Court Opinion

ID: 9352440
Source: CourtListenerOpinion
Date Created: 2023-01-06 15:04:56.408368+00
Date Added: 2024-06-11T17:02:43.714210
License: Public Domain

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
01/06/2023 09:04 AM CST

                                                        - 173 -
                               Nebraska Supreme Court Advance Sheets
                                        313 Nebraska Reports
                                                MUELLER V. PEETZ
                                                Cite as 313 Neb. 173

                     Cheryl M. Mueller, appellant, v. Jeffrey T. Peetz,
                         Personal Representative of the Estate of
                          Lorine H. Mueller, deceased, and Gary
                           Mueller, appellees, and Margo Loop,
                                   intervenor-appellee.
                                                    ___ N.W.2d ___

                                        Filed January 6, 2023.    No. S-21-1030.

                 1. Declaratory Judgments. Whether to entertain an action for declaratory
                    judgment is within the discretion of the trial court.
                 2. Declaratory Judgments: Parties. In a declaratory judgment action, a
                    party seeks a declaration as to the rights, status, or other legal relations
                    between the parties.

                 Appeal from the District Court for Platte County: Robert R.
               Steinke, Judge. Affirmed as modified.

                    Clark J. Grant, of Grant & Grant, for appellant.

                 Neal J. Valorz, of Sipple, Hansen, Emerson, Schumacher,
               Klutman & Valorz, L.L.C., for appellee Margo Loop, and
               Burke C. Brown III, of Burke Brown Law, L.L.C., for appellee
               Gary Mueller.

                 Miller-Lerman, Cassel, Stacy, Funke, Papik, and
               Freudenberg, JJ., and Marsh, District Judge.

                  Papik, J.
                  After Lorine H. Mueller died, disputes over the adminis-
               tration of her estate arose. One of the disputes was whether
                             - 174 -
         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                       MUELLER V. PEETZ
                       Cite as 313 Neb. 173

a Nebraska judgment entered in favor of Lorine and against
Cheryl M. Mueller, the widow of Lorine’s deceased son,
should be set off against the share of Lorine’s estate that
would otherwise pass to Cheryl. In probate proceedings com-
menced in Kansas, the state where Lorine resided at death,
Lorine’s living children, Margo Loop and Gary Mueller, took
the position that setoff should be applied. Cheryl disagreed,
arguing that an agreement between Cheryl and Margo pre-
cluded setoff. Cheryl also sought to halt the pursuit of setoff
by filing a lawsuit in Nebraska in which she sought an order
declaring that the agreement precluded setoff. The district
court disagreed with Cheryl’s reading of the agreement and
dismissed the action. Cheryl now appeals that ruling to us. As
we will explain, we find that the merits of Cheryl’s lawsuit
should not have been entertained. We thus modify the order
of dismissal in certain respects, but otherwise affirm.

                         BACKGROUND
   The district court resolved this case upon cross-motions for
summary judgment filed by Cheryl and by Margo and Gary.
The evidence offered by the parties at the summary judgment
hearing included various filings in other court proceedings
involving the parties. Because our decision in this case turns
in large part on the filings in those other proceedings, we dis-
cuss them in some detail below.

2016 Judgment and Settlement Agreement.
   In 2015, Margo, as guardian and conservator for Lorine,
filed an action in the district court for Platte County,
Nebraska, against Cheryl. In 2016, Cheryl filed a confes-
sion of judgment in the amount of $340,846.52. The parties
stipulated that judgment should be entered against Cheryl
and in favor of Lorine in accordance with the confession of
judgment. The district court entered a judgment as stipu-
lated (the 2016 judgment).
                             - 175 -
         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                       MUELLER V. PEETZ
                       Cite as 313 Neb. 173

   The 2016 judgment was entered pursuant to a “Settlement
Agreement and Mutual Release” (the settlement agreement)
involving a number of parties including Margo, individually
and as Lorine’s guardian and conservator, and Cheryl. The
settlement agreement provided that Cheryl would enter the
confession of judgment. It also included various other provi-
sions regarding the 2016 judgment. It stated that “Margo,
and Lorine’s estate shall not seek to collect the [2016 judg-
ment],” but it also stated that the 2016 judgment “shall not be
forgiven.” The settlement agreement additionally stated that
“Margo . . . shall not institute, promote, participate in, assist
with, submit, file or permit to be filed on her . . . behalf any
lawsuit, charge, claim, complaint, grievance . . . or other pro-
ceeding whether judicial, administrative, or arbitration, against
Cheryl” with the exception of certain rights reserved elsewhere
in the agreement. The agreement further provided the follow-
ing: “For purposes of clarification, Margo is not waiving or
relinquishing any rights to file a will contest action, a chal-
lenge to a personal representative or any actions in any estate
proceeding of Lorine after her passing.”
   The settlement agreement also contained a paragraph
regarding choice of law and forum selection. That paragraph
provided that the settlement agreement would be governed by
Nebraska law. With respect to forum selection, it stated:
      The parties hereby agree that any act to enforce the terms
      of this Agreement, or for any other remedy arising out
      of said Agreement, shall be brought only in the state
      or federal courts located in Columbus, Platte County,
      Nebraska, and in no other court, and each party specifi-
      cally acknowledges and submits to the personal jurisdic-
      tion of said court and waives as to such court any defense
      of inconvenient forum or improper venue.
Lorine’s Death and Commencement
of Kansas Probate Proceedings.
   Lorine died in 2017 as a resident of Kansas, and probate
proceedings were commenced there. Margo filed a motion in
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         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                       MUELLER V. PEETZ
                       Cite as 313 Neb. 173

those proceedings in November 2017 in which she asserted
that the court should order that the 2016 judgment be set off
against any distribution to which Cheryl would be entitled
from Lorine’s estate. The next month, Cheryl filed an affi-
davit in which she asserted that the relief sought by Margo
was precluded by the terms of the settlement agreement. In
June 2018, Cheryl made another filing in the Kansas pro-
bate proceedings. In that filing, Cheryl contended that under
the settlement agreement, only the district court for Platte
County, Nebraska, could construe the settlement agreement.
Cheryl also argued that setoff was precluded by the settle-
ment agreement.
Commencement of Legal Proceedings
in Nebraska.
   In addition to resisting setoff in the Kansas probate proceed-
ings, Cheryl also sought legal relief in Nebraska. Our record
indicates that on November 13, 2019, Cheryl filed the lawsuit
at issue in this appeal in the district court for Platte County.
The lawsuit initially was filed against the personal representa-
tive of Lorine’s estate. Subsequently, Margo intervened and
Cheryl added Gary as a defendant. In the operative complaint,
Cheryl alleged that Margo and Gary were seeking to enforce
the 2016 judgment in the Kansas probate proceedings and that
the settlement agreement precluded them from doing so. She
requested that the court enter an order “enforcing” the settle-
ment agreement and barring Lorine’s estate, Margo, and Gary
from pursuing an order setting off the 2016 judgment against
Cheryl’s share of Lorine’s estate.
   On November 19, 2019, Cheryl filed a motion in the case in
which the 2016 judgment was entered. Cheryl asked that the
district court for Platte County vacate the 2016 judgment.
Kansas Probate Proceedings.
   Margo and Gary and Cheryl continued to make various fil-
ings in the Kansas probate proceedings after the commence-
ment of the Nebraska legal proceedings. Our record includes
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         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                        MUELLER V. PEETZ
                        Cite as 313 Neb. 173

various filings from the Kansas probate proceedings in late
2019 and early 2020. In those filings, Margo and Gary argued
that the Kansas probate court should set off the judgment
against Cheryl’s distributive share of Lorine’s estate, and
Cheryl argued that the Kansas probate court lacked jurisdiction
to determine whether setoff should be applied and that even if
it had jurisdiction, the terms of the settlement agreement pre-
cluded setoff.
   Our record also includes a partial transcript of a hearing in
the Kansas probate proceedings. There appears to be no dis-
pute the hearing took place in March 2020. At that hearing, the
judge said the following:
      I’ll just say, I believe I have jurisdiction to enforce a
      judgment. The judgment doesn’t reference in the judg-
      ment the side agreement or the agreement between the
      parties and it is not contingent upon those. It is simply a
      judgment for the amount of $340,846.52. And whether the
      claim turns out to be frivolous or time barred or however
      it is, the reality is that’s the judgment.
          With that said and to that end, after considering the
      arguments of the parties, I do believe that I have author-
      ity to set off the amount of the confession of judgment
      plus accrued interest against [Cheryl’s] distributive share
      of the estate; however, what I will do at this point, I will
      order that the stock be placed back into the estate. I’ll
      withhold enforcing that judgment until you have had an
      opportunity to go through the process up in Platte County,
      Nebraska, to attempt to set aside the judgment since now
      the stock is back in the estate.
          ....
          That’s where I’m going to go right now. I have
      explained what I believe, and I will withhold ordering the
      executor to apply that equitable setoff until they have had
      the opportunity to determine whether or not they’re able
      to set aside that judgment. There’s no point in ordering
      that $340,000 judgment setoff and then find out Nebraska
                             - 178 -
         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                       MUELLER V. PEETZ
                       Cite as 313 Neb. 173

     has now set aside that judgment. But the property is back
     in the estate.
Cheryl’s Attempt to Vacate
2016 Judgment Fails.
   In October 2020, the district court dismissed Cheryl’s com-
plaint to vacate the 2016 judgment. The Nebraska Court of
Appeals later affirmed. See Loop v. Mueller, 30 Neb. App. 300,
967 N.W.2d 749 (2021).
Additional Probate Proceedings in Kansas.
   In February 2021, Margo filed a petition in the Kansas
probate court styled as a “Petition to Bar Collateral Attack on
Setoff and for Executor to Provide Accounting and Collect
Rent.” In it, she observed that Cheryl had failed to vacate
the confessed judgment, but was seeking an order precluding
setoff in the lawsuit at issue in this appeal. Margo requested
that the Kansas probate court enter an order that Cheryl’s
“collateral attack . . . seeking to overturn this court’s March
3, 2020 order that the Estate’s $340,846.52 judgment in Platte
County, Nebraska District Court CI15-356 be [set off] against
[Cheryl’s] distributive share of the estate will not be recog-
nized in this court.” The petition also requested other relief
regarding the executor of the estate.
   In April 2021, the Kansas court entered an order granting
Margo’s petition in part and denying it in part. It granted
some of the relief Margo sought regarding the executor of
the estate. With respect to Margo’s request that the court
bar Cheryl from seeking relief in the lawsuit at issue in this
appeal, the order stated, “The Court will allow the pres-
ent lawsuits filed in Platte County, Nebraska to proceed to
conclusion.”
District Court’s Order at Issue on Appeal.
   In September 2021, after a hearing on the cross-motions for
summary judgment, the district court entered the order that is
at issue in this appeal. In the order, the district court found
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         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                        MUELLER V. PEETZ
                        Cite as 313 Neb. 173

that Margo and Gary were entitled to summary judgment and
dismissed Cheryl’s action with prejudice. The district court
stated that disposition of the case required it to interpret the
settlement agreement. It determined that the terms of the set-
tlement agreement did not preclude the pursuit of setoff. The
district court concluded as follows: “Lorine died a resident of
Kansas. Her estate is being probated in Kansas in accordance
with Kansas law. It is for the Kansas court to determine if
there is merit to Margo’s claim for setoff.”
   Cheryl filed a motion to alter or amend. In support of
the motion, Cheryl contended that Lorine’s estate included
Nebraska real property, that Lorine’s will devised that real
property to Cheryl, and that, under Nebraska law, setoff could
not be applied to that real property. At the hearing on the
motion to alter or amend, Cheryl offered as an exhibit a “Proof
of Authority of Domiciliary Foreign Personal Representative”
filed on November 12, 2019, in the county court for Platte
County, Nebraska. Cheryl’s attorney argued that this document
demonstrated that there was an ancillary probate proceeding
in Nebraska for the purpose of administering Nebraska real
property Lorine owned at her death.
   In an order addressing the motion to alter or amend, the
district court found that Cheryl could have offered the evi-
dence regarding the ancillary probate proceeding at the earlier
hearing. For this reason, the district court refused to receive it
into evidence. The district court overruled the motion to alter
or amend.
   Cheryl filed a timely appeal. We moved the case to our
docket.

                 ASSIGNMENTS OF ERROR
   Cheryl assigns three errors, each of which challenge the
district court’s conclusion that the terms of the settlement
agreement did not preclude Margo and Gary from pursuing an
order setting off the 2016 judgment against Cheryl’s share of
Lorine’s estate.
                             - 180 -
         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                       MUELLER V. PEETZ
                       Cite as 313 Neb. 173

                  STANDARD OF REVIEW
  [1] Whether to entertain an action for declaratory judg-
ment is within the discretion of the trial court. Mansuetta v.
Mansuetta, 295 Neb. 667, 890 N.W.2d 485 (2017). See, also,
Neb. Rev. Stat. § 25-21,154 (Reissue 2016).

                         ANALYSIS
   Cheryl’s arguments on appeal challenge the district court’s
conclusion that the terms of the settlement agreement did
not preclude Margo and Gary from pursuing setoff. Cheryl
contends that if the agreement is properly interpreted under
Nebraska law, the setoff claim cannot be pursued and the dis-
trict court erred by concluding otherwise. Before we analyze
the merits of Cheryl’s lawsuit, however, we must first explore
a different question—whether the issue Cheryl raised in this
lawsuit should have been considered by the district court at all.
See Mansuetta, supra.
   [2] The need to explore whether the merits of Cheryl’s
lawsuit should have been entertained arises from the nature
of Cheryl’s lawsuit. Although not expressly titled as such,
Cheryl’s lawsuit was, in substance, that of an action for a
declaratory judgment. In a declaratory judgment action, a
party seeks a declaration as to the rights, status, or other
legal relations between the parties. See Vlach v. Vlach, 286
Neb. 141, 835 N.W.2d 72 (2013). See, also, Neb. Rev. Stat.
§ 25-21,149 (Reissue 2016). In this case, Cheryl sought an
order from the district court declaring the parties’ rights
under the settlement agreement as it related to the possibility
of setoff. At oral argument, Cheryl’s counsel acknowledged
that her lawsuit was, in substance, an action for a declara-
tory judgment and that Cheryl hoped to use a declaration to
preclude Margo and Gary from pursuing setoff in probate
proceedings. It is our practice to treat filings of litigants
according to their substance, as opposed to their title. See,
e.g., Gerber v. P & L Finance Co., 301 Neb. 463, 919 N.W.2d
116 (2018).
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         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                       MUELLER V. PEETZ
                       Cite as 313 Neb. 173

   The fact that Cheryl’s lawsuit was an action for a declaratory
judgment is significant because although, as a general matter,
district courts have subject matter jurisdiction to hear and
decide declaratory judgment actions, see Sandoval v. Ricketts,
302 Neb. 138, 922 N.W.2d 222 (2019), we have recognized that
there are situations in which courts should decline to reach the
merits of such actions. See, Cain v. Lymber, 306 Neb. 820, 947
N.W.2d 541 (2020); Mansuetta, supra. See, also, § 25-21,154.
For example, we have held that a declaratory judgment action
will not be entertained if there is pending, at the time of the
commencement of the declaratory action, another action or
proceeding to which the same persons are parties, in which
are involved and may be adjudicated the same issues that are
involved in the declaratory action. See U.S. Specialty Ins. Co.
v. D S Avionics, 301 Neb. 388, 918 N.W.2d 589 (2018), modi-
fied on denial of rehearing 302 Neb. 283, 923 N.W.2d 367
(2019). In fact, we have held that a court abuses its discretion
when it entertains jurisdiction over a declaratory judgment
action in such a situation. Id. This rule applies when the other
action or proceeding is pending in a court outside Nebraska.
See Woodmen of the World Life Ins. Soc. v. Yelich, 250 Neb.
345, 549 N.W.2d 172 (1996). We have also recognized a simi-
lar principle—that an action for a declaratory judgment will
not lie where another equally serviceable remedy is available.
Sandoval, supra.
   This appears to be a case in which the district court should
have declined to exercise jurisdiction pursuant to the absten-
tion principles discussed above. The evidence adduced at the
summary judgment hearing revealed that at the time Cheryl
filed this action, probate proceedings were pending in the
Kansas court and Margo, Gary, and Cheryl were litigating
the question of whether the settlement agreement precluded
setoff in those proceedings. In addition, Cheryl appeared to
have a remedy that was equally as serviceable as her declara-
tory judgment action—the Kansas probate court could rule
that the settlement agreement precluded an order of setoff.
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         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                        MUELLER V. PEETZ
                        Cite as 313 Neb. 173

Indeed, Cheryl argued that the Kansas probate court should
deny setoff on that basis.
   In the face of the potential applicability of the foregoing
declaratory judgment abstention doctrines, Cheryl contends
that the district court nonetheless should have decided whether
the settlement agreement precluded the pursuit of setoff. She
claims this is so for multiple reasons. First, she contends that
the Kansas probate court will not determine how the property
in Lorine’s estate will be distributed. Second, she argues that
the issue of whether the settlement agreement precluded setoff
could be decided only by a Nebraska court as a result of the
settlement agreement’s forum selection clause. Finally, she
finds significance in the Kansas probate court’s rejection of
Margo’s request in February 2021 that it bar Cheryl from seek-
ing relief in the lawsuit at issue in this appeal. We address each
of these points below.
   The parties disagree about whether the property in Lorine’s
estate is subject to the Kansas probate proceedings or the
ancillary probate proceeding in Nebraska. Cheryl contends
that the estate consists of primarily Nebraska real prop-
erty which is subject to the ancillary probate proceeding in
Nebraska and that even if the estate also includes personal
property, it too is subject to the ancillary probate proceed-
ing, because Lorine was under a Nebraska conservatorship at
the time of her death. Margo and Gary dispute that Lorine’s
estate includes Nebraska real property and take the position
that because Lorine died as a resident of Kansas, it is for the
Kansas probate court to decide how the personal property of
the estate will be distributed. We need not resolve the par-
ties’ dispute on this issue. As we will explain, in either case,
Cheryl has a remedy that is equally serviceable to the declara-
tory judgment she seeks.
   If the property in Lorine’s estate is subject to the Kansas
probate proceedings, Cheryl can, as we have already dis-
cussed, raise her argument that the settlement agreement pre-
cludes setoff in those proceedings. And even if Cheryl is
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         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                        MUELLER V. PEETZ
                        Cite as 313 Neb. 173

correct and some or all of the property in Lorine’s estate is
actually subject to the Nebraska ancillary probate proceeding,
nothing would prevent her from arguing to the county court
in that proceeding that the settlement agreement precludes
setoff. Cheryl’s counsel conceded that point at oral argument,
but claimed that the Nebraska county and district courts would
have concurrent jurisdiction over the issue. But even if there
is concurrent jurisdiction in the county and district courts, the
fact that Cheryl would have an equally serviceable remedy in
the ancillary probate proceeding in county court would mean
that a declaratory judgment action in district court would
not lie. See Sandoval v. Ricketts, 302 Neb. 138, 922 N.W.2d
222 (2019).
   As for Cheryl’s argument that the district court was the
correct court to decide whether the settlement agreement pre-
cluded setoff because of its forum selection clause, we again
disagree. Initially, we observe that if Cheryl is correct that all
of the property in Lorine’s estate is subject to the ancillary
probate proceeding in county court, an argument relying on
the forum selection clause fails to even get off the ground. The
language of the forum selection clause allows for the parties to
take action to enforce the terms of the settlement agreement in
state court in Platte County but does not differentiate between
district and county court.
   And if Gary and Margo are correct that the Kansas probate
court will decide how the assets in Lorine’s estate will be
distributed, we still disagree with Cheryl’s contention that the
forum selection clause required the district court to decide
whether the settlement agreement precluded setoff. Cheryl’s
counsel suggested at oral argument that because of the settle-
ment agreement’s forum selection clause, the Kansas court
lacked jurisdiction to decide issues regarding the settlement
agreement. This is plainly incorrect as there is widespread
consensus that parties may not deprive a court of subject
matter jurisdiction by their own agreement. See, e.g., Boyd
v. Cook, 298 Neb. 819, 906 N.W.2d 31 (2018). See, also,
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         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                       MUELLER V. PEETZ
                       Cite as 313 Neb. 173

The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 12, 92 S.
Ct. 1907, 32 L. Ed. 2d 513 (1972) (explaining that idea that
parties can deprive court of jurisdiction is “hardly more than
a vestigial legal fiction”); Restatement (Second) of Conflict of
Laws § 80 (1971). And, even if Cheryl’s argument is reframed
in nonjurisdictional terms, we still disagree that the presence
of the forum selection clause required the district court to
reach the merits of Cheryl’s declaratory judgment action. Our
decision in Woodmen of the World Life Ins. Soc. v. Yelich,
250 Neb. 345, 549 N.W.2d 172 (1996), lights the way on
this issue.
   In Yelich, supra, an employee brought suit against his for-
mer employer in West Virginia state court in the county in
which he lived and worked. He did so despite a provision in
his employment contract providing that the exclusive venue
for any legal proceeding arising out of the contract was to be
in Douglas County, Nebraska. But when the employer sought
to have the case dismissed based on the forum selection
clause, the West Virginia court denied the employer’s motion.
At that point, the employer brought a new lawsuit in the dis-
trict court in Douglas County. There, the employer sought and
obtained a declaration that the forum selection clause was
enforceable and an order enjoining the terminated employee
from further pursuing the West Virginia action. On appeal,
however, we reversed. We relied on our rule that a declara-
tory judgment action should not be entertained if, at the
commencement of the declaratory judgment action, another
action is pending in which the same persons are parties and
in which the issues involved in the declaratory action can be
adjudicated. We found that because the enforceability of the
forum selection clause was raised in the West Virginia action,
it was an abuse of discretion for the district court to entertain
the declaratory judgment action in Nebraska. And because we
found that the declaratory judgment action should have been
dismissed, we did not decide whether the forum selection
clause was enforceable.
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         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                       MUELLER V. PEETZ
                       Cite as 313 Neb. 173

   Just as in Yelich, supra, when the declaratory judgment
action was initiated in this case, the issue that is the subject
of that declaratory action—whether the settlement agreement
precludes setoff—had already been raised in another action
involving the same parties that was pending in the court of
another state. Accordingly, under Yelich, the district court in
this case should have declined to reach the merits of Cheryl’s
declaratory judgment action and the enforceability of the forum
selection clause.
   Finally, we also disagree with Cheryl to the extent she
claims that the district court should have reached the merits
of her declaratory judgment action as a result of the Kansas
probate court’s rejection of Margo’s request in February 2021
that it bar Cheryl from seeking relief in the lawsuit at issue in
this appeal. The Kansas probate court did not provide much
explanation for that decision, and we can discern nothing in
its order suggesting that it would not consider the question of
whether the settlement agreement precluded an order of set-
off. See Polk Cty. Rec. Assn. v. Susquehanna Patriot Leasing,
273 Neb. 1026, 734 N.W.2d 750 (2007) (rejecting argument
that because Pennsylvania court had stayed case involving
same parties and issues, district court should have reached
merits of declaratory judgment action).
   Finding no merit in any of Cheryl’s arguments to the con-
trary, we conclude that the district court abused its discretion
to the extent it reached the merits of this action. We emphasize
that we reach this conclusion without expressing any view as
to whether property in Lorine’s estate is subject to the Kansas
probate proceedings or the ancillary probate proceedings in
Nebraska. We need not make any determination on that issue
because, either way, the district court should have declined to
reach the merits.
   Although we find that the district court abused its discre-
tion to the extent it entertained the merits of this declaratory
judgment action, it correctly dismissed Cheryl’s declaratory
judgment action. Accordingly, we modify its order dismissing
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         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
                      MUELLER V. PEETZ
                      Cite as 313 Neb. 173

the action to vacate any determinations regarding the settle-
ment agreement’s effect on setoff and to vacate the specifi-
cation of a dismissal “with prejudice” but otherwise affirm
the dismissal.

                        CONCLUSION
  For the reasons we have discussed, we affirm the district
court’s dismissal of the action as modified herein.
                                      Affirmed as modified.
  Heavican, C.J., not participating.