Paxton v. Paxton , 314 Neb. 197 ( 2023 )

Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
05/05/2023 08:06 AM CDT
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Nebraska Supreme Court Advance Sheets
314 Nebraska Reports
PAXTON V. PAXTON
Cite as 314 Neb. 197Dustin L. Paxton, appellee, v. Linda K. Paxton,
individually and as Personal Representative
of the Estate of Ronald A. Paxton,
deceased, appellant.
Dustin L. Paxton, appellee, v.
Arlan Paxton, appellant.
Dustin L. Paxton, appellee, v. Linda K. Paxton,
Trustee of the Ronald A. Paxton
QTIP Trust, appellant.
___ N.W.2d ___
Filed May 5, 2023. Nos. S-22-469 through S-22-471.
1. Judgments: Jurisdiction: Appeal and Error. Determination of a juris-
dictional issue which does not involve a factual dispute is a matter of
law which requires an appellate court to reach its conclusions indepen-
dent from a trial court.
2. Jurisdiction: Appeal and Error. Before reaching the legal issues
presented for review, it is the duty of an appellate court to determine
whether it has jurisdiction over the matter before it, irrespective of
whether the issue is raised by the parties.
3. Jurisdiction: Final Orders: Appeal and Error. Pursuant to Neb. Rev.
Stat. § 25-1911 (Reissue 2016), for an appellate court to acquire juris-
diction of an appeal, the party must be appealing from a final order or
a judgment.
4. Final Orders. Where implicated, an order must comply with Neb. Rev.
Stat. § 25-1315 (Reissue 2016).
5. Judgments: Final Orders: Words and Phrases. A final judgment is
one that disposes of the case by dismissing it either before hearing is
had upon the merits or after trial by rendition of judgment for the plain-
tiff or defendant.
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Nebraska Supreme Court Advance Sheets
314 Nebraska Reports
PAXTON V. PAXTON
Cite as 314 Neb. 1976. Judgments: Words and Phrases. Every direction of a court or judge,
made or entered in writing and not included in a judgment, is an order.
7. Final Orders: Appeal and Error. In general, an appellate court pro-
hibits immediate appeals from orders so as to avoid piecemeal appeals
arising out of the same set of operative facts, chaos in trial procedure,
and a succession of appeals in the same case to secure advisory opinion
to govern further actions of the trial court.
8. Final Orders. Whether an order affects a substantial right depends
on whether it affects with finality the rights of the parties in the sub-
ject matter.
9. ____. The inquiry of whether a substantial right is affected focuses on
whether the right at issue is substantial and whether the court’s order has
a substantial impact on that right.
10. Final Orders: Appeal and Error. An order affects a substantial right
when the right would be significantly undermined or irrevocably lost by
postponing appellate review.
11. ____: ____. A substantial right is not affected when that right can be
effectively vindicated in an appeal from the final judgment.
12. Final Orders: Legislature: Property Settlement Agreements. A
motion to enforce a settlement agreement is not a remedy specifically
provided for by the Legislature as part of a special proceeding.
13. Jurisdiction: Final Orders: Appeal and Error. When an appeal pre­
sents the two distinct jurisdictional issues of appellate jurisdiction and
the trial court’s lack of subject matter jurisdiction, the first step is to
determine the existence of appellate jurisdiction by determining whether
the lower court’s order was final and appealable.
Appeals from the District Court for McPherson County:
Richard A. Birch, Judge. Appeals dismissed.
Terrance O. Waite, Daniel J. Greco, and William K.
Rounsborg, of Waite & McWha, for appellants.
Warren R. Arganbright and Kurt Dam Arganbright, of
Arganbright Law Office, L.L.C., for appellees.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
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Nebraska Supreme Court Advance Sheets
314 Nebraska Reports
PAXTON V. PAXTON
Cite as 314 Neb. 197Freudenberg, J.
INTRODUCTION
Upon the death of the decedent, an undivided one-half inter-
est in land holdings was retained by the decedent’s widow,
while the other one-half interest went into a trust for her
benefit. Specified parcels of land were to be distributed fol-
lowing her death to each of the decedent’s three children,
with all remaining property in the trust to be devised in equal
shares. Two of the three children and their mother entered
into court-ordered mediation of three separate actions brought
by one of the children. They signed a “Mediated Settlement
Memorandum” (Settlement Memorandum) that described con-
veying to the plaintiff the parcel set forth in the will to be
devised to him. After it became apparent that the defendants
did not believe the Settlement Memorandum had resolved all
material terms, the plaintiff moved in all three cases for the
court to enforce the Settlement Memorandum. After a hearing,
the court issued an order finding the Settlement Memorandum
to be a “valid and enforceable contract with which the par-
ties are obligated to comply.” The defendants appeal from the
order. The underlying actions remain pending. We dismiss the
appeals for lack of appellate jurisdiction.
BACKGROUND
These appeals in three cases consolidated for argument and
disposition involve a dispute between Dustin L. Paxton; his
mother, Linda K. Paxton; and his brother, Arlan Paxton. The
dispute arose after the death of Ronald A. Paxton, Linda’s
husband and Arlan’s and Dustin’s father, and involves exten-
sive land holdings and ranching operations. With limited
exceptions not at issue here, an undivided one-half interest
in Ronald and Linda’s real estate was transferred into the
“Ronald A. Paxton QTIP Trust” (the Trust) after Ronald’s
death. The other undivided one-half interest is still owned
by Linda.
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PAXTON V. PAXTON
Cite as 314 Neb. 197Linda is the personal representative of Ronald’s estate and
the trustee of the Trust with a right to receive income from
and invade the principal of the Trust. Upon Linda’s death,
certain identified parcels are to pass to Dustin, Arlan, and their
sister, Dana Epley (Dana). The residue of the real estate in the
Trust is to be divided equally among Dustin, Arlan, and Dana
or their issue by representation.
The dispute centers on the specifically identified real estate,
consisting of approximately 2,200 acres of land, that is to
pass to Dustin after Linda’s death. Linda originally leased the
land holdings to Dustin and Arlan, but, due to conflicts, she
eventually told Dustin she would no longer be leasing land
to him. Dustin was not happy with this decision and sought
control over the 2,200 acres he was the beneficiary of under
the will.
The pleadings for the underlying actions are not in the
record on appeal. Case captions demonstrate that one action
was brought by Dustin against Linda, individually and as
personal representative of Ronald’s estate, another action
was brought by Dustin against Arlan, and a third action was
brought by Dustin against Linda as the trustee of the Trust.
According to the parties’ briefs, in 2016, Dustin brought suit
against Linda, alleging breaches of fiduciary duty and failure
to account for assets of the estate and seeking an accounting,
her removal, and recoupment. Also in 2016, Dustin brought a
separate suit against Arlan for unjust enrichment. Arlan coun-
terclaimed for defamation, commercial disparagement, and
tortious interference.
On September 25, 2018, the court ordered the parties to
mediate. Dustin, Linda, and Arlan participated in mediation
on February 27, 2019. At the end of the day, all three signed
the Settlement Memorandum. The Settlement Memorandum
provided, among other things, that Linda would “deed” to
Dustin her one-half interest in the “Allen, Cooper/Wagner
and Lloyd parcels, which parcels were specifically desig-
nated to go to Dust[in] in the Trust.” The parties agree this is
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314 Nebraska Reports
PAXTON V. PAXTON
Cite as 314 Neb. 197the 2,200 acres specified to be bequeathed to Dustin upon
Linda’s death. The Settlement Memorandum further provided
that “[t]he Trust will distribute to Dust[in] the real estate des-
ignated for [him] in the Trust . . . .”
On March 28, 2019, Dustin’s attorney delivered to Linda’s
attorney a “Settlement Agreement” drafted by Dustin’s attor-
ney and signed by Dustin in front of a notary. Linda and
Arlan took issue with certain details of this agreement. For
example, Linda wanted the conveyance to Dustin to be a gift
rather than a purchase and wished for Dustin to pay the costs
and potential tax liabilities associated with the transfer. A
dispute also arose as to who was to commence and incur the
costs of modifying the Trust. The parties recognized that in
order to effectuate the transfer of the Trust’s undivided one-
half interest in the 2,200 acres, a petition would have to be
filed pursuant to Neb. Rev. Stat. § 30-3837(b) (Reissue 2016)
for the court to approve the modification to the Trust upon
the consent of all the beneficiaries, if the court concluded the
modification was not inconsistent with a material purpose of
the Trust.
Dustin thereafter filed, in all three cases, a motion to enforce
the Settlement Memorandum, asking the court for an order
requiring Linda and Arlan to comply with the February 27,
2019, Settlement Memorandum. Following a hearing, the court
issued the following order: “The Court finds that the . . .
Settlement Agreement is a valid and enforceable contract with
which the parties are obligated to comply.” The court stated
generally that “[t]o the extent there are matters unspecified
regarding deeds, recording fees, or documentary stamp taxes[,]
those matters are specified by statute or other . . . rules of law.”
It did not elaborate on what the statutes or rules of law speci-
fied with respect to any matter not explicitly covered in the
Settlement Memorandum.
The court acknowledged there may be “additional steps”
Linda needs to take before she can complete the terms of the
Settlement Memorandum, which “might result in additional
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Nebraska Supreme Court Advance Sheets
314 Nebraska Reports
PAXTON V. PAXTON
Cite as 314 Neb. 197expenses or taxes,” but “[h]ad she desired that her obligations
. . . be contingent upon certain occurrences, she could have
insisted that those contingencies be included in the memoran-
dum before . . . sign[ing] it.” The court did not order any of the
parties to take any specific action based on its finding that the
Settlement Agreement “is a valid and enforceable contract with
which the parties are obligated to comply.” The court did not
dismiss any of the underlying actions or claims, which remain
pending below.
Linda and Arlan appeal.
ASSIGNMENTS OF ERROR
Linda and Arlan assign, summarized and restated: (1) The
district court lacked jurisdiction over the underlying actions,
to order mediation, or to find the Settlement Memorandum
enforceable, without joining Dana as an indispensable party. To
the extent Dana could be considered merely a necessary party,
Linda and Arlan assert: (2) The district court erred by “failing
to make an on-the-record finding that [Dana’s] trust interest
was otherwise sufficiently protected for purposes of the Motion
to Enforce the . . . Settlement Memorandum.”
On the merits of the court’s finding that the Settlement
Memorandum was enforceable, Linda and Arlan assign that the
district court erred by (3) finding the Settlement Memorandum
enforceable, after finding its terms were sufficiently specific
and mutually agreed upon as to every essential element;
(4) failing to recognize the implied conditions precedent of
unanimous beneficiary consent and court approval to a trust
modification not inconsistent with a material trust purpose;
(5) finding enforceable a settlement agreement inconsistent
with a material trust purpose and without the consent of all the
beneficiaries; (6) finding enforceable a settlement agreement
that was abandoned by the parties’ conduct after its execution;
and (7) basing its decision, in whole or in part, on Dustin’s ex
parte, posttrial, closing argument brief.
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Nebraska Supreme Court Advance Sheets
314 Nebraska Reports
PAXTON V. PAXTON
Cite as 314 Neb. 197STANDARD OF REVIEW
[1] Determination of a jurisdictional issue which does not
involve a factual dispute is a matter of law which requires an
appellate court to reach its conclusions independent from a
trial court. 1
ANALYSIS
[2-4] Before reaching the legal issues presented for review,
it is the duty of an appellate court to determine whether it
has jurisdiction over the matter before it, irrespective of
whether the issue is raised by the parties. 2 Pursuant to Neb.
Rev. Stat. § 25-1911 (Reissue 2016), for an appellate court to
acquire jurisdiction of an appeal, the party must be appealing
from a final order or a judgment. 3 Additionally, where impli-
cated, an order must comply with Neb. Rev. Stat. § 25-1315(Reissue 2016). 4
[5] A final judgment is one that disposes of the case by dis-
missing it either before hearing is had upon the merits or after
trial by rendition of judgment for the plaintiff or defendant. 5
It must dispose of the case fully and leave nothing for further
determination. 6 The order being appealed from here does not
dispose fully of the underlying cases, which remain pending
below. It was not a final judgment.
[6,7] Every direction of a court or judge, made or entered
in writing and not included in a judgment, is an order. 7 In
general, this court prohibits immediate appeals from orders so
as to avoid piecemeal appeals arising out of the same set of
1
SID No. 2 of Knox Cty. v. Fischer, 308 Neb. 791, 957 N.W.2d 154 (2021).
2
Mann v. Mann, 312 Neb. 275, 978 N.W.2d 606 (2022).
3
See Florence Lake Investments v. Berg, 312 Neb. 183, 978 N.W.2d 308(2022).
4
Mann v. Mann, supra note 2.
5
In re Adoption of Madysen S. et al., 293 Neb. 646, 879 N.W.2d 34 (2016).
6
Ribble v. Furmin, 69 Neb. 38, 94 N.W. 967 (1903).
7
See In re Adoption of Madysen S. et al., supra note 5.
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Nebraska Supreme Court Advance Sheets
314 Nebraska Reports
PAXTON V. PAXTON
Cite as 314 Neb. 197operative facts, chaos in trial procedure, and a succession of
appeals in the same case to secure advisory opinions to gov-
ern further actions of the trial court. 8 There are only limited
exceptions to the general rule that orders are not immediately
appealable. 9 These are set forth in our final order statute, Neb.
Rev. Stat. § 25-1902 (Cum. Supp. 2022).
To be a final order subject to appellate review pursuant to
§ 25-1902, the lower court’s order must (1) affect a substan-
tial right and determine the action and prevent a judgment,
(2) affect a substantial right and be made during a special
proceeding, (3) affect a substantial right and be made on
summary application in an action after a judgment is entered,
or (4) deny a motion for summary judgment that was based
on the assertion of sovereign immunity or the immunity of
a government official. We hold that the district court’s order
finding that the Settlement Agreement “is a valid and enforce-
able contract with which the parties are obligated to comply”
did not affect a substantial right. Thus, it does not satisfy
§ 25-1902.
[8-11] Whether an order affects a substantial right depends
on whether it affects with finality the rights of the parties in
the subject matter. 10 The inquiry of whether a substantial right
is affected focuses on whether the right at issue is substantial
and whether the court’s order has a substantial impact on that
right. 11 Most fundamentally, an order affects a substantial right
when the right would be significantly undermined or irrevoca-
bly lost by postponing appellate review. 12 Conversely, a sub-
stantial right is not affected when that right can be effectively
vindicated in an appeal from the final judgment. 13
8
See id.
9
See id.
10
Yori v. Helms, 307 Neb. 375, 949 N.W.2d 325 (2020).
11
Id.12
Tegra Corp. v. Boeshart, 311 Neb. 783, 976 N.W.2d 165 (2022).
13
See In re Estate of Beltran, 310 Neb. 174, 964 N.W.2d 714 (2021).
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Nebraska Supreme Court Advance Sheets
314 Nebraska Reports
PAXTON V. PAXTON
Cite as 314 Neb. 197We have held that an order compelling mediation is not
a final order, because it neither entails a special proceeding
nor affects a substantial right. 14 An order to mediate does
not diminish the underlying issues of the action. 15 We have not
specifically addressed whether an order declaring a mediated
settlement agreement to be enforceable is final for purposes of
§ 25-1902 and look to other jurisdictions for guidance.
The U.S. Supreme Court in Digital Equipment Corp. v.
Desktop Direct, Inc., 16 has held, in the context of the collateral
order doctrine, that a privately conferred right by a settlement
agreement not to stand trial can be adequately vindicated on
appeal from a final judgment and does not justify an immedi-
ate appeal. In Florida, whether an order on the enforceability
of a settlement agreement is final and immediately appealable
depends on whether “further judicial labor is needed.” 17 The
Appellate Court of Connecticut has held that an order finding
a settlement agreement clear and unambiguous and ordering
performance was not immediately appealable when further
proceedings before a zoning board were required in order to
effectuate the agreement. 18 The Connecticut court explained
that if the zoning variance could not be obtained, it would be
as if no agreement had ever been reached, and that the court
would not render a conditional adjudication of the rights of
the parties. 19
Elsewhere, it has been held more broadly that orders to
enforce settlement agreements do nothing more than grant
a motion in pending litigation, and such orders are not
14
See Tegra Corp. v. Boeshart, supra note 12.
15
See id.16
Digital Equipment Corp. v. Desktop Direct, Inc., 511 U.S. 863, 114 S.
Ct. 1992, 128 L. Ed. 2d 842 (1994). See, also, e.g., CP 200 State, LLC v.
CIEE, Inc., 488 Mass. 847, 179 N.E.3d 45 (2022); Milton v. Thompson,
170 N.C. App. 176, 611 S.E.2d 474 (2005).
17
See Nastasi v. Thomas, 88 So. 3d 407, 410 (Fla. App. 2012).
18
Vance v. Tassmer, 115 Conn. App. 696, 975 A.2d 85 (2009).
19
See id.- 206 -
Nebraska Supreme Court Advance Sheets
314 Nebraska Reports
PAXTON V. PAXTON
Cite as 314 Neb. 197appealable until the case is at an end through a judgment
of the court terminating the litigation. 20 Thus, in Pattison v.
Pattison, 21 the Court of Special Appeals of Maryland held that
an order granting a motion to enforce a settlement agreement
in a divorce action that remained pending was not subject to
immediate appeal, because there was no benefit lost by wait-
ing until the divorce was granted to appeal the enforceability
of the settlement agreement.
Here, we have an order declaring the Settlement
Memorandum to be enforceable. It is clear under the facts of
these cases cited above that further judicial action is required
before all the terms of the Settlement Memorandum can be
effectuated and the cases dismissed. Indeed, if modification of
the Trust cannot be obtained pursuant to § 30-3837(b), it will
be impossible to effectuate the mutuality of obligation that is
an essential element of every enforceable contract. 22 Such an
occurrence would render moot any opinion in these appeals
as to the correctness of the court’s order on Dustin’s motion
to enforce.
[12] While it appears some of the underlying actions may
be multifaceted special proceedings, under which we have
held an order ending a discrete phase of the proceedings
affects a substantial right, 23 the court’s order was not made
in such a discrete phase of a multifaceted special proceeding.
Rather, a motion to enforce falls under motions generally,
as described by Neb. Rev. Stat. § 25-908 (Reissue 2016). A
motion to enforce a settlement agreement is not a remedy
specifically provided for by the Legislature as part of a spe-
cial proceeding.
20
See Claxton v. Adams, 357 Ga. App. 762, 849 S.E.2d 494 (2020).
21
See Pattison v. Pattison, 254 Md. App. 294, 272 A.3d 872 (2022). See,
also, Bishop v. Lattimore, 137 N.C. App. 339, 530 S.E.2d 554 (2000).
22
See Acklie v. Greater Omaha Packing Co., 306 Neb. 108, 944 N.W.2d 297(2020).
23
See, e.g., In re Estate of Severson, 310 Neb. 982, 970 N.W.2d 94 (2022);
In re Estate of Larson, 308 Neb. 240, 953 N.W.2d 535 (2021).
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Nebraska Supreme Court Advance Sheets
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PAXTON V. PAXTON
Cite as 314 Neb. 197We have said that certain orders directing the sale of real
estate affect a substantial right, 24 but the order in question did
not direct the sale of real estate, and again, the parties agree the
Trust’s undivided one-half interest cannot be conveyed without
court approval and Dana’s consent. The parties fail to identify
what substantial right would be significantly undermined or
irrevocably lost by postponing appellate review. We conclude
that whatever rights were affected by the court’s order, they
have not been affected with finality. The mere fact that a per-
son is subjected to inconvenience, annoyance, discomfort, or
even expense by an order does not entitle that person to imme-
diately appeal from it. 25
[13] We hold that we lack appellate jurisdiction. When an
appeal presents the two distinct jurisdictional issues of appel-
late jurisdiction and the trial court’s lack of subject matter
jurisdiction, the first step is to determine the existence of
appellate jurisdiction by determining whether the lower court’s
order was final and appealable. 26 Therefore, our opinion does
not reach the question of whether Dana was an indispen­
sable party to any of the underlying proceedings, the order to
mediate, the Settlement Memorandum, or the proceedings on
Dustin’s motion to enforce.
CONCLUSION
Linda and Dustin’s appeals are dismissed for lack of appel-
late jurisdiction.
Appeals dismissed.
24
See In re Estate of McKillip, 284 Neb. 367, 820 N.W.2d 868 (2012).
25
Tegra Corp. v. Boeshart, supra note 12.
26
Webb v. Nebraska Dept. of Health & Human Servs., 301 Neb. 810, 920
N.W.2d 268 (2018).