Opinion ID: 1359551
Heading Depth: 2
Heading Rank: 1

Heading: Nebraska Proceedings

Text: The Joint Venture's motion to dismiss the lien foreclosure proceeding alleged that by filing a surety bond issued by a company authorized to do business in Nebraska, the action was no longer in rem and the forum selection clause applied, mandating jurisdiction in Missouri. During the first hearing on this matter, the Nebraska court held that the bond was ineffective because only a person having an interest in the real estate may file a bond under Nebraska Revised Statute § 52-142, and the Joint Venture did not have an interest in the lien property. [2] After the Joint Venture amended the bond, the Nebraska court again held the bond ineffective because it failed to identify where and upon whom service should be made. Finally, after the Joint Venture corrected all purported mistakes, the Nebraska court ruled on the motion to dismiss. The Nebraska court first noted that the bond discharged the real estate lien, [3] but then concluded that the foreclosure action was still in existence in so much as the lien is transferred to the submitted surety bond. On this basis, the court held that the validity of the original construction lien and the amounts that might be owed on it were still in question. Thus, the court decided that an appropriate remedy was not available in the federal forum and denied the motion to dismiss. Although the contract action had not been asserted in Nebraska, the state court, in making its ruling, applied Nebraska Revised Statute § 25-415 to dispose of the contract's forum selection clause. That section codifies Nebraska's recognition of forum selection clauses, but provides five exceptions. While the court originally viewed three of the exceptions as potentially applicable, it ultimately determined that the Joint Venture's bond was ineffective in releasing the lien from the real estate, creating an in rem action that had to be resolved at the situs of the dispute-Nebraska. However, as earlier stated, the Nebraska court later recognized its error as to the efficacy of the bond in releasing the real estate lien and thereafter, upon reconsideration, made its dismissal decision based upon the purported unique[ness of the lien action] to the Nebraska jurisdictionmaking a remedy not available in the federal forum. As mentioned below, the federal district court found this to be error, a matter with which we agree and discuss in greater detail in Section IIA.