, supra note 3.

6 Eubank y. Richmond, 226 U.S. 137, 33 S. Ct. 76, 57 L. Ed. 156 (1912).

7 Cusack Co. v. City of Chicago, 242 U.S. 526, 37 S. Ct. 190, 61 L. Ed. 472
(1917).

804 be

of owners may make of their property””* The Court explained
that owners who have the authority to establish the line could
do so based on their own interest, caprice, or taste, and “[iJt is
hard to understand how public comfort or convenience, much
Jess public health, can be promoted by a line which may be so
variously disposed.”?

Five years after Eubank, in Cusack Co.,!° the Court upheld a
city ordinance that prohibited the construction of billboards in
residential areas without the consent of the owners of a majority
of the frontage property on the block in which the billboard was
to be erected. The corporation seeking to construct the billboard
argued that the ordinance was “a delegation of legislative power
to the owners of a majority of the frontage of the property in
the block ‘to subject the use to be made of their property by
the minority owners of property in such block to the whims and
caprices of their neighbors.’”"!

The Court rejected this argument and distinguished
Cusack Co. from its previous holding in Eubank. The Court
explained that

[a] sufficient distinction between the ordinance [in Eubank]
and the one at bar is plain. The former left the establish-
ment of the building line untouched until the lot owners
should act and then made the street committee the mere
automatic register of that action and gave to it the effect of
Jaw. The ordinance in the case at bar absolutely prohibits
the erection of any billboards in the blocks designated, but
permits this prohibition to be modified with the consent
of the persons who are to be most affected by such modi-
fication. The one ordinance perinits two-thirds of the lot
owners to impose restrictions upon the other property in
the block, while the other permits one-half of the lot own-
ers to remove a restriction from the other property owners.
This is not a delegation of legislative power, but is, as we

® Eubank v. Richmond, supra note 6, 226 U.S. at 143.

9 Id., 226 U.S. at 144, See, also, Seattle Trust Co. v. Roberge, 278 U.S. 116,
49 S. Ct. 50, 73 L. Ed. 210 (1928).

1 Cusack Co. v. City of Chicago, supra note 7.
1 Jq,, 242 U.S. at 528.

have seen, a familiar provision affecting the enforcement
of laws and ordinances.”

Hi From these cases, courts have derived a well-recognized,
general rule for determining whether a consent provision violates
due process as an unlawful delegation of legislative authority. If
the action of a property owner has the effect of legislation in that
the action creates the restriction or prohibition, then the ordi-
nance or statute constitutes an unlawful delegation of legislative
authority. But, if the consent is used for no other purpose than
to waive or modify a restriction which the governing body has
lawfully created and has provided for such a waiver or modifi-
cation by those most affected, then the consent is regarded as
being within constitutional limitations.">

Hl As the Court of Appeals for the District of Columbia
explained, “[t]he Supreme Court has long held that a municipal-
ity may prohibit a disfavored use of property but permit private
citizens to waive that prohibition and consent to the use.”!*

In order for a legislative delegation to private citizens to
survive a due process challenge, the Court instructs that
two criteria must be satisfied. First, the underlying exer-
cise of authority must be a reasonable regulation within
the power of the government. . . . Second, the legislature’s
restriction must be in the form of a general prohibition, and
the delegation must be in the form of permitting private
citizens to waive the protection of that prohibition.

We recognize and agree with that articulation of the appli-
cable due process principles. Thus, the zoning regulation at
issue in this case will survive Coffey’s constitutional challenge
if the regulation enacts a general prohibition that would be an
otherwise reasonable and valid regulation and then delegates to

12 Id., 242 US. at 531.

"3 O’Brien v. City of St. Paul, 285 Minn. 378, 173 N.W.2d 462 (1969). See,
e.g., Cross v. Bilett, 122 Colo. 278, 221 P.2d 923 (1950); Arno v. Alcoholic
Beverages Control Commission, 317 Mass. 83, 384 N.E.2d 1223 (1979);
Robwood Ady. Assoc. v. Nashua, 102 N.H. 215, 153 A.2d 787 (1959); Davis
v. Blount County Beer Bd., 621 S.W.2d 149 (Tenn. 1981).

™ Silverman v. Barry, 845 F.2d 1072, 1086 (D.C. Cir. 1988).

15 Td. (citation omitted).

806 Es

private citizens the mere opportunity to waive that prohibition.
Here, we find that § 501.03(9)(A) meets this standard and is a
constitutionally permissible legislative delegation.

The Nebraska Legislature has given Otoe County the power
to pass zoning ordinances “for the purpose of promoting the
health, safety, morals, convenience, order, prosperity, and wel-
fare of the present and future inhabitants of Nebraska.”"* Otoe
County, in accordance with this authority, adopted a com-
prehensive zoning plan and zoning regulations. As the Otoe
County zoning regulation states, the intent of the general agri-
cultural district is “to preserve and protect land best suited for
agricultural uses by preventing or regulating the introduction,
encroachment and location of . . ..non-agricultural uses, includ-
ing non-farm residential uses.”!” Otoe County accomplished this
intent by, among other things, enacting § 501.03(9)(A) which,
in general, prohibits the construction of single-family dwellings
within certain distances of animal feeding and waste handling
facilities, unless a mutual impact easement is obtained.

Had -Otoe County desired to do so, it could have adopted a
regulation, without the option of a mutual impact easement, that
absolutely prohibited the construction of single-family dwell-
ings within the setback distance set- forth in the regulations.
Stated differently, absolutely prohibiting the construction of
single-family dwellings within the distances specified in the
regulations would have been a reasonable setback and a valid
exercise of Otoe County’s police power.'*

Coffey argues, however, that Otoe County did not intend
to absolutely prohibit-the construction of single-family dwell-
ings within one-half mile of existing animal feeding or waste
handling facilities. Rather, Coffey suggests that by creating the
setback provision, Otoe County simply intended to regulate
such construction. In support of this argument, Coffey notes

16 Neb. Rev. Stat. § 23-114.03 (Cum. Supp. 2006).

17 § 501.01 (emphasis supplied).

18 See Neb. Rev. Stat. § 23-114 et seq. (Reissue 1997 & Cum. Supp. 2006).
See, also, Schaffer v. City of Omaha, 197 Neb. 328, 248 N.W.2d 764 (1977);
City of Beatrice v. Williams, 172 Neb. 889, 112 N.W.2d 16 (1961).

that single-family dwellings are listed as a permitted principal
use in the general agricultural district.

We are not persuaded by Coffey’s argument. Although the
zoning regulations contain a broad statement that single-family
dwellings are a permitted principal use in the general agricul-
tural district, § 501.03(9)(A) expressly limits this broad state-
ment. Section 501.03(9)(A) provides, in relevant part, that

[single-family] dwellings, if not on the same lot with and
not of the same ownership as any existing confined animal
feeding use, . . . any existing intensive animal feeding use,
... or any waste handling facility, . . . shall be separated
from such use by the minimum distance specified in Table
501.05 [(one-half mile in this case)].
It is clear from this language that single-family dwellings are
not allowed within specified distances of animal feeding and
waste handling facilities. And this prohibition is entirely con-
sistent with Otoe County’s stated intent for the creation of the
general agricultural district, “to preserve and protect land best
suited for agricultural uses.”

Notwithstanding the absolute prohibition set forth in the begin-
ning of § 501.03(9)(A), the second portion of § 501.03(9)(A)
provides that this absolute prohibition can be overcome, but
only if both parties are able to agree to a mutual impact ease-
ment. However, if no agreement is reached, the prohibition
remains in effect.

The regulations at issue simply afford the owners of animal
feeding and waste handling facilities a limited opportunity to
waive a restriction created by Otoe County, just as the ordi-
nance in Cusack Co.” provided one-half of the property owners
with the power to waive the billboard restriction. And since the
property owners in Cusack Co. were not empowered to make
the law and force it upon others, because the billboard prohibi-
tion remained in effect if they chose not to exercise their waiver
power, neither are owners of animal feeding and waste handling
facilities so empowered by the fact that Otoe County’s restric-
tion remains in effect if the owners choose not to exercise the

19 § 501.01
2© Cusack Co. v. City of Chicago, supra note 7.

808 Le

limited waiver power. In light of the foregoing discussion, we
conclude that the mutual impact easement language in Otoe
County’s zoning regulations is not an unconstitutional dele-
gation of legislative authority, and the district court erred in
concluding otherwise.

In arguing to the contrary, Coffey relies on a 1907 opinion by
this court, State v. Withnell.”" In Withnell, a gas company applied
for a permit to construct a gas storage facility. The application
complied with all of the regulations except for a requirement
that the gas company obtain the written consent of all the prop-
erty owners within 1,000 feet of the site of the proposed facility.
The application was denied because the gas company failed to
acquire the necessary consent. The gas company challenged the
validity of the consent requirement, and this court agreed, con-
cluding that the ordinance, “in so far as it requires the written
consent of the property owners, is void.””

Withnell, however, is distinguishable from the present case.
In Withnell, this court concluded that the ordinance was not
intended to be prohibitory. It was an unreasonable exercise
of the police power because it involved delegating a balance
between an “indispensable” public utility and the risk to public
safety it represented, which we held to be undelegable.* Such
is not the case here. And in any event, to the extent our analysis
in Withnell is inconsistent with the later decisions of the U.S.
Supreme Court, the Supreme Court’s exposition of the Due
Process Clause clearly controls.

Our conclusion that the regulation at issue is constitutional
is dispositive of this appeal, and therefore, we need not address
Coffey’s assignments of error.

CONCLUSION
We conclude that the district court erred in finding that the
mutual impact easement language in Otoe County’s zoning
regulations constituted an unlawful delegation of legislative

2 State v. Withnell, 78 Neb. 33, 110 N.W. 680 (1907).
2 Id, at 39, 110 N.W. at 682.
% Td, at 35, 110 N.W. at 681.

809

authority. Accordingly, we reverse the judgment and remand the
cause to the district court with directions to affirm the ruling of
the Otoe County Board of Adjustment.
REVERSED AND REMANDED WITH DIRECTIONS.
ConnoiLy, J., not participating.

AARON SILA, APPELLEE, V.
Kirk SAUNDERS, APPELLANT.
743 N.W.2d 641

Filed January 11, 2008. No. S-06-1160.

Lance D. Ehmcke, Jeremy J. Cross, and Joel D. Vos, of
Heidman, Redmond, Fredregill, Patterson, Plaza, Dykstra &
Prahl, L.L.P., for appellant.

Paul W. Deck, of Deck & Deck, L.L.P., for appellee.

Heavican, C.J,, WRIGHT, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

McCormack, J.

NATURE OF CASE . :
Aaron Sila brought this action under Neb. Rev. Stat. § 34-301
(Reissue 2004) to establish the east boundary line of his prop-
erty adjoining the property of the defendant, Kirk Saunders. Sila
sought to establish the boundary line in accordance with the
original government survey. Kirk asserted that under theories
of mutual acquiescence and adverse possession, the historically
recognized boundary should instead be acknowledged.

BACKGROUND

The properties in issue were once part of a single 78-acre
farm owned by Kirk’s grandfather, Fred Saunders. Fred owned
and farmed the land from the early 1940’s until his death in
1961. After Fred’s death, the land was divided into three parcels
and given to his three sons: Vern Saunders, George Saunders,
and Kirk’s father, Eugene Saunders. George was given the
smaller parcel of 18 acres immediately to the east of a county
road. Vern and Eugene were each given adjacent 30-acre parcels
to the east of George’s 18 acres. A year later, Vern died, and his
30 acres were acquired by Eugene. Kirk eventually inherited a
20-acre segment of Eugene’s 60 acres. That segment abuts the
disputed 18-acre parcel originally given to George, and most
recently acquired by Sila. It is the boundary between these two
properties that is currently in dispute.

In 1962, George and Eugene set about establishing the shared
boundary of their properties. Eugene’s son and Kirk’s brother,
Elliotte Saunders, was a teenager at the time. He assisted in
measuring the boundary and helped Eugene farm the land east
of the 18-acre parcel until Eugene’s death in 1989. Elliotte testi-
fied that their purpose in measuring and marking the boundary
was “[t]o split the farm up to get a boundary line so [George]
knew what he owned and what my dad owned.”

George’s 18 acres were legally described as: “The West
Thirty-Six (36) rods of the North Half of the Northwest
Quarter (N 1/2 NW 1/4) of Section Thirteen (13), Township
Twenty-Nine (29) North, Range Seven (7) East of the Sixth
Principal Meridian, Dakota County, Nebraska.” George and
Eugene decided not to hire a professional surveyor to mark the

boundary. There was a barbed wire fence along the north and
south borders of the properties, and George and Eugene mis-
takenly believed that the middle of the county road represented
a section line marking the west boundary of George’s 18 acres.
Thus, George and Eugene, with Elliotte’s assistance, took a
100-foot tape measure and some flags and measured 594 feet
(36 rods) east from the middle of the county road. Elliotte tes-
tified that they crimped a penny over the barbed wire and tied
red flags on the fence at the 594-foot line of both the north and
the south ends of the properties.

After this, George’s crops were farmed on the west side
of the boundary and were planted in a north-south direction.
Eugene planted his crops on the east side of the boundary in
an east-west direction. An aerial photograph from 1966 shows
a clear demarcation between the two parcels that appears to
be parallel to the county road from which the boundary had
been measured.

Elliotte testified that over time, the red flags wore away.
Along the north barbed wire fence, a row of trees grew up.
Eventually, a tree grew into the barbed wire fence where the
penny was crimped. The fence and the penny remained visible,
however, embedded in a knot in the tree. The trees were later
cut down, but the stumps remained, including the stump con-
taining a piece of the barbed wire with a crimped penny around
it. It is unclear when exactly the tree grew into the fence or
when it was cut down, but, in any event, there is no evidence
that the basic location of the crimped penny changed.

In 1965, Kirk moved into a mobile home placed on the south-
east corner of Eugene’s 60 acres. As part of the improvements
around the home, they removed the barbed wire fence on the
south end of the property. However, Kirk testified that before
removing the fence, they placed a water well “right next to the
property line” that was designated by the crimped penny in the
south fence. Elliotte similarly testified that Kirk and George
discussed the placement of the well and agreed to set it “kind of
on the line” between the two properties. Although Kirk sought
George’s approval of the placement, there is no indication that
Kirk asked George’s permission to place the well on George’s
property. Rather, it appears that the discussion was to ensure

812 a

that the well was placed on Eugene’s property. Elliotte testified
that after. the removal of the fence in 1965, the well was under-
stood by George and Eugene to be the south visual marker for
the boundary between their properties.

Elliotte testified that George and Eugene farmed their respec-
tive lands in accordance with the well on the south end and the
crimped penny on the north end for 21 years. When George
died in 1986, his 18 acres passed to his wife, Anna Saunders,
who put the land into a trust. Eugene and Elliotte continued to
farm Eugene’s 60-acre parcel, and they also farmed Anna’s land
for the trust, but they maintained the crop boundary line accord-
ing to the well/stump boundary.

When Eugene died in 1989, Elliotte continued to farm Anna’s
land and the 20 abutting acres inherited at this time by Kirk. At
this time, Elliotte decided, for the sake of efficiency, to farm
Kirk’s 20 acres and Anna’s 18 acres together without plant-
ing the crops in differing directions. Elliotte stated that he still
considered the well and the tree stump as boundary markers.
The evidence was inconclusive as to whether Anna or her
trustee specifically recognized the well/stump boundary mark-
ers. Elliotte gave Anna’s trust her share of the profits from the
crops and divided the proceeds from the 20 acres between him-
self and Kirk.

Sila purchased the 18 acres from Anna’s trust in 2001. He
did not notice any demarcation between Anna’s and Kirk’s
parcels at that time. Neither did he have a survey of the prop-
erty conducted prior to the purchase to mark the boundary in
accordance with the legal description. Sila testified that the real
estate agent referred to the property line’s being near a “high
line pole” on the east end of the field in reference to the divi-
sion of the properties. The location of this pole is not reflected
in the record. .

In 2005, Sila employed Fred Franklin, a licensed land sur-
veyor, to survey and create a plat of his land. Franklin discov-
ered that the centerline of the county road along the west side
of Sila’s property did not, in fact, as George and Eugene had
believed, correspond to the section line, Franklin explained that
while the county tries to build its roads to correlate to the sec-
tion lines, this was not always possible, and that, in any event,

the centerline of roads can shift slightly over the years. Franklin
did not notice either a stump or a well as visual markers of a
boundary line. Franklin’s survey demonstrates -that the platted
boundary of Sila’s property lies east of the boundary claimed
by Kirk.

Douglas Mordhorst, a registered land surveyor, was then hired
by Kirk to survey the 18 acres in accordance with the stump
and the well as boundary markers. With Elliotte’s assistance,
Mordhorst was able to pinpoint the location of these markers.
Elliotte testified that since the dispute with Sila began, someone
had covered the well with dirt such that it was no longer visible.
Also, someone had dug up the stump and thrown it some distance
away from its original location. Elliotte was able to retrieve the
stump itself as evidence. He was able to find the stump’s prior
location by excavating its remainder from underground in the
midst of a row of above-ground stumps along the north border
of the properties. Because Elliotte was familiar with the location
of the well, they were also easily able to excavate it.

Mordhorst’s survey used the stump as the northeast corner
and used the west edge of the well to reference the: southeast
comer, such that the entirety of the well was within Kirk’s
property. The survey also set forth the boundary of the property
in accordance with its legal description, measuring from the
actual section line on the west side. Mordhorst’s and Franklin’s
surveys agree as to the boundary that correlates to the legal
description of the property.

Mordhorst’s survey illustrates the disputed area as a trapezoid
that is narrower on the south end, encroaching approximately 5
fewer feet into the legally described 18 acres on the south end
than on the north. The boundary Elliotte testified was recog-
nized by George and Eugene thus did not run exactly parallel to
the west road. Mordhorst testified that the printed exhibit repre-
senting the survey was not completely proportionate. Although
the survey was to scale in the east-west direction, it was com-
pressed in the north-south direction to fit onto a legal-sized
sheet of paper. Mordhorst’s survey established that there was a
total of .264 of an acre in issue between the parties.

The district court ruled in favor of Sila, finding that Sila
was the owner of the property in accordance with the boundary

814 Le

described in the original plat. In its findings of fact, the court
noted that while the aerial photograph showed the boundary as
being parallel to the road, the exhibit representing Mordhorst’s
survey did not show a parallel line, and that thus, “it is not pos-
sible that the tract could be as Elliotte testified”

Furthermore, the court opined that as a matter of law, mutual
acquiescence can only determine a boundary that is unknown.
Since the true location of the boundary was set forth by
the property’s legal description and was readily ascertainable
through conventional surveying techniques, the court concluded
it was “known.” Moreover, the court stated that Elliotte’s mere
opinion that the stump and well were a “demarcation of owner-
ship” was insufficient to prove by a “preponderance of credible,
competent evidence” that those markers were not simply con-
sidered by George and Eugene as a “temporary agreement” or
“approximation” of the boundary. The court also rejected Kirk’s
adverse possession claim. Kirk appeals.

ASSIGNMENTS OF ERROR
Kirk assigns, consolidated, that the district court erred in
(1) determining that he had not established title to the disputed
tract under the theory of mutual recognition and acquiescence,
(2) holding that the filial relationship rule applies to his mutual
recognition and acquiescence defense, and (3) failing to find that
the stump and the well established the boundary line.

STANDARD OF REVIEW
Actions brought under § 34-301 are in equity.! As such, we
review the record de novo and reach an independent conclusion
without reference to the conclusion reached by the trial court;
except, however, that where credible evidence is in conflict, we
give weight to the fact that the trial court saw the witnesses and
observed their demeanor while testifying.”

ANALYSIS
Hl Under the doctrine of mutual recognition and acquies-
cence, while a boundary may be fixed in accordance with a

| Spilinek v. Spilinek, 215 Neb. 35, 337 N.W.2d 122 (1983).
2 Id.

survey, when a different boundary is shown to have existed
between the parties for the 10-year statutory period, it is that
boundary line which is determinative and not that of the original
survey. We have explained: “‘The rule long established in this
jurisdiction is that where a boundary, supposed to be the true
line established by the government survey, is acquiesced in by
the adjoining owners for more than ten years, it is conclusive
of the location.’ ”**

The district court, in concluding that the well/stump bound-
ary was not established by mutual acquiescence, relied on
Hakanson v. Manders* for the proposition that the doctrine is
simply unavailable when a deed to the disputed land sets forth
clearly a known and certain metes and bounds description. This
has never been the law. In Hakanson, we quoted the following
statement from American Jurisprudence:

“The cases approving the doctrine of acquiescence gener-
ally do not differentiate between cases where the boundary
was uncertain or in doubt at the time it was first acquiesced
in and cases where it was known and certain. However, in
the second case, only adverse possession can avail the per-
son claiming under the boundary so recognized.”
But, in Lynch v. Egan,’ we rejected the landowner’s argu-
ment that the boundary could not have been established by
mutual recognition and acquiescence because the true line could
have been ascertained by employing a county surveyor, stating:
“[W]e do not understand the rule to be that in order that an
agreement of that kind should be binding, the true line should
be absolutely unascertainable.”* As explained by the California

3 See Kraft v. Mettenbrink, 5 Neb. App. 344, 559 N.W.2d 503 (1997). See,
also, Matzke v. Hackbart, 224 Neb. 535, 399 N.W.2d 786 (1987); Converse
vy. Kenyon, 178 Neb. 151, 132 N.W.2d 334 (1965); Romine v. West, 134 Neb.
274, 278 N.W. 490 (1938).

* Hausner v. Melia, 212 Neb. 764, 772-73, 326 N.W.2d 31, 37 (1982) (empha-
sis omitted).

5 Hakanson v. Manders, 158 Neb. 392, 63 N.W.2d 436 (1954).

© Id. at 396, 63 N.W.2d at 439, quoting 8 Am. Jur. Boundaries § 72 (1937).

7 Lynch v. Egan, 67 Neb. 541, 93 N.W. 775 (1903).

8 Td. at 546, 93 N.W. at 77.

816 be

Supreme Court in Price v. De Reyes,? in fact, “{i]t is only where
the true location is subsequently ascertained that actions of this
kind arise.” Thus, in other mutual recognition and acquiescence
cases, although not directly addressing this issue, we have
affirmed a boundary by mutual recognition and acquiescence
even though an ascertainable metes and bounds description was
apparently described by deed.!°

Hi in Lynch, we explained that what was important was that
the true line was actually unknown and uncertain to the parties
acquiescing in the boundary. The parties were free to forgo the
expense and trouble of having a survey conducted and to agree
upon a division line. As stated by another court, “the fact that
an accurate survey is possible is not conclusive of the question
whether a doubt exists as to the location of a boundary." It is
the uncertainty in the minds of the landowners of the line on the
ground that is relevant to the ability to acquiesce to a boundary,
not the uncertainty in the written description of the deed.” That
the true boundary is “knowable” because the deed contains a
metes and bounds description that a registered surveyor could
have properly marked on the land—but did not—does not
preclude the property owners from acquiescing in a boundary
they believe corresponds with the deed’s description.”

The court alternatively found that Kirk had failed to prove
that the well/stump line was anything other than “an approxima-
tion of the line . . . on a temporary basis.” We disagree. In our
de novo review of the evidence, it is apparent that George and
Eugene understood the boundary they had marked to be the per-
manent, actual boundary between the properties. The boundary
was set after being carefully measured and marked. The fact that

° Price v. De Reyes, 161 Cal. 484, 489, 119 P. 893, 895 (1911).

10 See, Hausner v. Melia, supra note 4; Romine v. West, supra note 3.

" Kirkegaard v. McLain, 199 Cal. App. 2d 484, 491, 18 Cal. Rptr. 641, 645
(1962).

Norwood y. Stevens, 104 Idaho 44, 655 P.2d 938 (Idaho App. 1982).

© See, Lynch v. Egan, supra note 7; Piotrowski v. Parks, 39 Wash. App. 37,
691 P.2d 591 (1984); Sanlando Springs Animal Hosp. v. Douglass, 455 So.
2d 596 (Fla. App. 1984); Wampler v. Sherwood, 281 Or. 261, 574 P.2d 319
(1978); Nunley v. Walker, 13 Utah 2d 105, 369 P.2d 117 (1962).

there may have been error in the measurement, or even further
error in the placement of the well, does not make the boundary
established by the markers and recognized for 21 years thereaf-
ter a “temporary agreement” or “approximation.”

The evidence is that the brothers, George and Eugene, farmed
the land in opposite directions to keep their respective owner-
ship clear. They each kept the profits from their respective
crops. There is nothing in the record from which we could infer
that George and Eugene simply did not care whether one of
them was profiting off the other’s land. Nor is there evidence
that the boundary markers were not mutually recognized as the
real boundary between the properties. Elliotte specifically testi-
fied that Eugene, his father, and George, his uncle, meant “[t]o
split the farm up to get a boundary line so [George] knew what
he owned and what my dad owned.”

Hl That one of the crimped pennies was replaced by a
well that might not have exactly corresponded to the initial
measurement is of little consequence, because the well was
actually acquiesced to as the south boundary marker for the
statutory period. The fence on the south side with the crimped
penny was there only for 3 years, until 1965. Nothing in
Elliotte’s testimony indicates that from 1965 to 1989, the crop
line dividing the two farms ever changed. And Elliotte was inti-
mately aware of this boundary because he farmed the land with
Eugene during this period. That a boundary line is, in fact, an
approximation of the real boundary, does not preclude a finding
of mutual recognition and acquiescence, so long as the acqui-
escing parties recognized this approximation as their actual
boundary. Insofar as there appears to be a crop line parallel to
the road in the 1966 aerial photograph, we do not, as the district
court did, find this to be contradictory to Kirk’s claim. We have
no reason to believe that a 5-foot variance from the parallel, in
the boundary of an 18-acre property, would be readily discern-
ible in an aerial photograph that was obviously taken from a
great distance.

Hf Sila asserts that regardless of the other evidence, the filial
relationship rule must defeat Kirk’s claim. The filial relationship
tule is recognized in adverse possession claims and establishes .
a rebuttable presumption that the use of the land was permissive

818 as

when the occupier of the land is a relative of the true owner.'*
This is relevant to claims of adverse possession because permis-
sive use is inconsistent with the necessary element of hostility:
that the true owner had actual or constructive notice that his or
her title was in danger.'> But, as noted recently by the Nebraska
Court of Appeals in Campagna v. Higday,'* the filial relation-
ship rule has never been applied to a case involving a claim
of mutual recognition and acquiescence. And the doctrine of
mutual recognition and acquiescence does not rely on hostile
possession—to the contrary, it depends on the landowners’
agreement as to the boundary between their properties. We con-
clude that the filial relationship rule has no bearing on a mutual
recognition and acquiescence analysis.

Finally, Sila argues that the evidence of the mutual recogni-
tion and acquiescence is insufficient because Kirk only pre-
sented his own testimony and that of his brother, Elliotte, who,
Sila asserts, is biased in Kirk’s favor. Sila points out that there
was no testimony from neighbors or other witnesses to confirm
Elliotte’s and Kirk’s testimony.

Hi In order for mutual recognition and acquiescence to oper-
ate, there must be an assent, by words, conduct, or silence, in
a line as the boundary.’” Elliotte’s and Kirk’s testimony estab-
lished such conduct by a preponderance of the evidence. We
will not discredit the testimony of Elliotte merely because he
is Kirk’s brother, just as we do not discredit Kirk’s testimony
merely because he is a party to the action. And the conduct of
the various landowners between 1962 and 1989, established by
physical evidence, substantiates Elliotte’s and Kirk’s testimony.
It was Sila’s burden to bring forth conflicting testimony if he
thought it existed. As the record is presented to us, we find little
dispute that George and Eugene in fact mutually recognized and
acquiesced to the boundary represented in Mordhorst’s survey,
and we so find. Having found that the boundary was established

4 See, e.g., Petsch v. Widger, 214 Neb. 390, 335 N.W.2d 254 (1983).
'S Wanha v. Long, 255 Neb. 849, 587 N.W.2d 531 (1998).

16 Campagna v. Higday, 14 Neb. App. 749, 714 N.W.2d 770 (2006).
"” See Spilinek v. Spilinek, supra note 1.

by mutual recognition and acquiescence, we need not address
Kirk’s alternative theory that the boundary was established by
adverse possession.

CONCLUSION
For the foregoing reasons, we reverse the judgment of the
district court, and remand the cause with directions to enter
judgment in favor of Kirk and to set the boundary between the
properties in accordance with the stump and well markers as
represented in the Mordhorst survey.
REVERSED AND REMANDED WITH DIRECTIONS.

AARON J. STENGER, APPELLEE, V. DEPARTMENT OF Motor VEHICLES
OF THE STATE OF NEBRASKA AND BEVERLY NETH, DIRECTOR
OF THE DEPARTMENT OF Moror VEHICLES OF THE
Stave OF NEBRASKA, APPELLANTS.
743 N.W.2d 758

Filed January 11, 2008. No. S-06-1176.

820 Le

Jon Bruning, Attorney General, Edward G. Vierk, and Milissa
Johnson-Wiles for appellants.

William D. Kurtenbach, of Kurtenbach Law Office, for
appellee.

Heavican, C.J., Wricut, CoNnNoLty, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

Wricut, J.
NATURE OF CASE

The Department of Motor Vehicles and its director, Beverly
Neth (collectively the Department), appeal the judgment of
the district court for Platte County which concluded that “the
ALR [administrative license revocation] statutory scheme for
enhancement” denied Aaron J. Stenger due process of law and
that “the Director accordingly erred in enhancing the period of
Stenger’s revocation from 90 days to 1 year.”

SCOPE OF REVIEW
Hl Whether a statute is constitutional is a question of law;
accordingly, the Nebraska Supreme Court is obligated to reach
a conclusion independent of the decision reached by the court
below. Chase v. Neth, 269 Neb. 882, 697 N.W.2d 675 (2005).

FACTS

On April 23, 2006, an officer of the Columbus Police
Department arrested Stenger for operating a vehicle in viola-
tion of Neb. Rev. Stat. § 60-6,196 (Reissue 2004). The chemi-
cal test of Stenger’s blood revealed a blood alcohol content of
.125. After his arrest, Stenger was given a “NOTICE/SWORN
REPORT/TEMPORARY LICENSE” (temporary license), which
was valid for 30 days. The back of the temporary license stated:

“ACCORDINGLY, NOTICE IS HEREBY GIVEN THAT
YOUR OPERATOR’S LICENSE AND/OR OPERATING
PRIVILEGE WILL BE REVOKED IN THIRTY DAYS
FOR A PERIOD OF: (B) . . . (3) One year, if your test results
was [sic] 0.08 or more and you have ONE OR MORE PRIOR
revocations within a 12-year period . . . .” The temporary license
also provided that

[t]he Director will consider the following issues at
the hearing ....

(1) Whether the law enforcement officer had probable
cause to believe you were operating or in the actual
physical control of a motor vehicle in violation of
Section 60-6,196 or a city or village ordinance enacted
pursuant to Section 60-6,196;

(2) Whether you were operating or in actual physical
control of a motor vehicle with an alcohol concentration
of 0.08 or more.

On June 7, 2006, an administrative license revocation (ALR)
hearing was held. During the hearing, a certified copy of
Stenger’s driving abstract was offered into evidence by the
hearing officer. The abstract, a document maintained in the
Department’s computerized records, indicated that Stenger had
a prior license revocation. Stenger objected to the offering of the
abstract, claiming that the abstract was “not within the issues
for an ALR hearing” and that receipt of the abstract would
violate Stenger’s due process rights because he was unable to
challenge its validity. However, Stenger made no showing or
mention to the hearing officer of any actual inaccuracy appear-
ing on the abstract at that time or at any other time during the
proceedings. The hearing officer overruled the objection and
teceived the abstract into evidence.

On June 13, 2006, the director adopted the hearing officer’s
“Proposed Findings of Facts, Proposed Conclusions of Law, and
Recommended Order of Revocation.” In the order, the direc-
tor found that Stenger had a prior revocation and consequently
revoked Stenger’s driver’s license and operating privileges for
a period of 1 year, effective June 14. Stenger appealed the
director’s decision to the Platte County District Court pursuant

822 —

to the Administrative Procedure Act, Neb. Rey. Stat. § 84-901 et
seq. (Reissue 1999 & Cum. Supp. 2004).

In his petition for judicial review, Stenger alleged that he was
deprived of due process of law because the Department, without
notice or opportunity to challenge or present evidence, expanded
the issues at the ALR hearing to include evidence pertaining to
a prior ALR revocation. The district court concluded that the
ALR statutory scheme for enhancement denied Stenger due
process. It therefore reduced Stenger’s revocation from 1 year
to 90 days. The court affirmed the director’s order of revocation
to that extent. Because the court determined Stenger was denied
due process of law with respect to the director’s enhance-
ment determination, the court modified the director’s order to
reflect that Stenger’s Nebraska driver’s license and/or operating
privileges should be revoked for the statutory period without
enhancement, namely 90 days. The Department appealed.

Stenger has completed the 90-day revocation and now argues
that the case is moot. The Department argues that the case
is not moot because Stenger may be required to complete an
additional 270 days of revocation or, alternatively, the public
interest exception applies.

ASSIGNMENTS OF ERROR
The Department claims, consolidated and restated, that the
district court erred in finding that Stenger was denied due
process because he was not afforded notice and an opportunity
to be heard regarding any challenge to the accuracy of the
Department’s record establishing the prior ALR that was used
for enhancement of his revocation.

ANALYSIS

PRELIMINARY QUESTION OF MOOTNESS

Stenger claims this action is moot because he has already
completed the 90-day revocation. However, the Department
argues that 270 days of revocation are still in dispute or that the
public interest exception applies.

HBA case becomes moot when the issues initially presented
in litigation cease to exist or the litigants lack a legally cog-
nizable interest in the outcome of litigation. Rath v. City of

Sutton, 267 Neb. 265, 673 N.W.2d 869 (2004). For the reasons
set forth herein, we conclude that the action is not moot. The
district court held that the ALR statutory scheme for enhance-
ment denied Stenger due process of law. The constitutionality
of a statute is squarely before us.

We therefore proceed to address the constitutionality of the
ALR statutory scheme.

ConstirUTIONALITY OF ALR StaruToRY SCHEME
Neb. Rev. Stat. § 60-498.01 (Reissue 2004) provides for
revocation of the driver’s license of any person who has shown
himself or herself to be a health and safety hazard (1) by driving
with an excessive concentration of alcohol in his or her body or
(2) by driving while under the influence of alcohol. As a part"
of the ALR statutory scheme, any arrested person who desires
a hearing and has been served with a notice of revocation may
file a petition requesting a hearing. See § 60-498.01(5)(c).
Section 60-498.01(6) provides:
(c) At hearing the issues under dispute shall be
limited to:

(ii) If the chemical test discloses the presence of alcohol
in a concentration specified in section 60-6,196:

(A) Did the peace officer have probable cause to believe
the person was operating or in the actual physical control of
a motor vehicle in violation of section 60-6,196 ... and

(B) Was the person operating or in the actual physical
control of a motor vehicle while having an alcohol concen-
tration in violation of subsection (1) of section 60-6,196.

Neb. Rev. Stat. § 60-498.02 (Reissue 2004) provides that a
revocation is for 90 days unless the person’s driving abstract
shows one or more prior revocations in the previous 12 years.
The question presented is whether Stenger was afforded notice
and an opportunity to be heard regarding the issue of enhance-
ment pursuant to § 60-498.02.

HMB The burden of establishing the unconstitutionality of a
statute is on the one attacking its validity. Chase v. Neth, 269
Neb. 882, 697 N.W.2d 675 (2005). A statute is presumed to
be constitutional, and all reasonable doubts will be resolved

824 —

in favor of its constitutionality. Jd. The unconstitutionality of a
statute must be clearly demonstrated before a court can declare
the statute unconstitutional. Id.

In the case at bar, the district court concluded that the ALR
statutory scheme violated the procedural due process rights
of motorists who were subject to an enhanced penalty for a
prior revocation because the statutory scheme did not provide
notice that enhancement would be an issue at the ALR hearing.
We consider this a determination by the district court that the
ALR scheme was unconstitutional as applied to Stenger in the
enhancement of his license revocation.

HM Procedural due process limits the ability of the govern-
ment to deprive people of interests which constitute “liberty”
or “property” interests within the meaning of the Due Process
Clause and requires that parties deprived of such interests
be provided adequate notice and an opportunity to be heard.
Kenley y. Neth, 271 Neb. 402, 712 N.W.2d 251 (2006), modi-
fied 271 Neb. 683, 716 N.W.2d 44. Suspension of issued motor
vehicle operators’ licenses involves state action that adjudicates
important property interests of the licensees. Jd. Thus, the prop-
erty interest involved here is Stenger’s interest in retaining his
driving privileges.

HMM Before a state may deprive a motorist of his or her
driver’s license, that state must provide a forum for the determi-
nation of the question and a meaningful hearing appropriate to
the nature of the case. Id. In proceedings before an administra-
tive agency or tribunal, procedural due process requires notice,
identification of the accuser, factual basis for the accusation,
reasonable time and opportunity to present evidence concerning
the accusation, and a hearing before an impartial board. Id.

The basic question presented is whether Stenger received
notice that his prior ALR would be used for purposes of
enhancement and whether he was provided a reasonable oppor-
tunity to be heard on this issue.

The back of the temporary license provided to Stenger by the
police officer stated:

ACCORDINGLY, NOTICE IS HEREBY GIVEN
THAT YOUR OPERATOR’S LICENSE AND/OR

es 825
a

OPERATING PRIVILEGE WILL BE REVOKED IN
THIRTY DAYS FOR A PERIOD OF:

(B)(1) One year, if you refused the chemical test.

(2) Ninety days, if your test result was 0.08 or more
alcohol concentration and you do not have a prior revoca-
tion as described in paragraph (A) above.

(3) One year, if your test results was [sic] 0.08 or more
and you have ONE OR MORE PRIOR revocations within
a 12-year period as described in paragraph (A) above.

At the June 7, 2006, ALR hearing, the hearing officer offered
into evidence a copy of Stenger’s driving abstract. Exhibit 2,
which was entitled “COMPLETE ABSTRACT OF RECORD[,]
NEBRASKA DEPARTMENT OF MOTOR VEHICLES,”
included a certification that it was a true and correct abstract
of Stenger’s driving record as contained in the Department’s
files. The exhibit contained an entry showing that Stenger had
received a 90-day license revocation on November 10, 1998.

This abstract was maintained by the Department and was
open to Stenger’s inspection. See Neb. Rev. Stat. § 60-483
(Reissue 2004). At the ALR hearing, when exhibit 2 was offered
into evidence, Stenger objected, stating:

And I'll object to the abstract because the — it is not
within the issues for an ALR hearing as set forth in
Section 60-498.01 paragraph 6C(2). Further, we would
object to that exhibit because we don’t have an opportu-
nity to challenge the validity of the [Department of Motor
Vehicles] record, which purportedly shows a prior ALR
revocation and therefore denies us due process.
Stenger made no showing to the hearing officer that the abstract
contained any inaccuracy pertaining to his driving record or the
prior ALR revocation. The hearing officer overruled the objec-
tion and received exhibit 2 into evidence.

The foundation for Stenger’s attack of the ALR proceed-
ing is based upon his claim that “[wJhen the Administrative
License Revocation (ALR) statutory scheme (60-498.01 through
60-498.04, R.R.S., 1943 (Reissue 2004)), is examined, it is
readily apparent that [Stenger] did not have any opportunity
to challenge the actual existence of any prior ALR revocation

826 a

which may appear on his driving abstract.” See brief for appel-
lee at 5-6. He relies upon § 60-498.01(6)(c)(ii), which he
claims limits the issues under dispute at an ALR hearing to
the following:
(A) Did the peace officer have probable cause to believe
the person was operating or in the actual physical control of
a motor vehicle in violation of section 60-6,196 ... and
(B) Was the person operating or in the actual physical
control of a motor vehicle while having an alcohol concen-
tration in violation of subsection (1) of section 60-6,196.

Stenger further argues that pursuant to § 60-498.02(1), the
inquiry into whether a motorist had a prior ALR is not addressed
until after the ALR hearing has been held and the director has
made a finding that the motorist’s license should be revoked.
He asserts that under this statutory scheme where the issue
of whether Stenger had a prior ALR (which could enhance
the period of revocation from 90 days to 1 year) is only con-
sidered after the hearing is concluded, he has not been given
an opportunity to challenge the actual existence of the prior
ALR revocation.

Stenger relies on Hass v. Neth, 265 Neb. 321, 657 N.W.2d
11 (2003), and § 60-498.01 to support his contention that the
issues at the revocation hearing are limited to whether the officer
had probable cause to believe that the person was operating or
in control of the motor vehicle in violation of § 60-6,196 and
whether such person had a blood alcohol concentration in viola-
tion of § 60-6,196.

Our holding in Hass does not prevent the consideration of
a motorist’s driving abstract for enhancement purposes. Hass
dealt with the exclusion of Fourth Amendment search and
seizure issues. In Hass, we found that forcing the State to liti-
gate every element of a “driving under the influence” case at
an ALR hearing would seriously undermine the Legislature’s
goal-of providing an informal and prompt review of the deci-
sion to suspend a driver’s license. We did not discuss the issue
of enhancement or the admissibility of the motorist’s driving
abstract at the ALR hearing. The issue of enhancement under
§ 60-498.02(1) was not raised in Hass.

We do not interpret § 60-498.01 to exclude the receipt
of evidence for the purpose of enhancement at a revocation
hearing either. Although this section limits the issues under
dispute, it does not prohibit evidence pertinent to the ultimate
disposition of a case after those issues have been resolved.
Whether a person’s driver’s license has previously been revoked
is relevant evidence in determining the length of the revocation
under § 60-498.02(1)(b).

Therefore, we conclude that § 60-498.01 does not bar the
receipt of a driving abstract to enhance a revocation, and we
hold that a driving abstract may be admitted in an ALR proceed-
ing for that purpose. This holding does not prohibit a party from
contesting the accuracy of the abstract as to whether the party
did in fact have a prior revocation. Section 60-498.02(1)(b)
explicitly provides that if a driving abstract shows that the
driver had a revocation in the prior 12 years, the revocation
can be enhanced to 1 year. Therefore, the Legislature clearly
intended for the Department to consider such matter in the
ALR proceedings.

The driving abstract introduced at the administrative hearing
showed that Stenger had an ALR in the preceding 12 years. The
record also shows that the Department, in response to Stenger’s
motion for discovery, sent to Stenger his driving abstract, a
copy of the temporary license already provided to him, and the
results of his blood alcohol test. -

The record indicates that Stenger received a copy of his
abstract on May 23, 2006. The matter came on for hearing
before the hearing officer at 1:30 p.m. on June 7. After the
hearing officer offered Stenger’s driving abstract into evidence,
Stenger had the opportunity to argue or present evidence sup-
porting his claim as to the accuracy of the abstract.

After the hearing, the hearing officer prepared the following
recommended order:

Upon consideration of the Proposed Findings of Fact
and Proposed Conclusions of Law, it is recommended
that the Director of the Department of Motor Vehicles
find: the peace officers had probable cause to believe
Appellant [Stenger] was operating or in the actual physical
control of a motor vehicle in violation of Neb. Rev. Stat.

828 |

Sec. 60-6,196 or a city or village ordinance enacted pursu-
ant to such section; that the Appellant was operating or in
the actual physical control of a motor vehicle while hav-
ing an alcohol concentration in violation of subsection (1)
of section 60-6,196[;] and that the Appellant has a prior
Administrative License Revocation.
The director of the Department adopted the proposed find-
ings of fact and conclusions of law and ordered that Stenger’s
Nebraska operator’s license and operating privileges be revoked
for 1 year, effective June 14, 2006.

We conclude that the district court erred as a matter of law
in determining that Stenger was denied due process. The record
establishes that Stenger was not denied either notice or the
opportunity to challenge the accuracy of the driving abstract
used for enhancement of his revocation. Stenger was given
notice that enhancement would be at issue when he was given a
copy of his driving abstract, which was the basis of the enhance-
ment ordered by the director. The temporary license stated
that his operator’s license and/or operating privileges would
be revoked for 1 year if his test result was .08 or more and he
had one or more prior revocations within a 12-year period. The
abstract was then offered by the Department at the hearing. The
Department, by giving Stenger such notice and by furnishing
him with a copy of his driving abstract which showed a prior
revocation within a 12-year period, complied with the require-
ments of due process.

Section 60-498.02(1)(b) gives notice that if a driving abstract
shows that the driver had a previous revocation in the prior 12
years, then the revocation will be enhanced to 1 year. Given the
facts that the statute so provides and that Stenger was furnished
a copy of the abstract on May 23, 2006, which was offered
in evidence by the Department to enhance the revocation, we
conclude that the requirements of due process have been met.
Stenger had notice of the prior revocation and an opportunity to
contest the existence of that revocation at the hearing.

CONCLUSION
The district court erred in finding that Stenger was denied due
process of law with respect to the director’s ALR enhancement

829

determination. For the reasons stated herein, we reverse the
judgment of the district court and remand the cause to the court
with directions that it affirm the decision of the director to
revoke Stenger’s license for a period of 1 year. Stenger is to be
given credit for the 90 days of revocation already completed.
REVERSED AND REMANDED WITH DIRECTIONS.

Stave OF NEBRASKA EX REL. COUNSEL FOR DISCIPLINE
OF THE NEBRASKA SUPREME COURT, RELATOR,
v. EDOUARDO ZENDEJAS, RESPONDENT.
743 N.W.2d 765

Filed January 18, 2008. No. S-06-269.

Kent L. Frobish, Assistant Counsel for Discipline, for
relator.

Edouardo Zendejas, pro se.

830 a

Heavican, C.J., WricHt, ConNoLty, GERRARD, STEPHAN,
McCormack, and MiLcer-Lerman, JJ.

Per CurIAM.
INTRODUCTION

The office of the Counsel for Discipline of the Nebraska
Supreme Court filed formal charges against respondent,
Edouardo Zendejas. After a formal hearing, the referee con-
cluded that Zendejas had violated the Code of Professional
Responsibility and recommended a suspension of 30 days.
While we adopt the findings of the referee and conclude that
Zendejas violated the Code of Professional Responsibility and
the Nebraska Rules of Professional Conduct, we do not accept
the discipline recommended by the referee. We instead impose
discipline as indicated below.

FACTS

On August 3, 2006, formal charges were filed by the office
of the Counsel for Discipline against Zendejas. Those formal
charges set forth one count, that Zendejas had violated the fol-
lowing provisions of the Code of Professional Responsibility:
Canon 1, DR 1-102(A)(1) (violating disciplinary rule);
Canon 6, DR 6-101(A)(3) (neglecting legal matter); Canon 9,
DR 9-102(B)(3) (failing to render appropriate account records
to client); and DR 9-102(B)(4) (failing to promptly pay as
requested by client funds that client is entitled to receive). The
formal charges also alleged that Zendejas violated Neb. Ct. R. of
Prof. Cond. 8.4(d) (rev. 2005) (engaging in conduct prejudicial
to administration of justice), as well as his oath of office as an
attorney.’ In his answer, Zendejas disputed these allegations.

A referee’s hearing was held on March 5, 2007. Zendejas,
acting pro se, testified during the hearing. In addition, 18 exhib-
its were introduced into evidence. The referee’s findings were
announced in an April 5 report. The substance of those findings
is as follows:

Zendejas was admitted to the practice of law in the State of
Nebraska in 1991. He is authorized to practice law in several

1 Neb. Rev. Stat. § 7-104 (Reissue 1997).

tribal courts, including the Ponca Tribal Court and the Winnebago
Tribal Court. Zendejas has worked full time as general counsel
for the Omaha Tribe and teaches in the native studies department
at the University of Nebraska at Omaha.

In approximately November 2003, Zendejas was retained by
William Zuck to represent Zuck in a postconviction action in
district court. Zendejas had not previously handled a postconvic-
tion action. On November 21, Zuck paid Zendejas $9,000. On
December 3, 2004, Zuck paid Zendejas an additional $5,000.

Between November 2003 and October 2005, Zendejas failed
to file a postconviction action on behalf of Zuck, despite his
receipt of $14,000 from Zuck. On October 7, 2005, the Counsel
for Discipline received a letter from Zuck regarding Zendejas’
representation, in which Zuck sought, inter alia, a refund from
Zendejas of moneys paid. On October 11, the Counsel for
Discipline forwarded Zuck’s letter to Zendejas and requested
a written response. The Counsel for Discipline received no
response and, on November 18, sent another letter to Zendejas
requesting a response to Zuck’s letter. On November 29,
Zendejas notified the Counsel for Discipline that Zuck would
be reimbursed in the amount of $11,368 within 10 days and
that Zendejas would retain $2,632 in out-of-pocket expenses.
Zuck notified the Counsel for Discipline that he would accept
the $11,368 payment in settlement of his claim.

However, Zendejas did not reimburse Zuck within 10 days.
On January 5, 2006, Zendejas was directed to provide to the
Counsel for Discipline a copy of the refund check he had
sent to Zuck. No response was received, and on January 19,
the Counsel for Discipline again wrote Zendejas requesting a
response to the January 5 letter. On January 27, the Counsel for
Discipline converted Zuck’s original letter of complaint into a
grievance under Neb. Ct. R. of Discipline 9(E) (rev. 2001). The
Counsel for Discipline sent Zendejas a certified letter directing
Zendejas to answer, within 15 days, specific questions about his
representation of Zuck.

On January 31, 2006, Zendejas replied to the Counsel for
Discipline’s January 27 letter, but did not answer the specific
questions posed. Rather, Zendejas indicated that his failure
to pay was the result of delays in a real estate closing. On

832 Ee

February 21, Zendejas sent to the Counsel for Discipline a letter
and a copy of a check for $7,000 payable to Zuck. In the let-
ter, Zendejas indicated that the balance would be paid to Zuck
within 30 days. On that same day, the Counsel for Discipline
informed Zendejas, via letter, that it was still requesting a writ-
ten response to its January 27 letter.

Zuck eventually received the $7,000 check during the week
of March 12, 2006. No explanation was given in the record as
to the delay between the time the copy of the check was mailed
to the Counsel for Discipline and Zuck’s receipt of the check. At
oral argument, Zendejas claimed the delay was due to an issue
in which the particular envelope he used to send the check had
been rejected by the correctional facility holding Zuck.

On March 27, 2006, Zendejas replied to the Counsel for
Discipline’s January 27 letter requesting information regard-
ing his representation of Zuck. In that response, Zendejas
indicated he would pay Zuck the balance due of $4,368 “as
early as tomorrow, March 28, 2006.” However, the Counsel
for Discipline did not receive a copy of the final check, in the
amount of $4,340, until May 8. We note that the final amount
paid to Zuck was $28 less than the amount Zendejas indicated
would be paid to Zuck.

The referee issued his report on April 5, 2007. In that report,
the referee concluded Zendejas’ conduct was in violation of
DR 1-102(A)(1), DR 6-101(A)(3), DR 9-102(B)(3) and (4), rule
8.4(d), and his oath as an attorney. The referee recommended
that Zendejas be temporarily suspended from the practice of
law for a period of 30 days. No exceptions to this report were
filed. On April 18, the Counsel for Discipline filed a motion for
judgment on the pleadings, requesting that this court accept the
referee’s recommendation and enter judgment thereon.

ANALYSIS
As an initial matter, we note that some of Zendejas’ conduct
at issue occurred prior to September 1, 2005, and is governed by
the now-superseded Code of Professional Responsibility. Other
conduct at issue occurred on or after September 1, 2005, the
effective date of the Nebraska Rules of Professional Conduct,
and is therefore governed by those rules.

HA proceeding to discipline an attorney is a trial de novo
on the record.” To sustain a charge in a disciplinary proceeding
against an attorney, a charge must be supported by clear and
convincing evidence.’ Violation of a disciplinary rule concern-
ing the practice of law is a ground for discipline.*

HB As noted, neither party filed any written exceptions
to the referee’s report. Pursuant to Neb. Ct. R. of Discipline
10(L) (ev. 2005), the Counsel for Discipline filed a motion
for judgment on the pleadings. When no exceptions to the
referee’s findings of fact are filed by either party in an attor-
ney discipline proceeding, the Nebraska Supreme Court may,
in its discretion, consider the referee’s findings final and con-
clusive.> Based upon the undisputed findings of fact in the
referee’s report, which we consider to be final and conclusive,
we conclude the formal charges are supported by clear and
convincing evidence. We specifically conclude that Zendejas
has violated his oath of office as an attorney®; DR 1-102(A)(1),
DR 6-101(A)(3), and DR 9-102(B)(3) and (4) of the Code of
Professional Responsibility; and rule 8.4(d) of the Nebraska
Rules of Professional Conduct. Accordingly, we grant in part the
Counsel for Discipline’s motion for judgment on the pleadings.

I We have stated that the basic issues in a disciplinary
proceeding against an attorney are whether discipline should be
imposed and, if so, the type of discipline appropriate under the
circumstances.” Neb. Ct. R. of Discipline 4 (rev. 2004) provides
that the following may be considered as discipline for attorney
misconduct:

(A) Misconduct shall be grounds for:
(1) Disbarment by the Court; or
(2) Suspension by the Court; or

? State ex rel. Counsel for Dis. v. Petersen, 272 Neb. 975, 725 N.W.2d 845
(2007).

3d.

4 Id.

5 State ex rel. Counsel for Dis. v. Wickenkamp, 272 Neb. 889, 725 N.W.2d 811
(2007).

© $ 7-104.

7 State ex rel. Counsel for Dis. v. Petersen, supra note 2.

834 —

(3) Probation by the Court in lieu of or subsequent to
suspension, on such terms as the Court may designate; or

(4) Censure and reprimand by the Court; or

(5) Temporary suspension by the Court; or

(6) Private reprimand by the Committee on Inquiry or
Disciplinary Review Board.

(B) The Court may, in its discretion, impose one or more
of the disciplinary sanctions set forth above.®

HHH With respect to the imposition of attorney discipline
in an individual case, we have stated that each attorney dis-
cipline case must be evaluated individually in light of its
particular facts and circumstances.? For purposes of determin-
ing the proper discipline of an attorney, this court considers
the attorney’s acts both underlying the events of the case and
throughout the proceeding.’° The determination of an appro-
priate penalty to be imposed on an attorney in a disciplinary
proceeding also requires the consideration of any aggravating
or mitigating factors."

We have considered the applicable law as well as the
teferee’s report and recommendation, the findings of which
have been established by clear and convincing evidence. In
his report, the referee recommended that with respect to the
discipline to be imposed, Zendejas should be suspended from
the practice of law for 30 days. We disagree with the refer-
ee’s recommendation, and to the extent that the Counsel for
Discipline’s motion for judgment on the pleadings requests that
this court accept the referee’s recommendation with respect to
discipline, we overrule that motion.

The formal charges in this case allege that Zendejas failed
for nearly 2 years to file a postconviction action on Zuck’s
behalf. Such neglect is of serious concern to this court. In addi-
tion, we express concern with Zendejas’ failure to “promptly

8 See, also, disciplinary rule 10(N).

° State ex rel. Counsel for Dis. v. Wickenkamp, supra note 5.
10 State ex rel. Counsel for Dis. v. Petersen, supra note 2.

" Td,

pay” to Zuck funds that Zuck was entitled to receive.’? Finally,
Zendejas repeatedly ignored requests from the Counsel for
Discipline regarding his representation of Zuck. We have held
that an attorney’s failure to respond to inquiries and requests
for information from the office of the Counsel for Discipline is
considered to be a grave matter and a threat to the credibility of
attorney disciplinary proceedings.*

In his report, the referee did not note any aggravating factors
with regard to the imposition of discipline, but did note some
factors with respect to mitigation. In particular, the referee
noted that Zendejas’ “attitude at the hearing was one of regret
and remorse.” The referee also stated that Zendejas

has provided commendable service to his tribal commu-
nity and to the legal community. He is the juvenile court
“presenting officer” handling cases involving the Indian
Child Welfare Act. In that regard, he provides a valu-
able service to underrepresented children in the Indian
community. [Zendejas] has also served on the Ponca
Tribal Court Advisory Board and has provided services
in connection with the Ponca Tribe’s domestic violence
project. Respondent has assisted the Ponca Tribe in revis-
ing its election ordinance; assisted in the development
of family science nights at three reservation schools;
and provided training to the Iowa Department of Social
Services, Western Region, dealing with the Indian Child
Welfare Act.

Based upon our consideration of the record in this case, this
court finds that Zendejas should be and hereby is suspended
from the practice of law for a period of 120 days, effec-
tive immediately. Zendejas shall comply with Neb. Ct. R. of
Discipline 16 (rev. 2004) and, upon failure to do so, shall be
subject to a punishment for contempt of this court. At the end of

1 See State ex rel. Counsel for Dis. v. Rasmussen, 266 Neb. 100, 662 N.W.2d
556 (2003).

3 State ex rel. Counsel for Dis. v. Gilroy, 270 Neb. 339, 701 N.W.2d 837
(2005); State ex rel. Counsel for Dis. v. James, 267 Neb. 186, 673 N.W.2d
214 (2004); State ex rel. NSBA v. Mefferd, 258 Neb. 616, 604 N.W.2d
839 (2000).

836 be

the 120-day suspension period, Zendejas may apply to be rein-
stated to the practice of law, provided that Zendejas has demon-
strated his compliance with rule 16 and further provided that the
Counsel for Discipline has not notified this court that Zendejas
has violated any disciplinary rule during his suspension. We also
direct Zendejas to pay costs and expenses in accordance with
Neb. Rev. Stat. §§ 7-114 and 7-115 (Reissue 1997), disciplin-
ary rule 10(P), and Neb. Ct. R. of Discipline 23(B) (rev. 2001)
within 60 days after an order imposing costs and expenses, if
any, is entered by this court.

CONCLUSION

The motion of the Counsel for Discipline is sustained in
part and in part overruled. We adopt the referee’s findings of
fact and conclude that Zendejas has violated DR 1-102(A)(1),
DR 6-101(A)(3), and DR 9-102(B)(3) and (4) of the Code of
Professional Responsibility, and rule 8.4(d) of the Nebraska
Rules of Professional Conduct, as well as his oath of office as
an attorney.

It is the judgment of this court that Zendejas should be and
hereby is suspended from the practice of law for 120 days,
effective immediately.

JUDGMENT OF SUSPENSION.

Stare oF NEBRASKA, APPELLEE, V.
Darren L. Bossow, APPELLANT.
744 N.W.2d 43

Filed January 18, 2008. No. S-07-099.

Kate M. Jorgensen and, on brief, Andrew D. Weeks, of
Stratton & Kube, P.C., for appellant.

Jon Bruning, Attorney General, and George R. Love for
appellee.

Heavican, C.J., Wricut, CoNNOLLy, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

838 as

GERRARD, J.

Darren L. Bossow was convicted in a jury trial of posses-
sion of a controlled substance with intent to manufacture.!
Bossow appeals, primarily arguing that the district court failed
to properly instruct the jury with regard to the “personal use
exception” in Neb. Rey. Stat. § 28-401(14) (Cum. Supp. 2004).
Bossow also asserts that the court erred in denying his motion
to suppress evidence obtained from a search of his residence
and statements he made to law enforcement officials, and for
overruling his motion to reopen his case. For the reasons that
follow, we affirm the judgment of the district court.

STATEMENT OF FACTS

AcquirInG SEARCH WARRANT

On April 20, 2006, Sandra Tighe, an investigator with the
Nebraska State Patrol, prepared an affidavit for the purpose of
securing a search warrant to search “the person of Darren L.
Bossow,” his two vehicles, and his residence. The first section
in Tighe’s affidavit contained background information describ-
ing her training and experience with the Nebraska State Patrol.
This section also included general information relating to mari-
juana plants—specifically, that marijuana plants “can take up
to 22 weeks to mature,” “can grow in excess of eight (8) feet
tall[,] and can produce up to one (1) pound of illegal usable
plant material at the time of harvest.” Tighe’s affidavit further
explained that based on her “training and experience,” she knew
that “individuals involved in the manufacture or growing of
marijuana” may have in their possession, among other things,
“firearms and ammunition”; “large amounts of cash . . . from
the sales of the marijuana”; and “marijuana, packaging materi-
als, processing articles, [or] articles of horticulture . . . on their
person(s).”

In the second section of Tighe’s affidavit, she explained
that she had received a written report from another police offi-
cer, who had interviewed Ryan Lindstrom and B.J. Richtig.
Lindstrom had informed the officer that on March 18, 2006,
he and Richtig had been in Bossow’s residence and had seen

1 Neb. Rev. Stat. § 28-416(2)(b) (Cum. Supp. 2006).

“a four foot tall marijuana plant and approximately five smaller
three inch marijuana plants under a heat lamp in the living
room area by the entertainment center.” Lindstrom had stated
that “all of the plants were potted and well taken care of” and
that the larger marijuana plant was in the “‘skunk’” stage of
the growing process.

Tighe’s affidavit stated that on April 3, 2006, Lindstrom,
Richtig, and a third person had gone to Bossow’s residence,
but that Bossow had not been present. Lindstrom had, how-
ever, spoken to Bossow’s son, who had told Lindstrom that the
marijuana plants had been moved to Bossow’s bedroom closet.
Lindstrom had not seen the marijuana plants on April 3, but the
house had a “strong nasty odor of marijuana on the inside while
he was present.”

Tighe also averred that on April 3, 2006, the police officer
had interviewed Richtig and Colin Zuhlke. Richtig confirmed
to the officer that he had gone with Lindstrom to Bossow’s
residence on March 18 and had seen the marijuana plants under
a heat lamp in the living room. Richtig had described one of
the plants as being 4 feet tall. Zuhlke had told the officer that
he had been in Bossow’s residence on March 19 and seen “four
or five large marijuana plants in the living room between the
entertainment center and the wall.” Zuhlke had said that the
plants were approximately 4 feet tall, potted like houseplants,
and under lights. Tighe’s affidavit also noted that she had inter-
viewed Zuhlke on April 20, and he had confirmed seeing the
marijuana plants in Bossow’s residence on March 19.

Tighe’s affidavit further stated that Bossow had previously
been arrested and that on April 20, 2006, she had reviewed
Bossow’s Pierce County sheriff’s office medical screening
form, which had been filled out on April 2. In this form,
Bossow had volunteered information that he used marijuana
“occasionally and last used marijuana the previous day, April
1, 2006.” The remaining sections of Tighe’s affidavit pro-
vided, among other things, a description of Bossow’s physical
characteristics, the location of his residence, and a description
of Bossow’s vehicles.

Based on Tighe’s affidavit, the district court issued a warrant
to search “[t]he person of Darren Lee Bossow,” his vehicles,
and his residence.

DETAINING AND QUESTIONING Bossow

On April 21, 2006, in anticipation of executing the search
warrant on Bossow’s residence, the police officers who were to
be involved in the search held a briefing. While the officers were
conducting the briefing, an investigator, who was doing surveil-
lance on Bossow’s residence, called an officer at the briefing
and said that Bossow was leaving his residence. As a result,
Trooper Jason Sears was instructed to leave the briefing and
detain Bossow until the search warrant had been executed.

Sears saw Bossow’s car pull into the parking lot of a gas sta-
tion and watched Bossow leave his car and enter the gas station.
Sears testified that before following Bossow into the building,
he noticed that Bossow’s car had a cover around the outside of
the license plate, such that Sears could not determine whether
the car was currently registered. Sears entered the building and
informed Bossow that he wanted to talk to Bossow outside,
about his license plate. Once outside the building, Bossow
identified himself to Sears as “Darren Bossow.” But, when
Sears asked for a driver’s license or other proof of identity,
Bossow was unable to produce any. It was later determined that
Bossow’s driver’s license had been suspended.

Sears informed Bossow that he was going to take Bossow to
the sheriff’s office to “clear up the registration and his identity”
and because there was an investigator at the sheriff’s office
who wanted to speak to Bossow. On cross-examination, Sears
testified that the purposes for “[dJetaining” Bossow were first,
to detain him “for the search warrant” and, second, because
Bossow “didn’t have identification and [Sears] wanted to be
sure that was him for sure.”

Sears handcuffed Bossow, placed Bossow in his police car,
and began driving to the sheriff’s office. While driving from
the gas station to the sheriff’s office, Sears advised Bossow of
his Miranda rights.? When they arrived at the sheriff’s office,
Tighe approached Sears’ police car and, while Bossow was still
seated in the back of the car, gave Bossow a copy of the search

? See Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694
(1966).

| “
warrant. Tighe testified that after Bossow read the search war-
rant, Bossow admitted there was a marijuana plant in his house
in an upstairs bedroom closet.

Sears took Bossow into the sheriff’s office while Tighe and
another officer remained outside and searched Bossow’s car,
which had been brought to the sheriff’s office. The officers
did not find any drugs or drug paraphernalia in Bossow’s car.
Following the search of Bossow’s car, Tighe returned to the
sheriff’s office and again advised Bossow of his Miranda rights,
after which Bossow signed a waiver of rights form.

Tighe testified that after reading Bossow his Miranda rights,
she questioned him about the marijuana plants in his house.
Tighe testified that Bossow told her that he had taken approxi-
mately eight marijuana seeds from marijuana that he had pur-
chased and had planted those seeds in a ceramic pot. Bossow
further explained that he watered the plants and placed them
under a heat lamp to help them grow. On cross-examination,
Tighe stated that Bossow told her that he “occasionally” used
marijuana and that the marijuana plant was “an experiment”
and was for his personal use.

EXECUTION OF SEARCH WARRANT

On April 21, 2006, shortly after Bossow left his residence,
police officers executed the search warrant at Bossow’s resi-
dence. In Bossow’s upstairs bedroom closet, police found a
ceramic pot containing four marijuana plants, a heat lamp, and
a water spray bottle. The marijuana plants had grown to be 3 to
4 feet in height. In other areas of the house, police also found.
two triple-beam scales and a marijuana pipe.

A police officer who assisted in the search testified that the
marijuana plants had a “viable root system” and would “develop
and if nurtured or cultivated [would] produce a product.” The
officer further testified that these plants were not “mature
plants,” nor were they “robust for this stage” of development.
The officer stated that the plants were “about average” and that
he had seen worse.

Motion To Suppress
The State filed an information charging Bossow with pos-
session of a controlled substance with intent to manufacture,

842 Es

pursuant to § 28-416(2)(b). Bossow subsequently filed a motion
to suppress all of the evidence seized as a result of the search,
and all statements made to law enforcement on April 21, 2006.
In support of his motion to suppress, Bossow argued that the
search warrant was issued on the basis of an affidavit that failed
to establish probable cause because the affidavit contained stale
evidence. Bossow also argued that Sears did not have prob-
able cause to detain him on April 21 and that as a result, the
incriminating statements he made to law enforcement were
not admissible.

Following a hearing, the district court overruled Bossow’s
motion to suppress. As to the incriminating statements, the court
determined that “[iJt does not matter what the officer thought at
the time he detained [Bossow]. The fact is that at that time the
officer clearly had probable cause to arrest [Bossow] for operat-
ing a motor vehicle while his license was suspended.” The court
determined that Bossow’s statements were admissible, based
on this probable cause and the facts that Bossow was given
his Miranda rights while being taken to the sheriff’s office and
again after arriving at the sheriff’s office. The court further
determined that the evidence presented in the affidavit was not
stale and that as a result, there was probable cause supporting
the magistrate’s decision to issue the search warrant.

Jury INstRUCTION

A jury trial was conducted, and during trial, Bossow pre-
served the issues raised in his motion to suppress by making
timely objections to the offered evidence. After the State had
rested its case, Bossow moved for a directed verdict, citing
State v. Wyatt and the statutory exception in § 28-401(14) pro-
viding that “manufactur[ing] shall not include the preparation
or compounding of a controlled substance . . . for [one’s] own
use.” Bossow argued that the evidence at trial established that
he qualified for the “personal use exception” in § 28-401(14).
Specifically, Bossow pointed to Tighe’s testimony on cross-
examination that Bossow told her the marijuana plants were for

3 State v. Wyatt, 6 Neb. App. 586, 575 N.W.2d 411 (1998), overruled on other
grounds, State v. Davidson, 260 Neb. 417, 618 N.W.2d 418 (2000).

| i.
his own personal use. The court overruled Bossow’s motion for
a directed verdict, finding that the State had produced sufficient
evidence for the jury to deliberate on the charge of possession of
a controlled substance with the intent to manufacture. Bossow
rested his case.

The court then conducted a jury instruction conference.
During the conference, Bossow moved to reopen his case in
order to introduce a “lab report [that] has the weight of the
marijuana” and “to allow [Bossow] . . . to testify in lieu of the
court’s interpretation of State v. Wyatt, about what is required
as far as [Bossow’s] burden or proof” relating to the “personal
use exception.” The State responded that it had anticipated
that Bossow would testify, but when the defense rested, the
State released its rebuttal witnesses. The court denied Bossow’s
motion to reopen his case.

Bossow also objected to jury instruction No. 6, which set
forth the definitions of “manufacture” and “production” as
defined in § 28-401(14) and (21). Jury instruction No. 6 stated,
in relevant part:

“Manufacture” shall mean the production, preparation,
propagation, compounding, or processing of a controlled
substance, either directly or indirectly by extraction from
substances of natural origin, independently by means of
chemical synthesis, or by a combination of extraction and
chemical synthesis, and shall include any packaging . . .
of the substance or labeling or relabeling of its container,
except that manufacture shall not include the preparation
or compounding of a controlled substance by an individual
for his or her own use.

“Production” shall include the manufacture, planting,
cultivation, or harvesting of a controlled substance.

In addition to jury instruction No. 6, Bossow requested that
the jury be given an instruction stating that “[if] you find by
the greater weight of the evidence that the defendant prepared
of [sic] compounded marijuana for his own use, you must find
the defendant not guilty of possession of marijuana with intent
to manufacture.” The court overruled Bossow’s objection and
denied his requested instruction.

844 P|

The jury found Bossow guilty of possession of a controlled
substance with intent to manufacture, and the court convicted
Bossow pursuant to that verdict. Bossow appeals.

ASSIGNMENT OF ERROR

Bossow assigns that the district court erred in (1) refusing to
instruct the jury on his burden of proof for the statutory “per-
sonal use exception,” (2) overruling his motion for a directed
verdict, (3) overruling his motion to suppress the evidence
seized as a result of the search warrant, (4) overruling his
motion to suppress the statements he made to law enforcement,
and (5) overruling his motion to reopen his case.

STANDARD OF REVIEW

Hl Statutory interpretation presents a question of law, and an
appellate court resolves such issues independently of the lower
court’s conclusions.*

HUA trial court’s ruling on a motion to suppress, based on
a claim of insufficiency of the affidavit supporting issuance of
a search warrant, will be upheld unless its findings are clearly
erroneous. In making this determination, an appellate court
does not reweigh the evidence or resolve conflicts in the evi-
dence, but, rather, recognizes the trial court as the finder of fact
and considers it observed the witnesses.*

Hl In criminal prosecutions, the withdrawal of a rest in a trial
on the merits is within the discretion of the trial court.®

ANALYSIS

“PERSONAL Use ExcepTion” IN § 28-401(14) Dozs Nor
ApPLy TO “PRODUCTION” OF CONTROLLED SUBSTANCE
Bossow was convicted of possession of a controlled sub-
stance with the intent to manufacture—specifically, production
of marijuana. Section 28-401(14) defines “manufacture,” in rele-
vant part, as follows:

4 State v. McKinney, 273 Neb. 346, 730 N.W.2d 74 (2007).
5 State v. Ball, 271 Neb. 140, 710 N.W.2d 592 (2006).

§ State v. Thomas, 236 Neb. 84, 459 N.W.2d 204 (1990), disapproved on other
grounds, State v. Boslau, 258 Neb. 39, 601 N.W.2d 769 (1999).

Manufacture shall mean the production, preparation, prop-
agation, compounding, conversion, or processing of a con-
trolled substance, either directly or indirectly, by extraction
from substances of natural origin, independently by means
of chemical synthesis, or by a combination of extrac-
tion and chemical synthesis . . . . Manufacture shall not
include the preparation or compounding of a controlled
substance by an individual for his or her own use... .
[Emphasis supplied.)] :
“Production” is defined in § 28-401(21) as. including
“the manufacture, planting, cultivation, or harvesting of a
controlled substance.”

Bossow argues that the district court erred in not instruct-
ing the jury on the burden of proof Bossow was required to
meet in order for the statutory “personal use exception” to
apply. The State contends, and we agree, that the “personal
use exception” is not available to Bossow because Bossow was
charged with the “production” of marijuana, and pursuant to
the plain language of § 28-401(14), the “production” of mari-
juana is not included within the “personal use exception.” Our
analysis in this regard is guided by well-established principles
of statutory interpretation.

HM Although penal statutes are strictly construed, they
are given a sensible construction 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.” A court must
attempt to give effect to all parts of a statute, and if it can be
avoided, no word, clause, or sentence will be rejected as super-
fluous or meaningless.* If the language of a statute is clear, the
words of such statute are the end of any judicial inquiry regard-
ing its meaning.?

In defining the term “manufacture,” § 28-401(14) uses six
specific terms to describe what types of activity are proscribed.
But of those six terms, only two are excluded from the definition

7 State v. Aguilar, 268 Neb. 411, 683 N.W.2d 349 (2004).
8 State v. Wester, 269 Neb. 295, 691 N.W.2d 536 (2005).
9 State v. Warriner, 267 Neb. 424, 675 N.W.2d 112 (2004).

846 a

of “manufacture” through application of the “personal use
exception”—specifically, “preparation” and “compounding” of
a controlled substance. We find it significant that the Legislature
expressly limited the “personal use exception” to only two of
the specified types of “manufacture” and did not include “pro-
duction,” which is the only accurate description of the conduct
in which Bossow was alleged to have engaged.

The suggestion that growing marijuana is encompassed
within the terms “preparation” or “compounding” of a con-
trolled substance, as urged by Bossow, fails to recognize that
“planting, cultivat[ing], or harvesting” a controlled substance is
already clearly included within the definition of “production,” as
opposed to “preparation” or “compounding.” In short, the pro-
duction of marijuana is plainly prohibited. Had the Legislature
intended to include within the “personal use exception” all of
the activities included within the definition of “manufacture,”
it could have easily done so. The plain meaning of the “per-
sonal use exception” is to avoid finding an individual liable for
the felony of manufacturing a controlled substance when that
individual is already in possession of the controlled substance
and is simply making it ready for use, such as rolling marijuana
into cigarettes for smoking or combining it with other ingre-
dients for use.’° Given the plain language of the statute, it is
evident that the Legislature intended to limit the application of
the exception to only the “preparation” or “compounding” of a
controlled substance.

Bossow contends that the “personal-use exception” is appli-
cable to this case, citing Wyatt,"' a decision of the Nebraska
Court of Appeals. In Wyatt, police officers, pursuant to a search
warrant, searched David Wyatt’s residence and found, among
other things, a healthy marijuana plant growing in a bucket,
marijuana seeds, and paraphernalia. Wyatt was charged with
manufacturing a controlled substance, to wit, marijuana.

"© State v. Childers, 41 N.C. App. 729, 255 S.E.2d 654 (1979). See, also, Stone
v, State, 348 Atk, 661, 74 S,W.3d 591 (2002); State v. Underwood, 168 W.
Va. 52, 281 S.E.2d 491 (1981); People v Pearson, 157 Mich. App. 68, 403
N.W.2d 498 (1987); State v. Netzer, 579 S.W.2d 170 (Mo. App. 1979).

1"! State v. Wyatt, supra note 3.

At trial, Wyatt argued that his conduct fell within the statuto-
rily mandated “personal use exception” in § 28-401(14). Wyatt
claimed that the State did not prove beyond a reasonable doubt
that he violated the manufacture element of the statute because
there was no evidence that the marijuana found in his residence
was used for anything other than his own personal use. The
Court of Appeals concluded that the burden was on Wyatt to
prove that he fell within the “personal use exception,” but he
had failed to “offer any evidence to show that he was prepar-
ing or compounding the marijuana for his own personal use.”
Accordingly, Wyatt’s conviction for manufacturing marijuana
was affirmed.

Hi But contrary to Bossow’s argument, the issue in Wyatt
was simply whether the defendant was required to prove that
the marijuana was intended for his own “personal use.” Whether
the marijuana was being “produced,” as opposed to “prepared”
or “compounded,” was not at issue. In short, Wyatt does not
support Bossow’s argument, which is without merit. We hold
that the “personal use exception” in § 28-401(14) only applies
to “preparation” and “compounding,” but does not apply to the
“production” of a controlled substance, even if that production is
for personal use. Accordingly, because the “personal use excep-
tion” was not available to Bossow, the district court did not err
in refusing to instruct the jury as Bossow had requested.

Bossow’s second assignment of error is that the district court
erred in overruling his request for a directed verdict based on
his claim that he met the “personal use exception” to manufac-
turing. For the reasons stated, this assignment of error is also
without merit.

INFORMATION IN AFFIDAVIT WAS SUFFICIENTLY RELATED IN TIME TO
IssuANCE OF WARRANT TO JusTiIFy FINDING OF PROBABLE CAUSE
HMM Next, Bossow argues that the district court erred in
overruling his motion to suppress because the affidavit support-
ing the search warrant contained stale evidence and therefore
did not establish probable cause. A search warrant, to be valid,

2 See State v, Taylor, 221 Neb. 114, 375 N.W.2d 610 (1985).
8 State v, Wyatt, supra note 3, 6 Neb. App. at 597, 575 N.W.2d at 419.

848 Le

must be supported by an affidavit which establishes probable
cause. Probable cause sufficient to justify issuance of a search
warrant means a fair probability that contraband or evidence of
a crime will be found. Proof of probable cause justifying the
issuance of a search warrant generally must consist of facts
so closely related to the time of issuance of the warrant as to
justify a finding of probable cause at that time.'* In reviewing
the strength of an affidavit submitted as a basis for finding prob-
able cause to issue a search warrant, an appellate court applies
a “totality of the circumstances” test. The question is whether,
under the totality of the circumstances illustrated by the affi-
davit, the issuing magistrate had a substantial basis for finding
that the affidavit established probable cause.'5
In arguing that the information in the affidavit was stale,
Bossow points to the fact that pursuant to the affidavit, the last
time the marijuana plants in Bossow’s residence had actually
been seen was March 19, 2006, but the search warrant was
not issued until April 20, approximately 1 month later. We
explained in State v. Faber'® that
“‘Tt}here is no bright-line test for determining when infor-
mation is stale. Whether the averments in an affidavit are
sufficiently timely to establish probable cause depends on
the particular circumstances of the case, and the vitality of
probable cause cannot be quantified by simply counting
the number of days between the occurrence of the facts
supplied and the issuance of the affidavit. Time factors
must be examined in the context of a specific case and the
nature of the crime under investigation.’ . . .”
We further stated that, where the affidavit recites a mere isolated
violation, it would not be unreasonable to imply that prob-
able cause dwindles rather quickly with the passage of time.
However, where the affidavit properly recites facts indicating

™ State v, Idefonso, 262 Neb. 672, 634 N.W.2d 252 (2001).
'5 State v. Lammers, 267 Neb. 679, 676 N.W.2d 716 (2004).
16 State v. Faber, 264 Neb. 198, 213-14, 647 N.W.2d 67, 82 (2002).

activity of a protracted and continuous nature—a course of
conduct—the passage of time becomes less significant.!”

In the present case, notwithstanding the passage of time
between the information in the affidavit and the issuance of the
warrant, we find that the information in the affidavit was not too
stale to establish probable cause. The information in the affi-
davit establishes that three separate individuals saw marijuana
plants growing under a heat lamp in Bossow’s residence approxi-
mately 1 month before the issuance of the search warrant.

The delay between the evidence collected in the affidavit and
the issuance of the warrant is not significant when considered
in light of the nature of the crime with which Bossow was
charged. Growing marijuana is not an isolated activity where the
evidence supporting probable cause tends to disappear quickly.
Rather, growing marijuana is a protracted process, for which
there is a much greater probability that the evidence related
to the crime would remain on thé premises for some time. As
indicated in Tighe’s affidavit, marijuana plants can take up to 22
weeks to mature and can grow in excess of 8 feet tall.

But here, the largest marijuana plant described in the affidavit
was approximately 4 feet tall, and the other marijuana plants in
Bossow’s residence were much smaller than that. This infor-
mation indicates that the plants were, at that time, in the early
stages of development and unlikely to be harvested in the near
future or removed from Bossow’s residence. Given the particu-
lar circumstances of this case, we conclude that the passage of
time was not fatal to the court’s finding of probable cause.

HE A. magistrate’s determination of probable cause to
issue a search warrant should be paid great deference by
reviewing courts.!8 After-the-fact scrutiny by courts of the suf-
ficiency of an affidavit used to obtain a search warrant should
not take the form of a de novo review." In this case, the facts
justifying the issuance of the warrant were sufficiently related

7 Id.
'8 State v, Detweiler, 249 Neb. 485, 544 N.W.2d 83 (1996).
19 Id.

Pe

850 Ee

to the time of the issuance of the warrant to justify the district
court’s finding of probable cause.

Bossow’s Derention Was Nor UNREASONABLE
SEIZURE AND STATEMENTS He MADE To
Law ENForcEMENT ARE ADMISSIBLE

In a related argument, Bossow claims that the informa-
tion provided in the affidavit did not establish probable cause
to search his person and that therefore, his detention was
an unreasonable seizure, and the incriminating statements he
made to law enforcement after he was detained should be sup-
pressed. We disagree. When the evidence in the affidavit and
the circumstances surrounding Bossow’s detention are consid-
ered collectively, we find that Bossow’s detention was not an
unreasonable seizure. .

As discussed above, the information in the affidavit was suf-
ficient to establish probable cause to believe that Bossow was
engaged in criminal activity—specifically, the manufacture of
marijuana. And in particular, Tighe averred that individuals
involved in the manufacture of marijuana may have evidence
on their person, such as marijuana itself; large amounts of cash;
weapons; or materials used for the production, processing, or
packaging. Contrary to Bossow’s argument, the affidavit estab-
lished probable cause for the search of Bossow’s residence and
his person. .

Nor did police act unreasonably in taking Bossow into cus-
tody and transporting him to the police station. A valid war-
rant to search Bossow had already issued. When contacted by
police, Bossow was unable to produce identification and had
been seen by police unlawfully operating a vehicle without a
driver’s license.” When considered collectively, the search war-
rant, the need to positively identify Bossow in connection with
the search, and Bossow’s unlawful behavior are sufficient to
establish that seizing Bossow was reasonable.

® See Neb. Rev. Stat. §§ 60-489 (Cum. Supp. 2006) and 60-4,111 (Reissue
1995).

District Court Dw Nor Asus Its Discretion IN
OVERRULING Bossow’s REQUEST TO REOPEN His CAsE

Finally, Bossow claims that the district court erred in over-
ruling his motion to reopen his case and allow him to testify
regarding the burden of proof for the “personal use exception.”
The withdrawal of a rest in a trial on the merits is within the
discretion of the trial court.?' As already discussed, the “personal
use exception” was not available to Bossow. Nor did Bossow,
in support of his motion, claim that he intended to proffer evi-
dence that would change that conclusion. Instead, Bossow’s
motion was premised on his intent to proffer evidence relevant
only to the misunderstanding of the “personal use exception”
that the district court had correctly rejected. Thus, the district
court did not abuse its discretion in refusing Bossow’s request
to reopen his case to present evidence relating to this exception.
Bossow’s final assignment of error is without merit.

CONCLUSION
For the foregoing reasons, we find no merit to Bossow’s assign-
ments of error and affirm the judgment of the district court.
AFFIRMED.

21 State v. Thomas, supra note 6.

Stare or NEBRASKA EX REL. COUNSEL FOR DISCIPLINE
OF THE NEBRASKA SUPREME Court, RELATOR, V.
CAROL PINARD-CRONIN, RESPONDENT.

743 N.W.2d 649

Filed January 18, 2008. No. S-07-275.

Heavican, C.J., Wricut, CoNNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

PER CurIAM.

INTRODUCTION
On March 16, 2007, formal charges were filed by the office of
the Counsel for Discipline, relator, against Carol Pinard-Cronin,

852 —

respondent. The formal charges set forth two counts that
included allegations that respondent violated the following
provisions of the Code of Professional Responsibility: Canon
1, DR 1-102(A)(5) (engaging in conduct prejudicial to admin-
istration of justice); Canon 6, DR 6-101(A)(1) (handling matter
not competent to handle); DR 6-101(A)(2) (inadequately pre-
paring to handle legal matter); and DR 6-101(A)(3) (neglecting
legal matter); as well as the following provisions of Neb. Ct.
R. of Prof. Cond. (rev. 2005): rule 1.1 (providing competent
representation to client), rule 1.3 (acting with diligence in rep-
resenting client), rule 8.4(a) (violating disciplinary rules), and
tule 8.4(d) (engaging in conduct prejudicial to administration
of justice). The formal charges also alleged that respondent vio-
lated her oath of office as an attorney. Neb. Rev. Stat. § 7-104
(Reissue 1997). Respondent’s answer in effect disputed certain
of the allegations.

A referee was appointed who heard evidence. The referee
filed a report on September 24, 2007. With respect to the formal
charges, the referee concluded that respondent’s conduct had
violated DR 1-102(A)(5); DR 6-101(A)(1) through (3); rules
1.1, 1.3, and 8.4(a) and (d); and her oath as an attorney. The
referee recommended that respondent receive a public reprimand
and be placed on probation for a period of 18 months, during
which time respondent would engage and work with a practicing
attorney to monitor respondent’s practice.

On October 26, 2007, relator filed a motion for judgment on
the pleadings, requesting that this court accept the referee’s rec-
ommendation and enter judgment thereon. The motion was not
opposed. We grant relator’s motion, and we impose discipline
as indicated below.

FACTS

The referee’s hearing was held on September 17, 2007.
Respondent testified during the hearing. A total of 16 exhibits
were admitted into evidence.

The substance of the referee’s findings may be summarized
as follows: Respondent was admitted to the practice of law in
the State of Nebraska in 2001. She has Practiced i in Douglas
County, Nebraska.

With regard to count I of the formal charges, the referee
found that on April 11, 2003, respondent was retained by Rex
Moulton to represent him in a personal injury claim arising
from an automobile accident. Respondent’s practice essentially
focuses on the areas of juvenile and family law, and Moulton’s
case was the first and only personal injury matter respondent
has handled. On November 15, 2004, respondent filed suit on
behalf of Moulton against Christine Roe in the district court for
Douglas County. Respondent attempted to serve Roe but failed
to serve Roe within 6 months of the filing of the lawsuit. On
May 17, 2005, Moulton’s lawsuit against Roe was dismissed
by the district court, by which time the statute of limitations
on Moulton’s claim had run. The referee found that respondent
failed to respond to telephone calls from Moulton regarding the
status of his case, failed to inform him that his lawsuit had been
dismissed, and failed to protect Moulton’s claim from being lost
due to the running of the statute of limitations.

With regard to count I, the referee found that in April 2006,
Moulton filed a grievance with relator regarding respondent’s
handling of his personal injury case. A copy of Moulton’s
grievance letter was sent to respondent by relator with direc-
tions to respond in writing to the grievance. Respondent failed
to respond. Respondent failed to answer two subsequent letters
sent by relator directing respondent to respond to Moulton’s
grievance letter. After receiving a fourth request to respond
to Moulton’s grievance, respondent provided a response and
effectively acknowledged that she had filed suit on behalf of
Moulton and that the suit had been dismissed and was barred
by the statute of limitations. Moulton subsequently brought a
malpractice action against respondent, which respondent settled
by paying $2,500.

With regard to count II of the formal charges, the referee
found that on October 10, 2006, respondent’s trust account check
in the amount of $200 was presented to respondent’s bank. At
the time, respondent’s trust account balance was $110.22. The
bank honored the check and charged respondent a service fee,
causing respondent’s trust account to be overdrawn by a total
of $120.78. On October 11, respondent’s trust account checks
in the amounts of $82 and $34 were presented to respondent’s

854 Le

bank. The bank honored the checks and charged respondent
additional service fees, which caused respondent’s trust account
to be overdrawn by a total of $298.78. The bank sent relator
a notice of respondent’s trust account overdrafts. On October
24, relator wrote respondent and asked her to provide a written
explanation as to why her trust account did not have sufficient
funds to honor checks presented against it. Respondent was also
asked to provide copies of all supporting documentation.

With regard to count HI, the referee found that on October
26 and again on November 1, 2006, relator received additional
notices from respondent’s bank indicating that respondent’s
trust account was again overdrawn. On October 26 and again
on November 1, relator wrote respondent and asked her to
provide a written explanation as to why her trust account did
not have sufficient funds to honor checks presented against it.
Respondent was also asked to provide copies of all support-
ing documentation. On November 14, respondent sent relator
a letter by facsimile transmission stating that the overdrafts
were caused by two clients’ checks that had been subsequently
dishonored by their respective banks. Respondent stated in her
letter that copies of her supporting documentation would be
sent by regular mail. On December 28, after relator had not
received respondent’s supporting documentation, relator wrote
respondent and asked her to provide that documentation as well
as copies of certain checks and respondent’s trust account bank
statements for the period of August through November 2006.
Respondent did not provide relator the supporting documenta-
tion or the requested copies.

With regard to the October and November 2006 overdrafts
in respondent’s trust account, the referee found that such over-
drafts occurred when checks from two of respondent’s clients
were dishonored. The referee found that respondent’s overdraft
situation was “a fleeting, isolated, one time situation, which had
never occurred before, and has not occurred since.” The referee
further found that the overdraft situation was not the result of
either respondent’s misappropriation of client funds or willful
negligence. The referee found that no client was harmed by the
overdraft situation and that respondent had taken immediate
steps to rectify the overdraft situation.

ee 855
Le

Finally, the referee found that during the fall and winter of
2005 and 2006, respondent was encountering several “personal
challenges.” Two of respondent’s children had sustained serious
injuries in separate accidents, respondent’s mother had suf-
fered a stroke, and three members of respondent’s family had
died, one by suicide. The referee found that at the time of the
hearing, respondent was seeing a mental health counselor. The
referee also found that if respondent was allowed to continue
in the practice of law, she intended to limit her practice to the
areas of juvenile and family law.

The referee found that among the exhibits admitted into evi-
dence were 14 letters written by juvenile court judges, lawyers,
and others, all “express[ing] a high regard for [respondent’s]
skills as a juvenile law practitioner.” Also included in the exhib-
its was a letter from respondent’s mental health counselor to the
effect that respondent was making progress in her counseling
and setting realistic goals to avoid a reoccurrence of the situation
that had resulted in the present disciplinary proceedings.

Based upon the evidence offered during the hearing, the
referee found that certain of respondent’s actions constituted a
violation of the following provisions of the Code of Professional
Responsibility: DR 1-102(A)(5) and DR 6-101(A)(1) through
(3). The referee also found that certain of respondent’s actions
violated rules 1.1, 1.3, and 8.4(a) and (d) of the Nebraska
Rules of Professional Conduct. Finally, the referee found that
respondent’s actions constituted a violation of respondent’s oath
of office as an attorney. With respect to the discipline to be
imposed, the referee recommended that respondent receive a
public reprimand and be placed on probation for a period of 18
months, during which time, respondent would engage and work
with a practicing attorney to monitor respondent’s practice.

No exceptions were filed to the referee’s report. On October
26, 2007, relator filed a motion for judgment on the pleadings,
in which relator moved this court to enter judgment in conform-
ity with the referee’s report and recommendation.

ANALYSIS
We note that certain of respondent’s conduct at issue in this
case occurred prior to the September 1, 2005, effective date

856 a

of the Nebraska Rules of Professional Conduct and is, there-
fore, governed by the now-superseded Code of Professional
Responsibility. We also note that certain of respondent’s con-
duct at issue in this case occurred on or after September 1,
2005, and is therefore governed by the Nebraska Rules of
Professional Conduct. We are nonetheless guided by the prin-
ciples previously announced in our prior decisions under the
Code of Professional Responsibility. See State ex rel. Counsel
for Dis. v. Dortch, 273 Neb. 667, 731 N.W.2d 594 (2007).

A proceeding to discipline an attorney is a trial de novo
on the record. State ex rel. Counsel for Dis. v. Petersen, 272
Neb. 975, 725 N.W.2d 845 (2007). To sustain a charge in a
disciplinary proceeding against an attorney, a charge must be
supported by clear and convincing evidence. Id. Violation of a
disciplinary rule concerning the practice of law is a ground for
discipline. Id.

As noted above, neither party filed written exceptions to the
teferee’s report. Pursuant to Neb. Ct. R. of Discipline 10(L)
(rev. 2005), relator filed a motion for judgment on the plead-
ings. When no exceptions to the referee’s findings of fact are
filed by either party in an attorney discipline proceeding, the
Nebraska Supreme Court may, in its discretion, consider the
referee’s findings final and conclusive. State ex rel. Counsel
for Dis. v. Wickenkamp, 272 Neb. 889, 725 N.W.2d 811 (2007).
Based upon the undisputed findings of fact in the referee’s
report, which we consider to be final and conclusive, we con-
clude the formal charges are supported by clear and convinc-
ing evidence, and the motion for judgment on the pleadings
is granted. Specifically, based upon the foregoing evidence,
we conclude that by virtue of respondent’s conduct occurring
before September 1, 2005, respondent has violated the fol-
lowing provisions of the Code of Professional Responsibility:
DR 1-102(A)(5) and DR 6-101(A)(1) through (3). We also
conclude that by virtue of respondent’s conduct occurring on or
after September 1, 2005, respondent has violated the following
provisions of the Nebraska Rules of Professional Conduct: rules
1.1, 1.3, and 8.4(a) and (d). Finally, we conclude that by virtue
of respondent’s conduct, respondent has violated her oath of
office as an attorney, § 7-104.

We have stated that the basic issues in a disciplinary proceed-
ing against a lawyer are whether discipline should be imposed
and, if so, the type of discipline appropriate under the citcum-
stances. State ex rel. Counsel for Dis. v. Dortch, supra. Neb. Ct.
R. of Discipline 4 (rev. 2004) provides that the following may
be considered as discipline for attorney misconduct:

(A) Misconduct shall be grounds for:

(1) Disbarment by the Court; or

(2) Suspension by the Court; or

(3) Probation by the Court in lieu of or subsequent to
suspension, on such terms as the Court may designate; or

(4) Censure and reprimand by the Court; or

(5) Temporary suspension by the Court; or

(6) Private reprimand by the Committee on Inquiry or
Disciplinary Review Board.

(B) The Court may, in its discretion, impose one or more
of the disciplinary sanctions set forth above.

See, also, rule 10(N).

With respect to the imposition of attorney discipline in an
individual case, we have stated that each attorney discipline case
must be evaluated individually in light of its particular facts and
circumstances. State ex rel. Counsel for Dis. v. Wickenkamp,
supra. For purposes of determining the proper discipline of an
attorney, this court considers the attorney’s acts both underlying
the events of the case and throughout the proceeding. Id. The
determination of an appropriate penalty to be imposed on an
attorney in a disciplinary proceeding also requires the consider-
ation of any aggravating or mitigating factors. Id.

We have considered the referee’s report and recommenda-
tion, the findings of which have been established by clear and
convincing evidence, and the applicable law. Upon due consid-
eration of the record, the court finds that respondent should be
and hereby is publicly reprimanded. Further, the court finds that
respondent shall be on probation for a period of 18 months, dur-
ing which period respondent will:

(1) be monitored by an attorney approved by relator;

(2) provide the monitoring attorney, on a monthly basis,
with a list of all cases for which respondent is then currently
responsible, said list to include the following information for
each case:

858 Es

(a) the date the attorney/client relationship began;

(b) the type of case;

(c) the last date and type of work completed on the case;

(d) the next type of work and date to be completed on the
case; and

(e) any applicable statute of limitations and its date;

(3) meet on a monthly basis with the monitoring attorney to
discuss respondent’s pending cases; and

(4) work with the monitoring attorney to develop and imple-
ment appropriate office procedures to ensure that
client matters are handled in a timely manner.

If at any time the monitoring attorney believes respondent
has violated a disciplinary rule, or has failed to comply with
the terms of probation, the monitoring attorney shall report the
same to relator.

Relator shall advise this court within 30 days of the fil-
ing of this opinion as to the attorney approved by relator to
monitor respondent.

CONCLUSION
Relator’s motion for judgment on the pleadings is sustained.
We find by clear and convincing evidence that respondent vio-
lated DR 1-102(A)(5); DR 6-101(A)(1) through (3); rules 1.1,
1.3, and 8.4(a) and (d); as well as her oath of office as an attor-
ney. It is the judgment of this court'that respondent should be
and hereby is publicly reprimanded. It is the further judgment
of this court that respondent shall be on an 18-month period
of monitored probation, subject to the terms set forth above.
Respondent is directed to pay costs and expenses in accor-
dance with Neb. Rev. Stat. §§ 7-114 and 7-115 (Reissue 1997),
disciplinary rule 10(P), and Neb. Ct. R. of Discipline 23(B)
(rev. 2001) within 60 days after an order imposing costs and

expenses, if any, is entered by the court.
JUDGMENT OF PUBLIC REPRIMAND.

IN RE INTEREST OF WALTER W., A CHILD UNDER 18 YEARS OF AGE.
Stave OF NEBRASKA, APPELLEE, V.
Martina A., APPELLANT.
744 N.W.2d 55

Filed January 18, 2008. No. S-07-393.

360 Es

Marian G. Heaney, of Legal Aid of Nebraska, for appellant.
Regina T. Makaitis, Special Prosecutor, for appellee.

Sarah Helvey and Jennifer A. Carter for amicus curiae
Nebraska Appleseed Center for Law in the Public Interest.

Mark C. Tilden, of Native American Rights Fund, and Marian
G. Heaney, of Legal Aid of Nebraska, for amici curiae Yankton
Sioux Tribe of South Dakota et al.

Shannon Smith, of Indian Child Welfare Law Center, and
Padraic I. McCoy and Mandi L. Hill, of Faegre & Benson,
L.L.P., for amicus curiae Indian Child Welfare Law Center.

Heavican, C.J., Wricut, Connotty, GERRARD, STEPHAN,
McCormack, and Mitier-Lerman, JJ.

Connoxi-y, J.

Martina A. appeals the separate juvenile court’s order termi-
nating her parental rights to her son, Walter W. He is an Indian
child, so the Indian Child Welfare Act (ICWA) applies. The
juvenile court initially terminated Martina’s parental rights in
September 2005. The Nebraska Court of Appeals vacated the
termination order in July 2006 because the State had failed
to give the Yankton Sioux Tribe proper notice before the ter-
mination hearing. After retrial in January and February 2007,
the juvenile court again terminated Martina’s parental rights.
Martina appeals, arguing the State failed to meet its burden
under ICWA.

ICWA requires the State to prove that “active efforts have been
made to provide remedial services and rehabilitative programs
designed to prevent the breakup of the Indian family.”! The main
issues are whether the State (1) must prove the “active efforts”
element beyond a reasonable doubt or by clear and convincing
evidence and (2) met its burden in proving this element. We
affirm because we conclude the State met its burden of proving,
by clear and convincing evidence, that the Department of Health

1 25 U.S.C. § 1912(d) (2000); Neb. Rev. Stat. § 43-1505(4) (Reissue 2004).

and Human Services (the Department) made active efforts to
provide remedial services and rehabilitative programs.

I. PROCEDURAL BACKGROUND

Martina gave birth to Walter on January 2, 2003. The fol-
lowing day, the State filed a supplemental petition. It alleged
Martina placed him in a situation injurious to his health or
morals. The petition alleged she was unable to provide safe,
stable, and independent housing for herself and her child and
that her use of alcohol or controlled substances placed Walter
at risk for harm. At the time, Martina had five other children
who were under the juvenile court’s jurisdiction because of
Martina’s faults or habits. The juvenile court placed Walter in
the Department’s temporary custody. Evidence later showed
that Walter tested positive for amphetamine at birth.

In January 2003, Martina informed the court that she was an
enrolled member of the Yankton Sioux Tribe and that Walter’s
father was an enrolled member of the Omaha Tribe. Later that
month, after a continued detention hearing, the court ordered
that Walter would remain in the Department’s temporary cus-
tody. In May, the court found that Martina was an enrolled
member of the Yankton Sioux Tribe and that Walter was eligible
for enrollment. The court ordered that ICWA and its Nebraska
counterpart, the Nebraska Indian Child Welfare Act (NICWA),
would apply in all future proceedings. In November, the Yankton
Sioux Tribe filed a notice to intervene. According to the parties,
the court never heard or granted the tribe’s motion.

In April 2004, the court declared Walter a child within
the meaning of Neb. Rev. Stat. § 43-247(3)(a) (Cum. Supp.
2002). After a disposition and permanency planning hearing in
July, the court ordered that Martina (1) complete an inpatient
chemical dependency treatment program, (2) participate in out-
patient chemical dependency treatment until admitted for inpa-
tient treatment, (3) maintain safe and adequate housing and a
legal source of income, and (4) complete psychological and
psychiatric evaluations.

On December 9, 2004, the State moved for termination of
Martina’s parental rights. The court heard the motion in June
2005 and terminated Martina’s parental rights in September.

862 a

Martina appealed. The Court of Appeals determined the ter-
mination hearing was invalid because the State had failed to
give proper notice to the Yankton Sioux Tribe as required under
ICWA.? The court vacated the termination order and remanded
the cause to the juvenile court for further proceedings following
proper notice to the Yankton Sioux Tribe.

After receiving the mandate, the juvenile court ordered
another hearing on the motion to terminate parental rights.
The special prosecutor notified the Yankton Sioux and Omaha
Tribes. The court held the hearing on January 31 and February
1, 2007. The Yankton Sioux Tribe did not appear. The court
terminated Martina’s parental rights in March.

II. ASSIGNMENTS OF ERROR
Martina assigns, restated, that the juvenile court erred in
terminating her parental rights because the State failed to meet
its burden of proof. In her second assignment of error, Martina
asserts that the Court of Appeals’ dismissal in an unrelated case
precluded her from appealing the adjudication in this case.

Il. STANDARD OF REVIEW
Hl We review juvenile cases de novo on the record, and
we reach our conclusions independently ‘of the juvenile
court’s findings.*

IV. ANALYSIS

HEB To terminate parental rights, the State must prove by
clear and convincing evidence that one or more of the statutory
grounds listed in Neb. Rev. Stat. § 43-292 (Reissue 2004) have
been satisfied and that termination is in the child’s best inter-
ests.> NICWA, however, adds two additional elements the State
must prove before terminating parental rights in cases involv-
ing Indian children. First, § 43-1505(4) provides an “active
efforts” element:

? See In re Interest of Walter W., 14 Neb. App. 891, 719 N.W.2d 304 (2006).
3 Id.

4 See In re Interest of Destiny A. et al., ante p. 713, 742 N.W.2d 758 (2007).
5 See In re Interest of Xavier H., ante p. 331, 740 N.W2d 13 (2007).

Any party seeking to effect a foster care placement of, or
termination of parental rights to, an Indian child under
state law shall satisfy the court that active efforts have
been made to provide remedial services and rehabilitative
programs designed to prevent the breakup of the Indian
family and that these efforts have proved unsuccessful.
Section 43-1505(4) is identical to its federal counterpart, 25
U.S.C. 1912(d). Second, Nebraska’s § 43-1505(6) provides a
“serious emotional or physical damage” element:
No termination of parental rights may be ordered in such
proceeding in the absence of a determination, supported by
evidence beyond a reasonable doubt, including testimony
of qualified expert witnesses, that the continued custody of
the child by the parent or Indian custodian is likely to result
in serious emotional or physical damage to the child.
Section 43-1505(6) is identical to 25 U.S.C. § 1912(f).

1. Tue Stare Mer Irs Burven oF Provinc Active Errorts
Martina contends the State failed to prove that the Department
made active efforts as required under ICWA.

(a) The “Active Efforts” Element Must Be Proved
by Clear and Convincing Evidence

Before deciding whether the State met its burden in prov-
ing active efforts, we must first determine the standard of
proof for this element. The language in § 43-1505(4) does not
impose any particular standard of proof for the active efforts
element. Section 43-1505(6), however, expressly requires the
State to prove beyond a reasonable doubt that the child is
likely to suffer serious emotional or physical harm if the parent
retains custody.

Martina contends that the proper standard for the active efforts
element is proof beyond a reasonable doubt. The State urges us
not to adopt the “beyond a reasonable doubt” standard.

Martina directs our attention to In re Interest of Phoenix L.6
In that case, the mother argued that a Nebraska Juvenile Code

© In re Interest of Phoenix L., 270 Neb. 870, 708 N.W.2d 786 (2006), disap-
proved on other grounds, In re Interest of Destiny A. et al., supra note 4,

864 Ee

section violated equal protection. She argued that the stat-
ute only required clear and convincing evidence to terminate
parental rights in a case involving non-Indian children but that
§ 43-1505(6) of NICWA required proof beyond a reasonable
doubt. We concluded that “the lower standard of proof under
§ 43-279.01(3) for the termination of parental rights to non-
Indian children, as opposed to the higher standard of proof
under the NICWA, does not violate the equal protection rights
of parents of non-Indian children.”’ In discussing the “beyond
a reasonable doubt” standard, we cited only the “serious emo-
tional and physical damage” element under § 43-1505(6) for
terminating parental rights. And we did not mention the active
efforts element or its standard of proof; that issue was not
before the court. We decline to read In re Interest of Phoenix L.
as requiring proof beyond a reasonable doubt for all elements
of an ICWA case.

Other jurisdictions are split on what standard should apply.
For instance, the South Dakota Supreme Court assumed the
burden to prove the serious emotional and physical damage ele-
ment—beyond a reasonable doubt—would apply to prove the
active efforts element.* Other courts have declined to apply the
“beyond a reasonable doubt” standard to the active efforts ele-
ment. We join this latter group.

Hl Congress did not intend in 25 U.S.C. § 1912 to cre-
ate a wholesale substitution of state juvenile proceedings for
Indian children. Instead, in § 1912, Congress created additional
elements that must be satisfied for some actions but did not
require a uniform standard of proof for the separate elements.
As discussed, Congress imposed a “beyond a reasonable doubt”
standard for the “serious emotional or physical damage” ele-
ment in parental rights termination cases under § 1912(f).
Congress also imposed a “clear and convincing” standard of
proof for the “serious emotional or physical damage” element

7 Id. at 884, 708 N.W.2d at 797-98.
5 People in Interest of S.R., 323 N.W.2d 885 (S.D. 1982).

° See, e.g., Matter of Baby Boy Doe, 127 Idaho 452, 902 P.2d 477 (1995); In
re M.S., 624 N.W.2d 678 (N.D. 2001); In re Annette P., 589 A.2d 924 (Me.
1991).

in foster care placements under § 1912(e). The specified stan-
dards of proof in subsections § 1912(e) and (f) illustrate that if
Congress had intended to impose a heightened standard of proof
for the active efforts element in § 1912(d), it would have done
so. Because it did not impose a heightened standard of proof,
we decline to interpret § 1912(d)—and its Nebraska coun-
terpart, § 43-1505(4)—as requiring the State to prove active
efforts beyond a reasonable doubt. Instead, we conclude that
the element requires proof by clear and convincing evidence
in parental rights termination cases—the standard required for
terminating parental rights under Nebraska law.

(b) The State Produced Sufficient Evidence to Find
the Department Made Active Efforts

Martina contends the Department failed to make active efforts
to provide remedial services and rehabilitative programs. Section
43-1505(4) is imprecise. The section provides that a party seek-
ing to terminate parental rights to an Indian child “shall satisfy
the court that active efforts have been made to provide remedial
services and rehabilitative programs designed to prevent the
breakup of the Indian family.” This language sets out praise-
worthy but vague goals for the courts to enforce. It fails to give
us guidance in determining whether the Department’s efforts
were sufficient to meet ICWA’s mandates.

HE We do know, however, that the “active efforts” standard
requires more than the “reasonable efforts” standard that applies
in non-ICWA cases.'° And at least some efforts should be “cul-
turally relevant.”"! Even with these guidelines, there is no precise
formula for “active efforts.” Instead, the standard requires a
case-by-case analysis.’

Martina asserts that the Department’s efforts consisted largely
of “‘encouragement and referrals,’”!? which she argues did not
amount to active efforts.

1 See 390 Neb. Admin. Code, ch. 5, § 004.02D (1998).
" See id.

12 See Matter of Baby Boy Doe, supra note 9.

13 Brief for appellant at 27.

366 Es

We begin by noting that the Department was unable to contact
Martina from June 2003 until March 2004 because her where-
abouts were unknown. It would have been impossible for the
Department to provide services during that time.

After the Department regained contact with Martina, it tried
to provide remedial services and rehabilitative programs. For
instance, the case manager contacted inpatient chemical depen-
dency treatment programs to verify the types of programs
and program admittance requirements. The case manager gave
Martina information about the programs and encouraged her to
apply for programs she had not already considered. The case
manager faxed necessary records to the programs at Martina’s
request. The record reflects that Martina told the case manager
she was contacting one program weekly to gain admittance.
Yet, when the case manager contacted the program, he was told
Martina had not contacted the program in almost 2 months.

The case manager also encouraged Martina to attend an out-
patient chemical dependency treatment program and gave her a
packet of resources she could contact for outpatient treatment.
On at least four occasions, he provided Martina a list of several
community resources that could help with job skill develop-
ment. He also gave Martina packets of community resources to
obtain a psychiatric evaluation and referred her to a psychologist
for a psychological evaluation.

For housing, the case manager reviewed a list of homeless
shelters with Martina in August 2004 after she moved out of
an apartment she was sharing with a roommate. He provided a
telephone at the state office building so she could secure a bed
at a shelter. In September, he gave Martina a letter addressed to
the Omaha Housing Authority stating she was in need of hous-
ing to comply with her case plan. After Martina told him she
intended to apply for assistance through the Omaha Housing
Authority, he offered bus tickets for transportation to the Omaha
Housing Authority office. Martina stayed at the Siena/Francis
House shelter until October, when she was asked to leave the
shelter because she was intoxicated. The case manager again
reviewed a list of homeless shelters with Martina.

Besides these efforts, the Department provided Martina
vouchers for rent, clothing, an electric bill, and drug testing;

bus tickets for transportation to Alcoholics Anonymous and
Narcotics Anonymous appointments and to other services; and
visitation with Walter, transportation of Walter for visitation,
and foster care and medical care for Walter.

Martina points out some areas where the Department’s efforts
may have fallen short. First, Martina called a Department pro-
tection and safety administrator to testify at the second termi-
nation trial. When given a series of hypotheticals, this witness
provided testimony suggesting that, from a Department policy
standpoint, the case manager’s efforts in some areas may not
have constituted active efforts. Martina also points out that
the agency the Department hired to provide visitation services
missed or canceled multiple visits during a 5-month period in
2004. She also argues that she had trouble gaining admission to
inpatient treatment programs. So, she argues that the case man-
ager should have explored other services throughout Nebraska
and Iowa or that he should have returned to the court to seek
an amended case plan. And, she argues the Department should
have tried to place Walter with relatives and should have cre-
ated a written cultural plan for him that addressed his specific
heritage. Although the case manager did not create a written
cultural plan, he did discuss a cultural plan with the foster
mother. We acknowledge, however, that the Department could
have created a plan that better incorporated specific elements of
Walter’s heritage.

Although the Department could have taken more progressive
actions in some of its efforts, we are satisfied that considering
the entire record, the Department made active efforts to provide
remedial services and rehabilitative programs to prevent the
breakup of the Indian family. We conclude the State proved
by clear and convincing evidence that the Department made
active efforts.

2. Tae Stare Mer Is BurDEN IN Provinc WALTER WOULD
Lixety SuFFER HARM IF RETURNED TO MARTINA
As explained above, § 43-1505(6) requires a “determination,
supported by evidence beyond a reasonable doubt, including
testimony of qualified expert witnesses, that the continued cus-
tody of the child by the parent . . . is likely to result in serious

868 |

emotional or physical damage to the child.” Martina argues that
testimony by the State’s expert failed to support, beyond a rea-
sonable doubt, a finding that Walter’s return to Martina is likely
to cause Walter serious emotional or physical damage.

At the disposition hearing in July 2004, Dr. Kevin Cahill,
a clinical psychologist, testified about whether the return of
Walter to Martina at that time would result in serious emotional
or physical damage to Walter. The parties stipulated to Cahill’s
qualifications as an expert under ICWA. An exhibit at the second
termination hearing included his July 2004 testimony.

Cahill identified concerns that could affect Martina’s ability
to provide competent parenting for Walter. He stated that depres-
sion was an ongoing problem for Martina and that depressed
parents are at a “very high risk” for neglecting their children.

He also expressed concern because a January 2002 evalua-
tion showed narcissistic traits. He explained that for a narcis-
sistic individual, “the needs of one’s self always come first and
everything else is secondary.” He explained one of the primary
minimal competencies an effective parent must have is the
ability to “relegate the importance of one’s own needs to the
primacy of the child’s needs.”

Cahill further noted that Martina had been identified with an
intermittent explosive disorder. He testified that “an individual
with an intermittent explosive disorder is likely to simply blow
up in rage and anger at intervals, sometimes with very little
provocation or in response to a provocation that seems com-
pletely out of proportion to the level of response.” He explained
that such tendencies conflict with another minimal competency
for parenting—the ability to withstand the frustrations of parent-
ing without becoming overly reactive.

Cahill also testified at the first trial to terminate Martina’s
parental rights, and this testimony was included in an exhibit
at the second trial. To prepare for the trial, Cahill reviewed
a psychological evaluation from another psychologist dated
December 2004. He stated the report increased his concerns
about Martina’s mental health. The other psychologist had
made some additional diagnoses that had not previously been
made. The other psychologist diagnosed Martina as depen-
dent on methamphetamine, having an impulse control disorder,

possible posttraumatic stress disorder, and a history of bipolar
disorder. He also diagnosed her with antisocial personality dis-
order. Cahill explained that personality disorders are typically
lifelong, even though the patient can mitigate the intensity of
some symptoms. Later in his testimony, Cahill opined that
Martina would not make enough progress to provide perma-
nency for Walter. He also opined that the return of Walter to
Martina would result in “serious psychological and potentially
physical damage.”

On cross-examination, Martina’s counsel challenged Cahill’s
reliance on the December 2004 psychological report because
the report contained a test that could be skewed for members of
different ethnicities, including Native Americans. For instance,
Native Americans typically score higher on the scale that mea-
sures antisocial personality disorder. Cahill acknowledged the
report did not expressly state that the authoring psychologist
used a correction scale or information regarding the Native
American population to interpret the results of the test.

Martina now contends that Cahill’s testimony failed to show
beyond a reasonable doubt that Walter’s return to Martina would
likely result in serious emotional or physical harm. She argues
the testimony failed to support the “beyond a reasonable doubt”
standard in part because of Cahill’s reliance on the December
2004 report. She also claims the State failed to give Cahill evi-
dence of her negative drug tests. She further claims the State
failed to give Cahill a chemical dependency counselor’s opinion
that she had remained sober between May and August 2004.

After considering Martina’s contentions and reviewing the
record, including Cahill’s testimony, we conclude the State
proved beyond a reasonable doubt that returning Walter to
Martina is “likely to result in serious emotional or physical
damage” to Walter. Setting aside Martina’s history of drug use,
we note a likelihood that Martina’s mental health issues could
cause harm to Walter.

3. Tag Stare Proved THat TERMINATING MartiNA’s PARENTAL
Ricuts WAS IN WALTER’s Best INTERESTS
Martina contends that the State’s expert testimony was “insuf-
ficient to establish, beyond a reasonable doubt, that termination

870 —

was in [Walter’s] best interests.”!* She again argues that Cahill
lacked information in forming his opinion, specifically, evi-
dence regarding negative drug tests and the counselor’s opinion
about her sobriety. She also argues that before a best interests
determination can be made, it is necessary to know whether the
child will be placed in a home consistent with ICWA placement
preferences. She argues the State failed to give Cahill informa-
tion about Walter’s likely permanent placement.

HB As explained above, the best interests element is imposed
by state law and generally requires proof by clear and convinc-
ing evidence. We decline to extend the heightened standard in
§ 43-1505(6) to all elements of an ICWA parental rights termi-
nation case. Just as we did not apply the heightened standard
to the active efforts element, we will not apply the heightened
standard to the state law elements under § 43-292 for terminat-
ing parental rights. As noted by the Utah Court of Appeals,
“ICWA does not preempt any state law grounds for termina-
tion of parental rights or impose a single burden of proof on
all supporting findings in termination proceedings in which it
applies.”'5 We note that in In re Interest of C.W. et al.,'° we
“{found] that the State [had] prove{d] beyond a reasonable
doubt that the best interests of the children require[d] termina-
tion of [the mother’s] parental rights.” This language appears
in dicta, and to the extent it suggests the State must prove the
best interests element beyond a reasonable doubt, we disapprove
this language. Therefore, we hold that the State must prove by
clear and convincing evidence that terminating parental rights is
in the child’s best interests; this need not include testimony of
a qualified expert witness. Martina’s argument that the State’s
expert testimony was insufficient to establish the best interests
element beyond a reasonable doubt is without merit.

4 Brief for appellant at 35.

3 KLE, v. State, 912 P.2d 1002, 1004 (Utah App. 1996). See, also, In re M.S.,
supra note 9; In re Interest of D.S.P., 166 Wis. 2d 464, 480 N.W.2d 234
(1992); In re Bluebird, 105 N.C. App. 42, 411 S.E.2d 820 (1992).

16 In re Interest of C.W. et al., 239 Neb. 817, 831, 479 N.W.2d 105, 115
(1992).

Hl When a parent is unable or unwilling to rehabilitate
himself or herself within a reasonable time, the child’s best
interests require termination of parental rights.” The court
originally removed Walter from Martina’s custody because of
her illegal drug use. With Martina’s history of drug abuse, we
are concerned that she failed to complete requested urinalysis
screenings. We recognize that Martina submitted some negative
urinalysis screenings in 2004 and 2005. But between January
and May 2005, she failed to complete 10 urinalysis screenings
that the case manager requested.

In addition to the missed urinalysis screenings, the record
shows that Martina has not acquired the responsibility needed to
parent a child. For instance, in October 2004—2 weeks before
Martina delivered her next child—she was asked to leave the
shelter where she was staying because she was intoxicated. In
June 2006, she called the case manager seeking advice on how
to keep custody of any other children she might have. She told
the case manager she was living with a man she had previously
lived with and wondered if that would affect her ability to keep
custody of any other children. This man was about 20 years
old and a former ward of the State. Martina had reported in
2004 that she asked him to leave her home because he admit-
ted to sexually abusing another child when he was 12 years
old. Viewed through the lens of life’s experiences, these two
examples illustrate that Martina does not appreciate the respon-
sibilities of parenting.

The record also shows that the director of ICWA affairs for
the Yankton Sioux Tribe attended a foster care review board
meeting in October 2004. A report created after the meeting
stated, in part: “[The director] indicated that permanency for
Walter is of utmost importance. He indicated that the tribe
would not object to termination of [Martina’s] rights, as [the
tribe] would like Walter to be adopted.” Similarly, Cahill opined
that based on Martina’s diagnoses and her history, she cannot
provide permanency for Walter.

HM When the court first terminated Martina’s parental rights
in September 2005, Walter had spent his entire life, 2/4 years,

1 See In re Interest of Destiny A. et al., supra note 4.

872 Es

in foster care. Children cannot, and should not, be suspended
in foster care or be made to await uncertain parental maturity.'*
We conclude the State provided clear and convincing evidence
that terminating Martina’s parental rights is in Walter’s best
interests.

4, We Do Nor REACH THE Mgrrrs oF Martina’s SECOND
ASSIGNMENT OF ERROR

HE Ass ber second assignment of error, Martina argues
that the court erred at the adjudication stage because she claims
ICWA requires a finding of active efforts at adjudication and
the court did not make such a finding. We have stated that a
proceeding before a juvenile court is a “special proceeding”
for appellate purposes.'? We have further held that a judicial
determination following an adjudication in a special proceed-
ing which affects the substantial right of parents to raise their
children is a final, appealable order.” Martina did not appeal the
court’s adjudication order.

Martina, however, argues “[t]his issue cannot be dismissed
as a collateral attack on a final order from which [she] failed
to perfect an appeal.””! She claims the Court of Appeals’ dis-
missal of an appeal in an unrelated case precludes appeals from
adjudications or dispositions in ICWA cases.” Martina’s belief
that the unrelated Court of Appeals’ dismissal precluded her
appeal in the present case does not excuse her failure to appeal
the adjudication order. Martina could have asked the Court of
Appeals to overrule its prior ruling. Because Martina failed to
appeal the adjudication order, we will not address her argu-
ments about alleged errors at the adjudication stage.

18 See id.

19 In re Interest of Ty M. & Devon M., 265 Neb. 150, 655 N.W.2d 672
(2003).

2 Id.

21 Brief for appellant at 40.

% See In re Interest of David T., 12 Neb. App. xlii (No. A-03-589, Nov. 5,
2003).

V. CONCLUSION

We conclude that in termination of parental rights cases, the
standard of proof for the “active efforts” element in § 43-1505(4)
is proof by clear and convincing evidence. We determine that
the State proved by clear and convincing evidence that the
Department made active efforts. We also conclude that the State
met its burden in proving the “serious emotional or physical
damage” element and that terminating Martina’s parental rights
is in Walter’s best interests. Because Martina failed to appeal
the adjudication order, we do not reach the merits of her second
assignment of error.

AFFIRMED.

StaTE OF NEBRASKA, APPELLEE, V.
MicuagL J. RAMIREZ, APPELLANT.
745 N.W.2d 214

Filed January 25, 2008. No. S-06-920.

James R. Mowbray and Robert W. Kortus, of Nebraska
Commission on Public Advocacy, for appellant.

Jon Bruning, Attorney General, and George R. Love for
appellee.

HEAvICAN, C.J., Wricut, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Leroan, JJ.

GERRARD, J.

I. NATURE OF CASE

Michael J. Ramirez was convicted by the district court in
2004 with use of a firearm to commit a felony,’ being a felon
in possession of a firearm,? and terroristic threats.? Ramirez was
also found to be a habitual criminal.‘ Ramirez was acquitted by
a jury of a count of possession of methamphetamine. Ramirez
was sentenced, collectively, to terms of imprisonment totaling
not less than 25 nor more than 50 years. His trial counsel also
served as counsel on direct appeal, and the only issue raised
in his brief was whether his sentences were excessive. The
Nebraska Court of Appeals summarily affirmed.*

Ramirez filed a motion for postconviction relief in the district
court on November 23, 2005, alleging ineffective assistance of
counsel in several respects. The court, after an evidentiary
hearing, denied Ramirez’ motion, and he appeals. The evidence
pertinent to the issues Ramirez raises on appeal will be set forth
below, in conjunction with our analysis of each issue.

Il. ASSIGNMENTS OF ERROR
Ramirez assigns, consolidated and restated, that the district
court erred in failing to conclude that

* See Neb. Rev. Stat. § 28-1205 (Reissue 1995).

? See Neb. Rev. Stat. § 28-1206 (Reissue 1995).

3 See Neb. Rev. Stat. § 28-311.01(1)(a) (Reissue 1995).

4 See Neb. Rev. Stat. § 29-2221 (Reissue 1995).

> See State v. Ramirez, 13 Neb. App. xxxix (No. A-04-1398, May 5, 2005).

876 |

(1) his rights to double jeopardy and due process were vio-
lated when the same felony conviction was used as a predicate
for (a) being a felon in possession of a firearm and (b) the
habitual criminal enhancement of his sentence for being a felon
in possession of a firearm;

(2) he was deprived of effective assistance of counsel when
counsel failed to adequately seek the suppression of evidence
obtained from the search of his residence; and

(3) he was deprived of effective assistance of counsel when
his counsel failed to (a) object to inadmissible evidence, (b)
introduce favorable evidence, and (c) impeach witnesses at trial
with inconsistent evidence from the affidavit used to obtain the
search warrant.

Tl. STANDARD OF REVIEW

Hl Appellate review of a claim of ineffective assistance of
counsel is a mixed question of law and fact. When review-
ing a claim of ineffective assistance of counsel, an appellate
court reviews the factual findings of the lower court for clear
error. With regard to the questions of counsel’s performance
or prejudice to the defendant as part of the two-pronged test
articulated in Strickland v. Washington,® an appellate court
reviews such legal determinations independently of the lower
court’s decision.’

IV. ANALYSIS

HB Ramirez’ arguments are each framed by whether he
was denied effective assistance of counsel at trial. In order to
establish a right to postconviction relief based on a claim of
ineffective assistance of counsel at trial or on direct appeal, the
defendant has the burden, in accordance with Strickland,* to first
show that counsel’s performance was deficient; that is, counsel’s
performance did not equal that of a lawyer with ordinary train-
ing and skill in criminal law in the area. Next, the defendant

® Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674
(1984).

7 State v. Sims, 272 Neb. 811, 725 N.W.2d 175 (2006).

8 Strickland, supra note 6.

must show that counsel’s deficient performance prejudiced the
defense in his or her case. In order to show prejudice, the
defendant must demonstrate a reasonable probability that but
for counsel’s deficient performance, the result of the proceeding
would have been different. The two prongs of this test, deficient
performance and prejudice, may be addressed in either order.?

Ill Before addressing the specific arguments Ramirez makes
on appeal, we note that the issues raised are not procedurally
barred. Although a motion for postconviction relief cannot be
used to secure review of issues which were or could have been
litigated on direct appeal,!° when a defendant was represented
both at trial and on direct appeal by the same lawyer, the
defendant’s first opportunity to assert ineffective assistance of
trial counsel is in a motion for postconviction relief."

1. Dousie Jeoparpy

Ramirez argues that his rights under the Double Jeopardy
Clause were violated when the same felony conviction was used
to prove his status as a felon for the charge of being a felon in
possession of a firearm, then prove he was a habitual crimi-
nal for the purpose of enhancing his sentence on that charge.
Ramirez claims that his right to effective assistance of counsel
was violated because trial counsel did not object to the sentenc-
ing enhancement on double jeopardy grounds. The postconvic-
tion court rejected this argument, concluding that Ramirez was
not prejudiced by counsel’s failure to object because the Double
Jeopardy Clause does not preclude the use of the same felony to
establish felon status and then enhance a sentence.

(a) Background
The information charging Ramirez with being a habitual
criminal alleged three predicates: (1) a 1991 conviction for
possession of marijuana with intent to deliver, (2) a 1999 con-
viction for theft, and (3) a 2000 conviction for manufacturing
or distributing marijuana. But at sentencing, the State only

° Sims, supra note 7.
1 State v. Marshall, 269 Neb. 56, 690 N.W.2d 593 (2005).
4 State v. McHenry, 268 Neb. 219, 682 N.W.2d 212 (2004).

878 Le

presented evidence of the 1991 and 2000 convictions to support
sentencing as a habitual criminal. And, as previously noted,
Ramirez was convicted pursuant to jury verdict of being a felon
in possession of a firearm. The only evidence adduced at trial
to establish Ramirez’ status as a felon was evidence of the 2000
marijuana conviction. The habitual criminal finding was used
to enhance Ramirez’ sentence for being a felon in possession
of a firearm.

Trial counsel testified in his deposition, on postconviction,
that he “briefly” considered the double jeopardy implications of
the charges, but did not pursue the issue “[w]hen [he] noticed
there were three prior felonies as opposed to two.” Counsel
later admitted that he did not specifically consider the double
jeopardy implications of using the same felony conviction for
the offense of felon in possession and then for the habitual
criminal enhancement.

(b) Analysis

HMMM The Double Jeopardy Clauses of both the federal
Constitution and the Nebraska Constitution protect against three
distinct abuses: (1) a second prosecution for the same offense
after acquittal, (2) a second prosecution for the same offense
after conviction, and (3) multiple punishments for the same
offense.'* Ramirez’ argument here seems to be that he is
being subjected to multiple punishments for the same offense,
although his argument also implicates statutory interpretation.
However, in this context, the two inquiries are related. As the
U.S. Supreme Court has explained with respect to the prohibi-
tion on multiple punishments, “the Double Jeopardy Clause
does no more than prevent the sentencing court from prescribing
greater punishment than the legislature intended.”!? The ques-
tion of what punishments are constitutionally permissible is no
different from the question of what punishment the legislative

"2 State v. Mata, 266 Neb. 668, 668 N.W.2d 448 (2003).

13 Missouri v. Hunter, 459 U.S. 359, 366, 103 S. Ct. 673, 74 L. Ed. 2d 535
(1983).

branch intended to be imposed. Where the Legislature intends
to impose multiple punishments, “imposition of such sentences
does not violate the Constitution.”* With those principles in
mind, we turn to the statutes at issue in this case.

Section 28-1206(1) provides that “[a]ny person who pos-
sesses any firearm .. . and who has previously been convicted
of a felony . . . commits the offense of possession of a deadly
weapon by a felon . . . .” Possession of a firearm by a felon is a
Class I felony.'® And § 29-2221(1) provides, subject to certain
exceptions not relevant here, that

[w]hoever has been twice convicted of a crime, sentenced,
and committed to prison. . . for terms of not less than one
year each shall, upon conviction of a felony committed in
this state, be deemed to be a habitual criminal and shall be
punished by imprisonment . . . for a mandatory minimum
term of ten years and a maximum term of not more than
sixty years....

It is clear that standing alone, neither § 28-1206 nor § 29-2221
implicates double jeopardy.'’ Ramirez does not contend other-
wise. Instead, he relies on our decisions in State v. Chapman'®
and State v. Hittle,!° which he claims are applicable.

In Chapman, the defendant was charged with third-offense
driving under the influence of alcoholic liquor (DUI) and
being a habitual criminal. Evidence was received of three prior
convictions for DUI, and the trial court found that the offense
with which the defendant was charged was a third offense.
The defendant had previously been convicted of two felonies:
third-offense DUI and malicious destruction of property. Based

\ Albernaz v. United States, 450 U.S. 333, 101 S, Ct. 1137, 67 L. Ed. 2d 275
(1981). Accord Hunter, supra note 13.

15 Albernaz, supra note 14, 450 U.S. at 344.
16 § 28-1206(3)(b).
1 See, State v. Peters, 261 Neb. 416, 622 N.W.2d 918 (2001); Addison v.

Parratt, 208 Neb. 459, 303 N.W.2d 785 (1981). See, also, Witte v. United
States, 515 U.S. 389, 115 S. Ct, 2199, 132 L. Ed. 2d 351 (1995).

18 State v. Chapman, 205 Neb. 368, 287 N.W.2d 697 (1980).
19 State v, Hittle, 257 Neb. 344, 598 N.W.2d 20 (1999).

880 be

upon those two felonies, the court sentenced the defendant as a
habitual criminal under § 29-2221.”

On appeal, we rejected the defendant’s constitutional claims.”!
But we concluded that the trial court had erred in its interpreta-
tion of the relevant statutes. We explained:

For the first time, this court faces the question of
whether a previous conviction of an offense made a felony
solely by reason of a previous conviction may be utilized
as a basis for an adjudication of habitual criminality under
the habitual criminal statute. We hold that offenses which
are felonies because the defendant has been previously
convicted of the same crime do not constitute “felonies”
within the meaning of prior felonies that enhance penalties
under the habitual criminal statute.

The weight of authority is against double penalty enhance-
ment through application of both a specific subsequent
offense statute and a habitual criminal statute. . . . [T]hese
decisions do not rest on federal constitutional grounds.
The issue of whether, upon conviction of a misdemeanor,
sentence could be imposed on a felony charge under
a habitual criminal statute rests on an interpretation of
state law.

We noted that “[s]everal states have held that penalty enhance-
ment provisions set forth for subsequent offenses of specific
crimes must be used when applicable instead of sentencing
under a habitual criminal act, implying that both statutes may
not be used for double penalty enhancement in sentencing for
one offense.” Adopting that reasoning, we concluded that a
felony based on a multiple-offense DUI was exempt from the
operation of § 29-2221.

In Hittle,* the defendant was convicted of felony flight
to avoid arrest and felony driving under a 15-year license

© See Chapman, supra note 18.
21 See id.

2 Td, at 370, 287 N.W.2d at 698-99 (citations omitted).
%3 Id, at 371, 287 N.W.2d at 699 (emphasis omitted).
4 Hittle, supra note 19.

suspension. The trial court found the defendant to be a habitual
criminal, based on two predicate terms of imprisonment, one of
which was for second-offense driving on a suspended license.

Hl On appeal, we acknowledged that Chapman was distin-
guishable, because even first-offense driving under a 15-year
license suspension is a Class I felony.* But we explained
Chapman as resting upon two general principles:

(1) A defendant should not be subjected to double pen-
alty enhancement through application of both a specific
subsequent offense statute and a habitual criminal statute
and (2) the specific enhancement mechanism contained
in Nebraska’s DUI statutes precludes application of the
general enhancement provisions set forth in the habitual
criminal statute. .
We further explained that “[o]ne can become a felon for driv-
ing under a suspended license only by having first committed
multiple DUI offenses, at least some of which are misdemean-
ors, for which the license suspension was imposed.”?” Thus,
we observed, “in a real sense, the penalty for this particular
act has been enhanced by virtue of the defendant’s prior viola-
tions of other provisions within the same statute.” Based on
that reasoning, we concluded that a felony conviction for driv-
ing under a suspended license in violation of the DUI statutes
could not be used to enhance a sentence under the habitual
criminal statute.

Hl Ramirez argues that Chapman and Hitile are applicable
here. But while some courts have extended “double enhance-
ment” reasoning to situations involving enhancement of a sen-
tence for being a felon in possession of a weapon,” the weight

5 See id.

26 Id. at 355, 598 N.W.2d at 29.
77 Id. at 356, 598 N.W.2d at 29.
28 Id.

» See, e.g., State v. Baker, 910 So. 2d 948 (La. 2007); Jackson v. Com., 650
8.W.2d 250 (Ky. 1983); State v. Ware, 201 Kan. 563, 442 P.2d 9 (1968);
State v. Haddenham, 110 N.M. 149, 793 P.2d 279 (NM. App. 1990);
Ramirez v. State, 527 $.W.2d 542 (Tex. Crim. App. 1975); State v. Smith,
12 Ariz. App. 272, 469 P.2d 838 (1970).

882 a

of.recent authority has established the rule that the use of a
prior conviction to establish status as a felon and then enhance
a sentence does not constitute impermissible double enhance-
ment.*° We find those decisions to be more persuasive and con-
sistent with Nebraska law.

First, Chapman and Hittle both rest on the Legislature’s
specific intention in enacting the repeat offender enhancements
of the DUI statutes, which are obviously not at issue here.
And many courts that have rejected the use of a conviction to
both establish status and enhance a sentence have done so, like
this court in Hittle and Chapman,*' because the status offense
contained a specific penalty provision that would have been
effectively nullified by the additional enhancement.” But that
reasoning has been rejected when considering statutes that,
like § 28-1206, do not expressly include their own sentenc-
ing provisions: Other courts that have rejected the use of a
conviction to both establish status and enhance a sentence have
relied on the implicit statutory conflict that arose when, under
their enhancement provisions, a single predicate conviction was
sufficient to enhance the sentence for a second conviction.
But again, that reasoning is not applicable here, because under
Nebraska law, a predicate conviction does not automatically
prove the entire basis for enhancement of a sentence.

3% See, e.g. U.S. v. Bates, 77 F.3d 1101 (8th Cir. 1996); U.S. v. Wallace, 889
F.2d 580 (Sth Cir. 1989); People v. Baird, 12 Cal. 4th 126, 906 P.2d 1220,
48 Cal. Rptr. 2d 65 (1995); Gholston v. State, 620 So. 2d 719 (Ala. 1993);
Woodson v. State, 302 Ark. 10, 786 S.W.2d 120 (1990); Woods v. State, 471
NE.2d 691 (Ind. 1984); People v. Bergstrom, 190 Colo. 105, 544 P.2d 396
(1975); Bailleaux v. Gladden, 230 Or. 606, 370 P.2d 722 (1962); State v.
Cramp, 178 N.C. App. 717, 632 S.E.2d 233 (2006); People v. Phillips, 219
Mich. App. 159, 555 N.W.2d 742 (1996); Fry v. State, 655 P.2d 789 (Alaska
App. 1983). Cf. State v. Wardell, 329 Mont. 9, 122 P.3d 443 (2005).

31 Hittle, supra note 19; Chapman, supra note 18.

® See, e.g., Baker, supra note 29; Ware, supra note 29; Smith, supra note 29.

% See, Bergstrom, supra note 30; Fry, supra note 30.

34 See, e.g., Jackson, supra note 29; Ware, supra note 29; Smith, supra note
29.

% See § 29-2221. See, also, Bergstrom, supra note 30, citing Hollander v.
Warden, 86 Nev. 369, 468 P.2d 990 (1970); Fry, supra note 30.

Nor, under Nebraska law, are the predicates for §§ 28-1206
and 29-2221 necessarily coextensive. The predicate for violat-
ing § 28-1206 is a felony conviction, which may or may not
result in the term of imprisonment of “not less than one year”
necessary to establish a predicate for sentence enhancement
under § 29-2221. The fact that the predicates for §§ 28-1206
and 29-2221 are defined in different terms suggests that the
same conviction can be used for both status and enhancement
if that conviction meets the independent requirements of each
statute.” Stated another way, the element of § 28-1206 to be
proved is the fact of a prior felony conviction, while the element
of § 29-2221 to be proved is a prior conviction resulting in a
term of imprisonment of no less than 1 year. “The distinction
between a prior felony conviction and a separate prison term
served for such felony is obvious,” and there is no statutory
conflict or double enhancement where, as here, a fact (i.e., the
service of a prior prison term) that is not integral or indispens-
able to an element of possession of a firearm by a felon (i.e., a
prior felony conviction) is used to enhance the sentence.**

Most importantly, this case simply does not involve double
penalty enhancement. There is a significant distinction between
double enhancement, which involves the “stacking” of multiple
enhancement provisions that this court rejected in Chapman,”
and the use of a conviction to establish status and then enhance
a sentence.” And under Nebraska law, possession of a firearm
by a felon is simply a Class III felony, with no indication that
it should be treated differently from any other Class III felony
for purposes of sentence enhancement. The habitual criminal
statute is, admittedly, a sentence enhancement—a stiffened
penalty for the latest crime which is considered to be an

36 See Neb. Rev. Stat. § 28-105(1) (Cum. Supp. 2006).
37 See, Baird, supra note 30; Gholston, supra note 30.

38 See Baird, supra note 30, 12 Cal. 4th at 132, 906 P.2d at 1224, 48 Cal. Rptr.
2d at 69. See, also, Gholston, supra note 30.

3° Chapman, supra note 18.
4 See, Wallace, supra note 30; Wardell, supra note 30; Bailleaux, supra note

30; Crump, supra note 30.
41 § 28-1206(3)(b).

884 Es

aggravated offense because it is a repetitive one.” Section
28-1206, however, is not a subsequent offense enhancement,”
but a separate-offense, enacted “‘“to lessen ‘a high potential of
danger to the public’ and to reduce the ‘probability that the con-
victed individual would continue his criminal activity” .. "+
Prohibiting a convicted felon from possessing a firearm neither
punishes the felon for the underlying felony, nor enhances the
sentence for another conviction—it is a new and separate crime
of which the prior conviction is merely an element.*

As previously noted, the fundamental question in this double
jeopardy analysis is one of legislative intent.** And it is appar-
ent, from Nebraska’s statutory scheme, that the Legislature
intended for habitual criminals to be sentenced pursuant to
§ 29-2221, even when convicted of violating § 28-1206. The
statutes define their necessary predicate elements using dif-
ferent standards. Possession of a firearm by a convicted felon
is a Class II felony, with no statutory indication that it is
meant to be treated differently from any other felony. In fact,
§ 28-105(3), which classifies felonies, specifically states that
“{njothing in this section shall limit the authority granted in
sections 29-2221 and 29-2222 [(Reissue 1995)] to increase
sentences for habitual criminals.” And § 29-2221(1)(a) and
(b) contain particular provisions for enhancing sentences for
various crimes of violence, indicating that the Legislature has
considered the implications of enhancing sentences for convic-
tions under different statutes.

TM Stated another way, there is no ambiguity in either
§ 28-1206 or § 29-2221, and Ramirez’ arguments do not pro-
vide us with a compelling basis for disregarding clear statutory
mandates. The Double Jeopardy Clause does not impose “a con-
stitutional rule requiring courts to negate clearly expressed

® Addison, supra note 17. Accord Witte, supra note 17.

* See Hittle, supra note 19.

* Peters, supra note 17, 261 Neb. at 423, 622 N.W.2d at 925.
® See id.

46 See Hunter, supra note 13.

legislative intent.’ Although the rule of lenity requires a court
to resolve ambiguities in a penal code in the defendant’s favor,
the touchstone of the rule of lenity is statutory ambiguity, and
where the legislative language is clear, “‘we may not manufac-
ture ambiguity in order to defeat that intent. . Lenity thus
serves only as an aid for resolving an ambiguity; it is not to be
used to beget one.”48
Neither the habitual offender statute nor the felon in pos-
session of a firearm statute prohibits the application of the
statutory habitual offender sentence enhancement provi-
sion for a conviction of felon in possession of a firearm.
Nor do these statutes expressly preclude a prior felony
conviction that is used to establish the crime of felon in
possession of a firearm from also being used as a prior
conviction under the habitual offender statutes. . . . “Thus
absent an absurd or unjust result, or one clearly inconsis-
tent with the purposes and policies of the statutes involved,
[this Court] would not be justified in concluding that
the statutes’ respective mutual use of a prior conviction”
is prohibited.”

In short, where neither § 28-1206 nor § 29-2221 violates
double jeopardy individually, there is no reason why they would
offend the Double Jeopardy Clause when used in conjunction.°°
We reject Ramirez’ claim that the Double Jeopardy Clause pre-
cluded the use of his 2000 marijuana conviction to establish his
status as a felon for purposes of § 28-1206 and then enhance
his sentence on that charge pursuant to § 29-2221. And because
his sentence was lawful, he was not prejudiced by his trial
counsel’s failure to object on that basis. For those reasons, we
find Ramirez’ first assignment of error to be without merit.

4 Id. 459 U.S. at 368.
48 Albernaz, supra note 14, 450 U.S. at 342.

“° Phillips, supra note 30, 219 Mich. App. at 163, 555 N.W.2d at 744 (citation
omitted), See, also, Gholston, supra note 30; Woods, supra note 30.

5% See Bates, supra note 30.

886 Es

2. Motion To Suppress EvIDENCE

Ramirez contends that trial counsel should have moved to
suppress evidence obtained from the execution of a search
warrant, because an “any time” warrant was not justified, and
the police did not “knock and announce” their presence when
serving the warrant. The district court found that Ramirez had
not been prejudiced because a motion to suppress would have
been without merit.

(a) Background
(i) Trial Evidence

The police investigation which led to the charges in this
case began on June 10, 2004, when Melissa Bates called
police and reported that she had been threatened at the home
of Lucy Marlatt, where she was staying. Bates came in to the
police department and made a report, along with Amber Troudt,
Marlatt’s daughter. Michael Cotant, an investigator with the
Scotts Bluff County Sheriff’s Department, interviewed Bates
and Troudt and contacted the county attorney’s office. Cotant
secured a search warrant for Marlatt’s residence, where Ramirez
was also staying, and an arrest warrant for Ramirez.

In support of the application for the warrants, Cotant pre-
pared two affidavits, in which he averred that Troudt and Bates
had informed him they had seen Ramirez with drugs and drug
paraphernalia. Cotant averred that Ramirez was a convicted
felon and that Bates had seen Ramirez with a shotgun that he
kept with him. Cotant also averred that Bates had reported that
on June 2 or 3, 2004, Ramirez had pointed the shotgun at Bates
and threatened to kill her.

The district court issued a search warrant at 11:42 p.m. on
June 10, 2004. The court found probable cause for the search
of Marlatt’s residence “and that the public interest requires that
this warrant be served at, any time.” Marlatt had already been
detained at a grocery store and taken to the Scottsbluff Police
Department, and Cotant served the warrant on her there. Police
finally began conducting the search at approximately 3:30 a.m.
The search revealed, among other things, a 12 gauge shotgun.

The commander of the Scottsbluff SWAT team testified
that his unit was assigned to execute the search warrant. He

explained that his team had approached the house on foot from
some distance away and had then attempted to determine where
Ramirez was in the house. They were still outside the house
when some dogs on the porch began barking, and Ramirez,
who was inside the house, began yelling at the dogs to be
quiet. The dogs kept barking, and Ramirez came to the front
door. The commander challenged Ramirez, identified himself,
and ordered Ramirez to show his hands and get down on the
ground. Ramirez complied, and police handcuffed him and
secured the residence.

(ii) Postconviction Evidence

Trial counsel testified that he had considered filing a motion
to suppress, but decided not to when Ramirez informed him
that the search had essentially taken place as described. Counsel
said he had been advised by Ramirez that Ramirez had opened
the front door when he heard his dogs barking and that when he
had seen the police, he had stepped onto the patio and placed
his hands behind his back to submit to the SWAT team com-
mander. Counsel had not considered a “knock and announce”
issue because Ramirez had opened the door before the police
could knock. Counsel also explained that given the facts in
the affidavit, he believed the court could have issued an “any
time” warrant. Ramirez averred, in an affidavit admitted at the
evidentiary hearing, that he had informed counsel that on the
night of his arrest, he had been awakened by barking dogs and
had actually opened the back door of the home.

(b) Analysis
For the reasons explained below, we agree with the dis-
trict court’s conclusion that a motion to suppress would have
been meritless. Therefore, counsel was not ineffective in not
filing such a motion, nor was Ramirez prejudiced by the
alleged ineffectiveness.

(i) Any Time Search
= Neb. Rev. Stat. § 29-814.04 (Reissue 1995) provides
in part that when a court issues a search warrant, “[t]he warrant
shall direct that it be served in the daytime unless the magis-
trate or judge is satisfied that the public interest requires that

it should not be so restricted, in which case the warrant may
direct that it may be served at any time.” But an affidavit in
support of a search warrant need not contain a separate state-
ment of facts showing why the public interest requires that the
warrant be served at night, in order for the nighttime search
to be valid.*' Instead, if the affidavit, read in a commonsense
manner and as a whole, reasonably supports the inference that
the interests of justice are best served by the authorization of
nighttime service of a search warrant, provision for such service
in the warrant is proper.”

Ramirez contends that the affidavit in his case did not set
forth a sufficient factual basis for the issuance of an “any time”
warrant. We disagree. The affidavit established that Ramirez
used methamphetamine, had a shotgun and ammunition, kept
the shotgun with him, and had threatened Bates with the shot-
gun. Thus, the affidavit provided information showing that the
execution of the warrant at night, when speed and surprise
could be accomplished, would serve to protect the safety of the
officers involved. Because the search warrant properly autho-
rized an “any time” search, Ramirez failed to prove counsel'was
ineffective, or that he was prejudiced, because counsel failed to
challenge the warrant.

(ii) Knock and Announce
HH Neb. Rev. Stat. § 29-411 (Reissue 1995) provides that
in executing a search or arrest warrant, the executing officer
may break open any outer or inner door or window of a
dwelling house or other building, if, after notice of his
office and purpose, he is refused admittance; or without
giving notice of his authority and purpose, if the judge or
magistrate issuing a search warrant has inserted a direction
therein that the officer executing it shall not be required
to give such notice .. . . The judge or magistrate may so
direct only upon proof under oath, to his satisfaction that
the property sought may be easily or quickly destroyed or

+ State v. Fitch, 255 Neb. 108, 582 N.W.2d 342 (1998). See, also, State v.
Paul, 225 Neb. 432, 405 N.W.2d 608 (1987).

® Peters, supra note 17; Fitch, supra note 51; Paul, supra note 51.

disposed of, or that danger to the life or limb of the officer

or another may result, if such notice be given... .
This statute codifies the common-law requirement of knocking
and announcing when serving a search warrant prior to break-
ing into a person’s dwelling.** And the Fourth Amendment to
the U.S. Constitution also requires, absent countervailing cir-
cumstances, that officers knock and announce their purpose and
be denied admittance prior to breaking into a dwelling.

Tn this case, the court did not issue a “no knock” warrant
pursuant to § 29-411. But the record indicates that Ramirez
opened the door, and surrendered to police, before they had an
opportunity to knock and announce their presence. Although
Ramirez averred that he stepped out the back door, rather than
the front door, he does not contest the essential fact that he
came out of the house before the police went in. In other words,
Ramirez was aware of the presence of the police, and aware of
their identity and purpose, before they entered the dwelling.
Further identification would have been “‘a useless gesture.’”*>
We agree with the district court that under these circumstances,
the knock and announce rule was not violated.°*

Because Ramirez’ trial counsel did not perform deficiently in
failing to object to the search of the residence, and Ramirez was
not prejudiced, this assignment of error is without merit.

3 State v. Kelley, 265 Neb. 563, 658 N.W.2d 279 (2003).

*4 See id., citing Wilson v. Arkansas, 514 U.S. 927, 115 S. Ct. 1914, 131 L. Ed.
2d 976 (1995).

55 See State v. Pierson, 238 Neb. 872, 877, 472 N.W.2d 898, 901 (1991).

6 Compare, e.g., United States v. Remigio, 767 F.2d 730 (10th Cir. 1985);
United States v. Lopez, 475 F.2d 537 (7th Cir. 1973); Wittner v. United
States, 406 F.2d 1165 (5th Cir. 1969); United States v. Conti, 361 F.2d 153
(2d Cir. 1966), vacated on other grounds 390 U.S. 204, 88 S. Ct. 899, 19
L. Ed. 2d 1035 (1968); Belton v. U.S., 647 A.2d 66 (D.C. 1994); State v.
Alldredge, 73 Wash. App. 171, 868 P.2d 183 (1994); Woodward v. Com., 16
Va. App. 672, 432 S.E.2d 510 (1993); People v Zuccarini, 172 Mich. App.
11, 431 N.W.2d 446 (1988).

890 —

3. FatLureE TO Ossecr TO INADMISSIBLE EvIDENCE, ADDUCE
FavorABLE EVIDENCE, AND IMPEACH WITNESSES AT TRIAL
In his remaining three assignments of error, Ramirez raises
several arguments with respect to trial counsel’s decisions
at trial. The district court rejected each of these arguments,
either because they were reasonable strategic decisions made
my counsel or because Ramirez was not prejudiced by them.
Because Ramirez’ arguments involve related testimony, it is
easiest to consider them together.

(a) Background

(i) Trial Evidence

At trial, Bates testified that in May and June 2004, she was
living in Marlatt’s home near Minatare, Nebraska. At the time,
a number of people were staying with Marlatt, including Bates
and her daughters, Marlatt’s daughters, and Ramirez. Bates tes-
tified that sometime during the week of June 7, Ramirez asked
Bates to step outside so he could speak to her. Ramirez was
upset, and Bates asked Ramirez what his problem was with her.
Bates testified that Ramirez reached into his parents’ vehicle,
parked outside, and pulled out a double-barreled shotgun,

[aJnd, he pointed it at my face at one point in time of the
conversation, and I asked him if he was going to shoot
me, and he screamed — he hollered a couple of things at
me, me being a stupid bitch. And, then he pointed the gun
above my head approximately an inch to two inches above
my head and he shot off three rounds.

Bates identified the shotgun seized from the residence as the
one Ramirez had brandished. In addition, the police found three
expended shotgun shells in the driveway. Later, a witness identi-
fied the shotgun as one that he had received as a birthday present
in 2003 and had sold to Ramirez in April 2004 for $200.

The amended information charged Ramirez with being in
possession of a firearm “on or about the week of June 7, 2004.”
But Bates testified, without objection, that she had seen Ramirez
with the shotgun before the incident and that he “carried it
around quite a bit” and “would always have a gun with him.”
Bates also testified, without objection, that Ramirez often left
the gun around the house and “shot the gun off a lot.” Bates

was asked if Ramirez had made any other threats with the shot-
gun, and answered, without objection, that “he stated that if the
police were going to come after him, that he wouldn’t be taken
into custody, he would kill them first.”

Bates said that she was high at the time of the incident, and
“didn’t realize what was going on at the time,” but reported the
incident to police a couple of days later after she realized that
Ramirez was dangerous. Ramirez’ trial counsel cross-examined
Bates regarding her history of drug use, and particularly her
use of methamphetamine at the time of the incident. Counsel
also questioned Bates about Ramirez’ tone of voice during the
incident, and when asked whether Ramirez had “scream[ed]” at
Bates, Bates replied without objection, “No, he had the intent
to frighten me.” Ramirez’ counsel responded by asking Bates
whether she had studied law and to what extent she had pre-
pared her testimony.

(ii) Postconviction Evidence

Ramirez’ trial counsel was a deputy public defender with the
Scotts Bluff County public defender’s office, experienced in
defending both misdemeanor and felony cases. Before joining
the public defender, trial counsel had also been a prosecutor in
Scotts Bluff County.

Trial counsel was asked, in his deposition, whether testimony
that put Ramirez in possession of a firearm outside the charged
timeframe of the week of June 7, 2004, was “something [he]
would have wanted to object to.” Counsel admitted that he “[i]Jn
retrospect, probably” should have objected. Counsel explained
that he did not believe the questions had been particularly
objectionable, but “[w]ith 20/20 hindsight, watching the game
film, yeah, maybe I’d have done a motion to strike.” Counsel
was also asked about impeaching Bates on cross-examination
and explained that Bates was “crying on the stand, [and] had
engendered, in my view, quite a bit of juror sympathy.” Counsel
explained that he believed Bates’ testimony “had had doubt cast
upon it significantly” and that he felt an objective fact finder
would have found her testimony incredible.

Counsel also was questioned about statements in the affi-
davit supporting the search warrant, and in Marlatt’s pretrial

392 De

deposition, indicating that Marlatt had asked Bates to leave the
residence on the evening of June 9, 2004. Marlatt testified in
her pretrial deposition that “the night [she] went to jail on the
warrant,” she had “kicked [Bates] out” of the house. Marlatt
explained that she had become tired of Bates’ being gone and
leaving her 2-year-old daughter unattended, claiming to be preg-
nant, and using drugs and claiming to have had a miscarriage.

Trial counsel explained that he decided “not [to] use...
Marlatt’s testimony during trial concerning any kind of drug
use because I believed the results would have been disastrous.”
Marlatt’s deposition had also indicated that she had seen
Ramirez with the shotgun and that she was aware of Ramirez’
drug use. Marlatt also testified in her deposition that the break-
ing point with Bates had been that “she was telling me all these
lies” including that “he had threatened her life.”

(b) Analysis

Ramirez argues that his trial counsel was deficient in
several instances. For the reasons that follow, we conclude that
each instance was either reasonable trial strategy by trial coun-
sel or was not prejudicial to Ramirez. An appellate court will
not second-guess reasonable strategic decisions by counsel.*’
The entire ineffectiveness analysis is viewed with a strong pre-
sumption that counsel’s actions were reasonable and that even if
they are found unreasonable, the error justifies setting aside the
judgment only if there was prejudice.*

HM Ramirez first complains that trial counsel did not object
to Bates’ testimony about Ramirez’ possession of the shotgun
outside the charged timeframe and several other incidental
remarks Bates made. We note that where actual or construc-
tive possession of a firearm by a felon is uninterrupted, as the
evidence suggests it was here, it constitutes a single offense.
But even if some of Bates’ testimony was irrelevant, it was not
prejudicial. There was no reason for the jury to find Bates’ tes-
timony credible on those subjects, but incredible with respect

57 State v. Brown, 268 Neb. 943, 689 N.W.2d 347 (2004).
58 See State v. McDermott, 267 Neb. 761, 677 N.W.2d 156 (2004).
® See State v. Williams, 211 Neb. 650, 319 N.W.2d 748 (1982).

to her testimony about the incident for which Ramirez was
convicted. If the jury believed Bates—which it obviously did—
then her testimony about that incident alone would leave little
alternative but to find Ramirez guilty. In short, Ramirez has not
demonstrated a reasonable probability that had counsel objected
to Bates’ allegedly irrelevant testimony, the result of the pro-
ceeding would have been different.©

Ramirez argues that trial counsel should have done more to
impeach Bates. For example, Ramirez contends that Marlatt
could have testified about evicting Bates from her residence,
about giving Bates a motive to lie, and about Bates’ character for
untruthfulness. But adducing that testimony would have opened
the door to Marlatt’s testimony, suggested in her deposition,
that Bates was evicted in part because she reported to Marlatt
that Ramirez had threatened Bates’ life. Given that, it is evident
that counsel made a reasonable strategic decision in not adduc-
ing the testimony. Ramirez also argues that Bates should have
been cross-examined about alleged inconsistencies between
her trial testimony and the police affidavits used to support the
search and arrest warrants. Having reviewed the record, we are
not convinced that they are as inconsistent as Ramirez asserts,
and we conclude that Ramirez was not prejudiced by counsel’s
failure to use the affidavits on cross-examination.

Ramirez’ brief also takes issue with several other alleged
failures of trial counsel. We have reviewed the record and find
each instance identified by Ramirez to be incidental. In each
instance, Ramirez failed to demonstrate a reasonable probability
that absent counsel’s alleged deficiency, the result of the pro-
ceeding would have been different.

In short, Ramirez has failed to demonstrate that any of the
alleged deficiencies in trial counsel’s performance deprived
Ramirez of effective assistance of counsel. We find no merit to
Ramirez’ remaining assignments of error.

V. CONCLUSION
For the foregoing reasons, the district court did not err in
rejecting Ramirez’ claim of ineffective assistance of counsel

See Sims, supra note 7.

894

and denying his motion for postconviction relief. The judgment
of the district court is affirmed.
AFFIRMED.

Steven L. ARCHBOLD, SUCCESSOR PERSONAL REPRESENTATIVE OF
THE EsTATE oF ALPHONS REIFENRATH, DECEASED, APPELLEE, V.
JoserH F. REIFENRATH AND DonNA REIFENRATH, APPELLANTS.

744 N.W.2d 701

Filed January 25, 2008. No. S-06-1124.

David A. Domina and Claudia L. Stringfield-Johnson, of
Domina Law Group, P.C., L.L.O., for appellants.

Thomas H. DeLay, of Jewell, Collins, DeLay & Flood, for
appellee.

Heavican, C.J., Wricut, CONNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

McCormack, J.
NATURE OF CASE

Steven L. Archbold, successor personal representative of the
estate of Alphons Reifenrath, brought the present action against
Joseph F. Reifenrath and his wife, Donna Reifenrath (collec-
tively the appellants), to recover assets formerly belonging to
Alphons. The district court found that Joseph, while acting as
Alphons’ power of attorney (POA), did not have authorization
to make substantially gratuitous transfers of Alphons’ assets to
himself and members of his family. The district court further
found that any oral authorization by Alphons for Joseph to
make such transfers was the result of undue influence exercised
by Joseph. The appellants now appeal.

BACKGROUND

Alphons was diagnosed with terminal cancer in August 2002
and died shortly thereafter on November 1, 2002. Alphons
was a bachelor and was survived by one brother, Joseph; one
sister, Angela Gubbels (Angela); and his nieces and nephews.
Alphons was preceded in death by his parents and seven sisters,
including a sister named “Beatrice Walter” (Beatrice). Alphons
had lived alone on his farm for a number of years prior to his
diagnosis. Following his diagnosis, however, Alphons resided in
a nursing home until his death.

896 Le

During his life, Alphons owned various parcels of real estate,
some of which he retained in his name as sole owner and some
of which he sold to Joseph. In addition, prior to September
2002, Alphons owned various bank accounts and certificates of
deposit. The account number, owner, title of the account, and
ending balance for the bank accounts at issue, as well as the
certificate number, owner, amount, and payee or payable-on-
death (POD) beneficiary for the relevant certificates of deposit
are as follows:

Account No. Owner Titled As —_ Closing Balance
491705 Alphons Alphons or $2,446.93
Beatrice
738536499 Alphons Alphons or 5,100.49
Angela
Certificate No. Owner Amount Payee
15466 Alphons $ 6,700.30 POD Angela
32064 Alphons or 45,000.00 Survivor
Beatrice
15630 Alphons 65,397.53 POD Angela
and Beatrice
2108332046 Alphons and 50,040.75 Survivor
Angela

Angela testified by deposition that prior to his death, Alphons
informed her that she was the beneficiary of a number of cer-
tificates of deposit and checking accounts and that upon his
death, she was to distribute the proceeds to Alphons’ estate for
distribution among the siblings.

Around the time Alphons was admitted into the nursing
home, Joseph contacted his attorney, Alice Rokahr, who drafted
a durable POA which was signed by Alphons. Under the POA,
Joseph was appointed Alphons’ attorney in fact and was given
plenary powers as well as all the specific and general powers
set forth in the Nebraska Short Form Act (the Act), Neb. Rev.
Stat. § 49-1501 et seq. (Reissue 1998). At trial, Rokahr testi-
fied, over a continuing objection by Archbold’s attorney on
the basis of parol evidence, that she explained to Alphons that
the document would give Joseph the right to stand in Alphons’
shoes, that Joseph could do anything Alphons could do, and

that “this was a full power with no limits.” In admitting this
testimony, the court stated:

I’m inclined to let it come in. But as far as the fact find-
ing of whether [Alphons’] understanding varies with what
he signed, or whether I believe it, that’s another matter. So
Tm going to let it come in. The objection is overruled. It’s
going to be for the weight that I place on it.

Rokahr also prepared an updated will for Alphons, which
was signed by Alphons and witnessed on September 17, 2002.
Joseph was appointed personal representative of the will. In
the will, Alphons directed that any property in his name and
another as joint tenant or beneficiary at the time of his death
be paid to such joint owner or beneficiary and that the personal
representative make no claim thereto. Alphons directed that all
certificates of deposit be cashed by the personal representative
and be divided equally among his beneficiaries. He directed
that the personal representative sell Alphons’ real estate, prefer-
ably to a family member, and distribute the proceeds in equal
parts to his residuary beneficiaries. Alphons also directed that
his personal property be distributed as the personal representa-
tive saw fit and that his farm machinery and equipment be sold
and the proceeds be equally distributed to his residuary ben-
eficiaries. Alphons left the residue and remainder of his estate,
including all cash, equally to Joseph and the children of five of
his sisters.

Following his appointment as Alphons’ attorney in fact,
Joseph deleted the names of Alphons’ sisters as joint own-
ers or POD beneficiaries on a number of Alphons’ deposit
accounts and certificates of deposit, and inserted his own name
as either the joint owner or POD beneficiary for nearly all
those assets. Following Alphons’ death, Joseph closed the two
deposit accounts for which he had substituted himself as joint
owner and deposited the balances into his personal accounts.
The inventory filed by Joseph as personal representative identi-
fied the account balances as “Jointly Owned Property,” with
Joseph as the surviving joint owner. Prior to Alphons’ death,
Joseph also drew checks upon Alphons’ deposit accounts in
the amounts of $65,000, $15,000, $10,000, and $1,000. These
checks were all payable to Donna.

898 |

With regard to Alphons’ certificates of deposit, certifi-
cate 15466 was redeemed by Joseph in October 2002, cer-
tificate 32064 was cashed in December 2002, and certificate
2108332046 was redeemed in December 2002. The proceeds
of these certificates were deposited into accounts owned by
either Joseph or the appellants jointly. With regard to certifi-
cate 15466, Joseph testified that he used the proceeds from the
certificate to pay his personal debt that had accumulated from
working with Alphons over the years. With regard to certificate
2108332046, Joseph claimed that he used the proceeds of the
certificate to pay a personal debt to reimburse expenses he had
accrued while farming with Alphons.

In addition, while acting as attorney in fact, Joseph partici-
pated in the sale of Alphons’ farm to Joseph’s son and daughter-
in-law for $115,000. Joseph testified that Alphons agreed to
sell his farm to Joseph’s son. Joseph drafted the deed, as well
as a note for the $115,000 consideration. Joseph claimed that
Alphons orally authorized the drafting of the note. The payees
of the note were identified as Alphons or Joseph or Donna. The
appellants received the payoff of the note in full on July 14,
2004. That amount was not paid into the estate; rather, it was
used for the appellants’ sole use and benefit.

Archbold, successor personal representative of Alphons’
estate, filed suit against the appellants. Archbold alleged that
Joseph abused his fiduciary duty as Alphons’ attorney in fact by
making gifts to himself and his family. Archbold alleged that
the appellants wrongfully retained funds from Alphons’ estate,
commingled funds from Alphons or Alphons’ estate, paid per-
sonal debts with those funds, and purchased property with those
funds. Archbold further alleged that Joseph exercised undue
influence over Alphons and that the appellants wrongfully took
property from Alphons and Alphons’ estate.

The principal issue before the district court was the question
of whether Joseph, as attorney in fact for Alphons, was autho-
rized to make substantial gifts of Alphons’ funds to himself and
his family. The district court found in part that the principles
of agency apply to the construction of a POA and supplement
the Act. The district court concluded that neither the POA in
this case, nor the general powers and plenary power of the

Act, expressly granted Joseph the authority and power to make
substantial gifts of Alphons’ property and funds to himself and
his family, including Donna. The district court found that there
was clear and convincing evidence of constructive fraud. The
district court further found that there was clear and convinc-
ing evidence of Joseph’s motive and intent to unduly influence
Alphons during the last days of Alphons’ life. The district
court found that if Alphons actually gave oral authorization for
Joseph to insert his name as joint payee or POD beneficiary
on the above-noted deposit accounts and certificates of deposit
and authorized the drafting of the promissory note payable to
Alphons and the appellants as joint tenants, such authority was
the product and result of undue influence exercised by Joseph
upon Alphons. The court held that the amounts taken from
Alphons’ deposit accounts and certificates of deposit accounts,
which are noted above, should be returned to Alphons’ estate,
as well as the proceeds from the sale of Alphons’ farm. The
court found that based upon the evidence, no reasonable contro-
versy existed as to the amount of damages or the time when the
cause of action arose, i.e., the time when Joseph received the
moneys and held that prejudgment interest should be assessed.
against the appellants.

The district court also addressed in its order the admissibil-
ity of Rokahr’s testimony, which was objected to at trial on the
basis of the parol evidence rule. In its order, the district court
found that although the objection was overruled, if the testimony
was offered as proof of the matter stated, then such expression
of intent was inadmissible under the parol evidence rule.

ASSIGNMENTS OF ERROR

The appellants contend, renumbered, that the district court
erred (1) in finding Joseph unduly influenced Alphons to make
certain gifts or transfers of certificates of deposit, (2) in set-
ting aside the promissory note payable to the appellants, (3) in
deciding that the Act does not eliminate the need for express
authority for an attorney in fact to convey assets to himself,
(4) in refusing to admit Rokahr’s testimony, and (5) in award-
ing Archbold prejudgment interest.

900 Le

STANDARD OF REVIEW

I in an appeal of an equity action, this court tries the fac-
tual questions de novo on the record and reaches a conclusion
independent of the findings of the trial court, provided, however,
that where credible evidence is in conflict on a material issue of
fact, we consider and may give weight to the fact that the trial
judge heard and observed the witnesses and accepted one ver-
sion of the facts rather than another.'

ANALYSIS

JoszpH Was Nor AuTHoRIZED TO MAKE SUBSTANTIALLY
Grarurrous TRANSFERS OF ALPHONS’ PROPERTY TO
HIMSELF AND Mempers oF His FaMity

The appellants’ first three assignments of error can be con-
solidated into one broad question: Does the plenary power in
the Act change the rule with regard to the fiduciary duty that an
agent owes to the principal?

HEN We have defined a power of attorney as “‘an instru-
ment in writing authorizing another to act as one’s agent.”?
An agent holding a power of attorney is termed an “attorney in
fact” as distinguished from an attorney at law.> An agency is a
fiduciary relationship resulting from one person’s manifested
consent that another may act on behalf and subject to the con-
trol of the person manifesting such consent and, further, result-
ing from another’s consent to so act.* An agent and principal are
in a fiduciary relationship such that the agent has an obligation
to refrain from doing any harmful act to the principal, to act
solely for the principal’s benefit in all matters connected with
the agency, and to adhere faithfully to the instructions of the
principal, even at the expense of the agent’s own interest.

' Fletcher v. Mathew, 233 Neb. 853, 448 N.W.2d 576 (1989).

? Id, at 858, 448 N.W.2d at 581. See, also, First Colony Life Ins. Co. v.
Gerdes, 267 Neb. 632, 676 N.W.2d 58 (2004).

3 First Colony Life Ins. Co. v. Gerdes, supra note 2; Crosby v. Luehrs, 266
Neb. 827, 669 N.W.2d 635 (2003).

* First Colony Life Ins. Co. v. Gerdes, supra note 2.
3 Ia.

IB As stated in Fletcher v. Mathew, because of the agency
relationship created by a power of attorney, the authority and
duties of an attorney in fact are governed by the principles of
the law of agency, including the prohibition against an agent
profiting in transactions in which the agent represents the
principal. We explained in Crosby v. Luehrs’ that no gift may
be made by an attorney in fact to himself or herself unless the
power to make such a gift is expressly granted in the instrument
and there is shown a clear intent on the part of the principal to
make such a gift. Thus, absent an express intention, an agent
may not use his or her position for the agent’s or a third party’s
benefit in a substantially gratuitous transfer.’ An attorney in fact,
under the duty of loyalty, always has the obligation to act in
the best interest of the principal unless the principal voluntarily
consents to the attorney in fact engaging in an interested trans-
action after full disclosure.°

Accordingly, we have determined that in situations involving
an attorney in fact,

a prima facie case of fraud is established if the plaintiff
shows that the defendant held the principal’s power of
attorney that the defendant, using the power of attorney,
made a gift to himself or herself. . . . The burden of going
forward under such circumstances falls upon the defen-
dant to establish by clear and convincing evidence that the
transaction was made pursuant to power expressly granted
in the power of attorney document and made pursuant to
the clear intent of the donor.’

In First Colony Life Ins. Co. v. Gerdes, we stated that in
situations involving an attorney in fact, a principal’s purported
oral authorization is ineffective as proof of the principal’s intent

6 Fletcher v. Mathew, supra note 1.
7 Crosby v. Luehrs, supra note 3.

8 id.

9 Id.

10 Id. at 836, 669 N.W.2d at 645. See, also, Vejraska v. Pumphrey, 241 Neb.
321, 488 N.W.2d 514 (1992); Fletcher v. Mathew, supra note 1.

1 First Colony Life Ins. Co. v. Gerdes, supra note 2.

902 |

to make a substantially gratuitous transfer. We explained that
this rule “was enunciated out of concern for potential abuse
and fraud with durable powers of attorney and has been lim-
ited in application to cases in which the attorney in fact, or
someone in relationship to the attorney in fact, stood to benefit
at the principal’s expense.”"? The appellants rely on Alphons’
alleged oral authorizations and the POA as Joseph’s author-
ity for making gifts to himself and members of his immediate
family. Because Alphons’ alleged oral authorizations are inef-
fective as proof of Alphons’ intent, the POA in this case would
have to provide Joseph with the express authority to make such
gratuitous transfers.

The appellants contend that the POA in this case, which was
patterned after the Act, conferred plenary power upon Joseph.
The appellants assert that included in that power was the
authority to personally acquire property from Alphons and to
convey Alphons’ property to any person, including Joseph and
members of his family. The appellants further assert that noth-
ing in the Act limits an attorney in fact’s authority to transfer
property to himself or herself or family.

Hl Powers of attorney are by necessity strictly construed,
and broad encompassing grants of power are to be discounted.”
The POA in this case provides in relevant part:

1. Durability: By this instrument, I create and estab-
lish a durable and general Power of Attorney upon the
following principals:

a. The authority and power within the scope of this
instrument derive their validity from and compromise [sic]
and constitute a durable Power of Attorney under the
provisions and within the meaning of Section 30-2664
through 2672, reissue revised statutes of Nebraska, 1995,
as amended, and all other applicable provisions of the
Nebraska Uniform Durable Power of Attorney Act, as
amended, and the Nebraska Probate Code, as amended;
and the short form expressions herein used have the mean-
ings ascribed by and are respectively subject to application,

12 Id. at 640, 676 N.W.2d at 65.
3 Fletcher v. Mathew, supra note 1.

Le -
construction, enforcement and interpretation as prescribed
under the provisions of Sections 49-1501 through 1561,
reissue revised statutes of Nebraska, 1998, as amended,
and all other applicable provisions of the Nebraska Short
Form Act....

2. Enumerated Powers: By this instrument, I confer
upon and grant to my power of attorney without limita-
tion to the generality, Plenary Power exercisable in the
absolute judgment and discretion of my Agent. This shall

The POA goes on to specify all those general and specific
powers and authorities contained in the Act. Included is the
specific authority for dispositions, the specific authority for
documents,'® the specific authority for investments,!* the gen-
eral power for bank and financial transactions,"’ and the general
power for real estate.!*

The Act defines a general power as “any one of the separate
general aggregations of related authorities and powers defined
by any short form expression specified by the . . . Act.”!° Plenary
power is defined by the Act as “the general and universal aggre-
gation of authorities and powers defined by the short form
expression specified by the . . . Act.””° The Act further provides
that plenary power “shall mean that the principal generally and
universally authorizes and empowers the agent to have and to
exercise collectively or singly and concurrently or consecutively
any one or more in combination or otherwise of each” of the
general power.! The Act provides that plenary power shall
mean that

4 See § 49-1532.
15 See § 49-1533.
6 See § 49-1537.
See § 49-1545.
® See § 49-1554.
® § 49-1512.
20 § 49-1515,
2 § 49-1557.

904 —

the principal generally and universally authorizes and
empowers the agent to act as and to be an alter ego of
the principal as to anything and everything not otherwise
fully within the scope of such enumerated general powers
and to the full extent permissible and practicable for any
person as an agent to do or omit to do for, in place of,
or on behalf of another person as a principal and without
reservation or restriction as to any circumstance, condi-
tion, interest, matter, property, question, or transaction
as the principal might do or omit to do in person and
while competent.”

The appellants argue that under the plenary power bestowed
upon Joseph, Joseph was expressly provided the authoriza-
tion to make substantially gratuitous transfers of Alphons’
property to himself and his family. The appellants misconstrue
the breadth of plenary power under the Act. Section 49-1557
provides that plenary power authorizes the agent to act as the
principal’s alter ego. Notably, § 49-1557 limits plenary power
to those acts an agent is otherwise authorized to do as an agent.
As explained above, our case law on the subject has made clear
that an agent is not authorized to make substantially gratuitous
transfers to himself or his family absent an express provision
in the POA. Because the POA in this case does not contain a
specific authorization for the making of gratuitous transfers
by Joseph to himself or his immediate family, we determine
that Joseph has failed to meet his burden. We, therefore, affirm
the district court’s findings. Specifically, we determine that
Joseph was not authorized to transfer the funds from Alphons’
bank accounts to himself or Donna. We further determine that
Joseph was not authorized to retain the proceeds from the cer-
tificates of deposit noted above. As for the real estate sold to
Joseph’s son, Alphons directed in his will that his real estate
be sold, preferably to a family member. Joseph did that by
selling the property to his son. We determine, however, that
the proceeds of that sale should not have been retained by the
appellants. Rather, the proceeds should have been remitted to
Alphons’ estate.

22 Td. (emphasis supplied).

RoKAuR’s TESTIMONY
We have examined the appellants’ fourth assignment of error
with regard to Rokahr’s testimony, and we find this assignment
of error to be without merit.

PREJUDGMENT INTEREST

Hl In their final assignment of error, the appellants contend
that the district court erred in awarding prejudgment interest.
Whether prejudgment interest should be awarded is reviewed
de novo on appeal.”

HEE Prejudgment interest may be awarded only as pro-
vided in Neb. Rev. Stat. § 45-103.02(2) (Reissue 2004).% Under
§ 45-103,02(2), prejudgment interest is recoverable only when
the claim is liquidated, that is, when there is no reasonable
controversy as to the plaintiff’s right to recover and the amount
of such recovery. This determination requires a two-pronged
inquiry. There must be no dispute as to the amount due and to
the plaintiff’s right to recover.

The district court determined that no reasonable controversy
existed as to the amount of damages. The appellants do not
dispute this determination. The appellants do, however, argue
that a reasonable controversy existed regarding Joseph’s rights
to retain Alphons’ assets. We disagree. Based on our analysis
above, we conclude that a reasonable controversy did not exist
as to Joseph’s rights to retain Alphons’ assets. We, therefore,
affirm the district court’s judgment on this issue.

CONCLUSION
For the reasons discussed, we affirm the judgment of the
district court.

AFFIRMED.

3 Travelers Indemnity Co. v. International Nutrition, 273 Neb. 943, 734
N.W.2d 719 (2007).

4 See id.
5 See id.

906 a

James E. Risor, APPELLEE, Vv. NEBRASKA BOILER, APPELLEE,
AND TWIN Ciry Fire Insurance Co., APPELLANT.
744 N.W2d 693

Filed January 25, 2008. No. S-07-269.

Joseph W. Grant, of Hotz, Weaver, Flood, Breitkreutz &
Grant, for appellant.

Brenda Spilker and Cynthia R. Lamm, of Baylor, Evnen,
Curtiss, Grimit & Witt, L.L.P., for appellee Nebraska Boiler.

Martin V. Linscott, of Linscott Law Office, for appellee
James E. Risor.

a ”

Heavican, C.J., Wricut, CoNnNoLLy, GERRARD, STEPHAN,
McCormack, and Miter-Lerman, JJ.

McCormack, J.
NATURE OF CASE

Twin City Fire Insurance Co. (Twin City) appeals from the
denial of its motion to intervene in a workers’ compensation
action while the appeal to the review panel of the underlying
award is pending. Although the review panel recognized that,
through error, Twin City had only recently been notified of the
action, it concluded that it lacked authority to grant the motion
to intervene.

BACKGROUND

James E. Risor filed his petition in the Nebraska Workers’
Compensation Court on January 20, 2004. Risor alleged bilat-
eral hearing loss from exposure to a loud work environment
at his employer, Nebraska Boiler. The accident date for the
hearing loss was alleged to be on or about June 25, 2002. The
petition also claimed various other injuries from work-related
accidents in 2002 and 2003.

In the proceedings before the single judge of the compen-
sation court, Fireman’s Fund Insurance Company (Fireman’s
Fund) entered an appearance for Nebraska Boiler for the cover-
age period of September 1, 1992, through June 1, 2002. Another
insurance company represented Nebraska Boiler for the period
after June 2002. The evidence presented before the single judge
demonstrated that Risor began experiencing hearing loss as early
as 1988. Until his retirement, however, the only time that Risor
missed any work due to the bilateral hearing loss was when he
went to a doctor’s appointment on October 19, 1993.

In its award entered on April 26, 2006, the single judge
concluded that Risor was permanently and totally disabled as
a result of the hearing loss arising out of and in the course of
his employment with Nebraska Boiler. The accident date for
the hearing loss was determined to be October 19, 1993. The
single judge found that compensation for the other alleged
injuries had already been paid. Payment for the total permanent
disability was ordered to begin as of the date of Risor’s retire-
ment, February 12, 2004.

908 |

An adjuster for Fireman’s Fund was sent notice of the
award. This same adjuster had originally informed Fireman’s
Fund’s attorney, who was hired to represent Nebraska Boiler,
that Fireman’s Fund provided workers’ compensation coverage
for Nebraska Boiler from September 1, 1992, through June 1,
2002. But when the adjuster was notified of the award setting
the date of the hearing loss injury at October 19, 1993, she
decided to investigate further into the dates of coverage.

_ Fireman’s Fund provided coverage for Nebraska Boiler under
a corporate account with the company Aqua Chem, in which
any subsidiary companies acquired by Aqua Chem automati-
cally became “additional named insureds.” Nebraska Boiler
was owned by Aqua Chem at the time Risor’s claim was filed.
The adjuster had apparently assumed that Nebraska Boiler
was owned by Aqua Chem during the entire period of Aqua
Chem’s contract with Fireman’s Fund. After the award, the
adjuster discovered that, in fact, Aqua Chem did not acquire
Nebraska Boiler until June 23, 1998. Accordingly, contrary to
its representations to the single judge, Fireman’s Fund was not
Nebraska Boiler’s workers’ compensation insurer on the date of
Risor’s hearing loss injury.

The award had already been entered when Nebraska Boiler
learned that Fireman’s Fund was not its insurer on the date of
Risor’s injury. Nevertheless, Nebraska Boiler, “as its interests
appear through June 1, 2002,” filed a motion with the single
judge seeking a continuation of the proceedings and allowing
that “additional parties who may have an exposure to liability
once a final determination has been made” be served and given
an opportunity to present additional evidence to the court. Risor
appealed the award to the review panel on May 9, 2006, on the
ground that the single judge had failed to order compensation
from the date of his injury, as opposed to the date of his retire-
ment. On May 10, the single judge overruled Nebraska Boiler’s
motion, and Nebraska Boiler cross-appealed the underlying
award to the review panel. Nebraska Boiler’s cross-appeal
asserted various errors with the award, including the absence of
participation by the insurer for the time period of the accident.
Risor’s appeal and Nebraska Boiler’s cross-appeal of the award

are still pending before the review panel and are not at issue in
this appeal.

It was eventually discovered that Nebraska Boiler’s insurer
for the period of August 1, 1991, to August 1, 1998, was Twin
City. Twin City insured Nebraska Boiler through a contract with
its previous parent company, National Dynamics Corporation.
Twin City was informed of Risor’s claim on August 1, 2006.
On October 25, 2006, Twin City filed with the review panel
a motion for leave to intervene in Risor’s pending review pro-
ceeding, which is the subject of the present appeal. The motion
stated in part:

4. If allowed to intervene, [Twin City] will seek a
reversal of the Award of April 26, 2006, and a remand
for a new trial. If [Twin City] is not given an opportunity
to intervene, fundamental principles of law will be vio-
lated, in that it will face significant exposure under the
Nebraska Workers’ Compensation Act, without having had
the opportunity to even be heard on the issues herein.

5. [Twin City] respectfully notes that its insured has at
all times been the only named Defendant herein, and that
perhaps [Twin City] could simply have its counsel enter
an appearance herein. However, as [Twin City] has not
participated in this action to date in any way, this Motion
is being filed to seek to have [Twin City’s] right to partici-
pate in any further proceedings recognized.

The review panel denied Twin City’s motion to intervene, not-
ing that there was no statutory authority for such action and
that the compensation court lacked equitable powers. Twin
City appeals.

ASSIGNMENT OF ERROR

Twin City asserts that the review panel erred as a mat-
ter of Jaw in refusing to grant Twin City’s request for leave
to intervene.

STANDARD OF REVIEW
HM Whether a party has the right to intervene in a proceed-
ing is a question of law.’ The determination of whether the

' Merz v. Seeba, 271 Neb. 117, 710 N.W.2d 91 (2006).

910 a

procedures afforded an individual comport with constitutional
requirements for procedural due process presents a question of
law An appellate court is obligated in workers’ compensation
cases to make its own determinations as to questions of law.

ANALYSIS

The only issue in this case is whether Twin City had a right
to intervene in the appeal of the award to the review panel when
Twin City had no notice of Risor’s action prior to that time.
For reasons that will be explained further below, we conclude
that Twin City did not have a right to postaward intervention in
Risor’s workers’ compensation action brought solely against his
employer, Nebraska Boiler.

Il We have said that the employer’s workers’ compensation
insurer is a proper patty defendant in a workers’ compensation
action, but that it is not a necessary party to the action.‘ Both the
Nebraska Workers’ Compensation Act (the Act)* and the rules of
the compensation court are silent on the issue of intervention.
And, as Risor points out, the compensation court is a tribunal of
limited and special jurisdiction and has only such authority as
has been conferred on it by statute.°

Twin City, however, argues that the power to allow its inter-
vention should be inferred from § 48-168(1) and the beneficent
purposes of the Act.”? Most often, § 48-168(1) is cited for the
proposition that within the confines of the Due Process Clause,
the compensation court has flexibility in the admission and

2 Newman v. Rehr, 263 Neb. 111, 638 N.W.2d 863 (2002).

3 Foster v. BryanLGH Med. Ctr. East, 272 Neb. 918, 725 N.W.2d 839
(2007).

* Peek v, Ayers Auto Supply, 157 Neb. 363, 59 N.W.2d 564 (1953).
5 Neb. Rev. Stat. §§ 48-101 to 48-1,117 (Reissue 2004 & Cum, Supp. 2006).

© See Anthony v. Pre-Fab Transit Co., 239 Neb. 404, 476 N.W.2d 559
(1991).

7 See § 48-168(1).

consideration of evidence relating to the employee claim.® This
is clearly the focus of § 48-168(1), which states in full:
The Nebraska Workers’ Compensation Court shall not
be bound by the usual common-law or statutory rules of
evidence or by any technical or formal rules of proce-
dure, other than as herein provided, but may make the
investigation in such manner as in its judgment is best
calculated to ascertain the substantial rights of the parties
and to carry out justly the spirit of the Nebraska Workers’
Compensation Act.
Nevertheless, Twin City points out that the Act is generally
to be given a liberal construction in order to carry out justly
its beneficent purposes.? And thus, Twin City argues that
§ 48-168(1) should be construed to allow postaward interven-
tion by an insurer despite the fact that no other provision spe-
cifically grants this power.

HH We are unconvinced that either § 48-168(1) or the Act’s
beneficent purposes, either alone or in conjunction with one
another, authorize a postaward intervention of the insurer in this
case. It is a general principle that intervention is not authorized
after trial? When posttrial intervention has been authorized in
the district courts of Nebraska, it is in the exercise of the court’s
equity jurisdiction.’ But no Nebraska statute grants equity juris-
diction to the compensation court.”

5 See, e.g., Olivotto v. DeMarco Bros. Co., 273 Neb. 672, 732 N.W.2d 354
(2007); Veatch v. American Tool, 267 Neb. 711, 676 N.W.2d 730 (2004);
Cunningham v. Leisure Inn, 253 Neb. 741, 573 N.W.2d 412 (1998);
Sheridan v. Catering Mgmt., Inc., 252. Neb. 825, 566 N.W.2d 110 (1997);
Paulsen v. State, 249 Neb. 112, 541 N.W.2d 636 (1996).

> See, Soto v. State, 269 Neb. 337, 693 N.W.2d 491 (2005); Jackson v. Morris
Communications Corp., 265 Neb. 423, 657 N.W.2d 634 (2003); Foote v.
O'Neill Packing, 262 Neb. 467, 632 N.W.2d 313 (2001).

1 See Neb. Rev. Stat. § 25-328 (Cum. Supp. 2006). See, also, e.g., Diaz v.
Attorney General of State of Tex., 827 S.W.2d 19 (Tex. App. 1992); Jenkins
v. Pullman Std. Car Mfg. Co., 128 Ind. App. 260, 147 N.E.2d 912 (1958).

1 See, e.g., State ex rel. City of Grand Island v. Tillman, 174 Neb. 23, 115
N.W.2d 796 (1962). See, also, Meister v. Meister, ante p. 705, 742 N.W.2d
746 (2007).

1 Anthony v. Pre-Fab Transit Co., supra note 6.

912 Le

Hl The beneficent purposes of the Act do not concern them-
selves with an insurer’s interests in intervention. In fact, there
is no provision in the Act that even requires notification of the
workers’ compensation insurer that an action against its insured
is pending. The principal purpose of the Act is to provide an
injured worker with prompt relief from the adverse economic
effects caused by a work-related injury or occupational disease."
That purpose is not implicated by an insurer’s intervention in a
review proceeding.

Still, Twin City argues that it is this interest of the employee
that is furthered by its intervention because, otherwise, a poten-
tial multiplicity of suits could delay recovery on an award.
This same argument was rejected by the court in Milner v. 250
Greenwood Ave. Corp.'* In Milner, the employee brought his
workers’ compensation action against his employer and did not
implead the employer’s insurer. The insurer then sought to be
designated as a party on appeal, arguing that this would avoid
circuity and multiplicity of actions. But the court explained that
the employee had chosen not to make the insurer a party in
order to avoid complicating and prolonging a judgment against
his employer:

[lt is clear that the only issue properly before [the work-
ers’ compensation court] was the liability of the employing
corporation as the sole respondent. Under the petition as
drawn and prosecuted petitioner’s purpose in instituting
these proceedings was to establish his right under the
provisions of the act to recover compensation directly
from the employer. For the attainment of that end it was
immaterial to him who, as between the employer and its
insurer or insurers, was ultimately chargeable with the
payment of compensation for his incapacity. In such a
situation it would be an unreasonable burden to impose
upon him the necessity of foregoing [sic] the protection
of the act until it was finally decided whether one or
the other of respondent’s insurers, who were not parties

® See, Soto v. State, supra note 9; Jackson v. Morris Communications Corp.,
supra note 9.
4 Milner v. 250 Greenwood Ave. Corp., 78 RI. 5, 78 A.2d 358 (1951).

in the case, was ultimately chargeable with the payment
of compensation.

We have said that proceedings under the Act are designed to
furnish a special proceeding, summary and speedy in its nature,
and for the particular purpose of compensating an injured
employee.'® While, under § 48-161, the compensation court
may determine the existence of insurance, such jurisdiction
is not exclusive.'” We agree with the reasoning in Milner that
joining an insurer and deciding coverage disputes may hinder
tather than further the beneficent purposes of the Act. As such,
we cannot interpret § 48-161 as authority for postaward inter-
vention when the employee has chosen to bring a claim against
the employer alone.

HM We ext consider Twin City’s argument that prin-
ciples of procedural due process mandate its participation in
the compensation ptoceedings. We have said that the concept
of due process defies precise definition, but that it embodies
and requires fundamental fairness.'* Due process requires notice
and an appropriate opportunity to be heard when a significant
property interest has been shown.'? The U.S. Supreme Court
has stated, “It is a violation of due process for a judgment to be
binding on a litigant who was not a party or a privy and there-
fore has never had an opportunity to be heard.””?

Section 48-146(3) provides that each workers’ compensation
policy shall contain a clause providing that the insurer “shall
in ali things be bound by the awards, judgments, or decrees
rendered against such insured.” And we have explained that this
section’s intent is to bind insurers to judgments rendered against

15 Id, at 10, 78 A.2d at 361 (emphasis in original).

16 Hull v. United States Fidelity & Guaranty Co., 102 Neb. 246, 166 N.W. 628
(1918).

1 See Schweitzer v. American Nat. Red Cross, 256 Neb. 350, 591 N.W.2d 524
(1999).

38 See Zahl v, Zahl, 273 Neb. 1043, 736 N.W.2d 365 (2007).
19 Newman v. Rehr, supra note 2.

20 Parklane Hosiery Co. v. Shore, 439 U.S. 322, 327 n.7, 99 S. Ct. 645, 58 L.
Ed. 2d 552 (1979).

o14 Le

their insureds.?! We thus agree that Twin City’s interests may be
affected by the proceedings against its insured, Nebraska Boiler.
Nevertheless, we conclude that because Nebraska Boiler and
Twin City are in privity with one another, due process does not
compel Twin City’s intervention in the review proceedings.
Hl Privity requires, at a minimum, a substantial identity
between the issues in controversy and a showing that the par-
ties in the two actions are really and substantially in interest
the same.” Absent a showing of fraud or collusion, courts in
other jurisdictions have found insurers to be in privity with
their insureds and bound by a judgment against the insured,
regardless of whether the insurer was notified of the under-
lying action.” Thus, in Harp v. Loux,* the court rejected a
defendant insurer’s argument that due process demanded that
a default judgment in a tort action against the defendant be set
aside because the insurer was not notified of the action. The
court explained:
The difficulty with [the defendant insurer’s] argument
is that the insurer’s legal interest in the action is wholly
derivative of the defendant’s . . . . It may be true that, in
fact, the insurer’s money and not the defendant’s is on the
table; however, the judgment runs against the defendant
and not the insurer.”

21 Thomas v. Omega Re-Bar, Inc., 234 Neb. 449, 451 N.W.2d 396 (1990);
Collins v. Casualty Reciprocal Exchange, 123 Neb. 227, 242 N.W. 457
(1932); Home Indem. Co. v. King, 34 Cal. 3d 803, 670 P.2d 340, 195 Cal.
Rptr. 686 (1983); Bernard v, Aeina Ins. Co., 150 So. 305 (La. App. 1933);
Power Co. v. General C. & S. Co., 252 Mich, 331, 233 N.W. 333 (1930);
Equitable Underwriters v. Industrial Com., 322 Tl. 462, 153 N.E. 685
(1926).

2 RW. v. Schrein, 263 Neb. 708, 642 N.W.2d 505 (2002).

% See, Crist v. Hunan Palace, Inc., 277 Kan. 706, 89 P.3d 573 (2004);
Cincinnati Ins. Co. v. MacLeod, 259 Ga. App. 761, 577 S.E.2d 799 (2003);
Liberty Mut. Ins, Co. v. Eades, 248 Va. 285, 448 S.E.2d 631 (1994). Cf,
RW. v. Schrein, supra note 22; Northern Sec. Ins. Co., Inc. v. Dolley, 669
A.2d 1320 (Me. 1996).

24 Harp v. Loux, 54 Or. App. 840, 636 P.2d 976 (1981).

25 Id. at 848, 636 P.2d at 981 (emphasis omitted).

Moreover, the court explained, insurers normally include notice
provisions in their contracts with the insureds, and it was “not
readily apparent why a plaintiff injured by an insured should
be required to protect the insurer from the consequences of the
insured’s failure to comply with the policy.”* The court noted
that the defendant could find “no case holding that an insurer
that is not a party has a due process right to service or notice of
an action in which its insured is a defendant.””” Similar reason-
ing has been applied more specifically to due process claims
of workers’ compensation insurers—even when the insurer
was required to maintain policy provisions like those set forth
by § 48-146(3).

In the case currently before us, Fireman’s Fund believed,
albeit incorrectly, that it was Nebraska Boiler’s insurer dur-
ing the period in which the court ultimately determined Risor
was injured. Fireman’s Fund, representing Nebraska Boiler,
vigorously defended against Risor’s claim. Twin City fails to
make any argument that there was fraud or collusion against
it. Rather, the evidence is that Nebraska Boiler’s interests,
represented by attorneys provided by Fireman’s Fund, were
substantially the same as Twin City’s. As such, we do not find
a violation of Twin City’s right to procedural due process from
the fact that Twin City was not notified of Risor’s action against
Nebraska Boiler and was not made a party to the proceedings
before the review panel.

Whether indemnification or any other remedy is available
to Twin City is not before us in this appeal. But Risor, who
was under no obligation to join insurers in his action against
Nebraska Boiler, should not now have to wait for the resolution
of insurance policy and other disputes regarding coverage to
establish his award for workers’ compensation.

26 Id. at 849, 636 P.2d at 981,

27 Id. at 850, 636 P.2d at 982.

28 See, Lott-Edwards v. Americold Corp., 27 Kan. App. 2d 689, 6 P.3d 947
(2000); Home Indem. Co. v. King, supra note 21; Fidelity & Casualty Co. v.
Vantaggi, 309 Mich. 633, 16 N.W.2d 101 (1944); Bernard v. Aetna Ins. Co.,
supra note 21; Equitable Underwriters v. Industrial Com., supra note 21.

916 Es

To the extent that Twin City is complaining of a due process
violation because the date of the injury found by the single
judge was not a date alleged in Risor’s pleadings, that issue is
more properly the subject of an appeal on the merits. We are
uncertain how that alleged deficiency is relevant to intervention.
Moreover, we find that Twin City and Nebraska Boiler’s inter-
ests in any controversy on this issue are substantially similar.
Thus, this complaint likewise fails to call for Twin City’s inter-
vention in its own behalf. Twin City would be free to represent
the interests of its insured, Nebraska Boiler, in the appeal of the
award to the review panel, if it so chooses.

As a practical matter, an insurer is notified of the proceed-
ings against an insured because the insured would have an
interest in its insurer’s providing representation in the insured’s
behalf, and because the failure to provide such notice would
be a breach of its policy with the insurer. Thus, normally, the
insurer’s representatives participate in the workers’ compensa-
tion action, even though the insurer may not be a party. And the
date of the injury is usually not a surprise to the parties of the
action, including, as alleged in this case, the employee himself.
Thus, we recognize that the circumstances surrounding Twin
City’s request for intervention are unique. Nevertheless, there is
no statutory or constitutional authority for allowing Twin City
to intervene in a review proceeding. The review panel was cor-
rect in denying Twin City’s motion to intervene.

CONCLUSION
For the foregoing reasons, we affirm the judgment below.

AFFIRMED.

Davin J. ANDERSON, APPELLEE, V. ROBERT HOUSTON, DIRECTOR,
NEBRASKA DEPARTMENT OF CORRECTIONAL SERVICES, APPELLANT.
144. N.W.2d 410

Filed February 1, 2008. Nos. S-05-1561, S-06-206.

918 Ee

Jon Bruning, Attorney General, Kimberley Taylor-Riley, and
Ryan Gilbride for appellant.

Michael D. Nelson and Cathy R. Saathoff, of Nelson Law,
LLC., and April L. O’Loughlin, of O’Loughlin Law, P.C.,
for appellee.

Heavican, C.J., Wricut, ConNotty, GERRARD, STEPHAN,
McCormack, and MiLer-Lerman, JJ.

Heavican, C.J.
I. INTRODUCTION

David J. Anderson, an inmate at the Nebraska State
Penitentiary in Lancaster County, filed a writ of habeas corpus
in the district court for Douglas County. In his writ, Anderson
requested sentence credit for time he spent at liberty after the
Nebraska Department of Correctional Services (Department)
mistakenly released Anderson long before his sentences were
to expire. After concluding that it had jurisdiction over the mat-
ter, the district court granted Anderson’s writ. The Department
appealed and also filed a petition to bypass the Nebraska Court
of Appeals, which we granted. We reverse, and remand for rea-
sons set forth below. We also vacate the district court’s orders
for related legal fees and costs.

Il. BACKGROUND

Anderson was convicted in Douglas County District Court
of a Class III felony, theft by unlawful taking, and a Class IV
felony, theft by unlawful taking. The court sentenced Anderson
to 3 to 5 years’ imprisonment for the Class III felony and 20
months’ to 5 years’ imprisonment for the Class IV felony. The
court ordered the sentences to run concurrently.

On July 8, 2003, the Department mistakenly released
Anderson from incarceration a mere 3 months into his sentence.
If Anderson had remained in custody, he would have been
eligible for parole on July 14, 2004, with a mandatory release
date of July 14, 2005. The Department eventually discovered its
mistake and, on September 16, 2003, filed a motion for capias
and notice of hearing in the Douglas County District Court. The
record is unclear, however, whether notice of this hearing was
sent to Anderson, nor is it clear whether he received it. Anderson
claims he did not receive the notice. Either way, Anderson ‘did
not appear at the hearing scheduled for September 24. That
same day, the district court issued an order directing any law
enforcement officers to arrest Anderson if they located him.
Although the record does not explain why, the clerk’s office did
not issue that warrant for approximately 14 months.

In the interim, however, Douglas County filed a motion for

declaration of forfeiture of Anderson’s bail bond for the rea- *

son that Anderson failed to appear at the September 24, 2003,
hearing. This motion, which was filed on March 17, 2004, and
an accompanying letter were mailed to Anderson at an address
specified in the certificate of service. Had Anderson received
these documents, he certainly would have had reason to believe
that something was amiss with his status as a released prisoner.
It is not clear, however, where the county obtained that address
or whether the address was, in fact, accurate. On March 26, the
court entered a default judgment forfeiting Anderson’s bond.
On January 3, 2005, a little more than 9 months after the bond
forfeiture proceeding, police arrested Anderson during a routine
traffic stop. Anderson was then returned to the Nebraska State
Penitentiary in Lancaster County. After accounting for the time
Anderson was absent from prison, the Department found that his

920 a

recalculated parole eligibility date was January 9, 2006, and that
his new mandatory release date was January 9, 2007.

Anderson then filed a writ of habeas corpus in Douglas
County District Court. At the initial hearing, the Department
waived any objection to jurisdiction in Douglas County.
Anderson was then transported from the state penitentiary to
the Douglas County Correctional Center by the Douglas County
sheriff. Sometime later, however, the Department attempted to
quash Anderson’s habeas corpus petition on the ground that the
Douglas County District Court lacked subject matter jurisdic-
tion. After an evidentiary hearing, the district court concluded
that it had jurisdiction. This conclusion was based on Gillard v.
Clark,' which the district court read as standing for the propo-
sition that jurisdiction in habeas proceedings can effectively
be transferred from one county to another. The district court
noted that the Department waived jurisdiction at the initial
hearing and therefore concluded that jurisdiction was proper in
Douglas County.

The court then held’ an evidentiary hearing to address the
merits of Anderson’s underlying habeas claim. Here, the court
cited our decision in State v. Texel,? in which we held that pris-
oners must serve their sentences continuously and therefore
may not consent to serving sentences intermittently. As a result,
the court granted Anderson’s writ. In response, the Department
filed a notice of appeal, our case No. S-05-1561.

Shortly thereafter, the district court entered two additional
orders. In its first order, filed on January 20, 2006, the court
granted Anderson’s request that the Department pay court
costs. Then, in an order filed on February 10, 2006, the court
permitted Anderson to withdraw his request that the Department
pay his legal fees. The Department appealed these orders, our
case No. S-06-206, and filed a petition to bypass the Court of
Appeals. We consolidated both appeals for our review.

' Gillard v. Clark, 105 Neb. 84, 179 N.W. 396 (1920).
? State v. Texel, 230 Neb. 810, 433 N.W.2d 541 (1989).

II. ASSIGNMENTS OF ERROR
On appeal, the Department assigns that the district court
erred by (1) finding that it had subject matter jurisdiction over
Anderson’s habeas petition, (2) granting habeas corpus relief
to Anderson, and (3) entering the January 20 and February 10,
2006, orders after the Department perfected its initial appeal.

IV. STANDARD OF REVIEW

Hf A jurisdictional question that 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 inde-
pendent of the lower court’s decision?

Hl it appears that Nebraska case law has not yet expressly
identified the exact standard of review on appeal of a habeas
petition. Drawing insight from other jurisdictions, we hold that
on appeal of a habeas petition, an appellate court reviews the
trial court’s factual findings for clear error and its conclusions
of law de novo.*

V. ANALYSIS

We think it prudent to address the arguments in the order in
which they were presented to us. Accordingly, we begin our
analysis by addressing whether the district court had jurisdic-
tion and then consider the Department’s claim that Anderson
was not entitled to habeas relief. We conclude our analysis
by addressing the orders of the district court issued after the
Department’s notice of appeal.

1. JURISDICTIONAL QUESTION
Hl The Department claims that the district court for Douglas
County did not have subject matter jurisdiction over Anderson’s
habeas petition because Anderson was confined in Lancaster
County. It is well established that if the court from which an
appeal was taken lacked jurisdiction, the appellate court acquires
no jurisdiction.> Thus, if the district court lacked jurisdiction to

3 State v. Loyd, 269 Neb. 762, 696 N.W.2d 860 (2005).
4 See Garcia v. Mathes, 474 F3d 1014 (8th Cir. 2007).
5 State v. Jacques, 253 Neb. 247, 570 N.W.2d 331 (1997).

922 ||

entertain Anderson’s habeas petition, we, too, would have no
jurisdiction to review the merits of Anderson’s petition.

Tl Before we proceed to the substance of the jurisdictional
issue, we pause to note our belief that the Department may
have misspoken when it fashioned its argument. The argument
that the case should have been brought in the district court for
Lancaster County as opposed to the district court for Douglas
County is perhaps a challenge to venue rather than subject mat-
ter jurisdiction. The difference is significant. For one, litigants
cannot confer subject matter jurisdiction upon a tribunal by
acquiescence or consent.® In contrast, venue provisions confer a
personal privilege which may be waived by the defendant.’

Hl In addition, we think it clear that the Douglas County
District Court had subject matter jurisdiction in this case.
Under Nebraska law, an application for habeas relief may be
made to “any one of the judges of the district court, or to any
county judge.”® Because “any” district judge obviously includes
the district court for Douglas County, it is beyond dispute that
the district court for Douglas County had subject matter juris-
diction over Anderson’s habeas claim.

I But while the above language makes clear that any and all
district courts in Nebraska have subject matter jurisdiction over
habeas claims, it does not identify which county’s district courts
may hear habeas claims. This issue—essentially a question of
venue—is the issue which lies at the heart of the Department’s
argument. To resolve that question, we turn to Gillard, in
which this court held that

an application for a writ of habeas corpus to release a
prisoner confined under sentence of court must be brought
in the county where the prisoner is confined. [Citation
omitted.] And where proceedings are instituted in another

© Muir v. Nebraska Dept. of Motor Vehicles, 260 Neb. 450, 618 N.W.2d 444
(2000) (citing Hagelstein v. Swift-Eckrich, 257 Neb. 312, 597 N.W.2d 394
(1999)).

7 Id.

8 Neb. Rev. Stat. § 29-2801 (Reissue 1995) (emphasis supplied).

° Gillard, supra note 1, 105 Neb. at 87, 179 N.W. at 398. See, also, Addison
v. Parratt, 204 Neb. 656, 284 N.W.2d 574 (1979).

a “
county, it is the duty of the court, on objection to its juris-
diction, to dismiss the proceedings.

Relying on Gillard, the Department points out that Anderson
was confined in the Nebraska State Penitentiary in Lancaster
County, yet sought habeas relief in the district court for Douglas
County. In effect, the Department appears to suggest that the
district court for Douglas County was not the proper venue to
litigate the merits of Anderson’s habeas claim.

Hi While the Department would be correct under Gillard’s
general rule, other language in Gillard provided for a
narrow exception:

[W]Jhere application is made for a writ of habeas corpus
to the d[i]strict court of a county other than that in which
the prisoner is confined, and the officer in whose custody
the prisoner is held brings the latter into court and sub-
mits to the jurisdiction without objection, the prisoner is
then under confinement in the county where the action
is brought, and the court has authority to inquire into the
legality of his restraint.!°

We believe this exception applies here. Although Anderson
filed his habeas petition in Douglas County—a county other than
the one in which he was confined—Anderson was later trans-
ferred to the Douglas County Correctional Center. Moreover,
the Department submitted to the court’s “jurisdiction” at the
initial hearing by failing to object to venue in Douglas County.
As such, Anderson was under confinement in Douglas County.
The Douglas County District Court therefore had authority to
consider the legality of Anderson’s restraint.

2, ANDERSON’S CLAIM FOR HABEAS RELIEF
HM Having resolved that the district court had jurisdic-
tion over Anderson’s habeas claim, we turn now to address
the merits of the habeas claim itself. The habeas corpus writ
provides illegally detained prisoners with a mechanism for
challenging the legality of a custodial deprivation of liberty.
To secure habeas corpus relief, the prisoner must show that he

19 Gillard, supra note’, 105 Neb. at 87, 179 N.W. at 398.
4 See Tyler v. Houston, 273 Neb. 100, 728 N.W.2d 549 (2007).

924 Le

or she is being illegally detained and is entitled to the benefits
of the writ.’

Anderson argues that he is entitled to day-for-day credit
toward his sentence for the time that he, an erroneously released
prisoner, spent at liberty. Anderson essentially believes that his
sentence continued to run from July 8, 2003, the date of errone-
ous release, to January 3, 2005, the date he was picked up by
officers, as though he were in prison the entire time. Therefore,
Anderson believes the Department was obligated to release
him no Jater than July 14, 2005, the date his sentence was
originally set to expire, and that detaining him beyond that date
was illegal.'>

In making this argument, Anderson invokes a line of cases
under which erroneously released prisoners received sen-
tence credit based on the belief that prematurely releasing
and then reincarcerating a prisoner impermissibly interferes
with the prisoner’s right to expeditiously pay his or her debt
to society.* We review this authority immediately below, then
address what impact it may have on the present case in a
subsequent section.

(a) Theories Permitting Relief to

Prematurely Released Prisoners
As set forth in the seminal case of White v. Pearlman,’ a
prisoner’s “chance to re-establish himself and live down his
past” is frustrated if the prisoner is prevented from serving his
sentence continuously. This is because “a prisoner sentenced to
five years might be released in a year; picked up a year later to
serve three months, and so on ad libitum, with the result that he
is left without even a hope of beating his way back.”"* Therefore,
on the theory that the government should not be “permitted to

? See id.
13 See Piercy v. Parratt, 202 Neb. 102, 273 N.W.2d 689 (1979).

¥ See, In re Roach, 150 Wash. 2d 29, 74 P.3d 134 (2003) (collecting cases);
Gabriel J. Chin, Getting out of Jail Free: Sentence Credit for Periods of
Mistaken Liberty, 45 Cath. U. L. Rev. 403 (1996) (same).

15 White v. Pearlman, 42 F.2d 788, 789 (10th Cir. 1930).
16 Id.

| “
play cat and mouse with the prisoner, delaying indefinitely the
expiation of his debt to society and his reintegration into the free
community,”"? numerous courts now employ various remedies in
cases involving interrupted sentences.

Specifically, courts have developed three distinct theories for
granting relief to a prematurely released prisoner.'® The first
theory is based on notions of due process and is often called
the “waiver-of-jurisdiction theory.”"* It appears that courts apply
the waiver-of-jurisdiction theory when the premature release
resulted from gross negligence by prison officials and lasted “a
long period of time.” In such cases, the government is said to
have waived its right to reincarcerate the prisoner and thus the
remedy is a complete exoneration of the prisoner’s sentence.”!
The rationale is that it would be “unequivocally inconsistent
with ‘fundamental principles of liberty and justice’ to require a
legal sentence to be served” after such an interruption.”

The second theory, devised by the Ninth Circuit, is known
as the “estoppel theory” and is also rooted in notions of due
process.” Under this theory, the government is estopped from
reincarcerating the prisoner when a particular set of circum-
stances are present. Essentially, those circumstances arise when
(1) the government knew the facts surrounding the release,
(2) the government intended that the prisoner would rely upon
its actions or acted in such a manner that the prisoner had a
right to rely on them, (3) the prisoner was ignorant of the facts,
and (4) the prisoner relied on the government’s actions to his or
her detriment.”

"” Dunne v. Keohane, 14 E.3d 335, 336 (7th Cir. 1994).
8 See, Tyler, supra note 11; In re Roach, supra note 14.
© Schwichtenberg v. ADOC, 190 Ariz. 574, 577, 951 P.2d 449, 452 (1997).

20 In re Roach, supra note 14, 150 Wash, 2d at 34, 74 P.3d at 137. See, also,
Schwichtenberg, supra note 19.

1 In re Roach, supra note 14; Schwichtenberg, supra note 19.
2 Green v. Christiansen, 732 F.2d 1397, 1399 (9th Cir. 1984).

2 U.S. v. Martinez, 837 F.2d 861, 865 (9th Cir. 1988). Accord Schwichtenberg,
supra note 19 (citing Martinez, supra).
24 Green, supra note 22.

926 a

Notably, a prisoner who knew that his or her release was
erroneous cannot claim to have been “ignorant of the facts” and
therefore cannot invoke the estoppel theory. Further, because
the estoppel theory is rooted in due process, and because a due
process challenge to executive action requires behavior that is
“egregious [and] outrageous,” the estoppel theory requires
some affirmative misconduct by authorities.””

The third and final remedy courts use in interrupted-detention
cases is to grant a prisoner day-for-day credit for the time spent
at liberty. However, numerous federal appellate courts have
held that the Due Process Clause does not require credit for
the time spent at liberty in cases of an interrupted sentence.”
Instead, credit for time spent at liberty is a common-law doc-
trine rooted in equity and is often called the “equitable doc-
trine.”° In contrast to the waiver-of-jurisdiction or estoppel
theories, a prisoner is eligible for credit under the equitable
doctrine when the premature release is due to simple negligence
by officials.>!

By asking for day-for-day credit toward his sentence,
Anderson relies solely on the equitable doctrine of credit for
time spent at liberty. He does not advance an argument under
the waiver-of-jurisdiction or estoppel theories, nor do we find
evidence in the record suggesting that the Department commit-
ted misconduct rising to the level of a due process violation
when it prematurely released Anderson. As such, today’s deci-
sion focuses solely on whether Anderson is entitled to credit for
time spent at liberty under the equitable doctrine.

25 Martinez, supra note 23, 837 F.2d at 865.

6 County of Sacramento v. Lewis, 523 U.S. 833, 847 n.8, 118 S. Ct. 1708, 140
L. Ed. 2d 1043 (1998).

27 Martinez, supra note 23.

°8 Tyler, supra note 11; In re Roach, supra note 14.

9 See, e.g., Vega v. U.S., 493 F.3d 310 (3d Cir. 2007); Thompson v. Cockrell,
263 FB: sd 423 (Sth Cir. 2001); Hawkins v. Freeman, 195 F.3d 732 (4th Cir.
1999); Dunne, supra note 17.

% Tyler, supra note 11, 273 Neb. at 108, 728 N.W.2d at 556. Accord, In re
Roach, supra note 14; Schwichtenberg, supra note 19.

31 In re Roach, supra note 14; Schwichtenberg, supra note 19.

For decades, the common-law rule in Nebraska was harsh but
simple: Prisoners were not entitled to credit for time spent out-
side the prison, regardless of the circumstances.” The first sign
that this longstanding rule might be in jeopardy came in Texel.
In dicta, the Texel court observed that prisoners have the right
to serve their sentences in a continuous manner,* a conclusion
which, as noted above, is universally cited as a reason to pro-
vide a remedy in interrupted-sentence cases.>>

More recently, we had occasion to discuss credit for time
spent at liberty in Tyler v. Houston.* In Tyler, a prisoner sought
day-for-day credit for time spent out on bond while the state
appealed, and ultimately succeeded in overturning, the district
court’s grant of habeas relief. Although we surveyed court deci-
sions applying the equitable doctrine, we found it unnecessary
to formally adopt or reject the doctrine in that case. As we
explained, even jurisdictions recognizing the equitable doctrine
refused to grant credit for time spent at liberty while the gov-
ernment appeals an adverse habeas ruling.*”

Resolving Anderson’s claim requires that we finally confront
questions hinted at in Texel and left unresolved in Tyler: Are
prisoners in Nebraska ever entitled to day-for-day credit for
time erroneously spent at liberty under the equitable doctrine,
and if so, under what circumstances will such credit be forth-
coming? It is to those questions that we now turn.

(b) Variations of the Equitable Doctrine
In considering whether to adopt the equitable doctrine in
Nebraska, we note that there are numerous variations to choose
from. The Ninth Circuit, for example, simply grants credit for
time erroneously spent at liberty so long as the prisoner did

® See, Ulrich v. O’Grady, 136 Neb. 684, 287 N.W. 81 (1939); Goodman v.
O’Grady, 135 Neb. 612, 283 N.W. 213 (1939); Mercer v. Fenton, 120 Neb.
191, 231 N.W. 807 (1930).

% Texel, supra note 2.

4 Id.

% See, e.g., White, supra note 15,
3 Tyler, supra note 11.
37 Id. (citing Hunter v. McDonald, 159 F.2d 861 (10th Cir. 1947)).

928 Ee

not contribute to his or her release.** In so holding, the Ninth
Circuit does not take into account whether. the prisoner misbe-
haves while at liberty.*° Several other courts, however, find that
prisoners who “abscond[] legal obligations while at liberty”
are not entitled to credit for time spent at liberty under the
equitable doctrine.”

Similarly, courts recognizing the equitable doctrine disagree
about whether to grant credit to prisoners who remained silent
when released, even though they knew the release was prema-
ture. A few courts, including the Ninth Circuit and Arizona
Supreme Court, conclude that such “informed silence” is incon-
sequential. Those courts grant credit for time spent at liberty
even where the prisoner knew the release was erroneous and
yet said nothing to authorities! In contrast, several other
courts have either denied credit in cases of informed silence”
or, conversely, granted credit specifically because the prisoner
informed officials of the mistake.

The district court in this case specifically found that Anderson
did not cause his premature release, nor is there evidence
that Anderson committed any crimes while he was errone-
ously at liberty. However, a legitimate question remains as to
whether Anderson knew that his release was premature and yet
remained silent.

38 Martinez, supra note 23.

39 See Schwichtenberg, supra note 19 (citing Martinez, supra note 23).

* Tyler, supra note 11, 273 Neb. at 109, 728 N.W.2d at 557. See, e.g., In re
Roach, supra note 14; Brown v. Brittain, 773 P.2d 570 (Colo. 1989); In re
Messerschmidt, 104 Cal. App. 3d 514, 163 Cal. Rptr. 580 (1980).

“| See, Martinez, supra note 23; Schwichtenberg, supra note 19. See, also,
Vega, supra note 29; People ex rel. Bilotti v. Warden, 42 A.D.2d 115, 345
N.Y.S.2d 584 (1973).

® Diaz v. Holder, 136 Fed. Appx. 230 (11th Cir. 2005); Gaines v. Florida
Parole Com’n, 962 So. 2d 1040 (Fla. App. 2007); Pugh v. State,
563 So. 2d 601 (Miss. 1990). See, also, In re Roach, supra note 14
(Chambers, J., concurring).

White, supra note 15; United States v. Merritt, 478 F, Supp. 804 (D.D.C.
1979); Hartley v. State, 50 Ala. App. 414, 279 So. 2d 585 (1973) (quoting
White, supra note 15).

In Schwichtenberg v. ADOC,“ the Arizona Supreme Court
addressed whether prisoners who remain in informed silence are
entitled to credit under the equitable doctrine. The court framed
the issue as whether a prisoner was “at fault” for his prema-
ture release simply because he knew the release was erroneous
yet said nothing. The court observed that “fault” implies that
an individual “refrained from doing that which he had a duty
to do.”*5 Because a prisoner is “under no legal obligation” to
speak up, the court concluded that a prisoner’s informed silence
should not disqualify him or her for sentence credit under the
equitable doctrine.*®

HH We believe, however, that credit for time spent at liberty
should be unavailable to prisoners who are aware of the error,
yet fail to object. A refusal to grant credit for time spent at lib-
erty is not a form of punishment, and therefore, it is irrelevant
that prisoners have no legal duty to bring a mistake to the atten-
tion of authorities. Rather, “[c]redit for time erroneously at lib-
erty is an equitable doctrine and should be applied only where
equity demands its application.”*” Therefore, the conclusion that
informed silence disqualifies a prisoner from receiving sentence
credit reflects not so much that the prisoner failed to execute a
legal duty, but that such behavior renders the prisoner ineligible
for equitable relief.

That certain behavior might prevent a prisoner from invoking
the equitable doctrine is not a novel concept. Indeed, as noted
above, numerous courts believe that it would offend notions of
equity to credit a prisoner for time erroneously spent at liberty
if the individual spent that time committing additional crimes.
We believe similar considerations ought to apply as to how a
prisoner handles the prospect of being released prematurely.

It has been said, both here and elsewhere, that two rights
are served by the equitable doctrine. The first right is society’s
“tight to expect that once a defendant has been incarcerated, the

“4 Schwichtenberg, supra note 19.
4 Id. at 579, 951 P.2d at 454.
46 Id.

41 In re Roach, supra note 14, 150 Wash. 2d at 38, 74 P.3d at 139 (Chambers,
J., concurring).

930 be

time will not be served in bits and pieces.”“* Of course, it is also
true that “[t]hose tried and convicted of crimes owe a debt to
society” and that “[s]ociety is entitled to have that debt paid”?
So whatever society’s interest in seeing that the government
does not play cat and mouse with prisoners, society has at least
as much “interest in knowing that its criminals are serving the
punishment to which they have been sentenced, regardless of
. .. negligent error attributable to the government.”

That leaves us with the other interest served by the equitable
doctrine: The right of “a prisoner . . . to pay his debt to society
in one stretch, not in bits and pieces.”>! Drawing upon this lan-
guage, Anderson reminds us that he “had the right to serve his
sentence in one single period of incarceration under Nebraska
law.” Of course, a prisoner who genuinely cherishes his right
to a continuous sentence, as Anderson purports to be, should at
least “call[] attention to the mistake being made” before being
“ejected from the penitentiary,”

In contrast, a prisoner who remains in informed silence
when erroneously released and then asks for equitable relief
upon reincarceration is not truly motivated by the right to a
continuous sentence. Rather, such a prisoner is motivated by
nothing more than the unsurprising desire to avoid as much jail
time as possible. It takes little imagination to see that prison-
ers who know their release is premature might nevertheless
remain silent in the hope that the mistake will go unnoticed
by officials. Predictably, when officials discover the mistake,
these prisoners try to obtain credit for time spent at large by
arguing that the mistaken release—a mistake they declined
to point out—deprived them of the right to a continuous sen-
tence. It seems plain to us, however, that the equitable doctrine

‘8 Texel, supra note 2, 230 Neb. at 814, 433 N.W.2d at 544.

© In re Roach, supra note 14, 150 Wash. 2d at 38, 74 P3d at 139 (Chambers,
J. concurring).

% Com. v. Blair, 699 A.2d 738, 743 (Pa. Super. 1997). See, also, Artez v.
Mulcrone, 673 F.2d 1169 (10th Cir. 1982).

5! Texel, supra note 2, 230 Neb. at 814, 433 N.W.2d at 544.
* Brief for appellee at 9.
53 See White, supra note 15, 42 F.2d at 789.

was not meant to encourage such a blatant attempt to game
the system.

HE Like a majority of courts, we agree that no equitable
relief is required where a prisoner causes his or her own pre-
mature release from prison, thwarts governmental attempts at
recapture, or misbehaves while at liberty. But we also believe
that “[w]here it is clear that a prisoner had knowledge of a gov-
ermment mistake and made no effort to correct it, equity does
not demand credit for time at liberty.’** As such, we hold that
prisoners who had knowledge of a governmental mistake and
yet made no effort to correct it—like prisoners who actively
cause or prolong a premature release or commit crimes while
at liberty—do not deserve sentence credit under the equitable
doctrine. Such a prisoner has essentially acquiesced in the loss
of his or her right to a continuous sentence.

To preserve the right to credit for time spent at lib-
erty, a prisoner who knows his or her release is erroneous must
make a reasonable attempt to notify authorities of the mistake.
Although the prisoner need not “continue to badger the authori-
ties,” a reasonable attempt may well include voicing an objec-
tion at the time of release or contacting authorities a short time
later in order to clarify his or her status.*

Having determined that informed silence disqualifies a pris-
oner from receiving credit for time spent at liberty, we next
address how lower courts should determine whether the pris-
oner knew that the release was, in fact, premature. It has been
argued elsewhere that determining whether a prisoner knew
the release was premature would be “difficult or impossible.”>*
The argument is that the complex nature of modern sentenc-
ing schemes would make it difficult for prisoners to identify a
precise release date and therefore recognize that they are being
released prematurely.”

*4 See In re Roach, supra note 14, 150 Wash. 2d at 39-40, 74 P.3d at 139
(Chambers, J., concurring).

5 Merritt, supra note 43, 478 F. Supp. at 807.
56 Schwichtenberg, supra note 19, 190 Ariz. at 579, 951 P.2d at 454.
51 See id. See, also, In re Roach, supra note 14 (Chambers, J., concurring).

932 Es

HH {n responding to these concerns, we note that “{a]mong
our most cherished rights, as American citizens, are the free-
dom of choice.as to our movements, to be free to go where and
when we wish, and the right to control and use our worldly
possessions as we see fit’** Given the significance of those
interests, we believe that unless the sentence has been exten-
sively modified by things such as earned release time, work
release, or a commutation, a prisoner ought to know the date
of his or her release with some. precision. We therefore hold
that the prisoner carries the burden to show that the complex-
ity in calculating his or her release date, or some cognitive
deficiency, prevented him or her from realizing the release was
premature. At the same time, the government has what essen-
tially amounts to a burden of production to provide the prisoner
with any and all records relevant to this inquiry. Such records
would include any copies of the original sentencing order, as
well as any records related to earned release time, work release,
commutations, and any other such materials.

The record in this case does not conclusively resolve whether
Anderson tried to inform officials that his release was prema-
ture. We therefore find it necessary to remand this cause for the
trial court to determine whether Anderson tried to inform offi-
cials of their mistake and, if not, whether Anderson reasonably
did not know his sentence was set to expire.

On remand, the district court is directed to make findings
regarding the circumstances surrounding the 14~month lag from
the date the district court authorized Anderson’s recapture and
the date the warrant was actually issued. Specifically, the district
court is to determine whether Anderson had or should have had
notice of the September 24, 2003, hearing on the Department’s
motion for capias. The parties should also present evidence
with regard to Douglas County’s motion to declare a forfeiture
of Anderson’s bond. If notice of either hearing was mailed
to Anderson’s residence, it could be evidence that Anderson
knew his release was premature from that point forward. We
reemphasize that the Department has a duty to provide any
records and documents that may be relevant to this inquiry.

+8 Boockholdt v. Brown, 224 Ga. 737, 739, 164 S.E.2d 836, 838 (1968).

On remand, the parties should also present evidence as to
why the arrest warrant for Anderson was not issued immedi-
ately after it was authorized by the district judge on September
24, 2003. Since the Department has a responsibility to provide
any records relevant to this issue, the district court’s inquiry in
this regard should include a determination as to whether the
delay was the part of an organized and diligent plan to notify,
find, and reapprehend Anderson, or was instead the product of
misconduct—negligent or affirmative—by public officials. If
the latter, the district court shall determine what impact, if any,
this should have on the equities of denying Anderson credit for
any or all of the 14 months after the warrant was authorized, but
before it was issued. Obviously, this equitable analysis should
be conducted in a manner consistent with the rationale and poli-
cies expressed in this opinion.

3. PROPRIETY OF ORDERS FOLLOWING
DepartMent’s Notice of APPEAL

The only issue remaining for our resolution is whether the
district court exceeded its authority when it issued orders grant-
ing Anderson’s request for payment of court costs and granting
Anderson’s motion to withdraw a prior request for legal fees.
To refresh, these orders, filed on January 20 and February
10, 2006, respectively, were issued after the Department had
already filed notice of its intent to appeal the district court’s
decision to grant Anderson habeas relief.

HH I is well settled that a trial court is divested of jurisdic-
tion when a party perfects appeal of a final order.*? The question
here is whether an order granting habeas relief to the petitioner
qualifies as a final order. Anderson argues that the order grant-
ing the writ of habeas corpus was not a final order because there
were still matters left for the court to resolve. The Department
argues the district court’s order granting Anderson habeas relief
was the final, appealable order. We agree.

%9 See, Billups v. Scott, 253 Neb. 293, 571 N.W.2d 607 (1997); McLaughlin
y. Hellbusch, 251 Neb. 389, 557 N.W.2d 657 (1997); WBE Co. v. Papio-
Missouri River Nat. Resources Dist., 247 Neb. 522, 529 N.W.2d 21 (1995).

934 be

HE Long ago, this court held that “[tJhe test of finality
for the purpose of an appeal in a habeas corpus proceeding is
not necessarily whether the whole matter involved in the action
is concluded, but whether the particular proceeding or action is
terminated by the judgment.” We have previously held that an
order denying habeas corpus relief qualifies as a final order.*
Therefore we hold that an order granting habeas relief also qual-
ifies as a final order. As such, the district court was divested of
jurisdiction when the Department perfected its appeal of the dis-
trict court’s order granting Anderson’s petition for habeas relief.
We therefore vacate the orders filed January 20 and February 10,
2006, for lack of jurisdiction.

VI. CONCLUSION

We conclude that the Douglas County District Court had
jurisdiction over Anderson’s habeas petition. Anderson was
confined in Douglas County at the time of the initial hearing
in this case, and the Department waived jurisdiction at the
initial hearing.

We further conclude that the district court erred in granting
Anderson’s habeas claim. The equitable doctrine of sentence
credit for time spent at liberty should not apply in cases where
the prisoner (1) caused or prolonged the premature release, (2)
committed crimes while at liberty, or (3) knew the release was
premature yet failed to bring the mistake to the government’s
attention. Because we cannot determine, based on this record,
whether Anderson attempted to inform authorities of their mis-
take, we find it necessary to remand the cause to the district
court. On remand, the court is to determine whether Anderson
made a reasonable attempt to inform authorities of their mistake
and, if not, whether Anderson legitimately did not know his
release was premature. As expressed above, the court is also
directed to make factual findings and conclusions regarding the
circumstances surrounding the 14-month period between the

© In re Application of Tail, Tail v. Olson, 144 Neb. 820, 825, 14 N.W.2d 840,
843 (1944),
Olson, supra note 60.

time the district court authorized an arrest warrant for Anderson
and when it was issued.

Finally, we hold that the district court lacked jurisdiction
when it issued two orders after the Department perfected its
appeal of the court’s decision to grant Anderson’s petition.
Accordingly, those orders are hereby vacated.

JuDGMENT IN No. S-05-1561 REVERSED, AND
CAUSE REMANDED FOR FURTHER PROCEEDINGS.
Jupcment IN No. S-06-206 vacarep.

ConnoLty and Gerrarp, JJ., concur in the result.

Wricat, J., concurring.

I concur. The issue is whether Anderson is entitled to credit
for time spent at liberty as a result of being prematurely
released. This is an equitable doctrine.

If the prisoner is obligated to notify the proper authority
when he knows his release was premature, the State has an obli-
gation to act when it discovers the error. The State is permitted
one error, but not two.

The Department discovered its mistake and sought a warrant
in Douglas County District Court. The court signed the warrant,
but the clerk’s office did not issue the warrant for approxi-
mately 14 months.

When considering what is fair, the State cannot be twice neg-
ligent at the prisoner’s expense. Once the State discovered the
premature release, it had a duty to act promptly.

If the State cannot establish a valid reason why the warrant
was not issued immediately after it was signed by the court,
Anderson should be entitled to credit for the time the State
knowingly failed to act. There is no evidence that Anderson
caused his premature release, nor is there evidence that he com-
mitted any crimes while he was at liberty. Equity must shine on
both sides of the coin.

936 be

In RE DissOLUTION AND WINDING UP of KeyTRONICS,
FORMERLY KNOWN AS SECURE Data SysTEMS,
A NEBRASKA GENERAL PARTNERSHIP.
Scorr WILLSON, APPELLANT, v. Don KING, APPELLEE.
744 N.W.24 425

Filed February 1, 2008. No. S-06-690.

ee 937
Le

Mitchel L. Greenwall, of Yeagley, Swanson & Murray, L.L.C.,
for appellant.

Bradley D. Holbrook, of Jacobsen, Orr, Nelson, Wright &
Lindstrom, P.C., for appellee.

Heavican, C.J., Wricut, CoNNOLLY, GERRARD, STEPHAN,
McCormack, and Mitter-Lerman, JJ.

McCormack, J.
NATURE OF CASE

The issue in this case is whether a business partnership was
formed between Don King and Scott Willson and, if so, what
business activities were part of that partnership. The Uniform
Partnership Act of 1998 (the Act),! at § 67-410(1), states
that “the association of two or more persons to carry on as
co-owners a business for profit forms a partnership, whether or
not the persons intend to form a partnership.” Willson brought
an action for the winding up and an accounting, alleging forma-
tion of a partnership, and King counterclaimed for wrongfully
withholding property, denying the partnership. The district
court found that King and Willson had “pooled resources,
money and labor,” but found no partnership existed because
there was no “specific agreement.” Alternatively, the court
found that because King did not commit his preexisting busi-
ness to any specifically formed partnership, the scope of the
partnership did not encompass any activity-garnering profits.
Willson appealed the district court’s order. We reverse, and
remand for further proceedings.

BACKGROUND
King and Willson first met sometime in 1999 when Willson,
an electronics technician and computer programmer, was work-
ing at a computer store. King was doing business at that time
under the name of “Washco,” as a sole proprietorship, and King
contracted with the store for a computer repair. Washco sold
and installed carwash systems and accessories. It also serviced.

1 Neb. Rev. Stat. §§ 67-401 to 67-467 (Reissue 2003).

938 Es

existing carwash systems and the systems it sold. Washco later
became Wash Systems, Incorporated.

One of the products King offered to his customers was the
“QuikPay” system. QuikPay is a cashless vending system for
carwashes. Customers use a memory chip key that can be placed
on their key chain and used with a controller at the carwash.
Either a cash value can be placed on the key, or an account can
be established through which carwash usage recorded on the
key is billed monthly.

Washco purchased QuikPay systems for resale from Datakey
Electronics Inc. (Datakey). Datakey’s main line of business was
the manufacture and sale of keys with reprogrammable memory
and their corresponding “Keyceptacles” for a variety of applica-
tions. The QuikPay carwash system was only one such applica-
tion, and it was becoming unprofitable for Datakey.

Part of the reason that the QuikPay system was unprofitable
was that the keys for QuikPay could only be obtained from
an attendant. If the key was set up for cash, when the credit
ran out, the key could only be recharged through an attendant.
Glen Jennings, president of Datakey, explained that since most
carwashes are unattended, this reliance on the presence of the
carwash owner or employee was limiting the product’s market.
The system needed some “peripherals” to make it self-service.
Datakey had decided, however, not to dedicate its limited
engineering resources to the design or manufacture of such
“peripherals.” It was looking into the possibility of working
with an outside source as the original equipment manufacturer
of such items.

As QuikPay’s largest distributor, King was aware that
QuikPay’s limitations made the product unattractive to many of
his customers. King was also having other problems with the
system. In the spring of 2002, Willson was working at a new
company as a computer programmer. King contacted Willson
privately to see if Willson could develop a combined “key
dispenser” and “revalue station” for the QuikPay system that
would make the system self-service. King also asked Willson if
he would design and install an interface between the QuikPay
system and the carwash of one of King’s customers. King
explained that although most carwashes already contained a

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third-party interface that would easily connect with the QuikPay

- system, a few did not. Without such an interface, King was
unable to sell QuikPay to these customers. Designing such an
interface was beyond King’s technical expertise.

There is little evidence in the record as to what sort of busi-
ness arrangement was made with regard to Willson’s services
in designing the interface. King states only that compensation
“was never discussed,” and, in fact, Willson was never paid for
his work. It is undisputed that Willson individually designed
and installed at least four specific customer interfaces that
allowed King to sell the QuikPay system to those customers.

As to the development of the key dispenser-revalue station,
King testified there was an oral agreement among himself,
Willson, and Scott Gardeen. Gardeen was an employee of
Datakey who was an original designer of QuikPay and was
King’s main contact with Datakey. According to King, they
agreed they would form a corporation whenever Willson devel-
oped the key dispenser-revalue station. Gardeen also recalled
discussing their business as a future corporation because they
were concerned about personal liability issues inherent to part-
nerships. Willson, on the other hand, had no memory of specifi-
cally discussing the formalities of their business relationship. He
was sure that they had agreed they would all “be a part of it”
and that they “each had a piece of the pie.”

The three parties met in Des Moines, Iowa, in the spring of
2002 to discuss the venture in which they would design and
build the key dispenser-revalue station and sell it to Datakey.
It was agreed that Willson would write the software and do
the firmware, hardware, and any other electrical or software
work; Gardeen would contribute his knowledge of the system
and his contact with Datakey; and King would contribute finan-
cial resources and his experience and contacts as QuikPay’s
largest distributor.

Together, Willson, King, and Gardeen came up with the
name “Secure Data Systems” for their business. They dis-
cussed the fact that the entity’s initials, “SDS,” were also
the initials of their first names, Scott, Don, and Scott. By
the summer, Willson had built a hand-held revalue station
for a meeting with Jennings. Jennings indicated that if a

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final, marketable key dispenser-revalue station were developed,
Datakey would be interested in a business relationship with
Secure Data Systems.

In the meantime, King was becoming increasingly frustrated
with maintenance of the QuikPay system for his customers. In
September 2002, King sent a letter to Gardeen complaining
about various issues with the system. The main complaint was
that controllers were not operating properly. Although Datakey
provided King with replacement controllers, King had'to drive
long distances to his customers’ sites to manually implement
the replacement or make other repairs he had not anticipated.
In the letter, King stated:

I can not [sic] continue to expose my self [sic] to the
expense of keeping this stuff running. Besides the expense
I don’t have the time. I don’t see that I have any other
choice but to back away from selling additional clients.
At least until the current problems are stable or we have
a new controller. I don’t feel like I can honestly charge or
pass expense’s [sic] on to my customer when this product
continues [to] have problems.

King then proposed:

Because of [Willson’s] future interests, I believe he
would be more motivated to address issues with the cur-
rent controller than a programmer with no interest in the
system. [Willson] has mentioned that programming cost
can exceed one hundred dollars an hour. If . . . Willson
were to work on the current system I believe he should be
compensated for his work. I would have to discuss it with
. . . Willson, but I don’t believe he would demand those
kind[s] of fees.

King suggested that Datakey allow Willson access to its
proprietary software.

King continued to involve Willson in dealing with other
technical issues relating to King’s QuikPay customers. Willson
explained: “[T]here w[ere] a lot of problems with the QuikPay
units. Sometimes they would put the wrong version of firm-
ware on there or they wouldn’t program for them at all and the
units just wouldn’t function properly.” It became King’s regular
practice to copy Willson into his e-mail correspondence with

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Datakey concerning QuikPay system maintenance. According
to Willson, King and Willson communicated regularly about
both the development of the key dispenser-revalue station and
QuikPay maintenance. Willson testified that he did not demand
or receive payment for these services, but believed they were
part of his contribution to the partnership.

Around October 2002, Datakey decided to discontinue its
QuikPay line. Its minimal sales of QuikPay were outweighed
by Datakey’s costs in addressing support issues for the product.
To each of its customers, Datakey sent one controller for every
two they had ever purchased, and informed them that Datakey
would no longer be supporting their product.

Datakey referred all of its customers to King at Washco
for continued support of the system. Datakey’s customer base
consisted of approximately 20 or 30 customers with a total
of at least 200 QuikPay controllers in use. It is unclear how
many QuikPay customers King had had prior to this time.
Datakey also gave to King, without charge, all of the parts and
equipment relating to QuikPay that Datakey had in stock. This
inventory had an original procurement cost of approximately
$200,000. Datakey had already given King and Willson access
to its software source codes. Jennings explained, “[W]e were
happy to have somebody who would give [QuikPay customers]
best-efforts supports [sic], because obsoleting a product can
reflect poorly on our name.” In addition, Datakey hoped to be
able to continue selling its keys and Keyceptacles to QuikPay
customers, if those systems were kept “alive” by King.

Willson testified that from the moment King acquired
Datakey’s customers and inventory, Willson was very involved
in making this acquisition a success. Willson testified that
King immediately asked him to put together a list of things
that they needed from Datakey to make all the inventory work.
The record contains an e-mail from Willson to King with this
list. In the e-mail, Willson also offered to accompany King
to Minneapolis, Minnesota, to Datakey’s headquarters if nec-
essary and Willson stressed that they would need as much
information as possible from Datakey “in order to make this a
successful venture.”

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Willson explained that he was in charge of assembly and
repairs of the QuikPay inventory once they received it. The inven-
tory was shipped in pieces, and many of the old input/output,
or I/O, boards had to be updated with the newest version of
the QuikPay program so that the QuikPay units would function
properly. Willson stated that his direct and indirect involve-
ment in customer service for the QuikPay line also increased at
this time.

Willson stated he was in frequent communication with King
regarding the QuikPay acquisition from Datakey and the devel-
opment of their new customer base. Willson said he discussed
with King in detail what would be appropriate pricing for
QuikPay repairs and equipment. The record contains evidence
of an e-mail from King to Willson with the QuikPay pricing
schedule. According to Willson, he and King discussed ways
to minimize costs of the QuikPay units. For example, Willson
stated that they jointly made the decision to discontinue about
half of the QuikPay box styles previously available to custom-
ers so that they could cut down on Secure Data Systems’ costs.
Willson also stated that they discussed creating a new brochure
to promote the QuikPay line to customers. “[B]etween help-
ing customers and modifying boards and getting the units put
together and tested so that [King] could sell those,” Willson
stated that when he had time, he also continued to work on
developing the key dispenser-revalue station.

King testified that by the beginning of 2003, he had deliber-
ately separated his QuikPay sales, maintenance, and its future
development from his Washco carwash business and had moved
all QuikPay business to Secure Data Systems. Around the same
time, Willson developed a Web site for Secure Data Systems
with e-mail accounts for King and Willson.

King continued to operate Washco as he had previously,
selling and maintaining the non-QuikPay carwash systems
and accessories. There is no allegation that Willson was ever
involved in non-QuikPay Washco ventures.

King and Willson had difficulties with some of the inventory
acquired from Datakey. The record contains a draft letter that
King e-mailed to Willson, in which King expressed his frustra-
tion to Gardeen, who, as mentioned, was King’s main liaison

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with Datakey. Apparently in reference to himself and Willson,
King repeatedly referred in the letter to “we” and “us.” King
stated that he would rather be writing a letter to Jennings thank-
ing him for “the faith that he extended to us that we have the
ability to make the QuikPay system work.” But, the system had
been “pieced mealed [sic]” to “us” and remained incomplete.
King made several complaints and described some of the future
challenges his acquisition would present:

Regarding the [computer] software, because of licens-
ing agreements, you told us that we had [to] go out
and buy [a specific computer application]. We did and
as you know it did not work. Now you are telling us
that we are going to have to go out and buy [another
computer application]. . - .

You suggested that we get on with development of
a new controller and write all new software. When the
parts run out, end users will simply have to purchase new
controllers and software. Development of a new controller
and software will differently happen. . . .

With the exception of the data back up problem in the
[computer] software, the controller and firmware with the
latest updates appear to be stable. On the other hand we
have no idea what is going to surface down the road.

King reminded Gardeen that there were customers with sub-
stantial commitment to Datakey’s key and that they “deserve
better.” King asked Datakey for more assistance and reiterated
that “we are looking forward to a long and successful associa-
tion with Datakey.”

Jennings explained that when King took over the QuikPay
system, Datakey had sent King compact discs with the source
files and other information Datakey thought would be needed
to support the system, but King was still having trouble getting
things to run. Both Jennings and Gardeen testified that it was
apparent that Willson was the person working with King to
get the QuikPay equipment working. And there was substan-
tial correspondence between Datakey and Willson regarding
the QuikPay system. Eventually, Jennings sent an e-mail to
Willson, copied to King, explaining that rather than trying to

944 Le

figure out which file might still be missing from the compact’
discs sent to them, Datakey would simply rebuild the system
on a computer and lend that computer to Willson as a reference
tool. This was, in fact, done.

When Jennings was asked whether he knew who the own-
ers of Secure Data Systems were, he answered that he “under-
stood that... King and . . . Willson were involved in Secure
Data Systems.” Upon further questioning, Jennings testified,
however, that it was “never clarified” whether both King and
Willson owned Secure Data Systems or whether one worked for
the other. : .

In May 2003, King and Willson went together to an inter-
national carwash convention in Las Vegas, Nevada. King sug-
gested to Willson that he make up Secure Data Systems busi-
ness cards for King and Willson. The cards presented Willson
as “System Designer & Engineer” and King as “Sales.” The
cards described Secure Data Systems as carrying the “QuikPay
Product Line.” According to King, “you just simply don’t go
to a convention like that without a card telling people who you
are.” In an e-mail sent by Willson to King at the end of April,
Willson asked King not to print up too many cards yet because
the next month he was planning on having a second telephone
line installed “specifically for Secure Data Systems so custom-
ers will have limited access to me as well,” and he wished to
add that number to his card.

After the Las Vegas trip, King and Willson had an argument
about the Secure Data Systems Web site because Willson had
made reference to a trademark name and logo on the site and
King was concerned about legal liability. Willson stated that he
became upset because of the way he felt he was being treated
by King during the.argument. After the argument, Willson sent
an e-mail to King stating, “[R]egarding Secure Data Systems
and our partnership, I have decided to take your suggestion and
leave you in complete control and give you complete owner-
ship.” Both King and Willson testified, however, that they soon
reconciled after this disagreement. They then continued with
their relationship as before, apparently without King’s ever
objecting to Willson’s characterization of their business relation-
ship as a partnership, and himself as a co-owner.

By the spring of 2003, Willson explained that his work
for Secure Data Systems consisted primarily of dealing with
QuikPay maintenance and repair issues, although he continued
to try to finish the key dispenser-revalue station whenever he
had time. Willson made changes in the QuikPay software to
fix some “annoy answers” and other problems that customers
wanted fixed. Willson then placed the software “patch” on the
Secure Data Systems’ Web site for downloading by Secure Data
Systems’ customers. There were also firmware upgrades that
had been designed by Datakey that had to be implemented. On
one occasion, Willson had to recover data and repair a unit that
had been struck by lightning.

Another maintenance job that Willson did was to continue to
modify I/O boards. Willson explained that the “older style [of
V/O boards] were burning out due to a transistor, a component
of the board not being set up right.” This particular modification
had been designed by Datakey, and Willson only implemented
it. By September, Secure Data Systems had hired another com-
pany to do the I/O board modifications because, as Willson
explained, the boards took about 45 minutes each and there
came to be too many of them.

Willson testified that King would call him regularly with
any number of QuikPay maintenance problems. According to
Willson, King was usually the direct contact with QuikPay
customers. Willson would correct the issues during the eve-
ning and early morning hours and put the repair information
onto the Secure Data Systems’ Web site for King to look at the
next morning. Willson stated that he also worked directly with
QuikPay customers on occasion.

As early as June 2003, Willson had asked King to clarify
what King thought Willson’s priorities should be concern-
ing his contribution to Secure Data Systems. King had asked
Willson to deal with a customer complaint as to the failure of
QuikPay’s managing software to automatically record cash keys
for accounting. In an e-mail to King, Willson explained that he
would rewrite a portion of the software, but that these QuikPay
maintenance issues were taking time away from developing the
key dispenser-revalue station:

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We need to get the vending machine completed, but I
get mixed signals from you alot [sic] as to what you want
to do. (ie. [sic] Vending machine, expresskey patch and
now this). I realize that they are all important and need to
be add[re]ssed and taken care of, but we need to stop mov-
ing back and forth, finish one and move on to the next as
we talked about before. Drop me a line and let me know

. what you think we need to be focusing on.

King replied:

I don’t intend to send mixed messages. I feel our priori-
ties ha[ve] always been and should remain on the Revalue
Station. We should follow up with a new controller, soft-
ware and hand held read/writer. . . .

This issue with this customer in Columbus[, Nebraska,]
is not the first time we have heard this complaint. It is
however the first time we have had a customer complain
this strongly about it. Issues like this and the complaints

_ that brought about the software patch, etc., arise routinely
in the course of the day to day activities of doing business.
‘We can not [sic] ignore these issues. We have to deal with
them in a manner that allows us to stay focused and still
do the best we can to deal with the complaints. It may
mean that we can only address a giv[en] issue with a band
aid [sic] or on a temporary basis. If it [is] something that
we can not [sic] provide we then have no other choice
but to advise the customer as such. If it is something that
is going to take a lot of time then we need to value the
importance while keeping our priorities in mind.

I am going to continue to call you when these things
come up. Again it is not by intention to change priorities.
We need to discuss these issue(s], if we can do anything,
the importance and how we want to handle what ever [sic]
comes along.

The record contains 17 repair tickets dating from March to
November 2003, totaling $4,150.77 in repairs done by Willson
on QuikPay systems for various customers. King admits that
either directly or indirectly, customers were billed off of these
tickets that King obtained through the Secure Data Systems’
Web site. Another bill is found in the record sent by King to

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a client for $600.26 in controller repairs, which King told the
client had been done by “Scott.” At trial, Willson estimated that
he had put at least 2,000 hours into QuikPay sales and main-
tenance and in developing the key dispenser-revalue station.

In correspondence with clients, King often referred to Willson
as the person doing technical work for QuikPay. Willson also
sent e-mails communicating directly with QuikPay clients on
various issues. In an e-mail dated August 12, 2003, Willson
describes himself as the software and hardware designer with
Secure Data Systems and he refers to King as his “partner.”
The record contains correspondence between King and Willson
discussing Secure Data Systems’ purchases for QuikPay maii-
tenance and development. In an e-mail from November 2003,
King forwarded to Willson the price list for what he had been
quoting customers for QuikPay repairs.

In October 2003, King sent an e-mail to a potential customer
in which King referred to Willson as “the other half of Secure
Data Systems.” This potential customer had an old version of
QuikPay, and King was trying to sell the owner updates that
Willson, who “does all the programming,” had made to the
software and firmware. These updates, King explained, coupled
with the necessary hardware updates, would resolve the owner’s
current complaints with his QuikPay system. King referred the
customer to the Secure Data Systems’ Web site for Willson’s
instructions as to how the owner should send his database in
for updating.

Willson incurred out-of-pocket expenses in 2002, but those
were apparently reimbursed by King. Willson stated that because
these out-of-pocket expenses were relatively small, King had
instructed him to make a list of those expenses so that King
could claim them on his taxes and Willson would not have to
worry about filing a special form. Willson was not aware that
he was supposed to file a partnership tax form, and he never
did so.

Again, in the first half of 2003, Willson testified that he
incurred out-of-pocket expenses, and he stated that he did not
always seek reimbursement for those expenses from King. It is
undisputed that later that year, King gave Willson a credit card
number and verification code so he could charge Secure Data

948 Le

Systems’ business to the card. It is unclear whether Willson
believed the card was an official Secure Data Systems’ card.
It was, in fact, King’s personal credit card that he had des-
ignated for Secure Data Systems’ business. Willson used the
card to purchase parts that he needed in working on QuikPay
maintenance and in development of the key dispenser-revalue
station. There is no evidence that Willson was required to get
King’s prior approval before incurring Secure Data Systems’
related. expenses.

When Willson was asked why he invested his time and
expertise into QuikPay without any remuneration, he explained,
“That was my contribution to the company. I mean that was
my piece.” Willson claimed that King periodically kept Willson
informed about how much money was in the bank that had
accrued in profits derived from QuikPay sales and maintenance.
Willson alleged that sometime in 2003, he and King discussed
distributing some of the profits through draws or bonuses at the
end of the year.

Still, Willson “started getting uneasy.” Willson explained that
he “wasn’t feeling comfortable continuing to repair controllers
[and] create a vending machine when the only reassurance I
had was, don’t worry, I’m not going to leave you hanging.”
Willson contacted a law firm to draw up papers to formalize
the partnership. These papers were never drafted. According to
Willson, when he told King he was looking into creating a writ-
ten agreement for their relationship, King “assured [him] that
he was having his attorneys look at it,’ and King asked for his
and his wife’s Social Security numbers. Willson’s wife testified
at trial that she remembered when King asked for their Social
Security numbers.

At the same time that Willson was seeking more formal
guarantees of his partnership interest, King was expressing his
impatience with the fact that Willson had not yet produced a key
dispenser-revalue station. Willson’s wife explained that shortly
before the meeting, King had come over to their house to pick
up something that Willson had worked on for QuikPay over
the Junch hour and that King had complained about Willson’s
“dedication.” She explained:

I was very upset because at that time I wanted [Willson]
to take our son to preschool and he couldn’t go because
he had to finish whatever it was [King] had him work-
ing on, something with the QuikPay. And I asked [King]
how could you question his — you know, he’s doing all
— everything you ask him to do. He does everything that
needs to be done. I didn’t know of any incomplete things.
Every time he had a chance, he was talking to [King] or
getting things done that needed to be done with QuikPay.

He never told [King] no. He didn’t ask for any money,
and I didn’t understand how [King] could question
[Willson’s] dedication.

King and Willson had a meeting with their wives to discuss
their respective concerns. Apparently, their respective unease
was at least temporarily resolved. Willson’s wife described the
meeting as follows:

And they were mainly focused on where they were
going, the revalue station was their key. That’s what they
wanted to do. And [King] kept staying [sic], well, we have
to make our customers happy. We have to get the QuikPay
working. If that doesn’t work, then you know the revalue
station is — you know, he said we had to make our cus-
tomers happy. And so he was telling [Willson] this as we
were sitting at [a restaurant], and I thought the meeting
went well. We had talked again about officers or I don’t
know how the business works. I was just trusting that
[Willson] would let me know.

On cross-examination, Willson’s wife clarified that when King
was discussing keeping customers happy, he was referring to
the existing QuikPay system and not the key dispenser-revalue
station Willson was trying to develop. Willson similarly testi-
fied that at the meeting, they discussed “officers or something
like that. For a corporation, I don’t really understand all how
that works, but at that time I felt at ease.”

During this general time period, King discovered that the name
“Secure Data Systems” had already been taken for incorporation
and this was discussed with Willson. The name “KeyTronics”
was suggested by Willson’s wife. In December 2003, Willson
developed a new Web site for “KeyTronics.” Willson then

950 : P|

moved over the “service tracker” program and other information
from the previous Secure Data Systems’ Web site to the new
Web site for “KeyTronics.”

The record contains an e-mail dated December 13, 2003, in
which King tells Willson that he had to cancel the “Secure Data
[credit] Card” in order to get the name on the card changed to
“KeyTronics.” Willson sent King a list of his understanding of
what the current objectives were for “KeyTronics.” This list
included completing projects relating to the development of the
key dispenser-revalue station as well as certain goals relating to
sales, inventory, and repairs for the existing QuikPay system.
Willson testified that he was still optimistic about getting a key
vending machine finished but that his relationship with King
was deteriorating. Willson testified that “[w]e were arguing
more, and nothing was getting done as far as paperwork.”

King and Willson had another meeting around the end
of December and agreed to end their relationship and any
joint QuikPay or key dispenser-revalue station activities.
Approximately 2 weeks after this meeting, King called Willson
and offered to compensate him for the time he had spent in
maintaining or repairing QuikPay. Willson refused and brought
this action instead.

The record indicates King currently conducts QuikPay busi-
ness under “Key-Tronics, Inc.,;’ which is registered in King’s
name alone. Its sole line of business is the QuikPay system.
King pays two independent contractors to assist him in instal-
lation, troubleshooting, and repairs.

King generally denied at trial any partnership relationship
with Willson. King minimized Willson’s assistance with regu-
lar QuikPay business and pointed out that Willson was never
able to produce a marketable key dispenser-revalue station.
King conceded that Willson had repaired 40 individual QuikPay
controllers. He also noted that Willson had looked into some
“glitches” in QuikPay’s software package and had worked on an
“LCD design” to go with the QuikPay controller. King indicated
that Willson had worked on some I/O boards. Still, King could
not believe that Willson had invested 2,000 hours in QuikPay or
the key dispenser-revalue station, explaining, “[Willson] played
softball, went out and helped his dad two nights a week, took

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Japanese lessons. I truly don’t know where you would come up
with those kind of hours, the activity that he was doing.”

King denied any agreement to share profits and equally
denied any agreement to compensate Willson as an employee
or independent contractor. King presented no explanation as to
why, without any promise of remuneration, Willson contributed
to King’s QuikPay profits. King simply stated that the QuikPay
business was solely his. He was distributing and maintaining
QuikPay before he met Willson, and he asserted that the acqui-
sition of Datakey customers and inventory did not significantly
alter his business.

King did not recall asking for either Willson’s or Willson’s
wife’s Social Security number. He did vaguely admit to, at some
point, telling Willson or his wife that he had spoken with an
attorney about incorporating. King generally denied consulting
with Willson about pricing for QuikPay or otherwise sharing
in control of the QuikPay business. King emphasized that any
work Willson did, which, again, he considered minimal, was
always at King’s request.

In its order, the district court, as the trier of fact, con-
cluded: “[T]he evidence indicates that Willson and King pooled
resources, money and labor.” But, “the parties never entered
into any specific agreement which would establish a partner-
ship.” Even if a partnership had been established, however, the
court concluded that there would be no profits from the joint
venture because “nothing in the evidence reflects that [King]
ever committed his existing business and its related assets to the
development efforts for the key system.”

ASSIGNMENTS OF ERROR
Willson assigns that the district court erred in (1) finding that
there was no partnership under Nebraska law and (2) finding
that no dissolution and accounting were necessary. .

STANDARD OF REVIEW
HM In considering the proper standard of review for the
question of the existence of a partnership, we apply the standard

952 a

of review generally applicable to the underlying action.? An
action for the dissolution of a partnership and an accounting
between partners is one in equity. As such, in this case, the trial
court’s determination as to whether a partnership was estab-
lished is reviewed de novo on the record.?

ANALYSIS

This case is governed by the Act which was adopted after
the passage of the revised Uniform Partnership Act.* Section
67-410(1) of the Act defines that a partnership is formed by “the
association of two or more persons to carry on as co-owners a
business for profit” and explains that this is true “whether or not
the persons intend to form a partnership.”

El Obviously, the relationship between King and Willson is
“of two or more persons.” In addition, whether the business of
QuikPay maintenance, or even the development of the never-
produced key dispenser-revalue station, qualifies as a business
“for profit” is not in issue. It is not essential that the business
for which the association was formed ever actually be carried
on, let alone that it earn a profit. Rather, a business qualifies
under the “business for profit” element of § 67-410(1) so long
as the parties intended to carry on a business with the expecta-
tion of profits.>

Still, Willson admits he is not pursuing an action for an
accounting of a partnership that would be limited to the devel-
opment of a key dispenser-revalue station. That product was

2 See, Lewis v. Gallemore, 173 Neb. 211, 113 N.W.2d 54 (1962). Cf. South
Sioux City Star v. Edwards, 218 Neb. 487, 357 N.W.2d 178 (1984). See,
also, Pennfield Oil Co. v. Winstrom, 272 Neb. 219, 720 N.W.2d 886 (2006);
Gast y. Peters, 267 Neb. 18, 671 N.W.2d 758 (2003); Bass v. Dalton, 213
Neb. 360, 329 N.W.2d 115 (1983); Byram v. Thompson, 154 Neb. 756, 49
N.W.2d 628 (1951).

3 See, e.g., Lewis v. Gallemore, supra note 2.

* Unif. Partnership Act (1997) § 101 et seq., 6 U.L.A. 58 et seg. (2001).

5 See, Thompson v. McCormick, 149 Colo. 465, 370 P.2d 442 (1962). See,
also, 1 Alan R. Bromberg & Larry E. Ribstein, Bromberg and Ribstein on
Partnership § 2.06(c) (2007); J. William Callison & Maureen A. Sullivan,
Partnership Law and Practice, General and Limited Partnerships, § 5:10
(2006).

never produced and did not independently garner any profits to
account for. We are instead asked to determine whether King
and Willson were partners in an enterprise that involved both
the development of the key dispenser-revalue station and the
sales and maintenance of the regular QuikPay line. If so, Wilson
claims that King must account to Willson for any profits relat-
ing to all QuikPay business.

The elements disputed by the parties are whether there was
an “association” formed for QuikPay business, and whether
such association, if created, was as “co-owners.” The exis-
tence of a partnership is a question of fact under the evidence.®
Because this is an action for an accounting, which lies in equity,
we conduct our review de novo on the record, reaching a con-
clusion independent of the findings of the trial court.

BURDEN OF PROOF

I The burden of establishing the partnership is upon the
party asserting that such a relationship exists.’ We have said that
where the plaintiff is alleging a partnership with the defendant,
which the defendant denies, the plaintiff must establish the
existence of the partnership by clear and convincing evidence.
In contrast, where a third party to the alleged partnership has
brought the action, the third party need only prove the existence
of a partnership by a preponderance of the evidence.’ Thus, we
have required more convincing evidence to prove the existence
of a partnership where the alleged partners are the only liti-
gants than where the controversy is between a third party and
the partners.’

In In re Estate of Wells,” we were not presented with a con-
troversy between a third party and the partners. Furthermore, the
plaintiff in that case was one of the alleged partners. Yet, we held
that the plaintiff’s burden of proof to establish the partnership
was by a preponderance of the evidence. We found this lower

© In re Estate of Wells, 221 Neb. 741, 380 N.W.2d 615 (1986).
7 Id.; Johnson v. Graf, 162 Neb. 396, 75 N.W.2d 916 (1956).
8 See In re Estate of Wells, supra note 6.

® See, e.g., Johnson v. Graf, supra note 7.

10 In re Estate of Wells, supra note 6.

954 De

standard of proof applicable because the other alleged partner
was deceased and the action was against the State contest-
ing inheritance taxes. As such, we characterized the plaintiff’s
action as falling under the third-party rule.

I We have never explained, nor is there any reasoning to
support, the confusing myriad of standards we have applied
to what is, effectively, the same legal issue. Thus, we believe
that the tenuous distinction between actions by alleged partners
inter sese and actions by a third party against the alleged part-
nership should be abolished. In civil actions, a preponderance
of the evidence is generally all that is required to sustain the
claim of a party."! Exceptions to this standard for civil actions
are uncommon” and are generally reserved for cases “where
particularly important individual interests or rights are at stake,”
such as termination of parental rights, involuntary commitment,
and deportation."? While a preponderance of the evidence stan-
dard allows “both parties to ‘share the risk of error in roughly
equal fashion.’ . . . Any other standard expresses a preference
for one side’s interests.”"*

Generally, in both law and equity, proof of alleged contracts
between the parties need only be shown by a preponderance of
the evidence.'5 We see no reason to hold out a special standard
for partnership relations that favors the party denying the rela-
tionship over the party asserting that the partnership exists. And
the logic behind imposing a higher burden of proof in actions
between alleged partners as opposed to actions by third parties
against an alleged partnership has never been fully articulated.

1 State v. Neimer, 147 Neb. 284, 23 N.W.2d 81 (1946). See, also, Price
Waterhouse v. Hopkins, 490 U.S. 228, 109 S. Ct. 1775, 104 L. Ed. 2d 268

. (1989) (superseded on other grounds by Civil Rights Act of 1991).

” Price Waterhouse v. Hopkins, supra note 11.

3 Herman & MacLean v. Huddleston, 459 U.S. 375, 389, 103 S. Ct. 683, 74
L. Ed. 2d 548 (1983).

"4 Id., 459 US, at 390.

8 See, e.g., Lewis v. Poduska, 240 Neb. 312, 481 N.W.2d 898 (1992); Hersch
Buildings, Inc. v. Steinbrecher, 198 Neb. 486, 253 N.W.2d 310 (1977);
Dunbier v. Rafert, 170 Neb. 570, 103 N.W.2d 814 (1960); Herrin v. Johnson
Cashway Lumber Co., 153 Neb. 693, 46 N.W.2d 111 (1951).

By eliminating any common-law distinctions as to the burden
of proof between actions alleging a partnership inter sese and
actions by third parties, we bring greater predictability and con-
sistency to partnership determinations.

In our de novo review, we thus determine whether Willson
established by a preponderance of the evidence that he and
King were partners in a business that entailed both the develop-
ment of the key dispenser-revalue station and regular QuikPay
sales and maintenance.

ASSOCIATION

We first consider whether King and Willson formed an
association. King correctly points out that inherent to the term
“association” is the idea that the relationship between the
“two or more persons” be intentional.© King argues that no
partnership was formed because he never intended to form a
partnership relationship with Willson. “In the domain of private
law the term association necessarily involves the idea that the
association is voluntary.”"” It is perhaps for this reason that the
district court found it significant that King and Willson “never
entered into any specific agreement which would establish
a partnership.”

Hl But, as § 67-410(1) explicitly states, the intent necessary
to form an association does not refer to the intent to form a
partnership per se. There is no requirement that the parties have
a “specific agreement” in order to form a partnership. People do
not become partners when they attain co-ownership of a busi-
ness for profit through an involuntary act.'® But, if the parties’
voluntary actions form a relationship in which they carry on as
co-owners of a business for profit, then “they may inadvertently
create a partnership despite their expressed subjective intention
not to do so.”"? Intent, in such cases, is still of prime concern,

16 See Bromberg & Ribstein, supra note 5, § 2.05(a).
1 Unif. Partnership Act (1914) § 6, comment 1(1), 6 U.L.A. 394 (2001).
18 Bromberg & Ribstein, supra note 5, § 2.05(a).

19 Unif. Partnership Act (1997) § 202(a), supra note 4, comment 1 at 93.
See, also, Bass v. Bass, 814 S.W.2d 38 (Tenn. 1991); 59A Am. Jur. 2d
Partnership § 139 (2003).

956 be

but it will be ascertained objectively, rather than subjectively,
from all the evidence and circumstances.”

Because of this, King’s focus on his intent to form a corpora-
tion, as opposed to a partnership, does more to prove an intent
to form the requisite association than to disprove it. It is, in fact,
not unusual for courts to find a partnership relationship between
parties that were operating with the intent to form a corpora-
tion and to specifically avoid a partnership relationship." Even
where a corporation has successfully been formed, courts have
found a partnership relationship between the shareholders when
the corporation is a mere agency for convenience in carrying out
the joint venture or partnership.”

In Hauke v. Frey,” we found sufficient evidence of a partner-
ship relationship between two parties who admittedly had once
intended to form a corporation, but had never done so. The
plaintiff in Hauke was the sole titleholder of the business prop-
erty, which operated as a bowling alley, and he claimed he had
no partnership with the defendant who was allegedly in wrong-
ful possession of his property. According to the plaintiff, the
defendant was merely an employee who managed the business
in return for a set monthly wage. While the receipt of payment
for services could be interpreted against a partnership relation-
ship, there was also evidence that the defendant had purchased
some equipment for the business and that the defendant was a
mandatory signatory on a partnership bank account used for
business expenses. We concluded although there was not an
agreement containing complete details either of organization
or of functions after organization, the conduct of the parties

© See, In re Estate of Wells, supra note 6; South Sioux City Star v. Edwards,
supra note 2.

1 See, e.g., Wine Packing Corp. of Cal. v. Voss, 37 Cal. App. 2d 528, 100 P.2d
325 (1940).

22 Aditi v. Dubitzky, 354 F.2d 483 (2d Cir. 1965); Bartomeli v. Bartomeli,
65 Conn. App. 408, 783 A.2d 1050 (2001); Koestner v. Wease & Koestner
Jewelers, 63 Ill. App. 3d 1047, 381 N.E.2d 11, 21 Ill. Dec. 76 (1978);
Elsbach v. Mulligan, 58 Cal. App. 2d 354, 136 P.2d 651 (1943).

3 Hauke v. Frey, 167 Neb. 398, 93 N.W.2d 183 (1958).

implied a partnership that was to continue until a corporation
could be organized to take its place.

In considering the parties’ intent to form an association, it
is generally considered relevant how the parties characterize
their relationship or how they have previously referred to one
another.” The joint use of a business name is evidence of an
association.” This is especially true when the business name is
composed of the parties’ names or initials.?6

It is undisputed that King and Willson discussed the fact that
Secure Data Systems had the initials of Scott, Don, and Scott.
Granted, at its inception, Secure Data Systems was an associa-
tion among three parties focused on the limited task of creating
a key dispenser-revalue station. But, despite King’s claim that
the acquisition of all of Datakey’s QuikPay inventory and cus-
tomer base was insignificant, after this occurred, King removed
any QuikPay operations from his Washco business. He instead
began to conduct all QuikPay business exclusively through
Secure Data Systems. Willson was clearly associated with King
in that venture.

At that point, in e-mail correspondence with Datakey in
regard to various complaints with the QuikPay system, King
no longer referred to himself in the first person singular, but
instead in first person plural, as “us” or “we.” Business cards
were created for King and Willson describing their respective
positions in Secure Data Systems. King and Willson went as
joint representatives of Secure Data Systems to a Las Vegas
carwash convention. King and Willson worked together both in
servicing the QuikPay line, assembling and repairing Datakey’s
old inventory, and developing the key dispenser-revalue sta-
tion. Various e-mails to customers and to Datakey evidence
their joint efforts in this regard. To King and to others, Willson

2 Mardanlou v. Ghaffarian, 135 P.3d 904 (Utah App. 2006).

25 See, e.g., Van Dyke v. Bixby, 388 Mass. 663, 448 N.E.2d 353 (1983); Beck
v. Indiana Surveying Co., 429 N.E.2d 264 (Ind. App. 1981).

26 See, e.g., PHC-Minden, L.P. v. Kimberly-Clark Corp., 235 S.W.3d 163 (Tex.
2007); Landise v. Mauro, 725 A.2d 445 (D.C. 1998); Grissum v. Reesman,
505 S.W.2d 81 (Mo. 1974); Asamen v. Thompson, 55 Cal. App. 2d 661, 131
P.2d 841 (1942).

958 Es

referred to himself and King as partners. Specifically in regard
to ventures involving the regular QuikPay system, King referred
to Willson as “the other half of Secure Data Systems.” We
believe the evidence is clear that King and Willson formally
associated to develop a key dispenser-revalue station and that
further, this association expanded in scope to encompass all
QuikPay operations.

Co-OWNERSHIP

Still, King asserts that any reference he made to Willson as
the “other half of Secure Data Systems” was an insignificant
figure of speech. Most importantly, according to King, there
was no partnership because Willson never had co-ownership of
the QuikPay business. King claims that he started selling and
maintaining QuikPay by himself and asserts that he maintained
full control of that business line. According to King, Willson
simply did what King asked him to—apparently for free.

HM Being “co-owners” of a business for profit does not
tefer to the co-ownership of property,”” but to the co-ownership
of the business intended to garner profits. It is co-ownership
that distinguishes partnerships from other commercial relation-
ships such as creditor and debtor, employer and employee, fran-
chisor and franchisee, and landlord and tenant.”* Co-ownership
generally addresses whether the parties share the benefits,
tisks, and management of the enterprise such that (1) they
subjectively view themselves as members of the business rather
than as outsiders contracting with it and (2) they are in a better
position than others dealing with the firm to monitor and obtain
information about the business.”

HM The objective indicia of co-ownership are commonly
considered to be: (1) profit sharing, (2) control sharing, (3) loss
sharing, (4) contribution, and (5) co-ownership of property.*°
The five indicia of co-ownership are only that; they are not all
necessary to establish a partnership relationship, and no single

2 See, § 67-410(3); 59A Am. Jur, 2d, supra note 19, § 140.
28 See Callison & Sullivan, supra note 5, § 5:11.

% Bromberg & Ribstein, supra note 5, § 2.14.

30 Jd; Callison & Sullivan, supra note 5, § 5:11.

indicium of co-ownership is either necessary ‘or sufficient to
prove co-ownership.*!

The district court found that King and Willson had “pooled
resources, money and labor.” This is significant evidence of
contribution. The record demonstrates that Willson contributed
his time and expertise not only to the business of developing
the key dispenser-revalue station, but also to the continued
operations of the regular QuikPay product line. And even if
Willson had not more directly contributed to regular QuikPay
business, we again note that the business of QuikPay and the
business of developing a peripheral product that would ensure
QuikPay’s continued viability in the marketplace were inex-
tricably commingled. This was especially true with regard to
Willson’s contribution when King emphasized that Willson had
to help keep the QuikPay system running because, otherwise,
the development of the key dispenser-revalue station would lose
its customer base and become irrelevant.

The continuing investment of one’s labor without pay is
generally considered a strong indicator of co-ownership.™ It is
evidence that, as Willson testified he explicitly understood, the
party is not an outsider contracting with the business. Valid
consideration for an ownership interest in a partnership may
take the form of either property, capital, labor, or skill, and the
law does not exalt one type of contribution over another.*

In this case, Willson contributed his time and expertise with-
out any compensation for approximately 1 year. Conservatively,
Willson estimated his contribution as totaling over 2,000 hours.
King did not present evidence of how many hours he had spent
in the QuikPay venture. But more importantly, we conclude
on our review of the record that without Willson’s technical

3 See Bromberg & Ribstein, supra note 5, § 2.07(a).

% See, e.g., Schymanski v. Conventz, 674 P.2d 281 (Alaska 1983); Huffman
Technical Drilling, Inc. v. Smith, 424 So. 2d 435 (La. App. 1982).

% Bromberg & Ribstein, supra note 5, § 2.07(c).

34 Kennedy v. Miller, 221 Ill. App. 3d 513, 582 N.E.2d 200, 163 Ill. Dec. 934
(1991); South Sioux City Star v. Edwards, supra note 2; Cutler v. Bowen,
543 P.2d 1349 (Utah 1975); Chaiken v. Employment Security Commission,
274 A.2d 707 (Del. Super. 1971); 59A Am. Jur. 2d, supra note 19, § 95.

960 Le

assistance, King would have been unable to continue QuikPay’s
viability after Datakey abandoned the product. That King could
have dealt with certain issues by hiring contractors or employees
is irrelevant. He chose not to do so—presumably because the
promise of the key dispenser-revalue station made a partnership
relationship more worthwhile—and saved himself the expense
of paying for this labor.

We also find that despite King’s protestations to the contrary,
the evidence shows that King and Willson shared control over
QuikPay business. We note that control is “elusive because
of the many gradations of control and because partners often
delegate decision-making power. Still, Willson testified that
he and King consulted with each other over what appropri-
ate pricing would be as they picked up Datakey’s equipment
and customers. This is evidenced by an e-mail of the price list
that King sent to Willson. Under King’s theory of the case,
the e-mail would have been completely unnecessary, because
according to King, Willson contributed very little and had no
direct contact with customers or their billing.

Willson testified that he and King made joint decisions to cut
certain costs. Willson set up the invoice system they used to bill
QuikPay customers, and there is no indication that such a system
was anything other than that of Willson’s independent initiative
and design. Willson made technical decisions on how best to
assemble, repair, or maintain various aspects of the QuikPay
system. The June 2003 e-mail written by King illustrates King’s
understanding that he and Willson would jointly address QuikPay
customer issues as they arose and jointly evaluate Secure Data
Systems’ priorities as they went along.

Willson also testified that he had an agreement with King to
share profits, although King denies this. Of the five indicia of
co-ownership, profit sharing is possibly the most important, and
the presence of profit sharing is singled out in § 67-410(3)(c) as
creating a rebuttable presumption of a partnership.* However,
what is essential to a partnership is not that profits actually be

35 Bromberg & Ribstein, supra note 5, § 2.07(a) at 2:79.

3 See, also, Farmers d& Merchants Bank v. Grams, 250 Neb, 191, 548 N.W.2d
764 (1996); Frisch v. Svoboda, 182 Neb. 825, 157 N.W.2d 774 (1968).

distributed, but, instead, that there be an interest in the profits.*”
Willson’s testimony that they agreed to share in the profits of
the business is, in light of all the evidence, simply more credible
than King’s statement that compensation “was never discussed.”
And even King vaguely admits that they had an understand-
ing to share profits of the key dispenser-revalue station, if
that were developed. It seems reasonable to assume that this
same understanding would apply to Willson as his participa-
tion and the scope of the venture expanded to encompass all
QuikPay business.

We do not find any evidence that King and Willson had an
agreement for loss sharing. But we find this of little import,
since purported partners, expecting profits, often do not have
any explicit understanding regarding loss sharing.* Likewise,
although King and Willson admittedly do not own any joint
property, in an informal relationship, the parties may intend
co-ownership of property but fail to attend to the formalities of
title.” Moreover, in this case, it is unclear that there is much
QuikPay “property” at all. Certainly, as King’s counterclaim
alleged, Willson has possession of some QuikPay equipment.
To the extent that a bank account is property, we note that
although Willson had delegated financial matters to King and
was not a signatory to the bank account where Secure Data
Systems’ revenues were deposited, Willson testified that King
did keep him abreast of the financial status of that account.
Willson believed he had an ownership interest in the funds in
that account.

‘We conclude that the objective, as well as subjective, indicia
are sufficient to prove co-ownership of the business of sell-
ing, maintaining, and developing QuikPay. Having already
concluded that there was an association for the same, we
conclude that Willson proved that he and King had formed
a partnership for the business of selling, maintaining, and
developing QuikPay.

37 See, Bromberg & Ribstein, supra note 5, §§ 2,06(c) and 2.07(b); Callison &
Sullivan, supra note 5, § 5:10.

38 See Bromberg & Ribstein, supra note 5, § 2.07(d).
® Bromberg & Ribstein, supra note 5, § 2.07(f).

962 Le

CONCLUSION

Because Willson has proved a partnership relationship with
King, he is entitled to a winding up and an accounting in
accordance with the Act. The district court erred in concluding
otherwise. Accordingly, we reverse the decision and remand the
cause for further proceedings.
: REVERSED AND REMANDED FOR

FURTHER PROCEEDINGS.