Title: Pilot Inv. Group Ltd. v. Hofarth

State: nebraska

Issuer: Nebraska Supreme Court

Document:

550 N.W.2d 27 (1996) 250 Neb. 475 PILOT INVESTMENT GROUP LTD., a Nebraska limited partnership, and Mark M. Rhodes, as general partner of Pilot Investment Group Ltd., appellants, v. Danny HOFARTH et al., appellees. No. S-94-281. Supreme Court of Nebraska. July 5, 1996. *29 Steven J. Lefler, of Lefler & Franklin, Omaha, for appellants. James S. Jansen, Douglas County Attorney, and John E. Huber, Omaha, for appellee Douglas County. William T. Ginsburg, of Suber & Ginsburg, Omaha, for appellee Land Reutilization Commission of Douglas County. *30 WHITE, C.J., and CAPORALE, FAHRNBRUCH, LANPHIER, WRIGHT, CONNOLLY, and GERRARD, JJ. GERRARD, Justice. This is an appeal from an order of the district court sustaining demurrers of Douglas County and the Land Reutilization Commission, defendants in the underlying action to quiet title or, alternatively, for unjust enrichment brought by Pilot Investment Group Ltd. and its general partner, Mark M. Rhodes (both hereinafter referred to as Pilot). Both Douglas County and the Land Reutilization Commission demurred on the grounds that there was a defect of the parties defendant, that the two causes of action were improperly joined, and that the petition failed to state a cause of action against the moving defendant. The district court sustained the demurrers and dismissed the petition without granting Pilot an opportunity to amend its petition. This appeal followed. We reverse, and remand for further proceedings. This case arises out of a tax sale of real property owned by Pilot and located at 1006 South 30th Avenue, Omaha, Nebraska. The property in question was sold at a sheriff's sale to the Land Reutilization Commission and then resold to defendant Danny Hofarth. Pilot did not object at the time of sale or at the confirmation hearing; however, Pilot asserts lack of notice of both the sale and the confirmation hearing. In pertinent part, Pilot alleged the following in its petition: 15. On February 12, 1990, said Answer was filed in the Douglas County District Court, along with a Certificate of Mailing certifying that a copy of said Answer had *31 been mailed to the County's counsel of record, Ronald L. Staskiewicz, Douglas County Attorney.... Both Douglas County and the Land Reutilization Commission demurred to the petition alleging a defect in parties defendant, improper joinder of causes of action, and failure to state a cause of action. After hearing arguments of counsel and taking the matter under advisement, the district court entered an order sustaining the demurrers, without specifying on which grounds the demurrers were sustained, and dismissing the petition. Pilot asserts that the district court erred in sustaining the demurrers of the defendants and dismissing the petition. In considering a demurrer, a court must assume that the pleaded facts, as distinguished from legal conclusions, are true as alleged and must give the pleading the benefit of any reasonable inference from the facts alleged, but cannot assume the existence of facts not alleged, make factual findings to aid the pleading, or consider evidence which might be adduced at trial. Berntsen v. Coopers & Lybrand, 249 Neb. 904, 546 N.W.2d 310 (1996); SID No. 57 v. City of Elkhorn, 248 Neb. 486, 536 N.W.2d 56 (1995). In determining whether a cause of action has been stated, the petition is to be construed liberally. If as so construed the petition states a cause of action, a demurrer based on the failure to state a cause of action is to be overruled. Carlson v. Metz, 248 Neb. 139, 532 N.W.2d 631 (1995); S.I. v. Cutler, 246 Neb. 739, 523 N.W.2d 242 (1994). Furthermore, when a demurrer to a petition is sustained, a court must grant leave to amend the petition unless it is clear that no reasonable possibility exists that amendment will correct the defect. Fox v. Metromail of Delaware, 249 Neb. 610, 544 N.W.2d 833 (1996); Proctor v. Minnesota Mut. Fire & Cas., 248 Neb. 289, 534 N.W.2d 326 (1995). As set forth above, the defendants demurred to Pilot's petition on three grounds. We have stated on numerous occasions that a trial court should specify the grounds for sustaining a demurrer when several grounds for the demurrer are asserted. LaPan v. Myers, 241 Neb. 790, 491 N.W.2d 46 (1992); St. Paul Fire & Marine Ins. Co. v. Touche Ross & Co., 234 Neb. 789, 452 N.W.2d 746 (1990); Meyerson v. Coopers & Lybrand, 233 Neb. 758, 448 N.W.2d 129 (1989). Such a requirement is primarily for the benefit of the reviewing court. However, failure to specify the grounds for sustaining a demurrer does not affect the legal position of the parties in the case. LaPan v. Myers, supra. An order sustaining a demurrer should be affirmed if any one of the grounds on which it was asserted is well taken. Fox v. Metromail of Delaware, supra; Gallion v. Woytassek, 244 Neb. 15, 504 N.W.2d 76 (1993). Therefore, we must examine whether any one of the grounds for the demurrers is well taken and, further, whether any reasonable possibility exists that an amendment will correct the defects. We conclude that even if there existed a defect of parties defendant in the petition of Pilot, as to Hofarth, Douglas *33 County, and the Land Reutilization Commission, such defect would be curable by amendment of the petition. Similarly, a demurrer on the grounds of misjoinder of causes of action is also curable by filing two petitions and separately docketing each of the petitions in the district court. Neb.Rev.Stat. § 25-809 (Reissue 1995). Therefore, neither the ground of defect of the parties defendant nor that of misjoinder of causes of action stated in the demurrers supports the action of the district court in dismissing the petition. The only ground on which a dismissal would be proper in this case is if the petition failed to state a cause of action and this defect was not curable by amendment. Thus, we turn to a determination of those two specific issues. Pilot alleges in both the quiet title and unjust enrichment causes of action that the tax sale to the Land Reutilization Commission and the subsequent transfer to Hofarth are void due to lack of proper notice to Pilot regarding the underlying foreclosure action and subsequent tax sale. The law is well settled that there is no presumption of valid service contained in the statutes governing sheriff's deeds that follow a tax foreclosure sale. Brown v. Glebe, 213 Neb. 318, 328 N.W.2d 786 (1983). See, also, Neb.Rev.Stat. §§ 77-1901 through 77-1941 (Reissue 1990). In its petition, Pilot concedes that constructive notice was provided by publication, but alleges that service by publication was improper because Douglas County had actual notice of where Pilot could be served personally or by mail. We have held that a collateral attack upon an order confirming a sale by way of a quiet title action is allowed where, due to improper service and lack of actual notice, a court fails to obtain personal jurisdiction over the party in possession of or owning the property being sold. Brown v. Glebe, supra (stating, in context of quiet title action, that lack of personal jurisdiction over party in possession renders order of sale void and subject to collateral attack). Sileven v. Tesch, 212 Neb. 880, 326 N.W.2d 850 (1982) (stating that void judgment is subject to collateral attack). However, Pilot failed to allege that it lacked actual notice of the foreclosure action and subsequent tax sale. That being so, Pilot failed to state a cause of action that would entitle it to relief by way of either quiet title or unjust enrichment. Moreover, equitable remedies are generally not available where a statute provides an adequate remedy at law. Clayton v. Nebraska Dept. of Motor Vehicles, 247 Neb. 49, 524 N.W.2d 562 (1994); Southwest Trinity Constr. v. St. Paul Fire & Marine, 243 Neb. 55, 497 N.W.2d 366 (1993). In its petition in equity, Pilot failed to allege that there was no adequate remedy at law in this case. Neb.Rev.Stat. § 25-525 (Reissue 1995) sets forth a statutory procedure whereby a party against whom a judgment has been rendered without other service than by publication may, at any time within 5 years after the date of the judgment, have the judgment opened, and the party is allowed to defend. "`"`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.'"'" Clayton v. Nebraska Dept. of Motor Vehicles, 247 Neb. at 55, 524 N.W.2d at 567. Accord Golden v. Bartholomew, 140 Neb. 65, 299 N.W. 356 (1941). Therefore, the district court was correct in sustaining the respective demurrers based on Pilot's failing to state a cause of action in its petition. However, we conclude that there is a reasonable possibility that Pilot could correct the defects in the petition by amendment, and the district court should have granted Pilot the opportunity to amend its pleadings. See Fox v. Metromail of Delaware, 249 Neb. 610, 544 N.W.2d 833 (1996). An amended petition could state whether or not Pilot lacked actual notice of the foreclosure action and subsequent tax sale. Furthermore, even though § 25-525 sets forth a statutory procedure to reopen a judgment rendered after service by publication, it is not clear from the allegations in the petition that such a statutory procedure provides a wholly adequate remedy at law. Thus, Pilot may plead a cause of action seeking relief pursuant to § 25-525, or alternatively, it may seek equitable remedies if § 25-525 does not provide a wholly adequate remedy under the *34 circumstances of this case. In either event, Pilot must be granted a reasonable opportunity to set forth, in an amended petition, sufficient facts and reasons for seeking either equitable relief or a remedy at law. For the foregoing reasons, we reverse the judgment of dismissal of the district court and remand this cause for further proceedings consistent with this opinion. REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.