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ROYAL v. McKEE

Cite as 298 Neb. 560

Kevin Royal, appellant and cross-appellee, v. 

Loma McKee and Edmund R. McKee, wife and

husband, now deceased, et al., appellees, 

and Omaha Public Power District, 

appellee and cross-appellant.

___ N.W.2d ___

Filed December 29, 2017. No. S-16-708.

1. Equity: Quiet Title. A quiet title action sounds in equity.

2. Equity: Appeal and Error. 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, provided that where credible 

evidence is in conflict in a material issue of fact, the appellate 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.

3. Adverse Possession: Proof: Time. A party claiming title through 

adverse possession must prove by a preponderance of the evidence that 

the adverse possessor has been in (1) actual, (2) continuous, (3) exclusive, (4) notorious, and (5) adverse possession under a claim of ownership for the statutory period of 10 years.

4. Actions: Default Judgments: Complaints: Damages: Proof. Where a 

defendant is in default, the allegations of the complaint are to be taken 

as true against him, except allegations of value and amount of damage. 

Thus, if the complaint states a cause of action, the plaintiff is entitled to 

judgment without further proof.

5. Easements: Adverse Possession: Notice. Under Nebraska law, a permissive use is not adverse and cannot ripen into an easement. If a use 

begins as a permissive use, it retains that character until notice that the 

use is claimed as a matter of right is communicated to the owner of the 

servient estate.

Nebraska Supreme Court Online Library

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

01/19/2018 08:13 AM CST
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ROYAL v. McKEE

Cite as 298 Neb. 560

Appeal from the District Court for Otoe County: Jeffrey J. 

Funke, Judge. Affirmed in part, and in part vacated.

Donald J. Pepperl, P.C., L.L.O., for appellant.

Mark C. Laughlin and Jacqueline M. DeLuca, of Fraser 

Stryker, P.C., L.L.O., for appellee Omaha Public Power 

District.

Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, and

Kelch, JJ.

Heavican, C.J.

INTRODUCTION

Kevin Royal filed a quiet title action against his predecessors in interest and against Omaha Public Power District 

(OPPD) alleging fee title ownership of certain land along the 

railroad right-of-way passing through his property as a result 

of adverse possession. OPPD filed a counterclaim, alleging that 

it had acquired fee simple title to that same land, also under a 

theory of adverse possession.

The district court granted Royal’s motion for entry of default 

as to his predecessors in interest, but following a trial, denied 

both Royal’s and OPPD’s claims of title under adverse possession. Royal appealed, and OPPD cross-appealed. We affirm in 

part, and in part vacate.

FACTUAL BACKGROUND

Prior Litigation

Royal filed a second amended complaint alleging that he 

was the owner of certain real property located in Otoe County, 

Nebraska. He further alleged that OPPD possessed a railroad 

right-of-way easement which ran through his property. Finally, 

Royal alleged that he obtained title of the railroad right-ofway by adverse possession and that title should be quieted in 

his name.
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ROYAL v. McKEE

Cite as 298 Neb. 560

OPPD filed an answer and affirmative defenses, and a 

counterclaim and cross-claim. OPPD alleged that it was the 

owner of 100 feet on either side of the center of the rail line 

running through Royal’s property, that OPPD acquired this 

land by adverse possession, and that title should be quieted in 

its name.

Various orders from the Otoe County District Court in this 

litigation predate the order at issue on appeal. In one such 

order, Royal had filed an action against OPPD alleging damages incurred as a result of its construction of an electricity 

transmission line within the railroad right-of-way. The district court held that Midland Pacific Railway Company, later 

Burlington Northern and Santa Fe Railway Company (BNSF), 

had obtained a railroad right-of-way by eminent domain in 

1869 and that the railroad right-of-way had been continuously 

used since that time for the operation of a railroad. OPPD 

obtained the railroad’s right-of-way from BNSF by quitclaim 

deed in 1998. The district court held that OPPD did not own 

fee title to the right-of-way, but acquired an easement in the 

right-of-way that “traverses across” Royal’s property.

In that case, the district court held that OPPD’s erection 

of transmission lines from Lincoln, Nebraska, to Nebraska 

City, Nebraska, along the railroad line was not an incidental use associated with the operation of a railroad line, but 

instead was a separate and distinct activity which was not part 

of the rights acquired through the original 1869 condemnation action.

Another order issued earlier in this litigation provided that 

as a result of the deeds which ultimately transferred Royal’s 

property to him, Royal was not the titled owner of the railroad 

right-of-way. As such, Royal’s appeal seeking damages from a 

board of appraisers as a result of the construction of the transmission line was dismissed.

Finally, early in the matter on appeal, an order was filed 

entering default against all defendants except OPPD. The district court then concluded that the “sole determination left to 
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Cite as 298 Neb. 560

be made . . . is whether either Royal or OPPD have proven by 

a preponderance of the evidence” that they have acquired title 

to the railroad right-of-way by adverse possession.

History of Ownership

The ownership at issue dates back to the condemnation 

action granting OPPD’s predecessor in interest a railroad rightof-way easement in 1869. OPPD took possession of its predecessor’s interest in 1998.

On January 4, 1930, Loma McKee and Edmund R. McKee, 

wife and husband, and Lois B. Nelson and Obel T. Nelson, 

wife and husband, conveyed a portion of the land now belonging to Royal to William E. Beecham. This conveyance specifically excluded the right-of-way. On March 11, 1944, Loma 

McKee (now widowed) and Lois B. Bennefield, formerly 

Lois B. Nelson, and her husband Benny Bennefield, conveyed 

the remaining portion of Royal’s property to John McCarthy, 

again specifically excluding the railroad right-of-way. Through 

various deeds and conveyances from 1987 to 2012, Royal’s 

property was conveyed to him. Those deeds and conveyances 

always excluded the railroad right-of-way.

As a result of the conveyances specifically excluding the 

railroad right-of-way, Loma McKee and Lois Bennefield continued to hold fee simple title to that portion of the subject 

property located within the railroad right-of-way. Any interest 

that Loma McKee, Lois Bennefield, or their heirs, devisees, 

legatees, or personal representatives may have had was extinguished by the order of default entered March 17, 2015.

Royal’s Use of Property

The record shows that Royal lived in a farmhouse on the 

property adjacent to the right-of-way on and off from 1989 

to 2012. Royal testified that in 1989, he began to assist his 

father and uncle in farming the property. In conjunction with 

the farming operation, during that period of time, parts of 

the right-of-way were utilized by Royal’s father and uncle 
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Cite as 298 Neb. 560

for uses such as driving farm equipment in the right-of-way, 

planting and harvesting crops in the right-of-way, using the 

right-of-way to pasture and chase livestock and to drive fourwheelers, and using the right-of-way to store hay, hunt, and 

hike, and to access the adjacent creek. Royal’s father and 

uncle also removed trees and brush from the right-of-way, 

mowed weeds in the right-of-way, and maintained the fence. 

Most of this was done in the outer 50 feet of the right-of-way. 

Royal also testified that much of this activity was done on a 

sporadic basis.

OPPD’s Use of Property

The evidence at trial shows the railroad right-of-way had 

been used continuously for railroad purposes since its establishment and that OPPD had been in control of the rightof-way since 1998. The record shows that OPPD had routinely used the right-of-way and expended significant funds 

to maintain it. OPPD had authorized BNSF and Union Pacific 

to use the line, referred to as the “Arbor Line,” to deliver 

coal to OPPD’s Nebraska City powerplant and to carry other 

goods to consumers located along the line. The Arbor Line 

had also been used by OPPD to store railcars for other railroad entities.

It is not entirely clear from the record whether OPPD ran 

trains on the line at the time of trial. One witness, formerly 

employed by OPPD, testified that trains were still operated on 

the line at the time of his retirement in 2013. But Royal testified that he had not seen a train on the line in the 5 years prior 

to trial (or from approximately 2011).

An OPPD representative testified that when not using property it owns, OPPD often leased property to others, and that 

where leases were not in place, adjoining landowners were 

often permitted to use the land for farming purposes, because 

such use promotes goodwill and keeps the land maintained. 

The representative testified that he had informed Royal that 

OPPD owned the right-of-way (in accordance with OPPD’s 
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erroneous belief that they had purchased the fee title and not 

an easement over this right-of-way) and that OPPD was aware 

Royal was using the right-of-way for farming purposes and had 

observed Royal on the land.

District Court’s Decision

Following a bench trial, the district court found that neither Royal nor OPPD had established the elements of adverse 

possession and that thus, title could not be quieted as to 

either party.

ASSIGNMENTS OF ERROR

On appeal, Royal alleges 22 assignments of error, which 

can be restated and consolidated into 3 assignments of error: 

that the district court erred in (1) “not finding that since the 

ownership interest of the fee title holders of record [was] 

extinguished by its Order of March 17, 20[15], that neither 

. . . Royal nor . . . OPPD proved . . . that he/it was entitled 

to judgment quieting title in that party by reason of adverse 

possession,” (2) making or failing to make multiple factual 

findings, and (3) not finding that Royal had proved his claim 

of adverse possession.

On cross-appeal, OPPD assigns that the district court erred 

in finding that OPPD did not adversely possess the real 

property.

STANDARD OF REVIEW

[1,2] A quiet title action sounds in equity.1 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, provided that where credible 

evidence is in conflict in a material issue of fact, the appellate 

court considers and may give weight to the fact that the trial 

1 Poullous v. Pine Crest Homes, 293 Neb. 115, 876 N.W.2d 356 (2016).
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judge heard and observed the witnesses and accepted one version of the facts rather than another.2

In an appeal from the entry of a default judgment, an appellate court will affirm the action of the trial court in the absence 

of an abuse of discretion.3

ANALYSIS

Both Royal’s appeal and OPPD’s cross-appeal raise the issue 

of whether either party had obtained title to the 200-foot rightof-way as a result of adverse possession.

[3] A party claiming title through adverse possession must 

prove by a preponderance of the evidence that the adverse possessor has been in (1) actual, (2) continuous, (3) exclusive, (4) 

notorious, and (5) adverse possession under a claim of ownership for the statutory period of 10 years.4

Neb. Rev. Stat. § 39-1404 (Reissue 2016)

Before we turn to Royal’s assignments of error, we address 

OPPD’s contention that Royal cannot adversely possess the 

railroad right-of-way, because § 39-1404 prohibits such ownership. Section 39-1404 provides:

No privilege, franchise, right, title, right of user, or 

other interest in or to any street, avenue, road, thoroughfare, alley or public grounds in any county, city, municipality, town, or village of this state, or in the space or 

region under, through or above any such street, avenue, 

road, thoroughfare, alley, or public grounds, shall ever 

arise or be created, secured, acquired, extended, enlarged 

or amplified by user, occupation, acquiescence, implication, or estoppel.

2 Klein v. Oakland/Red Oak Holdings, 294 Neb. 535, 883 N.W.2d 699 

(2016).

3 State of Florida v. Countrywide Truck Ins. Agency, 258 Neb. 113, 602 

N.W.2d 432 (1999).

4 Klein v. Oakland/Red Oak Holdings, supra note 2.
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We generally agree with OPPD that this section prohibits land owned by a political subdivision from an ownership 

change as a result of, among other means, adverse possession. But even assuming that OPPD is a political subdivision 

for purposes of this section, we find OPPD’s contention to be 

without merit.

The district court has already concluded that OPPD does not 

own the fee title to the right-of-way and owns only an easement; thus, quieting fee title in Royal would not affect OPPD’s 

interest. And to the extent OPPD might argue that Royal seeks 

to convert OPPD’s easement by adverse possession, we note 

that Royal concedes that OPPD owns such easement and does 

not seek to prevent OPPD’s ownership of the easement. On 

these facts, § 39-1404 has no application.

Effect of Earlier Default

We now address Royal’s first assignment of error, in which 

he assigns that the district court erred in “not finding that 

since the ownership interest of the fee title holders of record 

[was] extinguished by its Order of March 17, 20[15], that 

neither . . . Royal nor . . . OPPD proved . . . that he/it was 

entitled to judgment quieting title in that party by reason of 

adverse possession.”

Royal sought to quiet title on the basis of adverse possession against both OPPD and all prior owners of the property 

and their heirs and devisees. It appears this was done because 

the district court had, in prior but related litigation, determined 

that the right-of-way had remained with the original owners 

and had not been conveyed from owner to owner when the 

remainder of the property was transferred. Service on those 

individuals was done by publication. OPPD was the only 

defendant to file an appearance.

As a result of the lack of appearance, Royal sought an entry 

of default against all parties except OPPD. Royal and OPPD 

stipulated that the motion should be granted. The district 

court accordingly signed an order stating that “[b]y failing to 
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answer both [Royal’s] Complaint and . . . OPPD’s Crossclaims, 

all Defendants, except . . . OPPD, have relinquished any 

rights they may have had to the land at issue in the abovecaptioned matter.”

[4] The general rule is that “‘where a defendant is in 

default, the allegations of the [complaint] are to be taken as 

true against him, except allegations of value and amount of 

damage.’”5 Thus, if the complaint states a cause of action, the 

plaintiff is entitled to judgment without further proof.

But we have also held that a trial court should defer from 

entering a default judgment against one of multiple defendants when doing so could result in inconsistent and illogical 

judgments following a determination on the merits as to the 

defendants not in default.6

The facts presented by this appeal demonstrate how the 

entry of default judgment may lead to an inconsistent and 

illogical result. While the district court granted default judgment, that default judgment was insufficient to quiet title in 

Royal or OPPD, because it did not settle the dispute between 

those parties. Rather, all the entry of default judgment did was 

extinguish the rights of the prior landowners. And as we find 

in further detail below, by extinguishing the rights of the prior 

landowners, and then finding that neither Royal nor OPPD had 

established the elements of adverse possession, the 200 feet of 

this right-of-way are effectively owned by no one. This is an 

illogical result that should be avoided.

We observe that the district court did not err when it ultimately held that the entry of default did not lead to the quieting of title in Royal. However, that portion of the district 

court’s order granting default that extinguished the rights of 

the prior landowners led to an illogical result and was an 

5 Turbines Ltd. v. Transupport, Inc., 285 Neb. 129, 137, 825 N.W.2d 767, 

774 (2013).

6 State of Florida v. Countrywide Truck Ins. Agency, supra note 3.
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abuse of discretion. As such, we vacate that portion of the 

entry of default.

Alleged Factual Errors

In his second assignment of error, Royal alleges various 

factual findings as erroneous. Our standard of review is de 

novo on the record, and we reach a conclusion independent of 

the decision of the district court. As such, we will not address 

Royal’s claims as to the district court’s factual findings. There 

is no merit to Royal’s second assignment of error.

OPPD’s Claim of

Adverse Possession

We next turn to OPPD’s cross-appeal. In it, OPPD claims 

the district court erred in concluding that it had not established 

that it adversely possessed the right-of-way.

Our starting point is the conclusion which is the law of the 

case, that OPPD owns an easement over the right-of-way and 

not a fee simple. That easement was obtained in 1869, and 

a railroad was continuously operated on the land by various 

entities. OPPD acquired the line, known as the Arbor Line, in 

1998. Since that time, OPPD authorized BNSF, Union Pacific, 

and other railroad companies to deliver goods along the line. 

OPPD also used the line to store railcars for various entities. 

These uses are permissive and a direct or incidental use associated with the operation of a rail line.

[5] Under Nebraska law, a permissive use is not adverse and 

cannot ripen into an easement.7 If a use begins as a permissive use, it retains that character until notice that the use is 

claimed as a matter of right is communicated to the owner of 

the servient estate.8 As such, OPPD’s use of the line for railroad purposes was not hostile and therefore cannot ripen into 

ownership by adverse possession.

7 See Fischer v. Grinsbergs, 198 Neb. 329, 252 N.W.2d 619 (1977).

8 Gerberding v. Schnakenberg, 216 Neb. 200, 343 N.W.2d 62 (1984).
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The character of OPPD’s use changed when the transmission line was constructed in approximately 2007. However, 

on these facts this use was insufficient to establish adverse 

possession. OPPD filed its counterclaim, asserting that it had 

adversely possessed the right-of-way in January 2015. This 

date is less than 10 years after construction of the line. As 

such, the 10-year time requirement for a claim of adverse possession has not been met.

The district court did not err in finding that OPPD had not 

established the elements of adverse possession. OPPD’s argument on cross-appeal is without merit.

Royal’s Claim of

Adverse Possession

Having concluded that OPPD did not establish the elements 

of adverse possession, we turn to Royal’s third assignment of 

error. Royal contends that the district court erred in not quieting title in the 200-foot right-of-way in his name based upon 

his adverse possession of that property.

In his second amended complaint, Royal sought title to the 

entire 200 feet of the right-of-way. The district court found 

that Royal had not met the elements of adverse possession and 

thus title could not be quieted in Royal:

Though [Royal] and his predecessors in interest have 

owned the property surrounding the railroad right-of-way 

for more than ten years, their use of the property has been 

sporadic in occurrence and sporadic in location. More 

specifically, the majority of activities, other than farming, described by Royal have occurred randomly over a 

nineteen year period. Those uses, such a [sic] walking or 

riding four wheelers along the right-of-way or allowing 

hunters access to the right-of-way have occurred so rarely 

that the same could not be sufficient to put anyone on 

notice that Royal was intending to claim the right-of-way 

as his own property.
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Further, the evidence indicates that farming was done 

routinely upon portions of the right-of-way during that 

same 19 year period. However, the farming was being 

done with the tacit approval of OPPD who was holding 

itself out as the owner of the property. Further, though 

the farming was allegedly done on an annual basis, it 

was only done during the planting, growing and harvesting periods and not done consistently throughout 

each year.

Lastly, the survey presented at trial merely provides a 

legal description for the entirety of the right-of-way and 

the outer fifty feet of both sides of the right-of-way. The 

evidence is clear that Royal has not used the entire rightof-way for his own purposes; that he has rarely used the 

interior 100 feet of the right-of-way; and has only used 

portions of the outer 50 feet of the right-of-way for his 

own purposes. There has not been sufficient evidence 

presented to adequately describe the land with enough 

particularity to enable this court to exact the extent of 

the land adversely possessed and to enter a judgment 

upon the description. As a result, Royal’s use and maintenance of the right-of-way for his own purposes cannot 

be considered actual, continuous, exclusive, notorious, 

and adverse under a claim of ownership for the statutory 

period of 10 years and, therefore, his claim of adverse 

possession must fail under these [sic] set of facts.

We agree that there is some evidence in the record that 

lends support to Royal’s claim of adverse possession. But 

applying our de novo standard of review, we must affirm the 

trial court’s finding that Royal did not establish his claim 

of adverse possession as to the 200 feet of the right-of-way 

claimed in his amended complaint.

An expert witness for Royal who surveyed the right-of-way 

testified that there was evidence of farm operations, including tilled land and crop residue. But he observed the property 

only at the time he conducted the survey. While this testimony 
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supports the conclusion that some of the land had been used 

for farming operations, it does not support the conclusion that 

it was done for a continuous period of time sufficient to prove 

a claim of adverse possession.

Royal himself testified that there was no area in the outside 

50 feet on each edge of the right-of-way that was not utilized 

in some manner, whether it was farmed or used for pastureland, 

hay land, or drainage. But Royal also acknowledged that he 

had not continuously lived on the property and had not continuously assisted with the farming of the property. This limits 

the weight of Royal’s evidence on this point.

Moreover, we note that Royal’s credibility was challenged 

by contrary statements that he made during depositions in 

this case. The trial court heard and observed the witness, 

and in finding that Royal had not established the elements of 

adverse possession, gave greater weight to Royal’s deposition testimony.

On the record before us, giving deference to the trial court, 

who heard and observed the witnesses and accepted one version of the facts rather than another,9

 we find that Royal did 

not establish the elements of adverse possession as to the 200 

feet of the railroad right-of-way and, as such, is not entitled 

to have title quieted in his name. Royal’s final assignment of 

error is without merit.

CONCLUSION

The district court’s order denying both Royal’s and OPPD’s 

claims for adverse possession are affirmed. The order granting 

default judgment to Royal and OPPD and extinguishing the 

property rights of the prior owners is vacated.

Affirmed in part, and in part vacated.

Wright, J., not participating in the decision.

Funke, J., not participating.

9 See Klein v. Oakland/Red Oak Holdings, supra note 2.