Stone Land & Livestock Co. v. HBE , 309 Neb. 970 ( 2021 )


Menu:
  • Nebraska Supreme Court Online Library
    www.nebraska.gov/apps-courts-epub/
    08/27/2021 01:07 AM CDT
    - 970 -
    Nebraska Supreme Court Advance Sheets
    309 Nebraska Reports
    STONE LAND & LIVESTOCK CO. v. HBE
    Cite as 
    309 Neb. 970
    Stone Land and Livestock Company, Inc.,
    a Nebraska corporation, et al., appellants,
    v. HBE, LLP, a Nebraska limited liability
    partnership, and Michael
    J. Arens, appellees.
    ___ N.W.2d ___
    Filed August 13, 2021.   No. S-20-672.
    1. Jurisdiction: Appeal and Error. A jurisdictional question which does
    not involve a factual dispute is determined by an appellate court as a
    matter of law.
    2. Judgments: Appeal and Error. An appellate court independently
    reviews questions of law decided by a lower court.
    3. Service of Process: Waiver: Intent: Proof. A voluntary appearance
    refers to a party who has not been served with process taking some
    action or making some submission to the court that demonstrates an
    intention to waive service of process.
    4. Attorney and Client: Negligence. A client is bound by the acts, omis-
    sions, neglect, and fraud of the client’s attorney when such is within the
    attorney’s scope of express, implied, apparent, or ostensible authority.
    Appeal from the District Court for Lancaster County:
    Andrew R. Jacobsen, Judge. Affirmed.
    Steven E. Guenzel, Cameron E. Guenzel, and Corey J.
    Wasserburger, of Johnson, Flodman, Guenzel & Widger, for
    appellants.
    Taylor M. Hayes and Gregory C. Scaglione, of Koley Jessen,
    P.C., L.L.O., for appellees.
    - 971 -
    Nebraska Supreme Court Advance Sheets
    309 Nebraska Reports
    STONE LAND & LIVESTOCK CO. v. HBE
    Cite as 
    309 Neb. 970
    Heavican, C.J., Cassel, Stacy, Funke, Papik, and
    Freudenberg, JJ.
    Papik, J.
    This case presents the question of whether a defendant’s
    filing of an “Appearance of Counsel” constitutes a voluntary
    appearance that relieves a plaintiff of the ordinary obligation to
    serve defendant with the lawsuit. We hold that it does not and
    therefore affirm the district court’s order dismissing the lawsuit
    on the grounds that defendants were not timely served.
    BACKGROUND
    Complaint and “Appearance of Counsel.”
    On March 1, 2019, Stone Land and Livestock Company,
    Inc., and its shareholders (collectively Stone Land) filed suit
    against HBE, LLP, an accounting firm, and Michael J. Arens,
    a member and manager of HBE (collectively HBE), in the
    Lancaster County District Court. The complaint alleged that
    Arens provided Stone Land with incorrect information regard-
    ing the income tax consequences of a sale of land.
    On April 8, 2019, attorneys for HBE filed a document
    entitled “Appearance of Counsel.” The document bore the
    caption of the lawsuit and stated, “Gregory C. Scaglione and
    Cassandra M. Langstaff of the law firm of Koley Jessen P.C.,
    L.L.O., hereby enter their appearance as counsel of record for
    Defendants HBE, LLP and MICHAEL J. ARENS.” Under this
    statement were the names of the defendants and the signature
    block of the attorneys.
    Dismissal and Attempt to Reinstate.
    Our record reflects no activity in the case for nearly a year
    after the filing of the Appearance of Counsel. Then, on April
    6, 2020, the district court entered an order dismissing the case
    without prejudice. The order of dismissal stated that the com-
    plaint was being dismissed because Stone Land had not timely
    served HBE with the lawsuit.
    - 972 -
    Nebraska Supreme Court Advance Sheets
    309 Nebraska Reports
    STONE LAND & LIVESTOCK CO. v. HBE
    Cite as 
    309 Neb. 970
    On April 13, 2020, Stone Land filed a motion asking the
    district court to reinstate the case. Stone Land asserted that the
    Appearance of Counsel was a voluntary appearance that was
    “equivalent to service” under 
    Neb. Rev. Stat. § 25-516.01
    (1)
    (Cum. Supp. 2020).
    The district court denied Stone Land’s motion. The district
    court concluded that the Appearance of Counsel was not a
    voluntary appearance under § 25-516.01(1). It relied on lan-
    guage from Carlson v. Allianz Versicherungs-AG, 
    287 Neb. 628
    , 641, 
    844 N.W.2d 264
    , 274 (2014), in which we stated
    that “a voluntary appearance is the equivalent to service that
    waives a defense of insufficient service or process if the party
    requests general relief from the court on an issue other than
    sufficiency of service or process, or personal jurisdiction.” The
    district court concluded that because HBE had not invoked the
    district court’s authority or requested general relief, it had not
    made a voluntary appearance. Based on its determination that
    HBE had not made a voluntary appearance and Stone Land had
    not perfected service upon HBE, the district court determined
    that the matter was properly dismissed under 
    Neb. Rev. Stat. § 25-217
    (2) (Reissue 2016).
    Stone Land timely appealed, and we moved the case to our
    docket. We later granted a motion for revivor filed by the per-
    sonal representative of the estate of a deceased shareholder of
    Stone Land and revived the appeal in the name of the personal
    representative, in her capacity as personal representative.
    ASSIGNMENT OF ERROR
    Stone Land assigns several errors, but they can be effec-
    tively consolidated and restated into one: Stone Land contends
    the district court erred by dismissing the complaint for failure
    to perfect service within the statutory deadline.
    STANDARD OF REVIEW
    The parties disagree regarding the appropriate standard of
    review in this case. HBE contends that because Stone Land
    - 973 -
    Nebraska Supreme Court Advance Sheets
    309 Nebraska Reports
    STONE LAND & LIVESTOCK CO. v. HBE
    Cite as 
    309 Neb. 970
    seeks review of the district court’s order denying its motion
    to reinstate the case, which was a motion to alter or amend the
    judgment, an abuse of discretion standard applies. Stone Land
    argues that we should review this matter independently of the
    determination reached by the district court.
    [1,2] Although the denial of a motion to alter or amend the
    judgment is generally reviewed for an abuse of discretion, see,
    e.g., State v. Robertson, 
    294 Neb. 29
    , 
    881 N.W.2d 864
     (2016),
    Stone Land seeks review of a jurisdictional determination by
    the district court, see, e.g., Kovar v. Habrock, 
    261 Neb. 337
    ,
    
    622 N.W.2d 688
     (2001) (district court lacks jurisdiction over
    action after failure to serve defendant pursuant to § 25-217).
    A jurisdictional question which does not involve a factual dis-
    pute is determined by an appellate court as a matter of law. In
    re Estate of Brinkman, 
    308 Neb. 117
    , 
    953 N.W.2d 1
     (2021).
    Stone Land’s arguments also require that we engage in statu-
    tory interpretation, which also presents a question of law. Ryan
    v. Streck, Inc., ante p. 98, 
    958 N.W.2d 703
     (2021). An appel-
    late court independently reviews questions of law decided by
    a lower court. In re Estate of Brinkman, 
    supra.
     Further, it is
    of little practical consequence in this case whether we label
    our review as abuse of discretion or de novo. As we have
    explained, this case presents a question of law, and a “district
    court by definition abuses its discretion when it makes an error
    of law.” Koon v. United States, 
    518 U.S. 81
    , 100, 
    116 S. Ct. 2035
    , 
    135 L. Ed. 2d 392
     (1996).
    ANALYSIS
    Under the version of § 25-217 in effect at the time Stone
    Land filed its complaint, it was required to serve HBE within
    6 months. But, see, 2019 Neb. Laws, L.B. 308, § 1 (amending
    service deadline of 6 months to 180 days, effective September
    1, 2019). If service is not completed within this statutory
    deadline, the district court loses jurisdiction and the action is
    dismissed without prejudice by operation of law. See Vopalka
    v. Abraham, 
    260 Neb. 737
    , 
    619 N.W.2d 594
     (2000).
    - 974 -
    Nebraska Supreme Court Advance Sheets
    309 Nebraska Reports
    STONE LAND & LIVESTOCK CO. v. HBE
    Cite as 
    309 Neb. 970
    There is no dispute that HBE was not actually served within
    6 months of the filing of Stone Land’s complaint. Another
    statute, however, provides that the “voluntary appearance of
    the party is equivalent to service.” § 25-516.01(1). If, as Stone
    Land contends, the Appearance of Counsel was a voluntary
    appearance under this statute, that would be a timely “equiva-
    lent to service,” and the district court should not have dis-
    missed the action under § 25-217.
    The district court determined that the Appearance of Counsel
    was not a voluntary appearance, because it did not request gen-
    eral relief from the court on an issue other than sufficiency of
    service of process or personal jurisdiction. Stone Land argues
    that the district court overlooked a way in which HBE did in
    fact request relief through its Appearance of Counsel. Stone
    Land points out that HBE electronically filed its Appearance
    of Counsel and, by doing so, ensured that its counsel would
    receive automatic notice of subsequent filings in the case. We
    disagree that HBE requested general relief on an issue other
    than sufficiency of service or process, or personal jurisdiction
    in its Appearance of Counsel. Even assuming that a request
    to be notified of future filings would amount to a request for
    relief on an “issue” in the case, the Appearance of Counsel
    made no such request. Automatic notice of future filings may
    have been a consequence of the Appearance of Counsel, but
    not because the Appearance of Counsel requested it.
    Alternatively, Stone Land asks that we find that the
    Appearance of Counsel was a voluntary appearance even if it
    did not request relief from the district court on an issue other
    than sufficiency of service or process, or personal jurisdic-
    tion. Although we have stated that a party makes a voluntary
    appearance if it makes such a request, see Carlson v. Allianz
    Versicherungs-AG, 
    287 Neb. 628
    , 
    844 N.W.2d 264
     (2014), that
    cannot be the only mechanism by which a party can make a
    voluntary appearance. If that were so, a party filing a document
    stating that it had received the complaint and was entering
    - 975 -
    Nebraska Supreme Court Advance Sheets
    309 Nebraska Reports
    STONE LAND & LIVESTOCK CO. v. HBE
    Cite as 
    309 Neb. 970
    its voluntary appearance and waiving service of process would
    not make a voluntary appearance. That is obviously not the
    case. See, e.g., J.S. v. Grand Island Public Schools, 
    297 Neb. 347
    , 
    899 N.W.2d 893
     (2017) (recognizing such filing as vol-
    untary appearance). See, also, John P. Lenich, Nebraska Civil
    Procedure § 10:26 (2021).
    While there is no question that a party can make a voluntary
    appearance without requesting general relief from the court on
    an issue other than sufficiency of service or process, or personal
    jurisdiction, we do not appear to have previously explored
    what a party must do to make a voluntary appearance in this
    way. To answer this question, we must interpret § 25-516.01(1)
    and particularly the term “voluntary appearance” as it appears
    in that subsection. Ordinarily, we give statutory language its
    plain and ordinary meaning. See In re Guardianship of Eliza
    W., 
    304 Neb. 995
    , 
    938 N.W.2d 307
     (2020). The term “volun-
    tary appearance,” however, is a legal term of art. A legal term
    of art is a word or phrase having a specific, precise meaning
    in a given specialty apart from its general meaning in ordinary
    contexts. State ex rel. Peterson v. Creative Comm. Promotions,
    
    302 Neb. 606
    , 
    924 N.W.2d 664
     (2019). When legal terms of art
    are used in statutes, they are to be construed according to their
    term of art meaning. 
    Id.
    The term “appearance,” in this context, generally refers to
    the idea of a party to a lawsuit taking some action or submit-
    ting something to the court by which that party demonstrates
    an intention to submit to the court’s jurisdiction. See, e.g.,
    Dyer v. Surratt, 
    266 Ga. 220
    , 
    466 S.E.2d 584
     (1996) (appear-
    ance signifies overt act by which person against whom suit
    has commenced submits to court’s jurisdiction); U.S. Aviation,
    Inc. v. Wyoming Avionics, 
    664 P.2d 121
    , 124 (Wyo. 1983)
    (“[a]n appearance in an action involves some submission or
    presentation to the court by which a party shows his intention
    to submit himself to the jurisdiction of the court”); Minton
    v. First National Exchange Bank of Virginia, 
    206 Va. 589
    ,
    593, 
    145 S.E.2d 139
    , 143 (1965) (“[i]t is generally held that
    - 976 -
    Nebraska Supreme Court Advance Sheets
    309 Nebraska Reports
    STONE LAND & LIVESTOCK CO. v. HBE
    Cite as 
    309 Neb. 970
    an appearance by a party requires some act on the part of
    that party evidencing an intention to submit himself to the
    jurisdiction of the court”). A “voluntary appearance” stands in
    contrast to a “compulsory appearance”: a voluntary appearance
    is made by one who appears without having been served with
    process, while a compulsory appearance is made by a party
    who is required to appear as a result of being served with
    process. Black’s Law Dictionary 122 (11th ed. 2019); 6 C.J.S.
    Appearances § 2 (2016). In Nebraska, the term “voluntary
    appearance” has traditionally referred to a waiver of service of
    process. See Lenich, supra, § 11:26.
    [3] Based on the foregoing, we understand a voluntary
    appearance to refer to a party who has not been served with
    process taking some action or making some submission to
    the court that demonstrates an intention to waive service of
    process. We observe that our prior cases holding that a party
    makes a voluntary appearance if it requests general relief
    from the court on an issue other than sufficiency of service or
    process, or personal jurisdiction is consistent with this under-
    standing; by making such a request and thereby invoking the
    authority of the court, a party demonstrates an intent to waive
    service of process.
    HBE takes the position that the Appearance of Counsel did
    not demonstrate its intent to do anything. HBE frames the
    Appearance of Counsel as a filing by which the attorneys refer-
    enced appeared in the action, but that the parties they purported
    to represent did not.
    [4] We disagree that the Appearance of Counsel should be
    treated as a filing of only the referenced attorneys and not a
    filing on behalf of HBE. HBE conceded at oral argument that
    it could be assumed in this case that the Appearance of Counsel
    was made with the consent of HBE. The signature block of
    the Appearance of Counsel indicates that it was submitted
    on behalf of HBE. Further, the relationship between attorney
    and client is one of agency. See VRT, Inc. v. Dutton-Lainson
    Co., 
    247 Neb. 845
    , 
    530 N.W.2d 619
     (1995). Consequently, the
    - 977 -
    Nebraska Supreme Court Advance Sheets
    309 Nebraska Reports
    STONE LAND & LIVESTOCK CO. v. HBE
    Cite as 
    309 Neb. 970
    client is bound by the acts, omissions, neglect, and fraud of
    the client’s attorney when such is within the attorney’s scope
    of express, implied, apparent, or ostensible authority. 
    Id.
     The
    Appearance of Counsel was a filing of HBE.
    Although we find that the Appearance of Counsel was filed
    on behalf of HBE, we disagree that it demonstrated an inten-
    tion on the part of HBE to waive service of process. In the
    Appearance of Counsel, HBE did nothing more than acknowl-
    edge the existence of the lawsuit and disclose to Stone Land
    and the district court that the referenced attorneys would be
    representing it in that lawsuit. A party’s awareness of a lawsuit
    and its disclosure that it has chosen attorneys to represent it in
    that lawsuit does not, in our view, demonstrate an intention to
    waive service of process. A party can be aware of a lawsuit and
    still insist on service of process. Further, a party’s attorneys
    might take no action in a lawsuit other than contending that
    service was not perfected.
    Finally, we are not persuaded by Stone Land’s argument
    that if the Appearance of Counsel does not qualify as a vol-
    untary appearance, neither would a form entitled “Voluntary
    Appearance” made available on the Nebraska Judicial Branch’s
    website. The form to which Stone Land refers both expressly
    cites § 25-516.01 and provides room for parties to acknowledge
    they are making a “Voluntary Appearance” in the action. The
    reference to the statute and the term “Voluntary Appearance”
    demonstrate an intention to waive service of process pursuant
    to § 25-516.01 that is absent from the Appearance of Counsel
    filed in this case.
    The Legislature has directed that actions are dismissed if
    defendants do not, prior to the statutory deadline, receive serv­
    ice or make a voluntary appearance. HBE was not served prior
    to the statutory deadline, and, for reasons we have explained, its
    Appearance of Counsel did not amount to a voluntary appear-
    ance. Under the circumstances, the district court was obligated
    to recognize the dismissal of the complaint.
    - 978 -
    Nebraska Supreme Court Advance Sheets
    309 Nebraska Reports
    STONE LAND & LIVESTOCK CO. v. HBE
    Cite as 
    309 Neb. 970
    CONCLUSION
    Because we find that the Appearance of Counsel was not a
    voluntary appearance and that HBE was not timely served, the
    district court correctly recognized the complaint as dismissed
    pursuant to § 25-217. We therefore affirm.
    Affirmed.
    Miller-Lerman, J., not participating.