Court Opinion

ID: 9381967
Source: CourtListenerOpinion
Date Created: 2023-03-24 14:06:25.872052+00
Date Added: 2024-06-11T17:17:36.014013
License: Public Domain

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
03/24/2023 09:06 AM CDT

                                                       - 853 -
                               Nebraska Supreme Court Advance Sheets
                                        313 Nebraska Reports
                                  DARLING INGREDIENTS V. CITY OF BELLEVUE
                                             Cite as 313 Neb. 853

                          Darling Ingredients Inc., formerly known as
                           Darling International Inc., and Darling
                             National LLC, appellants, v. City of
                                Bellevue, a Nebraska municipal
                                    corporation, appellee.
                                                  ___ N.W.2d ___

                                        Filed March 24, 2023.    No. S-22-164.

                 1. Judgments: Appeal and Error. The construction of a mandate issued
                    by an appellate court presents a question of law on which an appellate
                    court is obligated to reach a conclusion independent of the determination
                    reached by the court below.
                 2. Annexation: Ordinances: Equity. An action to determine the valid-
                    ity of an annexation ordinance and enjoin its enforcement sounds in
                    equity.
                 3. Equity: Appeal and Error. On appeal from an equity action, an appel-
                    late court decides factual questions de novo on the record and, as to
                    questions of both fact and law, is obligated to reach a conclusion inde-
                    pendent of the trial court’s determination.
                 4. Appeal and Error: Words and Phrases. In appellate procedure, a
                    “remand” is an appellate court’s order returning a proceeding to the
                    court from which the appeal originated for further action in accordance
                    with the remanding order.
                 5. Courts: Appeal and Error. When a lower court is given specific
                    instructions on remand, it must comply with the specific instructions and
                    has no discretion to deviate from the mandate.
                 6. Judgments: Courts: Appeal and Error. When the judgment of a trial
                    court is reversed on appeal and the cause remanded without specific
                    instructions, it is the duty of the trial court to exercise its discretion in
                    the further disposition of the case.
                                  - 854 -
            Nebraska Supreme Court Advance Sheets
                     313 Nebraska Reports
             DARLING INGREDIENTS V. CITY OF BELLEVUE
                        Cite as 313 Neb. 853

 7. Annexation: Taxation. It is improper for an annexation to be solely
    motivated by an increase in tax revenue.
 8. Ordinances: Proof. The burden is on one who attacks an ordinance,
    valid on its face and enacted under lawful authority, to prove facts to
    establish its invalidity.

   Appeal from the District Court for Sarpy County: Nathan
B. Cox, Judge. Affirmed.

    Michael S. Degan, of Kutak Rock, L.L.P., for appellants.

    Bree Robbins, Bellevue City Attorney, for appellee.

  Heavican, C.J., Cassel, Stacy, Funke, Papik, and
Freudenberg, JJ., and Engleman, District Judge.

    Funke, J.
                      INTRODUCTION
   For the second time, a challenge by Darling Ingredients
Inc. and Darling National LLC (collectively Darling) to an
annexation ordinance enacted by the City of Bellevue (the
City) is before this court. Previously, in Darling Ingredients
v. City of Bellevue (Darling I), 1 Darling and Frank R. Krejci
sought to invalidate and permanently enjoin the City’s ordi-
nance on three bases. The district court for Sarpy County
found for Darling and Krejci on the first two bases and, as
such, did not address the third. After consolidating Darling’s
and Krejci’s appeals, we reversed the district court’s deci-
sions. We remanded the causes for further proceedings to con-
sider Darling’s and Krejci’s third basis for relief—their claims
that the City enacted the ordinance for an improper purpose.
On remand, the district court entered judgment for the City.
Darling appeals the judgment, but Krejci does not. For the rea-
sons stated below, we affirm.
1
    Darling Ingredients v. City of Bellevue, 309 Neb. 338, 960 N.W.2d 284
    (2021).
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            Nebraska Supreme Court Advance Sheets
                     313 Nebraska Reports
              DARLING INGREDIENTS V. CITY OF BELLEVUE
                         Cite as 313 Neb. 853

                          BACKGROUND
                             Darling I
   In 2019, the City considered an annexation package made
up of several sanitary and improvement districts and unincor-
porated parcels of land in its extraterritorial jurisdiction. The
City ultimately adopted ordinances annexing various areas,
including a portion of land referred to as “Area #9.” Area #9
consisted of properties owned by Darling and Krejci. Darling
and Krejci separately brought complaints against the City.
Both alleged that the City had exceeded its annexation author-
ity under Neb. Rev. Stat. § 16-130(2) (Reissue 2022), which
provides that the mayor and city council of a “city of the first
class” described in § 16-130(1) may
      by ordinance at any time include within the corporate
      limits of such city any contiguous or adjacent lands, lots,
      tracts, streets, or highways as are urban or suburban in
      character and in such direction as may be deemed proper.
      Such grant of power shall not be construed as conferring
      power upon the mayor and city council to extend the
      limits of such a city over any agricultural lands which are
      rural in character.
Both alleged, also, that the ordinance was invalid because it
was enacted for an improper purpose. Specifically, they argued
that the City enacted the ordinance solely for the purpose of
increasing revenue. 2 The two cases were consolidated for dis-
covery and trial.
   Following trial, the district court declared the City’s ordi-
nance invalid under § 16-130, reasoning that Area #9 was
rural in character and neither contiguous nor adjacent to the
City. The district court permanently enjoined the City from
taking any action to enforce the ordinance. The court did not
address whether the ordinance was enacted for an improper
2
    See id. See, also, SID No. 196 of Douglas Cty. v. City of Valley, 290 Neb.
    1, 858 N.W.2d 553 (2015) (it is improper for annexation to be solely
    motivated by increase in tax revenue).
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            Nebraska Supreme Court Advance Sheets
                     313 Nebraska Reports
              DARLING INGREDIENTS V. CITY OF BELLEVUE
                         Cite as 313 Neb. 853

purpose. The City appealed both actions, which we consoli-
dated for oral argument and disposition. Upon review, we con-
cluded that the annexation of Area #9 was not invalid based
on the character of the use and that Area #9 was adjacent and
contiguous to the City for purposes of § 16-130. We reversed
the district court’s decision that Area #9 did not satisfy the
requirements of § 16-130 and “remand[ed] the causes to
the district court for further proceedings to consider Darling’s
and Krejci’s improper purpose challenges.” 3

                     Order After Remand
   Following our ruling in Darling I, the district court met in
camera with counsel for the parties and requested arguments
as to our direction of “remand the causes for further proceed-
ings.” After considering the arguments of counsel, the district
court concluded that our mandate did not order a retrial or
direct the district court to reopen the evidence, but, rather, it
ordered the district court “merely to consider the evidence and
argument from the parties at trial and decide the sole issue of
improper purpose” as distinguishable from any party having a
“‘second bite at the apple.’”
   Upon review, the court entered an order determining that
Darling and Krejci failed to meet their burden of establishing
that the City’s annexation was motivated by an improper pur-
pose. Based on the evidence presented at trial, the court was
unconvinced that the City’s annexation was solely motivated
by an increase in tax revenue. The court found that no evidence
negated its finding that the City acquired Area #9 as part of a
larger plan to annex numerous properties for the stated purpose
of the “natural growth and development of the [C]ity.” The nat-
ural growth and development of the City, the court explained,
was a legitimate purpose for the annexations, including that of
Area #9.
3
    Darling I, supra note 1, 309 Neb. at 357, 960 N.W.2d at 298.
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            Nebraska Supreme Court Advance Sheets
                     313 Nebraska Reports
             DARLING INGREDIENTS V. CITY OF BELLEVUE
                        Cite as 313 Neb. 853

                 ASSIGNMENTS OF ERROR
  Darling assigns, consolidated and restated, that the district
court erred in (1) failing to properly carry into effect the man-
date of this court in Darling I and (2) finding that the City’s
annexation was not motivated by an improper purpose based
on the evidence received at the prior trial.
                    STANDARD OF REVIEW
   [1] The construction of a mandate issued by an appellate
court presents a question of law on which an appellate court is
obligated to reach a conclusion independent of the determina-
tion reached by the court below. 4
   [2,3] An action to determine the validity of an annexation
ordinance and enjoin its enforcement sounds in equity. 5 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. 6
                          ANALYSIS
                  Construction of Mandate
   In Darling I, we reversed the district court’s judgment
and remanded the causes for further proceedings “to consider
Darling’s and Krejci’s improper purpose challenges.” 7 Darling
asserts that upon remand, the trial court was required to hold
a new trial or “other proceeding” allowing for the introduc-
tion of additional evidence on its improper purpose challenge. 8
We disagree.
   [4-7] In appellate procedure, a “remand” is an appellate
court’s order returning a proceeding to the court from which
4
    Barnett v. Happy Cab Co., 311 Neb. 464, 973 N.W.2d 183 (2022).
5
    SID No. 196 of Douglas Cty., supra note 2.
6
    Id.
7
    Darling I, supra note 1, 309 Neb. at 357, 960 N.W.2d at 298.
8
    Brief for appellant at 10.
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             Nebraska Supreme Court Advance Sheets
                      313 Nebraska Reports
               DARLING INGREDIENTS V. CITY OF BELLEVUE
                          Cite as 313 Neb. 853

the appeal originated for further action in accordance with the
remanding order. 9 When a lower court is given specific instruc-
tions on remand, it must comply with the specific instructions
and has no discretion to deviate from the mandate. 10 When the
judgment of a trial court is reversed on appeal and the cause
remanded without specific instructions, it is the duty of the
trial court to exercise its discretion in the further disposition of
the case. 11
   As previously mentioned, at trial in this matter, Darling
raised alternative bases for invalidating the annexation ordi-
nance, namely that Area #9 was neither adjacent to nor con-
tiguous with the existing City limits, that the land was agricul-
tural and rural in character rather than urban or suburban, and
that the ordinance was enacted for an improper purpose. As
such, proof on all three of Darling’s bases for relief was fully
presented at trial. At the close of the evidence, the district court
found for Darling on the first two bases; upon review, we con-
cluded this was error and reversed the trial court’s decision. 12
But we observed that the trial court did not render any decision
as to Darling’s third basis for relief. 13 Thus, we remanded the
cause for further proceedings so that the trial court could con-
sider Darling’s improper purpose challenge. 14
   On remand, the district court considered the evidence
offered at the original trial and ruled that Darling had not
met its burden of establishing that the City annexed Area #9
for an improper purpose. Darling contends that the district
 9
     TransCanada Keystone Pipeline v. Tanderup, 305 Neb. 493, 941 N.W.2d
     145 (2020).
10
     Id.
11
     See Sowerwine v. Central Irrigation District, 91 Neb. 457, 136 N.W. 44
     (1912).
12
     See Darling I, supra note 1.
13
     See id.
14
     See id.
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             Nebraska Supreme Court Advance Sheets
                      313 Nebraska Reports
               DARLING INGREDIENTS V. CITY OF BELLEVUE
                          Cite as 313 Neb. 853

court erred in declining to reopen the matter for further
pleadings, discovery, and trial because our remand “reset”
Darling’s position.
   It is true, as a general rule, that a remand on the merits resets
the parties back to their positions before the trial. 15 However,
there are exceptions to that rule. 16 For example, we have recog-
nized exceptions where the undisputed facts are such that only
one judgment can be rendered 17 or where a case is reversed
for error committed after the trial. 18 Other jurisdictions have
recognized another exception where an issue has been tried
but not yet decided by the trial court. 19 The obvious basis for
each exception is one congruent with our precedents—we are
inclined to avoid retrial of issues for “no good reason.” 20 Thus,
notwithstanding the general rule to which Darling refers, if no
specific directions are given on remand, the trial court must
determine what further proceedings should be had from the
nature of the particular case. 21
   Our opinion and mandate in Darling I did not direct that
any specific action be taken by the district court other than
to consider Darling’s improper purpose claim. Accordingly,
upon remand, the district court had the authority to allow the
15
     TransCanada Keystone Pipeline, supra note 9.
16
     See, e.g., Bohmont v. Moore, 141 Neb. 91, 2 N.W.2d 599 (1942) (citing
     Bliss v. Live Stock Nat. Bank, 124 Neb. 880, 248 N.W. 645 (1933)).
17
     See, e.g., TransCanada Keystone Pipeline, supra note 9; deNourie & Yost
     Homes v. Frost, 295 Neb. 912, 893 N.W.2d 669 (2017); Bohmont, supra
     note 16.
18
     See Missouri, Kansas & Texas Trust Co. v. Clark, 60 Neb. 406, 83 N.W.
     202 (1900).
19
     See 5 C.J.S. Appeal and Error § 1184 (2019) (citing Recontrust Co. v.
     Zhang, 130 Nev. 1, 317 P.3d 814 (2014), and Ruff v. Raleigh Assembly of
     God Church, 241 S.W.3d 876 (Tenn. App. 2007)).
20
     See Missouri, Kansas & Texas Trust Co., supra note 18, 60 Neb. at 407,
     83 N.W. at 203.
21
     See 5 C.J.S., supra note 19, § 1156.
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             Nebraska Supreme Court Advance Sheets
                      313 Nebraska Reports
               DARLING INGREDIENTS V. CITY OF BELLEVUE
                          Cite as 313 Neb. 853

parties to amend the pleadings, complete additional discovery,
and offer new evidence at another trial, but it also had the
authority to merely consider the evidence already received. 22
The district court had discretion as to how to proceed, and
deciding the case without receiving additional evidence was
within the scope of our broad mandate. 23
   Darling emphasizes that by effectively terminating pro-
ceedings, the district court’s judgment following remand pre-
cluded Darling from presenting “new” evidence relevant to
its improper purpose argument. But the new evidence that
Darling alludes to is not before us, nor was it ever before the
district court. Nothing within our appellate record indicates
that Darling formally sought leave to amend the pleadings,
seek additional discovery, or offer new evidence at a subse-
quent trial. Additionally, nothing in the record indicates what
amendments to the pleadings would have been, how addi-
tional discovery was necessary, or what new evidence would
have been offered at a subsequent trial. As such, we cannot
find that the district court abused its discretion in resolving
Darling’s improper purpose argument on the record the court
had before it. 24
                  Purpose of Annexation
   [7,8] Darling argues that the district court erred in not
finding that the annexation of Area #9 was for an improper
22
     Cf. deNourie & Yost Homes, supra note 17. See, also, Sowerwine, supra
     note 11 (where case is remanded generally, trial court has discretion as
     to further proceedings); Colby v. Foxworthy, 78 Neb. 288, 110 N.W. 857
     (1907) (where case is remanded generally, whether to proceed from point
     where first material error occurred or award trial de novo is within sound
     discretion of trial court).
23
     Cf. deNourie & Yost Homes, supra note 17.
24
     See, e.g., Bedore v. Ranch Oil Co., 282 Neb. 553, 805 N.W.2d 68 (2011)
     (appellate court cannot consider as evidence statements made by parties at
     oral argument or in briefs, as these are matters outside record).
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             Nebraska Supreme Court Advance Sheets
                      313 Nebraska Reports
               DARLING INGREDIENTS V. CITY OF BELLEVUE
                          Cite as 313 Neb. 853

purpose. It is improper for an annexation to be solely moti-
vated by an increase in tax revenue. 25 Proving that the City
acted pursuant to this improper purpose is Darling’s burden;
the burden is on one who attacks an ordinance, valid on its face
and enacted under lawful authority, to prove facts to establish
its invalidity. 26
   As the district court observed, there is substantial evidence
that the natural growth and development of the City was a
factor in the City’s decision to annex properties, including
Area #9. The City’s comprehensive plan indicates that the
City existed as a total of 10,601 acres and needed to acquire
7,835 additional acres to accommodate expected population
growth by 2030. The plan encourages the City to monitor
“future-growth” areas and be prepared to annex land before
it is developed. The plan includes detailed annexation goals
and explains that the City’s planning department conducts an
annual study consisting of a cost-benefit analysis of poten-
tial areas for annexation. The study considers costs, includ-
ing sanitary improvement district debt, infrastructure repair,
upkeep, and additional manpower and equipment necessary to
provide city services. The study considers benefits, including
sanitary improvement district funds, property tax revenues,
and sales tax revenues. Areas as to which the costs “sig-
nificantly outweigh” the benefits are generally not considered
for annexation.
   Referring to the general area where Area #9 is located, the
City’s comprehensive plan recommends the establishment
of a large industrial park. The plan states, “[I]f commercial
development occurs in this area and is adjacent to the corpo-
rate boundary, the area should be annexed immediately.” The
plan considers Area #9 developable, recommending future
land use of Area #9 as light industry, heavy industry, and
25
     See SID. No. 196 of Douglas Cty., supra note 2.
26
     Id.
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             Nebraska Supreme Court Advance Sheets
                      313 Nebraska Reports
               DARLING INGREDIENTS V. CITY OF BELLEVUE
                          Cite as 313 Neb. 853

flex space. 27 The term “flex space” is described as supporting
a variety of commercial, retail, and industrial uses. 28
   Further, on May 15, 2019, the City’s planning director sent a
memorandum to the mayor, the city administrator, and the city
council. The memorandum provides:
         As a result of its recent Strategic Planning session, the
      City is taking the position that it is in its best interest to
      annex areas adjacent to the existing city limits [including
      Area #9]; it is also part of the natural growth and devel-
      opment of a city. . . .
         The City will . . . begin receiving property tax revenue
      from these areas beginning in 2020. . . . [T]he increase in
      property tax receipts for the City would be approximately
      $157,000 . . . . In addition . . . the City will receive an
      additional $75,000 in State Highway Allocation funding,
      plus other revenue including such things as sales taxes on
      items delivered to these areas.
The city planning director’s memorandum includes the plan-
ning department’s recommendation that the City annex Area
#9 “based upon the positive financial impact on the City and
the natural growth and development of the City.” The city
council subsequently voted to adopt the ordinance annexing
Area #9.
   The appellate record also contains the affidavit of the city
administrator. His affidavit provides that recent annexations,
including that of Area #9, all contributed to the overall growth
and development of the City. Specifically, he states that the
annexations occurred “to continue the cohesive unity of [the]
community, provide for connectivity of [the] community, work
on filling ‘gaps’ within the City, and work towards contin-
ued growth for the City of Bellevue.” The city administrator
explained that Area #9 was not considered for annexation
27
     See Darling I, supra note 1.
28
     Id.
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             Nebraska Supreme Court Advance Sheets
                      313 Nebraska Reports
               DARLING INGREDIENTS V. CITY OF BELLEVUE
                          Cite as 313 Neb. 853

solely for revenue purposes. Further, he explained that the
City would provide services to Area #9, including fire protec-
tion, police services, road maintenance, and snow removal,
as well as consider the roads and infrastructure needs for the
unincorporated areas annexed.
   The district court also received the affidavit of the land
use planner for the City’s planning department. Her affidavit
corroborated that Area #9 was annexed in order to continue
the growth and development of the City and “fill gaps” in the
community. She indicated that the City planned to provide
services, including fire services, police services, and road
maintenance to Area #9 on the effective date of its annexation.
She also averred that the public works department requested
an additional $35,000 for its annual budget to fulfill the
needs of “annexations in . . . unincorporated areas” and that
there would be a review and a plan for infrastructure needs in
the future.
   After consideration of the evidence presented at trial, the
district court concluded that the City was motivated to annex
Area #9, at least in part, to foster the natural growth and
development of the City. The record on appeal demonstrates
the same. Assuredly, the City considered the financial impacts
of potential annexations as well. But prudent annexation plan-
ning compels the City to consider any revenue to be engen-
dered by annexation, in light of the liabilities to be incurred. 29
Accordingly, our cases recognize that the legal proscription
against annexation solely for revenue purposes does not mean
that a municipality cannot consider potential revenues in
deciding whether to proceed with an annexation. 30 United
29
     SID No. 57 v. City of Elkhorn, 248 Neb. 486, 536 N.W.2d 56 (1995),
     disapproved on other grounds, Adam v. City of Hastings, 267 Neb. 641,
     676 N.W.2d 710 (2004).
30
     United States Cold Storage v. City of La Vista, 285 Neb. 579, 831 N.W.2d
     23 (2013).
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             Nebraska Supreme Court Advance Sheets
                      313 Nebraska Reports
               DARLING INGREDIENTS V. CITY OF BELLEVUE
                          Cite as 313 Neb. 853

States Cold Storage v. City of La Vista 31 is an illustra-
tive example.
   In United States Cold Storage, a property owner and a
sanitary and improvement district challenged separate annexa-
tion ordinances enacted by a city. 32 In particular, the property
owner and the sanitary improvement district argued that the
city had acted solely for the purpose of obtaining revenue. 33
Noting evidence that the city had considered and been influ-
enced by several other factors, the district court concluded that
the property owner had failed to meet its burden of proving
that the annexation ordinances were improper. 34 Upon review,
we agreed with the district court. 35 Although revenue was
“surely a factor,” the city had considered other factors, includ-
ing the indebtedness the city would assume by annexation, the
city’s objective of “orderly growth,” and the perception that
the annexation would eliminate jurisdictional issues related
to the provision of services. 36 We accordingly affirmed. 37
Similarly, in Swedlund v. Hastings, 38 SID No. 196 of Douglas
Cty. v. City of Valley, 39 and other cases, 40 we determined that
interested parties failed to meet their burden of proving that an
annexation was enacted for an improper purpose even though
revenue was considered.
31
     Id.
32
     Id.
33
     Id.
34
     See id.
35
     See id.
36
     Id. at 589, 831 N.W.2d at 32.
37
     See United States Cold Storage, supra note 30.
38
     Swedlund v. City of Hastings, 243 Neb. 607, 501 N.W.2d 302 (1993).
39
     SID No. 196 of Douglas Cty., supra note 2.
40
     See, e.g., SID No. 57, supra note 29; S.I.D. No. 95 v. City of Omaha, 221
     Neb. 272, 376 N.W.2d 767 (1985).
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         Nebraska Supreme Court Advance Sheets
                  313 Nebraska Reports
           DARLING INGREDIENTS V. CITY OF BELLEVUE
                      Cite as 313 Neb. 853

   Here, the district court concluded that Darling failed to meet
its burden of establishing that the City acted for an improper
purpose. Upon review of the evidence, we agree. Although tax
revenue was considered and likely a factor in the City’s deci-
sion to annex, Darling has not met its burden of proving that
the City was motivated to annex Area #9 solely for the pur-
pose of increasing tax revenue. Accordingly, we find no error
in the district court’s decision.
                         CONCLUSION
   The district court did not err in either assigned respect, and
its judgment is accordingly affirmed.
                                                     Affirmed.
   Miller-Lerman, J., not participating.