Opinion ID: 1910748
Heading Depth: 1
Heading Rank: 6

Heading: district's motion for summary judgment

Text: 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 district 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 following annexation. Section 31-766 provides further that if the district and city or village do not agree on the proper adjustment of all matters 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, maintenance, and other obligations under § 31-766 in Millard Rur. Fire Prot. Dist. No. 1 v. City of Omaha. [6] In that case, the Millard Fire Protection District (the Millard District) brought a declaratory 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 assumption of the Millard District's indebtedness was to multiply the Millard District's net debt by the percentage of the valuation of 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, maintenance, 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 maintenance 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 services to the annexed areas. [7] In its January 3, 2005, order, the district court entered summary judgment in favor of the District based on the formula set forth in Millard Rur. Fire Prot. Dist. No. 1, with one modification. 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. 1 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 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 present 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 partially 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 therefore reverse the order and remand the cause to the district court for further proceedings.