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Nebraska Supreme Court Advance Sheets

308 Nebraska Reports

SID NO. 2 OF KNOX CTY. v. FISCHER

Cite as 308 Neb. 791

Sanitary Improvement District No. 2 of Knox 

County, Nebraska, et al., appellees, v. 

Joann Fischer et al., appellants.

___ N.W.2d ___

Filed April 2, 2021. No. S-19-1193.

1. Judgments: Jurisdiction: Appeal and Error. Determination of a jurisdictional issue which does not involve a factual dispute is a matter of 

law which requires an appellate court to reach its conclusions independent from a trial court.

2. Declaratory Judgments: Parties. When declaratory relief is sought, 

it is a statutory requirement that all persons shall be made parties who 

have or claim any interest which would be affected by the declaration, 

and no declaration shall prejudice the rights of persons not parties to 

the proceeding.

3. Declaratory Judgments: Courts: Jurisdiction: Parties. The rule in a 

declaratory judgment action is that all who have or claim any interest 

which would be affected by the declaration sought are indispensable 

parties, and when all such parties have not been joined, the district court 

has no jurisdiction to determine the controversy.

4. Declaratory Judgments: Parties: Words and Phrases. In a declaratory judgment action, a party is “indispensable” when the party has an 

interest in the controversy to an extent that such party’s absence from 

the proceedings prevents the court from making a final determination 

concerning the controversy without affecting such party’s interest.

Appeal from the District Court for Knox County: Mark 

A. Johnson, Judge. Vacated and remanded with directions 

to dismiss.

John Thomas, Knox County Attorney, for appellant Joann 

Fischer.

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

04/23/2021 08:09 AM CDT
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Nebraska Supreme Court Advance Sheets

308 Nebraska Reports

SID NO. 2 OF KNOX CTY. v. FISCHER

Cite as 308 Neb. 791

Ryan D. Cwach, of Birmingham & Cwach Law Offices, 

P.L.L.C., for appellants Coburn Construction, L.L.C., et al.

Tracey L. Buettner, of Stratton, DeLay, Doele, Carlson, 

Buettner & Stover, P.C., L.L.O., for appellees.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, 

Papik, and Freudenberg, JJ.

Stacy, J.

Several board members of a sanitary improvement district 

filed a declaratory judgment action seeking a declaration of the 

proper construction and application of the election procedures 

in Neb. Rev. Stat. § 31-735(2)(b) (Reissue 2016). The district 

court held a trial and issued a declaratory judgment from which 

the plaintiffs below appeal. Because we conclude the plaintiffs 

failed to join indispensable parties, we vacate the judgment 

of the district court and remand the cause with directions 

to dismiss.

BACKGROUND

In 1970, the district court for Knox County decreed the creation of Sanitary Improvement District No. 2 of Knox County, 

Nebraska (the SID). The SID currently includes both platted 

lots and unplatted areas. There are approximately 2,470 platted 

lots within the SID, which are not uniform in size. The total 

number of acres within the SID is unclear from the record. Our 

record shows there are several hundred landowners in the SID, 

and the parties generally agree that 27 landowners reside on the 

platted lots either full time or part time. The remaining lots and 

areas within the SID are described as vacant.

Election Procedure for Board of Trustees

By statute, sanitary improvement districts in Nebraska are 

governed by a five-member board of trustees. 1 Only those who 

own real estate in the district, or those who are designated by 

entities owning real estate in the district, may serve on the 

1 See, Neb. Rev. Stat. § 31-733 (Reissue 2016); § 31-735(1).
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SID NO. 2 OF KNOX CTY. v. FISCHER

Cite as 308 Neb. 791

board. 2 Section 31-735(2)(b) sets out the procedure by which 

the trustees are to be elected. That statute provides, in relevant part:

[A]t the election held six years after the first election of 

trustees and at each election thereafter, three members of 

the board of trustees shall be elected by the legal property 

owners resident within such sanitary and improvement 

district and two members shall be elected by all of the 

owners of real estate located in the district pursuant to 

this section. If there are not any legal property owners 

resident within such district or if not less than ninety 

percent of the area of the district is owned for other than 

residential uses, the five members shall be elected by the 

legal property owners of all property within such district 

as provided in this section. 3

Summarized, § 31-735(2)(b) establishes two categories of 

trustee: those elected by the “property owners resident” within 

the district and those elected by “all of the owners of real 

estate located” within the district. In another part of the statute, 

§ 31-735(2)(b) provides that for those trustee positions elected 

by all property owners, the number of votes to which each 

owner is entitled generally depends on how much property they 

own in the district.

The record shows that since at least the early 1990’s, the 

SID’s board of trustees has been composed of three trustees 

elected by the resident owners and two trustees elected by all 

property owners. But in May 2019, the board of trustees was 

notified that pursuant to § 31-735, a different procedure would 

be followed for the election to be held in September 2019.

Proposed Change to Election Procedure 

for Board of Trustees

Joann Fischer serves as the election commissioner of 

Knox County. In that capacity, Fischer is responsible for 

2 See § 31-735(1).

3 § 31-735(2)(b).
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SID NO. 2 OF KNOX CTY. v. FISCHER

Cite as 308 Neb. 791

facilitating the election process for the SID’s five-member 

board of trustees. Generally speaking, this process involves 

determining how many votes each property owner is entitled 

to cast in the election, a decision which requires the commissioner to also determine how many trustee positions are to be 

filled by election of all property owners and how many are to 

be filled by election of resident owners only.

On May 14, 2019, Fischer sent a letter to the SID board of 

trustees. Fischer’s letter stated that under § 31-735, the election 

procedure changes when “not less than ninety percent of the 

area of the district is owned for other than residential uses.” 

Because Fischer had determined that more than 90 percent of 

the SID area consisted of “vacant lots,” she advised the board 

that in the September 2019 election, all five trustees would be 

elected by all property owners; no trustee would be elected 

exclusively by resident owners.

After receiving Fischer’s letter, the SID board of trustees 

passed a resolution authorizing the filing of a lawsuit to determine the proper construction and application of § 31-735. 

Thereafter, three trustees filed an action for declaratory judgment in the district court for Knox County. The same trustees 

also sought a peremptory writ of mandamus, which the district 

court denied, and from which no appeal was taken. We limit 

our factual discussion, and our related analysis, to only the 

declaratory judgment action.

Declaratory Judgment Action

The complaint for declaratory judgment named as plaintiffs 

the “SID#2 of Knox County, Nebraska [as] a body corporate 

and politic of the State of Nebraska” and three of the SID’s 

five trustees: Greg Blomberg, Jim Pelster, and Denny Tilton. 

The complaint alleged that Blomberg, Pelster, and Tilton were 

resident property owners and had been elected as trustees by 

the SID’s resident property owners. The named defendants 

included Fischer, in her capacity as election commissioner, and 

three corporate entities alleged to be property owners within 

the SID whose rights “may be affected by these proceedings.”
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SID NO. 2 OF KNOX CTY. v. FISCHER

Cite as 308 Neb. 791

The complaint alleged that a controversy had arisen as to 

the proper interpretation of the language in § 31-735 requiring 

that all five trustees are to be elected by all property owners “if 

not less than ninety percent of the area of the district is owned 

for other than residential uses.” Summarized, the complaint 

alleged that Fischer had erroneously construed § 31-735 and 

had incorrectly determined that more than 90 percent of the 

SID area was “owned for other than residential uses” based on 

the fact that more than 90 percent of the SID lots were vacant. 

The complaint alleged that certain covenants restricted the 

platted lots to “single family resident USES” and that therefore, “[t]he platted lots owned for residential uses encompass 

approximately 40% of the area” within the SID. The complaint alleged that Fischer’s interpretation and application of 

§ 31-735 would “deny the legal property owners resident their 

legal right to elect three members of the Board of Trustees.” 

As relevant to the issues on appeal, the complaint prayed for 

a judicial declaration interpreting the phrase “owned for other 

than residential uses” in § 31-735(2)(b) and a declaration that 

the area of the SID “owned for other than residential uses” was 

less than 90 percent of the total land area of the SID.

Fischer and the corporate defendants filed separate answers. 

Fischer’s answer expressly denied that she had acted improperly in changing the election procedure, and it alleged the 

procedural change was required by § 31-735 because “less 

than one percent” of the land within the SID was being used 

for residential purposes. Fischer’s answer also suggested the 

covenants restricting platted lots to single family resident uses 

were unenforceable.

The corporate defendants filed a joint answer that generally 

agreed with Fischer’s decision to change the election procedure. Their answer expressly alleged the restrictive covenants 

relied upon by the plaintiffs were no longer binding, and it also 

asserted several affirmative defenses, including that the complaint failed to include necessary parties.

Trial on the declaratory judgment was held in October 

2019. One witness testified for the plaintiffs, and four 
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SID NO. 2 OF KNOX CTY. v. FISCHER

Cite as 308 Neb. 791

witnesses testified for the defendants. Several exhibits were 

received into evidence, but not all were included in our appellate record. The evidence adduced at trial generally comports 

with the facts set out above.

On November 21, 2019, the court entered a declaratory 

judgment finding generally in favor of the plaintiffs. The 

court reasoned that the restrictive covenants required platted 

lots within the SID, whether presently inhabited or not, to be 

used only for single family resident uses and that the “few 

lots owned for a public purpose” within the SID were not significant enough to constitute 90 percent of the area in the SID. 

Based on this reasoning, the court determined that less than 

90 percent of the area of the SID was “owned for other than 

residential uses” within the meaning of § 31-735(2)(b) and that 

Fischer was wrong to conclude otherwise. The court ordered 

the next trustee election to be conducted “with the legal owners resident having vote eligibility for the three (3) Trustees of 

[the SID], and all legal owners having vote eligibility for the 

remaining two (2) Trustees of [the SID].”

All defendants timely appealed, and we moved this case to 

our docket on our own motion. 4

ASSIGNMENTS OF ERROR

Fischer assigns, restated and consolidated, that the district 

court erred by (1) not applying a presumption of regularity to 

the election commissioner’s official acts, (2) relying on provisions of recorded covenants to find that less than 90 percent of 

the area of the SID is owned for other than residential uses, and 

(3) refusing to receive an exhibit offered at trial.

The remaining defendants assign, restated and consolidated, 

that the district court erred by (1) relying on the recorded 

covenants to determine the percentage of SID area owned for 

other than residential uses; (2) holding that election commissioners should consider the contents of recorded easements, 

covenants, and restrictions when interpreting § 31-735(2)(b) to 

4 See Neb. Rev. Stat. § 24-1106 (Cum. Supp. 2020).
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the exclusion of other relevant factors; (3) requiring the election commissioner to consider the prospective use of a commercial developer’s present ownership of land when applying 

§ 31-735(2)(b); and (4) finding that less than 90 percent of the 

area in the SID is owned for other than residential uses.

STANDARD OF REVIEW

[1] Determination of a jurisdictional issue which does not 

involve a factual dispute is a matter of law which requires an 

appellate court to reach its conclusions independent from a 

trial court. 5

ANALYSIS

[2] This is a declaratory judgment action, and when declaratory relief is sought, it is a statutory requirement that “all 

persons shall be made parties who have or claim any interest 

which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the 

proceeding.” 6 Our cases have generally described those who 

must be made parties as either “statutorily mandated necessary part[ies],” 7 “interested or necessary [parties],” 8 “significant necessary part[ies]” 9 or “necessary and indispensable 

[parties].” 10 But despite these differing phrases, it has long 

5 Sandoval v. Ricketts, 302 Neb. 138, 922 N.W.2d 222 (2019).

6 Neb. Rev. Stat. § 25-21,159 (Reissue 2016).

7 Dunn v. Daub, 259 Neb. 559, 564, 611 N.W.2d 97, 101 (2000).

8 See, e.g., Taylor Oil Co. v. Retikis, 254 Neb. 275, 279, 575 N.W.2d 870, 

873 (1998), citing Krohn v. Gardner, 238 Neb. 460, 471 N.W.2d 391 

(1991). See, also, Concerned Citizens v. Department of Environ. Contr., 

244 Neb. 152, 159, 505 N.W.2d 654, 660 (1993) (“[t]his court has held 

on numerous occasions that the statute authorizing declaratory judgments 

is applicable only where all interested and necessary persons are made 

parties to the proceeding”).

9 SID No. 57 v. City of Elkhorn, 248 Neb. 486, 497, 536 N.W.2d 56, 65 

(1995), disapproved on other grounds, Adam v. City of Hastings, 267 Neb. 

641, 676 N.W.2d 710 (2004).

10 See, e.g., Taylor Oil Co., supra note 8, 254 Neb. at 280, 575 N.W.2d 

at 874.
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been the rule in declaratory judgment actions that the presence 

of such parties is jurisdictional and cannot be waived. 11

[3,4] The rule in a declaratory judgment action, restated 

using the statutory language, is that all who have or claim any 

interest which would be affected by the declaration sought are 

indispensable parties, 12 and when all such parties have not been 

joined, the district court has no jurisdiction to determine the 

controversy. 13 Our cases have explained that a party is “indispensable” under this rule when the party “‘has an interest in 

the controversy to an extent that such party’s absence from 

the proceedings prevents the court from making a final determination concerning the controversy without affecting such 

party’s interest.’” 14

It is apparent from our record that many of the landowners within the SID have not been joined as parties to this 

declaratory judgment action. We must therefore determine, as 

a threshold jurisdictional matter, whether all the landowners 

within the SID are indispensable parties in this declaratory 

judgment action.

All Landowners Are Indispensable Parties

In SID No. 57 v. City of Elkhorn,

 15 we described residents in a sanitary improvement district as indispensable parties to a declaratory judgment action seeking to enjoin the 

partial annexation of their district because such individuals 

11 See, e.g., Carlson v. Allianz Versicherungs-AG, 287 Neb. 628, 844 N.W.2d 

264 (2014); Dunn, supra note 7; Taylor Oil Co., supra note 8; Concerned 

Citizens, supra note 8; Shepoka v. Knopik, 197 Neb. 651, 250 N.W.2d 619 

(1977); Redick v. Peony Park, 151 Neb. 442, 37 N.W.2d 801 (1949).

12 See § 25-21,159.

13 See Carlson, supra note 11.

14 Dunn, supra note 7, 259 Neb. at 563, 611 N.W.2d at 100, quoting Taylor 

Oil Co., supra note 8. See, also, Concerned Citizens, supra note 8.

15 SID No. 57, supra note 9, 248 Neb. at 497, 536 N.W.2d at 65 (finding 

residents of SID “no doubt have an interest in the outcome of a declaratory 

judgment action seeking to enjoin the partial annexation of their sanitary 

and improvement district”).
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SID NO. 2 OF KNOX CTY. v. FISCHER

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necessarily had an interest in the outcome of such action. We 

reach a similar conclusion here.

In this declaratory judgment action, the rights, status, and 

legal relations upon which a declaration is sought turn on 

how the voting rights under § 31-735(2)(b) are construed and 

applied to all property owners in the SID. Under the appellants’ desired interpretation and application of § 31-735(2)(b), 

all property owners—resident and nonresident alike—would be 

entitled to cast votes for all five board positions, and the number of votes to which each owner is entitled depends generally 

on how much property they own in the district. As such, appellants seek a declaration that would reallocate majority control 

of the SID board of trustees from the 27 resident property owners to those owners with the most property in the SID.

Under the appellees’ desired construction and application of 

§ 31-735(2)(b), each of the 27 resident property owners in the 

SID would be entitled to cast ballots for three trustee positions, 

regardless of how much property each resident owns in the district. For the other two positions, all of the SID property owners are entitled to cast ballots, and the number of votes each 

owner is entitled to cast will depend upon how much property 

they own in the district. Thus, appellees seek a declaration 

interpreting and applying § 31-735 so that the resident property 

owners retain majority control of the SID board.

Given the nature of the declarations sought in this action, 

it is apparent that any declaration construing and applying 

§ 31-735 to the voting rights within the SID will necessarily 

affect the voting rights and legal interests of every SID property owner. Because all of the property owners within the SID 

have an interest in the controversy such that the district court 

could not make a final determination without affecting their 

interests, all of the SID property owners are indispensable parties. 16 And while there may be circumstances under which it 

is possible to represent the interests of an indispensable party 

16 See, Dunn, supra note 7; Taylor Oil Co., supra note 8. See, also, 

Concerned Citizens, supra note 8.
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in a representative fashion, 17 we see nothing in this record suggesting that any of the named parties purported either to bring 

or to defend this declaratory judgment action in any sort of 

permissible representative capacity.

Because the presence of all indispensable parties is jurisdictional in a declaratory judgment action and cannot be waived 

by the parties, 18 the district court had no jurisdiction to determine the controversy. 19 Therefore, we must vacate the district 

court’s judgment for lack of jurisdiction and remand the cause 

with directions to dismiss. 20

CONCLUSION

For the foregoing reasons, we vacate the judgment of the 

district court and remand the cause with directions to dismiss the cause without prejudice for failure to join indispensable parties.

Vacated and remanded with 

directions to dismiss.

17 See, e.g., Calabro v. City of Omaha, 247 Neb. 955, 531 N.W.2d 541 (1995); 

Hoiengs v. County of Adams, 245 Neb. 877, 516 N.W.2d 223 (1994). See, 

also, Jack’s Cookie Corporation v. Giles County, 219 Tenn. 131, 137, 

407 S.W.2d 446, 449 (1966), quoting Annot., 71 A.L.R.2d 723 (1960) 

(explaining several cases support conclusion that “‘Uniform Declaratory 

Judgments Act will not preclude the bringing of a declaratory judgment 

action as a class action in which the parties appear by representation’”); 

Lozoff v. Kaisershot, 11 Wis. 2d 485, 489, 105 N.W.2d 783, 786 (1960) 

(construing declaratory judgment act’s indispensable party requirement in 

conjunction with statute permitting class actions and explaining declaratory 

judgment statute “does not exclude the procedure of representative defense 

of the interests of a class from an action for declaratory relief”).

18 Concerned Citizens, supra note 8. See, also, Carlson, supra note 11; 

Dunn, supra note 7; Taylor Oil Co., supra note 8; Shepoka, supra note 11; 

Redick, supra note 11.

19 Dunn, supra note 7; Taylor Oil Co., supra note 8.

20 See id.