Court Opinion

ID: 2680768
Source: CourtListenerOpinion
Date Created: 2014-06-27 14:04:19.984928+00
Date Added: 2024-06-11T13:15:00.450165
License: Public Domain

Nebraska Advance Sheets
	                         SID NO. 424 v. TRISTAR MGMT.	425
	                              Cite as 288 Neb. 425

         Sanitary and Improvement District No. 424 of
         Douglas County, Nebraska, appellee, v. Tristar
            Management, LLC, a Nebraska limited
                 liability company, appellant.
                                    ___ N.W.2d ___

                         Filed June 27, 2014.    No. S-13-582.

 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 decides 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 trial
     court’s determination.
 3.	 Summary Judgment: Appeal and Error. An appellate court will affirm a lower
     court’s grant of summary judgment if the pleadings and admitted evidence show
     that there is no genuine issue as to any material facts or as to the ultimate infer-
     ences that may be drawn from the facts and that the moving party is entitled to
     judgment as a matter of law.
 4.	 Statutes: Appeal and Error. Statutory interpretation presents a question of law
     that an appellate court independently reviews.

   Appeal from the District Court for Douglas County:
J. Michael Coffey, Judge. Reversed and remanded with
directions.
  Christian R. Blunk, of Harris Kuhn Law Firm, L.L.P., for
appellant.
  Mark J. LaPuzza, of Pansing, Hogan, Ernst & Bachman,
L.L.P., for appellee.
  Heavican, C.J., Wright, Connolly, Stephan, McCormack,
Miller-Lerman, and Cassel, JJ.
    Miller-Lerman, J.
                     NATURE OF CASE
   Tristar Management, LLC (Tristar), appeals the order of the
district court for Douglas County in which it ruled that the
special assessment liens levied by Sanitary and Improvement
District No. 424 of Douglas County, Nebraska (the SID),
against five parcels of real estate located within the SID sur-
vived Tristar’s acquisition of title to the parcels by the issu-
ance to Tristar of treasurer tax deeds under Neb. Rev. Stat.
    Nebraska Advance Sheets
426	288 NEBRASKA REPORTS

§ 77-1837 (Reissue 2009). Because we conclude that the liens
were foreclosed by the issuance of the tax deeds, the district
court erred as a matter of law. We reverse the order entering
summary judgment in favor of the SID and denying Tristar’s
motion for summary judgment, and we remand the cause
with directions.

                    STATEMENT OF FACTS
   This case involves five parcels of real estate that are located
within the boundaries of the SID: lots 46, 53, 54, 94, and 176
(the Properties). The Properties are located in Stone Park,
which is a subdivision in Douglas County. The parties stipu-
lated to the underlying facts as follows:
          1. That the special assessments on [the Properties]
      were levied on December 3, 1999 by the [SID] via
      special assessment in the amount of $8,496.57 per Lot.
      Interest as of 2.28.13 totals $12,576.15 for a total per Lot
      of $21,072.72.
          2. That the [Properties] had been in a 2005 tax sale
      auction and were subsequently sold under Neb. Rev.
      Stat. § 77-190[1] et [seq]. [(Reissue 2009)] collection
      of delinquent real property taxes through district court
      proceedings to HBI, LLC pursuant to Douglas County
      District Court case CI 1082, Page 845 entitled Adair
      Asset Mgmt v. East. . . .
          3. HBI, LLC brought Douglas County District Court
      matter CI 1099-167, HBI, LLC v. Sanitary Improvement
      District 424, against [the] SID . . . seeking declaratory
      action. [The] SID . . . answered and cross claimed the
      sale was improper and that [the] SID . . . was not prop-
      erly served. . . .
          4. Douglas County District Court matter CI 1099-167
      was dismissed with prejudice. . . .
          5. A Special Warranty Deed #2011030257 was filed
      [by HBI, LLC] with the Douglas County Register of
      Deeds office on April 5, 2011, [whereby the SID became
      titleholder,] along with the accompanying Real Estate
      Transfer Statement Form 521, designating the address of
      MARK LaPUZZA, Pansing Hogan Ernst & Bachman,
                  Nebraska Advance Sheets
	                  SID NO. 424 v. TRISTAR MGMT.	427
	                       Cite as 288 Neb. 425

      10250 Regency Circle, Suite 300, Omaha, NE 68114 as
      the place to send tax statements. . . .
          6. [At some point] TRISTAR . . . became the assignee
      of the [2009] Tax Certificates attached to the follow-
      ing [Properties:]
          2009-2311	      Lot 46
          2009-2356	      Lot 94
          2009-2873	      Lot 176
          2009-3348	      Lot 53
          2009-3376	      Lot 54
          7. TRISTAR commenced in March, 2012 under Neb.
      Rev. Stat. § 77-180[1] et [seq]. [(Reissue 2009)] the
      collection of property tax by sale of real property and
      caused the attached Notices to be delivered by certified
      mail, receipt requested to the SID’s address of record. See
      attached Exhibit “6” for each Lot[’s] respective Notice
      and green card c/o MARK LaPUZZA, 10250 Regency
      Circle, Suite 300, Omaha, NE 68114 which all green
      cards were signed for and returned.
          8. TRISTAR further published the Notice on each
      respective Lot. . . .
          9. On various dates, TRISTAR applied for Tax Deeds
      on each of the respective properties. . . .
          10. On various dates, the Deeds were granted and sub-
      sequently recorded. . . .
          11. The SID . . . took no action to redeem the
      Certificates within each respective certificate’s 90-day
      redemption period.
          12. [The SID’s] chairman is Lori Bachman, 6228
      North 153rd Avenue, Omaha, NE 68116. [The SID’s]
      clerk is Tom Umthun, 6214 North 154th Street, Omaha,
      NE 68116.
          13. The record of address of the SID for the Lots cer-
      tified by the Douglas County Assessor for the period of
      January 1, 2012 to June 30, 2012 is c/o Mark LaPuzza,
      10250 Regency Cir., Suite 300, Omaha, NE. . . .
    As reflected in the stipulated facts, the SID became the
titleholder of the Properties in 2011 and, through assign-
ment, Tristar became the holder of five 2009 tax certificates
    Nebraska Advance Sheets
428	288 NEBRASKA REPORTS

on the Properties. In March 2012, Tristar began proceedings
to redeem the tax certificates under statutes in chapter 77,
article 18, of the Nebraska Revised Statutes relating to the
“Collection of Delinquent Real Property Taxes by Sale of
Real Property.” Tristar published notices regarding its intent to
redeem the tax certificates and mailed notices to the address of
the SID’s attorney, Mark LaPuzza, who had been designated
as the place to send tax statements to be paid by the SID on
the Properties. Tristar then applied for and obtained from the
Douglas County treasurer the tax deeds to the Properties pur-
suant to § 77-1837.
   As will be explained more fully below in our analysis, there
are two processes through which a holder of tax certificates
can exercise his or her rights to the property purchased at
a tax sale. Under chapter 77, article 18, the holder of a tax
certificate can obtain a tax deed from the county treasurer,
after having given proper notice; we refer to this as the “tax
deed” method. Under chapter 77, article 19, the holder of a tax
certificate can foreclose upon the tax lien in a court proceed-
ing and compel sale of the property, yielding a sheriff’s deed,
under Neb. Rev. Stat. § 77-1902 (Cum. Supp. 2012); we refer
to this as the “judicial foreclosure” method. See, generally,
Knosp v. Shafer Properties, 19 Neb. Ct. App. 809, 820 N.W.2d
68 (2012).
   In this case, after Tristar had obtained tax deeds for the
Properties under the “tax deed” method under chapter 77,
article 18, the SID filed its complaint against Tristar in the dis-
trict court for Douglas County on August 21, 2012. This case
gives rise to the instant appeal. The SID asserted two causes of
action. “Count I” was an action to quiet title in the Properties
in the SID. The SID alleged that the tax deeds held by Tristar
were void due to lack of proper notice to the SID. The SID
also sought orders declaring that its special assessments levied
in 1999 continued to be valid liens on the Properties and that
Douglas County’s public tax records should reflect such special
assessment liens. “Count II” was an action for foreclosure of
the liens for the special assessments.
   On October 11, 2012, Tristar filed a motion to dismiss
count II for failure to state a claim. On January 11, 2013, the
                   Nebraska Advance Sheets
	                  SID NO. 424 v. TRISTAR MGMT.	429
	                       Cite as 288 Neb. 425

district court sustained Tristar’s motion to dismiss count II of
the complaint.
   On February 12, 2013, Tristar filed a motion for sum-
mary judgment, and a hearing was held on the motion on
March 1. The bill of exceptions from the hearing includes a
set of “Stipulated Facts” and eight exhibits. At the hearing,
the district court granted Tristar’s motion for leave to file
its answer out of time. In its answer with regard to count I,
Tristar affirmatively averred that the SID had been properly
notified and served under the relevant statute in chapter 77,
article 18, including Neb. Rev. Stat. § 77-1832 (Reissue 2009).
Tristar also affirm­tively averred that “TRISTAR tax deeds
                      a
are valid and have cleared the title[s] from all liens, interests,
and encumbrances of record.” (Emphasis in original.) Tristar
requested an order stating that the special assessments were
no longer valid liens on the Properties. After the hearing on
Tristar’s motion for summary judgment, the SID filed its cross-
motion for summary judgment, stating that its motion could
be considered in connection with the evidence adduced at the
hearing on Tristar’s motion for summary judgment.
   The district court filed its order on June 13, 2013, ruling
on the parties’ cross-motions for summary judgment. It is this
order from which Tristar appeals. In its order, the district court
stated that “[a]t issue is whether or not a tax deed issued by
a county treasurer excludes any lien on real estate for special
assessments levied by a sanitary improvement district.”
   In making its determinations in its June 13, 2013, order, the
district court relied upon § 77-1902 from the judicial foreclo-
sure statutes. Section 77-1902 provides:
         When land has been sold for delinquent taxes and a
      tax sale certificate or tax deed has been issued, the holder
      of such tax sale certificate or tax deed may, instead of
      demanding a deed or, if a deed has been issued, by sur-
      rendering the same in court, proceed in the district court
      of the county in which the land is situated to foreclose
      the lien for taxes represented by the tax sale certificate
      or tax deed and all subsequent tax liens thereon, exclud-
      ing any lien on real estate for special assessments levied
      by any sanitary and improvement district which special
    Nebraska Advance Sheets
430	288 NEBRASKA REPORTS

      assessments have not been previously offered for sale
      by the county treasurer, in the same manner and with
      like effect as in the foreclosure of a real estate mortgage,
      except as otherwise specifically provided by sections
      77-1903 to 77-1917. Such action shall only be brought
      within six months after the expiration of three years
      from the date of sale of any real estate for taxes or spe-
      cial assessments.
   Based on § 77-1902, the district court concluded that the
tax deeds issued to Tristar by the Douglas County treasurer
did not foreclose or extinguish the special assessment liens
held by the SID. The district court reasoned that “[f]oreclos-
ing special assessments upon the issuance of a treasurer’s deed
would nullify the priority given to special assessments as set
forth in Neb. Rev. Stat. 77-1902.” Because of this determina-
tion, the district court stated that the issue regarding whether
Tristar gave proper notice to the SID when Tristar was in the
process of obtaining its tax deeds was moot and need not
be decided.
   Given the foregoing determinations, the district court denied
Tristar’s motion for summary judgment and granted the SID’s
motion for summary judgment. The district court ordered that
the Properties
      are not subject to foreclosure or termination pursuant to
      the treasurer[’]s deed[s] received by Tristar . . . from the
      Douglas County Treasurer and that the special assess-
      ments levied by [the SID] on December 3, 1999 continue
      to be a valid lien against each of the [Properties] until
      paid and that Douglas County should amend its public
      tax records to reflect such special assessments against
      the [Properties].
   Tristar appeals.
                 ASSIGNMENTS OF ERROR
   Tristar claims on appeal, restated, that the district court
erred when it (1) granted the SID’s motion for summary judg-
ment and denied Tristar’s motion for summary judgment, (2)
found that the tax deeds issued to Tristar did not foreclose
or terminate the SID’s special assessment liens and that the
                  Nebraska Advance Sheets
	                  SID NO. 424 v. TRISTAR MGMT.	431
	                       Cite as 288 Neb. 425

special assessment liens continued to be valid liens against
the Properties, (3) applied § 77-1902 to a proceeding for a
tax deed, (4) failed to address the issue of the sufficiency
of the notice provided by Tristar to the SID in obtaining its
tax deeds and found such issue moot, (5) failed to find that
Tristar’s notice to the SID was sufficient, (6) impliedly found
that the SID had standing to bring count II for foreclosure of
the special assessment liens, and (7) failed to address Tristar’s
argument that because the SID filed the special warranty deeds
to the Properties in 2011, the doctrine of merger should be
applied to conclude that the SID’s special assessment liens
merged with the SID’s interest as a titleholder.

                   STANDARDS OF REVIEW
   [1,2] A quiet title action sounds in equity. Obermiller v.
Baasch, 284 Neb. 542, 823 N.W.2d 162 (2012). On appeal
from an equity action, an appellate court decides factual ques-
tions de novo on the record and, as to questions of both fact
and law, is obligated to reach a conclusion independent of the
trial court’s determination. Id.
   [3] An appellate court will affirm a lower court’s grant of
summary judgment if the pleadings and admitted evidence
show that there is no genuine issue as to any material facts or
as to the ultimate inferences that may be drawn from the facts
and that the moving party is entitled to judgment as a matter
of law. Coffey v. Planet Group, 287 Neb. 834, 845 N.W.2d
255 (2014).
   [4] Statutory interpretation presents a question of law that
an appellate court independently reviews. SourceGas Distrib. v.
City of Hastings, 287 Neb. 595, 844 N.W.2d 256 (2014).

                         ANALYSIS
   The central issue in this appeal is the correctness of the
district court’s order in which it concluded that the SID’s
special assessment liens survived issuance of the tax deeds
to Tristar. The court reached this conclusion by applying
§ 77-1902, which effectively provides for the survival of
sanitary improvement district special assessment liens in judi-
cial foreclosure proceedings under Neb. Rev. Stat. § 77-1901
    Nebraska Advance Sheets
432	288 NEBRASKA REPORTS

et seq. (Reissue 2009 & Cum. Supp. 2012), to the tax deed
process Tristar had pursued under the treasurer’s tax deed
statutes found at Neb. Rev. Stat. § 77-1801 et seq. (Reissue
2009 & Cum. Supp. 2012). As explained below, we conclude
that the district court erred as a matter of law when it applied
the chapter 77, article 19, provision to the transfer of prop-
erty under chapter 77, article 18, and we reverse, and remand
with directions. Given the disposition of this appeal, we find
it unnecessary to reach certain assignments of error and we
combine and comment only briefly on other issues raised in
this appeal.

Merger.
    We turn first to Tristar’s contention that because the lesser
interests, i.e., special assessment liens, merged into the greater
interests, i.e., titles, held by the same entity, after the SID
gained title, the SID had no lienhold interests to protect. See,
generally, Franksen v. Crossroads Joint Venture, 245 Neb. 863,
515 N.W.2d 794 (1994). Tristar contends that due to merger,
the SID lacked standing to bring count II, in which it sought to
foreclose on its liens, and that the district court erred when it
denied the portions of Tristar’s motions seeking to dispose of
count II.
    The procedural posture of this case is complex and does not
warrant repeating. In sum, the record shows that the district
court dismissed the SID’s count II earlier in the pendency of
the case and did not properly reinstate it. Count II stands dis-
missed. Thus, to the extent the order on appeal purports to rule
on count II, such rulings are a nullity and are vacated. Further,
with respect to merger, for purposes of our consideration of
the central issue in the case, our analysis will assume that the
SID’s special assessment liens did not merge into the SID’s
title, and therefore, we proceed to consider the survival of the
SID’s special assessment liens following the issuance of the tax
deeds to Tristar.

Notice.
  We turn next to Tristar’s claim that the district court erred
when it failed to rule on the SID’s contention that notice
                  Nebraska Advance Sheets
	                  SID NO. 424 v. TRISTAR MGMT.	433
	                       Cite as 288 Neb. 425

to the SID of the pending issuance of tax deeds to Tristar
was not sufficient. Tristar maintains that application of the
law to the stipulated facts shows that notice was sufficient.
We agree.
   The SID relied on Neb. Rev. Stat. § 25-510.02(3) (Cum.
Supp. 2012) in support of its argument. Given its disposition
on the merits favorable to the SID, the district court ruled that
the “issue of the sufficiency of notice provided to SID 424 is
moot” and did not address the issue. The SID did not cross-
appeal the district court’s treatment of notice.
   A county treasurer’s tax deed is presumptive evidence that
procedures required by law to make a good and valid tax sale
and vest title in the purchaser were done. See, § 77-1842;
Ottaco Acceptance, Inc. v. Huntzinger, 268 Neb. 258, 682
N.W.2d 232 (2004). As to proper notice under the tax deed
method, § 77-1832 provides in part:
        (1) Service of the notice provided by subsection (1) of
     section 77-1831 shall be made by:
        (a) Personal or residence service as described in sec-
     tion 25-505.01 upon every person in actual possession
     or occupancy of the real property and upon the person
     in whose name the title to the real property appears of
     record who can be found in this state; or
        (b) Certified mail, return receipt requested, upon the
     person in whose name the title to the real property
     appears of record who cannot be found in this state or
     who cannot be served by personal or residence service
     to the address where the property tax statement was
     mailed and upon every encumbrancer of record in the
     office of the register of deeds of the county. Whenever
     the record of a lien shows the post office address of the
     lienholder, notice shall be sent by certified mail, return
     receipt requested, to the holder of such lien at the address
     appearing of record.
   The parties stipulated to the following facts, which we repeat
because, taken together, they show sufficient notice: A “Special
Warranty Deed” was filed with the Douglas County register
of deeds at instrument No. 2011030257, on April 5, 2011,
whereby the SID became the titleholder of the Properties. Also
    Nebraska Advance Sheets
434	288 NEBRASKA REPORTS

filed with such “Special Warranty Deed” was a “Real Estate
Transfer Statement Form 521.” Item No. 19 of “Form 521”
designated LaPuzza and his office address as the address of
record to which the tax statements should be sent.
   Tristar, through assignment, was the holder of the five
2009 tax certificates (Nos. 2009-231l, 2009-2356, 2009-2873,
2009-3348, and 2009-3376) when the SID did not pay the
general real property taxes on the Properties. During March
2012, Tristar caused the redemption notices authorized by
§ 77-1831 to be delivered by certified mail, receipt requested,
to the address of record where the property tax statements
were mailed pursuant to § 77-1832. As noted in the stipu-
lated facts, this address was designated by the SID under
“Form 521” filed with the “Special Warranty Deed” as “c/o
MARK LaPUZZA, 10250 Regency Circle, Suite 300, Omaha,
NE 68114.” Tristar also published the notices, pursuant to
§ 77-1834.
   On various dates in July to August of 2012, Tristar applied
for the tax deeds to the Properties, pursuant to § 77-1831 et
seq. At the time Tristar applied for the tax deeds, affidavits
of service of notice were provided to the Douglas County
treasurer pursuant to § 77-1833, as was proof of publication
pursuant to § 77-1835. The Douglas County treasurer, pursuant
to § 77-1837, issued the respective tax deeds. The SID took no
action to redeem the tax certificates within the 90-day redemp-
tion period or at any time prior to the redemption period.
According to the stipulated facts, the Douglas County asses-
sor’s office certified that the address of record for the SID for
tax purposes on the Properties was “c/o Mark LaPuzza, 10250
Regency Cir[cle], Suite 300, Omaha, NE.”
   Despite the foregoing undisputed facts, the SID relied on
Neb. Rev. Stat. § 25-501 et seq. (Reissue 2008 & Cum. Supp.
2012) to support its claim of inadequate notice. The SID
specifically contends that, as a political subdivision, service
should have been made on a board member or officer. See
§ 25-510.02(3). The statutes upon which the SID relies are
general service statutes and do not control. Instead, the spe-
cific statutes, § 77-1831 and following, control proper notice
relative to the issuance of tax deeds and provide, inter alia,
                   Nebraska Advance Sheets
	                   SID NO. 424 v. TRISTAR MGMT.	435
	                        Cite as 288 Neb. 425

that notice be given to the address of record provided by the
SID to the county for delivery of its tax statement. Because
notice was given to the address so designated, we determine
that notice was sufficient, and the district court should have
so determined.

Misapplication of § 77-1902.
   The district court relied on § 77-1902 when it concluded
that the SID’s special assessment liens survived the issu-
ance of the tax deeds to Tristar. It was on this basis that the
district court denied Tristar’s motion for summary judgment
and granted the SID’s motion for summary judgment. In its
order, the district court stated that the SID’s assessment liens
“continue to be a valid lien against each of the [Properties]
until paid and that Douglas County should amend its pub-
lic tax records to reflect such special assessments against
the [Properties].”
   Tristar claims that the district court erred when it invoked
§ 77-1902—found in chapter 77, article 19, pertaining to judi-
cial foreclosures—and applied it to the tax deed process found
in chapter 77, article 18, pursued by Tristar. We agree that the
district court erred.
   Statutory interpretation presents a question of law that an
appellate court independently reviews. SourceGas Distrib. v.
City of Hastings, 287 Neb. 595, 844 N.W.2d 256 (2014).
Because the district court erred in its reading and application
of a statute, it erred as a matter of law, and because the mate-
rial facts are not in dispute, we reverse the district court’s order
granting summary judgment in favor of the SID and remand
the cause with directions to enter summary judgment in favor
of Tristar and other directions.
   As a general matter, when a county treasurer sells real prop-
erty for delinquent taxes, the purchaser receives a “tax certifi-
cate,” but the owner of the property can redeem the property
by paying the delinquent taxes plus interest. See Knosp v.
Shafer Properties, 19 Neb. Ct. App. 809, 820 N.W.2d 68 (2012).
In several of our cases, we have described the “two courses
of action by which the purchaser of a tax certificate may pro-
ceed—the purchaser can either wait and obtain a [tax] deed
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of conveyance [from the treasurer] for the property or obtain
an order of foreclosure [from a court] and compel the sale of
the property.” INA Group v. Young, 271 Neb. 956, 960, 716
N.W.2d 733, 737 (2006). See, also, Ottaco Acceptance, Inc.
v. Larkin, 273 Neb. 765, 733 N.W.2d 539 (2007). The former
method is sometimes referred to as the “tax deed” procedure
and is authorized by § 77-1837, and the latter is sometimes
referred to as a “judicial foreclosure” and is governed by
§ 77-1901 et seq. The cases of INA Group, supra; Ottaco
Acceptance, Inc., supra; and Knosp, supra, explain the two
methods in greater detail.
   Although the two methods bear similarities, they are neither
comparable nor fungible. For example, notice procedures con-
cerning the tax deed process are well defined in § 77-1831 and
subsequent statutes, so as to give interested parties notice of
the holder’s intent to apply for the tax deed and provide such
parties an opportunity to take action to protect their interests.
In the face of inaction, the treasurer issues the tax deeds. In
contrast, notice procedures concerning judicial foreclosure, in
§ 77-1901 et seq., are designed to bring interested parties into
the judicial foreclosure proceeding so that they may be heard
together and competing interests reconciled.
   Although the overall objective of both procedures is the
recovery of unpaid taxes on real property, these “are two sepa-
rate and distinct methods for the handling of delinquent real
estate taxes.” Brown v. Glebe, 213 Neb. 318, 320, 328 N.W.2d
786, 788 (1983). We have observed that the two “methods are
neither the same nor duplicative of each other, and the provi-
sions of Chapter 77, article 18, are not interchangeable with
the provisions of Chapter 77, article 19.” 213 Neb. at 321, 328
N.W.2d at 788. This principle applies to the instant case.
   The Nebraska Court of Appeals has recently considered
the issue of whether a lien on a piece of real property was
foreclosed by the issuance of a treasurer’s tax deed under
§ 77-1837. See Knosp, supra. After reviewing the arguments
of the parties, the relevant statutes, and our jurisprudence,
the Court of Appeals held that “a treasurer’s tax deed, issued
pursuant to § 77-1837 and in compliance with Neb. Rev. Stat.
§§ 77-1801 to 77-1863 (Reissue 2009), passes title free and
                   Nebraska Advance Sheets
	                  SID NO. 424 v. TRISTAR MGMT.	437
	                       Cite as 288 Neb. 425

clear of all previous liens and encumbrances.” Knosp, 19 Neb.
App. at 810, 820 N.W.2d at 70. This holding is supported by
earlier case law cited in Knosp. See, e.g., Sanford v. Scott, 105
Neb. 479, 484, 181 N.W. 148, 150 (1920) (concluding that
county treasurer’s tax deed “conveyed the title to the defend­
ant . . . free from the lien of plaintiff’s mortgage”). Although
the lienholder in Knosp was a private entity, the holding in
Knosp applies to the SID, because the SID, albeit public, is
not a general taxing authority and does not enjoy general pri-
ority. Compare, e.g., Neb. Rev. Stat. § 77-203 (Reissue 2009)
(“taxes on real property shall be a first lien”); Neb. Rev. Stat.
§ 14-557 (Reissue 2012) (“general municipal taxes upon real
estate [levied by cities of the metropolitan class] shall be a
first lien”).
   We have long held that title passes free and clear of all
previous liens and encumbrances pursuant to the judicial fore-
closure method found in chapter 77, article 19. E.g., Polenz v.
City of Ravenna, 145 Neb. 845, 18 N.W.2d 510 (1945). And
under Knosp and earlier cases cited therein, the same is true
when the tax deed method found in chapter 77, article 18, is
utilized. This being so, the portion of § 77-1902 added in 1996
upon which the district court relied, which effectively excludes
special assessments levied by sanitary improvement districts
from the free and clear effects of judicial foreclosure, is an
exception to the common law. See 1996 Neb. Laws, L.B. 1321.
Accordingly, we read it narrowly, and limit its application to
the judicial foreclosure statutory method in which it was placed
by the Legislature. See ML Manager v. Jensen, 287 Neb. 171,
175, 842 N.W.2d 566, 571 (2014) (stating that “if a statute is in
derogation of common law, it is to be strictly construed”). As
we observed in Brown, discussing chapter 77, articles 18 and
19, “[t]here is no authority in this court to transfer a portion of
one statute to another.” 213 Neb. at 321, 328 N.W.2d at 788.
The terms of § 77-1902 are limited by law and logic to applica-
tion in the judicial foreclosure method.
   For completeness, we note that, expanding on the theme
in § 77-1902, the Legislature amended § 77-1914 effective
August 27, 2011, to provide that the sheriff’s deed which
results from the judicial foreclosure proceeding passes title to
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the purchaser free and clear of all liens and interests of all per-
sons who were parties to the proceedings, “excluding any lien
on real estate for special assessments levied by any sanitary
and improvement district.” As with § 77-1902, this provision
is inapplicable to tax deeds, and furthermore, it is a substantive
change which was not in effect in 2009 when the tax certifi-
cates were issued. See § 77-1837.01.
   In this case, the SID had numerous opportunities to protect
its interests. Tristar lists these opportunities as including: by
paying real estate taxes when they came due, by redeeming
the property within the 3-year redemption period after issuance
of the tax certificates, or by foreclosing its special assessment
liens under § 77-1917.01, which provides in part:
      When such special assessments have become delinquent,
      without the real property against which they are assessed
      being first offered at tax sale by the tax sale certificate
      method or otherwise, the municipal corporation or dis-
      trict involved may itself as party plaintiff proceed in
      the district court of the county in which the real estate
      is situated to foreclose, in its own name, the lien for
      such delinquent special assessments in the same man-
      ner and with like effect as in the foreclosure of a real
      estate mortgage, except as otherwise specifically pro-
      vided by sections 77-1903 to 77-1917, which shall gov-
      ern when applicable.
See, also, § 77-1858 (providing for sale as requested by sani-
tary and improvement district). However, the SID did not pur-
sue these avenues.
   Tristar elected to exercise its rights to the Properties pursu-
ant to the tax deed method. Tristar recorded its tax deeds, and
thereafter, the SID filed this action. Summary judgment was
granted in favor of the SID on the surviving quiet title claim.
In a quiet title action, the SID was required to prove that it
was the owner of the legal or equitable title to the Properties
or had some interest therein superior to the rights of Tristar.
Knosp v. Shafer Properties, 19 Neb. Ct. App. 809, 820 N.W.2d
68 (2012). See, also, Weesner v. Weesner, 168 Neb. 346, 95
N.W.2d 682 (1959). Based on our analysis above, title passed
                        Nebraska Advance Sheets
	                             STATE v. MERCHANT	439
	                              Cite as 288 Neb. 439

to Tristar free and clear of all previous liens and encumbrances
as a matter of law and the SID’s special assessment liens did
not survive the transfer to Tristar. The SID did not meet its
burden of showing it had an enforceable interest that entitled it
to judgment, and the district court erred when it granted sum-
mary judgment in favor of the SID, entered orders accordingly,
and denied Tristar’s motion for summary judgment.
                          CONCLUSION
    The treasurer tax deeds issued to Tristar pursuant to
§ 77-1837 and in compliance with § 77-1801 et seq. passed
title to Tristar free and clear of all previous liens and encum-
brances, including the special assessment liens of the SID. The
district court erred when it applied § 77-1902 from the judicial
foreclosure statutes to this case involving the treasurer tax deed
method and reached a contrary conclusion. We reverse the
order of the district court granting summary judgment to the
SID and denying Tristar’s motion for summary judgment, and
remand the cause with directions to enter judgment in favor of
Tristar on the SID’s complaint.
                      R eversed and remanded with directions.

                    State of Nebraska, appellee, v.
                    Thomas P. Merchant, appellant.
                                  ___ N.W.2d ___

                        Filed June 27, 2014.   No. S-13-903.

 1.	 Jury Instructions: Appeal and Error. Whether jury instructions are correct is
     a question of law, which an appellate court resolves independently of the lower
     court’s decision.
 2.	 Statutes: Appeal and Error. Statutory interpretation presents a question of law,
     for which an appellate court has an obligation to reach an independent conclusion
     irrespective of the determination made by the court below.
 3.	 Criminal Law: Directed Verdict. In a criminal case, a court can direct a
     verdict only when there is a complete failure of evidence to establish an essen-
     tial element of the crime charged or the evidence is so doubtful in character,
     lacking probative value, that a finding of guilt based on such evidence cannot
     be sustained.