Village of Memphis v. Frahm ( 2014 )

Nebraska Advance Sheets
VILLAGE OF MEMPHIS v. FRAHM 427
Cite as 287 Neb. 427
Village of Memphis, Nebraska, a political subdivision,
appellee, v. Roger Frahm and Marcia Frahm,
husband and wife, appellants.
___ N.W.2d ___
Filed February 14, 2014. No. S-13-273.
1. Contracts. The construction of a contract is a question of law.
2. Statutes. Statutory interpretation presents a question of law.
3. Judgments: Appeal and Error. When reviewing questions of law, an appellate
court has an obligation to resolve the questions independently of the conclusion
reached by the trial court.
4. Attorney Fees: Appeal and Error. On appeal, a trial court’s decision awarding
or denying attorney fees will be upheld absent an abuse of discretion.
5. Contracts. A settlement agreement is subject to the general principles of con-
tract law.
6. Contracts: Statutes: Attorney Fees. In accordance with the legal maxim
“expressio unius est exclusio alterius” (the expression of one thing is the exclu-
sion of the others), an express reservation in a settlement agreement of a claim
for attorney fees under one specific statute excludes a claim for attorney fees
under any other statute.
7. Courts: Eminent Domain. The powers conferred upon a county court judge by
the condemnation statutes are not judicial powers or duties, but are instead purely
ministerial in character.
8. Eminent Domain: Damages: Proof. In a condemnation action, the public entity
has the burden to allege and prove that before commencing condemnation pro-
ceedings, a good faith attempt was made to agree with the owner of the land as
to the damages the owner was entitled to receive.
9. Eminent Domain. The requirement of good faith negotiations is in the nature of
a condition precedent to the right to condemn.
10. Constitutional Law: Eminent Domain: Words and Phrases. Inverse condem-
nation is a shorthand description for a landowner suit to recover just compensa-
tion for a governmental taking of the landowner’s property without the benefit of
condemnation proceedings.
11. Eminent Domain: Property: Intent. Inverse condemnation has been character-
ized as an action or eminent domain proceeding initiated by the property owner
rather than the public entity, and has been deemed to be available where private
property has actually been taken for public use without formal condemnation
proceedings and where it appears that there is no intention or willingness of the
taker to bring such proceedings.
12. Eminent Domain: Attorney Fees: Appeal and Error. Neb. Rev. Stat. § 76-720
(Reissue 2009) does not permit an award of attorney fees for services rendered
prior to the initiation of an appeal in district court.
13. Courts: Eminent Domain: Time: Appeal and Error. Because a public entity
does not have the right to condemn without a good faith attempt to negotiate, it
follows that if an appeal is taken to the district court in a condemnation action,
Nebraska Advance Sheets
428 287 NEBRASKA REPORTS
for purposes of Neb. Rev. Stat. § 76-720 (Reissue 2009), the critical time period
for good faith negotiations with the landowner is before the public entity initiated
condemnation proceedings.
14. Eminent Domain. There is no requirement of good faith negotiations before a
landowner commences an inverse condemnation action.
15. Eminent Domain: Time: Appeal and Error. If an appeal is taken to the district
court in an inverse condemnation action, the relevant time period for any good
faith negotiations for purposes of Neb. Rev. Stat. § 76-720 (Reissue 2009) is after
the filing of the appeal.
16. Eminent Domain: Statutes: Intent: Appeal and Error. The purpose of Neb.
Rev. Stat. § 76-720 (Reissue 2009) is to protect property owners against harass-
ment by the institution of groundless appeals on the part of public entities, and its
use should be limited to the purposes for which it was intended.
17. Eminent Domain: Attorney Fees. Under Neb. Rev. Stat. § 76-720 (Reissue
2009), the district court shall award the property owner attorney fees if the
court finds that the public entity did not negotiate in good faith with the prop-
erty owner.
Appeal from the District Court for Saunders County: Mary
C. Gilbride, Judge. Affirmed.
Robert M. Sullivan, of Sullivan Shoemaker, P.C., L.L.O., for
appellants.
Damien J. Wright, of Welch Law Firm, P.C., for appellee.
Heavican, C.J., Wright, Connolly, Stephan, McCormack,
Miller-Lerman, and Cassel, JJ.
Cassel, J.
INTRODUCTION
If a public entity initiates condemnation proceedings without
negotiating in good faith with the property owner, a statute
mandates that the owner be allowed attorney fees upon an
appeal to the district court.1 In this appeal, we must determine
how this statute applies where the property owner initiates an
inverse condemnation proceeding with a county judge and the
public entity appeals to the district court. We conclude that
in such a situation, good faith negotiations after the taking of
the appeal satisfy the statutory requirement. And because the
record demonstrates that the public entity did so, we conclude
1
See Neb. Rev. Stat. § 76-720 (Reissue 2009).
Nebraska Advance Sheets
VILLAGE OF MEMPHIS v. FRAHM 429
Cite as 287 Neb. 427
that the district court did not abuse its discretion in declining
to award attorney fees.
BACKGROUND
In 1974, a church executed an “Easement for Right of Way”
that granted to the Village of Memphis, Nebraska (Village),
the right to construct and operate a water distribution line and
wellhouse on a strip of land owned by the church. At some
point, the Village had underground electrical wires installed
on the real property in order to connect the equipment to a
power supply. However, the electrical wires were partly situ-
ated under a portion of the real property that was outside of the
easement area.
In 2008, Roger Frahm and Marcia Frahm purchased the
church’s property. The Frahms observed the wellhouse, but
their efforts to obtain a copy of the easement for it were unsuc-
cessful. The easement was not recorded in the records of the
register of deeds for Saunders County, Nebraska, until April 3,
2009. Sometime after the Frahms purchased the property, they
discovered that one of the Village’s underground utility lines
associated with the operation of the wellhouse had been placed
outside of the easement area.
In October 2009, the Frahms filed with the county judge an
inverse condemnation petition against the Village and sought
compensation for an alleged unlawful taking. They claimed
that the Village deprived them of their property in violation
of the state and federal Constitutions by (1) maintaining a
well, wellhouse, and related improvements upon the Frahms’
property without an easement and (2) maintaining a buried
powerline and water pipes without an easement. The appraisers
appointed by the county judge found that the Frahms suffered
damages by the Village’s burying electric cable and a water
line outside of the easement area and by the Village’s failure
to record an easement in the office of the Saunders County
register of deeds. The appraisers assessed the damages to be
awarded to the Frahms at $15,000. The Frahms subsequently
moved for attorney fees and expenses under Neb. Rev. Stat.
§ 76-726(2) (Reissue 2009), and the county judge ordered the
Village to pay $5,322 to the Frahms.
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430 287 NEBRASKA REPORTS
The Village appealed to the district court from the return
of the appraisers and requested that the court determine the
Village had a valid and existing easement. The Village subse-
quently moved for summary judgment, alleging that there was
no genuine issue of material fact with regard to the validity
of its easement rights upon the Frahms’ property. Following
a hearing, the district court entered partial summary judg-
ment. The court stated that there was no issue of fact that
the presence of the wellhouse was apparent, that the Frahms
conducted an inquiry into the facts and learned of the ease-
ment prior to the purchase, and that they purchased the land
subject to the easement for the wellhouse and the underground
lines which serve the wellhouse. The court determined that
the Frahms were not entitled to compensation as the result of
inverse condemnation with respect to the easement, but that
there was an issue as to whether they were entitled to com-
pensation for the portion of the lines which was outside of the
easement area.
After the Village filed its appeal to the district court, there
were numerous communications between the parties in an
attempt to negotiate a settlement. The parties ultimately signed
a settlement agreement and release. According to a recital in the
agreement, the parties intended to “fully and forever settl[e] the
issue of compensation to be paid to the Frahms for the alleged
taking on the terms set forth in this Settlement Agreement,
and to submit the issue of the Frahms’ claim for attorney’s
fees to the Court for determination.” Under the agreement, the
Village would pay the Frahms $250 and upon receipt of that
payment, the Frahms would execute a utility license to grant
the Village a license for the operation, use, and maintenance
of the Village’s utility line. The Village agreed to abandon the
powerline that was outside of the easement area and to install
a new line within the easement area. The agreement contained
the following release:
4. Release. Upon receipt of the Settlement Payment in
full, the Frahms irrevocably and unconditionally waive,
release, acquit and forever discharge the Village . . . from
any and all claims, demands, obligations, losses, causes
of action, costs, expenses, and liabilities that in any way
Nebraska Advance Sheets
VILLAGE OF MEMPHIS v. FRAHM 431
Cite as 287 Neb. 427
arise from or relate to the taking alleged in their inverse
condemnation suit, whether such claims are based on
contract, tort, statutory or other legal or equitable theory
of recovery, whether known or unknown, that the Frahms
may have against the Village for acts occurring prior to
the execution of this Settlement Agreement; Except that
the Frahms reserve a claim for attorney’s fees as allowed
by . . . § 76-720.
The parties subsequently filed a stipulation with the district
court which stated that the parties had entered into a settlement
agreement as to compensation to be paid to the Frahms for the
taking alleged in their inverse condemnation action and that
the Frahms “preserved a claim for attorney’s fees pursuant to
. . . § 76-720.”
The Frahms subsequently moved for fees and costs, seek-
ing a total of $25,362.15 in attorney fees. During a hearing on
the motion, the district court received evidence of the parties’
numerous attempts to reach a settlement. The court denied the
motion, stating: “The record reflects that the Village negotiated
an easement with the prior owners of the property. . . . The
record does not demonstrate that the Village failed to engage
in good faith negotiations with respect to that small portion of
the utility line placed outside the easement.” The court con-
cluded that under the terms of the settlement agreement, the
Frahms waived their right to attorney fees under § 76-726 and
that attorney fees were not available on the facts of this case
under § 76-720.
The Frahms timely appealed, and we moved the case to our
docket under our statutory authority to regulate the caseloads
of the appellate courts of this state.2
ASSIGNMENTS OF ERROR
The Frahms allege that the district court erred in (1) fail-
ing to find that the Village abandoned the easement by failing
to timely file it and by failing to timely produce a copy of it
upon the Frahms’ request, (2) finding that the Frahms were
not bona fide purchasers without notice of the easement on
2
See Neb. Rev. Stat. § 24-1106 (Reissue 2008).
Nebraska Advance Sheets
432 287 NEBRASKA REPORTS
the property, (3) finding that the Frahms learned of the ease-
ment prior to their purchase of the property, (4) finding that
the Frahms purchased the property subject to the easement, (5)
finding that the property was servient to the easement when
it was purchased by the Frahms, (6) finding that the Frahms
were not entitled to compensation for the easement, (7) deny-
ing the Frahms’ motion for attorney fees and costs, and (8)
finding that the Frahms waived recovery of attorney fees
under § 76-726(2).
STANDARD OF REVIEW
[1-3] The construction of a contract is a question of law.3
Statutory interpretation presents a question of law.4 When
reviewing questions of law, an appellate court has an obliga-
tion to resolve the questions independently of the conclusion
reached by the trial court.5
[4] On appeal, a trial court’s decision awarding or denying
attorney fees will be upheld absent an abuse of discretion.6
ANALYSIS
Waiver of Claims
The Frahms’ first six assignments of error relate to the
district court’s order granting the Village partial summary
judgment. Generally, the Frahms attack the court’s rulings
related to their knowledge of the easement at the time of
purchase, the easement’s continued validity, and whether the
Frahms were entitled to monetary damages due to the ease-
ment. They contend that the court should not have entered
partial summary judgment because genuine issues of material
fact existed.
[5] The Frahms’ arguments ignore the terms of the settle-
ment agreement. A settlement agreement is subject to the gen-
eral principles of contract law.7 In the settlement agreement,
3
Thrower v. Anson, 276 Neb. 102, 752 N.W.2d 555 (2008).
4
Id.
5
Id.
6
Armstrong v. County of Dixon, 282 Neb. 623, 808 N.W.2d 37 (2011).
7
Id.
Nebraska Advance Sheets
VILLAGE OF MEMPHIS v. FRAHM 433
Cite as 287 Neb. 427
the Frahms “acknowledge[d]” that the easement was “binding
upon them” and they specifically waived and released all claims
that “in any way arise from or relate to the taking alleged in
their inverse condemnation suit.” Their inverse condemnation
petition alleged two unlawful takings: (1) the maintenance
of the well, wellhouse, and related improvements without an
easement and (2) the maintenance of the buried powerline and
water pipes without an easement. Under the clear and unam-
biguous language of the release, the Frahms have waived any
claims concerning the easement and the court’s entry of partial
summary judgment.
[6] The Frahms also assign that the district court erred
in finding that they waived recovery of attorney fees under
§ 76-726(2). Their argument acknowledges the release con-
tained in the settlement agreement but claims that the release
did not waive recovery of fees under § 76-726 because the
general language of the release did not mention attorney fees.
We disagree. The release explicitly waived “all claims . . . that
in any way arise from or relate to the taking alleged in their
inverse condemnation suit . . . Except that the Frahms reserve
a claim for attorney’s fees as allowed by . . . § 76-720.” In
accordance with the legal maxim “expressio unius est exclusio
alterius” (the expression of one thing is the exclusion of the
others),8 the express reservation in the settlement agreement
of a claim for attorney fees under one specific statute excludes
a claim for attorney fees under any other statute. Because the
release specifically reserved a claim for attorney fees under
§ 76-720 but did not reserve a claim for attorney fees under
§ 76-726, we conclude such a claim is waived under the plain
language of the settlement agreement.
Attorney Fees Under § 76-720
Because of the waiver of all other claims, the only assign-
ment of error properly before us is the Frahms’ contention
that the district court erred in finding attorney fees were not
available to them under § 76-720. Section 76-720 provides
in part:
8
Poulton v. State Farm Fire & Cas. Cos., 267 Neb. 569, 675 N.W.2d 665
(2004).
Nebraska Advance Sheets
434 287 NEBRASKA REPORTS
If an appeal is taken from the award of the apprais-
ers by the [property owner] and the amount of the final
judgment is greater by fifteen percent than the amount of
the award, or if appeal is taken by the [public entity] and
the amount of the final judgment is not less than eighty-
five percent of the award, or if appeal is taken by both
parties and the final judgment is greater in any amount
than the award, the court may in its discretion award
to the [property owner] a reasonable sum for the fees
of his or her attorney and for fees necessarily incurred
for not more than two expert witnesses. On any appeal
by the [public entity], the [public entity] shall pay all
court costs on appeal. If appeal is taken by the [property
owner] only and the final judgment is not equal to or
greater than the award of the appraisers, the court may in
its discretion award to the [public entity] the court costs
incurred by the [public entity], but not attorney or expert
witness fees.
If an appeal is taken to the district court and the district
court finds that the [public entity] did not negotiate in
good faith with the property owner or there was no public
purpose for taking the property involved, the court shall
award to the [property owner] a reasonable sum for the
fees of his or her attorney and the [public entity] shall pay
all court costs on appeal.
The parties focus on the second paragraph of the statute,
as did the district court. There does not appear to be any
dispute that the taking was for a public purpose; rather, the
dispute centers on whether the Village engaged in good faith
negotiations.
The parties disagree on when the good faith negotiations
need to have occurred in the context of § 76-720 as applied in
an inverse condemnation proceeding initiated by the Frahms
before a county judge and appealed by the Village to the dis-
trict court. The Frahms assert that the lack of good faith nego-
tiations is inherent in inverse condemnation cases and that the
Village needed to initiate good faith negotiations prior to the
filing of the petition in inverse condemnation. The Village, on
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VILLAGE OF MEMPHIS v. FRAHM 435
Cite as 287 Neb. 427
the other hand, points out that § 76-720 relates only to appeals
and asserts that the Frahms’ interpretation is inconsistent with
the language of the statute. Before deciding this question, we
must briefly summarize the nature of condemnation proceed-
ings at the county court level and the distinctions between
condemnation and inverse condemnation actions.
[7] The powers conferred upon a county court judge by the
condemnation statutes are not judicial powers or duties, but are
instead purely ministerial in character.9 Instead of conducting
a trial and receiving evidence, the county judge appoints the
appraisers.10 The hearing is before the appraisers rather than
the court, and the issues in county court are limited to the
amount of damages.11 Thus, we have determined that whether
a public entity had attempted to negotiate a sale prior to com-
mencing condemnation proceedings was a judicial question
which the county court lacked power to decide.12 The appeal to
the district court taken under Neb. Rev. Stat. § 76-715 (Reissue
2009) is part of the proceedings which are initiated by the
property owner in county court by filing under Neb. Rev. Stat.
§ 76-705 (Reissue 2009).13 The appeal authorized by § 76-715
is not a conventional civil appeal from county court to district
court.14 Under § 76-715, the property owner or public entity
appeals from the assessment of damages by the appraisers
rather than from an order or ruling of the county court.15 And
unlike a conventional appeal, the appeal is tried de novo in the
district court.16
[8-11] A condemnation action is distinct from an inverse
condemnation action. “A condemnation proceeding is ‘the
9
City of Waverly v. Hedrick, 283 Neb. 464, 810 N.W.2d 706 (2012).
10
See id.
11
See id.
12
See Higgins v. Loup River Public Power Dist., 157 Neb. 652, 61 N.W.2d
213 (1953).
13
Armstrong v. County of Dixon, supra note 6.
14
Id.
15
See id.
16
See id.
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exercise of eminent domain by a governmental entity.’”17 In a
condemnation action, the public entity has the burden to allege
and prove that before commencing condemnation proceedings,
a good faith attempt was made to agree with the owner of the
land as to the damages the owner was entitled to receive.18
The requirement of good faith negotiations is in the nature of
a condition precedent to the right to condemn.19 There is no
similar requirement of good faith negotiations in an inverse
condemnation action. Inverse condemnation is a shorthand
description for a landowner suit to recover just compensa-
tion for a governmental taking of the landowner’s property
without the benefit of condemnation proceedings.20 Inverse
condemnation has been characterized as an action or eminent
domain proceeding initiated by the property owner rather than
the public entity, and has been deemed to be available where
private property has actually been taken for public use with-
out formal condemnation proceedings and where it appears
that there is no intention or willingness of the taker to bring
such proceedings.21
[12] Other statutes make it clear that attorney fees in inverse
condemnation proceedings initiated by the owner at the county
court level are not included in § 76-720. A statute specifically
allows the owner of property taken or damaged for public
use without condemnation proceedings to file a petition with
the county judge to have the damages ascertained and deter-
mined.22 Another statute expressly requires that the property
owner be awarded costs, including reasonable attorney fees,
where the owner receives an award of damages or a settlement
is effected at the county court level.23 And under this statute,
17
Pinnacle Enters. v. City of Papillion, 286 Neb. 322, 332-33, 836 N.W.2d
588, 596 (2013).
18
See Moody’s Inc. v. State, 201 Neb. 271, 267 N.W.2d 192 (1978).
19
Id.
20
Henderson v. City of Columbus, 285 Neb. 482, 827 N.W.2d 486 (2013).
21
Id.
22
See § 76-705.
23
See § 76-726(2).
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VILLAGE OF MEMPHIS v. FRAHM 437
Cite as 287 Neb. 427
the owner is entitled to the award of attorney fees regardless
of whether there have been good faith negotiations. Thus, the
attorney fees attributable to a proceeding commenced by the
owner with the county judge are not included under § 76-720
but are governed by another statute. It necessarily follows that
attorney fees in such a proceeding authorized by § 76-720
apply only at the district court level. Indeed, we have held
that § 76-720 does not permit an award of attorney fees for
services rendered prior to the initiation of an appeal in dis-
trict court.24
[13-15] Nothing in the language of § 76-720 indicates that
it does not apply to inverse condemnation actions. Thus, we
must interpret § 76-720 in such a manner that it applies to
both condemnation and inverse condemnation actions. Because
a public entity does not have the right to condemn without a
good faith attempt to negotiate,25 it follows that if an appeal
is taken to the district court in a condemnation action, for
purposes of § 76-720, the critical time period for good faith
negotiations with the landowner is before the public entity ini-
tiated condemnation proceedings. On the other hand, there is
no requirement of good faith negotiations before a landowner
commences an inverse condemnation action. And, as we have
already noted, another statute mandates an award of attorney
fees for the proceedings at the county court level. Thus, we
conclude that if an appeal is taken to the district court in an
inverse condemnation action, the relevant time period for
any good faith negotiations for purposes of § 76-720 is after
the filing of the appeal. We reject the Frahms’ argument that
the good faith negotiations must occur before the filing of an
inverse condemnation action.
[16] As the Village points out,
[o]nce the appraisers return their award, the parties must
consider whether to appeal to the District Court for a de
novo proceeding. In this context, § 76-720 is intended to
promote the efficient resolution of disputes by providing
24
Johnson v. Nebraska Public Power Dist., 187 Neb. 421, 191 N.W.2d 594
(1971).
25
See Moody’s Inc. v. State, supra note 18.
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for attorney’s fees through two mechanisms: the 85/15
percent threshold, and the “good faith” requirement.
These mechanisms provide an incentive for the parties to
either accept the appraisers return if they do not believe
that it will be substantially altered by trial on the merits,
or to negotiate a settlement to the matter. Thus, the statute
contemplates that “good faith” negotiations will occur as
part of the appeal process.26
The purpose of § 76-720 is to protect property owners against
harassment by the institution of groundless appeals on the part
of public entities, and its use should be limited to the purposes
for which it was intended.27
[17] Under § 76-720, the district court shall award the
property owner attorney fees if the court finds that the public
entity did not negotiate in good faith with the property owner.
Here, the district court declined to award fees, stating that the
record did not demonstrate that the Village failed to engage in
good faith negotiations. Based on the evidence contained in the
record—which was just a sampling of the numerous commu-
nications between the parties aimed at settling this case after
the appeal to the district court was filed—we conclude that the
district court did not abuse its discretion in declining to award
attorney fees.
CONCLUSION
We conclude that under the clear and unambiguous language
of the release contained in the parties’ settlement agreement,
the Frahms waived all claims concerning the easement, the
court’s entry of partial summary judgment, and attorney fees
under § 76-726. We further conclude that the district court
did not abuse its discretion in declining to award attorney
fees under § 76-720, because the record demonstrated that the
Village engaged in good faith negotiations to settle with the
Frahms after the Village appealed to the district court.
Affirmed.
26
Brief for appellee at 22-23.
27
Anderson v. State, 184 Neb. 467, 168 N.W.2d 522 (1969).