Fuel Exploration, Inc. v. Novotny

• Decision Date: 11 October 1985
• Docket Number: No. 84-433,84-433
• Citation: 374 N.W.2d 838,221 Neb. 17
• Parties: FUEL EXPLORATION, INC., A Corporation, Appellee and Cross-Appellant, v. Richard M. NOVOTNY and Caroline E. Novotny, Husband and Wife, Appellants and Cross-Appellees, MMS Energy Investment Group I, Inc., et al., Intervenors-Appellees and Cross-Appellants.
• Court: Nebraska Supreme Court

Page 838

374 N.W.2d 838

221 Neb. 17

FUEL EXPLORATION, INC., A Corporation, Appellee and Cross-Appellant, v. Richard M. NOVOTNY and Caroline E. Novotny, Husband and Wife, Appellants and Cross-Appellees MMS Energy Investment Group I, Inc., et al., Intervenors-Appellees and Cross-Appellants.

No. 84-433.

Supreme Court of Nebraska.

Oct. 11, 1985.

Syllabus by the Court

1. Directed Verdict. On a motion for directed verdict the moving party is deemed to have admitted as true all the relevant evidence received which is favorable to the party against whom the motion is directed, and, further, the party against whom the motion is directed is entitled to the benefit of all proper inferences which can reasonably be deduced from such evidence.

2. Property: Appurtenances: Words and Phrases. The term "fixture" refers to a chattel which is capable of existing separate and apart from realty, but which, by actual annexation and appropriation to the use or purpose of the realty with the intention of making it a permanent accession thereto, becomes a part of the realty.

3. Property: Appurtenances. Once a chattel becomes a fixture, it is treated as a part of the realty and may not be removed therefrom except by the owner of the realty.

4. Property: Appurtenances. A "trade fixture" is not considered part of the realty and may be removed therefrom by the trade fixture's owner, so long as the removal does not cause substantial damage to the realty.

5. Property: Appurtenances. Whether articles constructed upon realty owned by another become annexed to and part of the realty depends to a great extent upon the facts and circumstances of the particular case.

6. Property: Appurtenances: Intent. The intention of the party making the annexation is to be inferred from the nature of the articles affixed, the relation between the parties, the situation of the party making the annexation, the nature of the structure, the mode of annexation, and the purpose or use for which the annexation has been made.

7. Property: Appurtenances. Generally, in the absence of statute any permanent improvement placed upon land of another by one having no interest or title in the land, without the landowner's consent, prima facie becomes a part of the realty and belongs to the owner of the land, although it was placed thereon by mistake or with a view of enforcing an adverse right in the land, unless there is an express agreement which takes the case out of the rule or unless the owner is estopped to claim such ownership.

8. Replevin: Proof. In a replevin action the burden is on the plaintiff to show the facts necessary to recover existed at the time the action was commenced; what takes place thereafter is immaterial in the consideration and determination of the merits of the case.

9. Replevin: Proof. A plaintiff in replevin must prove the interest pled; proof of a special ownership interest does not support an allegation of a general ownership interest.

10. Judgments: Appeal and Error. Harmless error forms no basis for reversal of a judgment on the verdict of a jury.

11. Appeal and Error. A party cannot be heard to complain of error which he or she was instrumental in bringing about.

George P. Burke of Van Steenberg, Myers & Burke, Kimball, for appellants and cross-appellees.

Robert G. Simmons, Jr., of Wright, Simmons & Selzer, Scottsbluff, for appellee and cross-appellant.

KRIVOSHA, C.J., and BOSLAUGH, WHITE, HASTINGS, CAPORALE, SHANAHAN, and GRANT, JJ.

PER CURIAM.

The appellee corporation, Fuel Exploration, Inc., brought a replevin action against the appellants, Richard M. and Caroline E. Novotny, husband and wife, seeking possession of certain oil field equipment which Fuel Exploration alleged it owned. The trial court entered a replevin order, after which Fuel Exploration took possession. Following an allegation in the Novotnys' amended answer that there were in existence others who had an interest in the equipment, a group of "working interest owners" intervened and alleged that they became owners of the equipment after the order of replevin was issued, and joined in Fuel Exploration's prayer that possession be given to it. At trial the court determined as a matter of law that Fuel Exploration did not own the equipment at the commencement of the action as it had alleged but had "at best" a security interest in it and that the Novotnys, therefore, had the right to possess the equipment as of that time. The trial court also determined as a matter of law that the equipment constituted trade fixtures and instructed the jury that it was to determine ultimate ownership and whether Fuel Exploration and the working interest owners had the right to remove the equipment from the Novotny land. The jury returned a general verdict in favor of Fuel Exploration and the working interest owners. The trial court then, pursuant to a waiver of the jury on the issue of damages, awarded the Novotnys $1 in nominal damages for their temporary loss of possession. The Novotnys have appealed and by their six assignments of error raise three issues: (1) whether the Novotnys owned the equipment, (2) whether they were entitled to more than nominal damages, and (3) whether the working interest owners should have been permitted to intervene. In their cross-appeal Fuel Exploration and the working interest owners urge that the trial court erred in holding as a matter of law that they were not the owners of the equipment at the commencement of this action. We affirm in part and reverse in part.

To the extent the trial court resolved questions upon motions for directed verdicts, we review the evidence in light of the rule that upon such a motion the moving party is deemed to have admitted as true all the relevant evidence received which is favorable to the party against whom the motion is directed and, further, that the party against whom the motion is directed is entitled to the benefit of all proper inferences which can reasonably be deduced from such evidence. Quad-States, Inc. v. Vande Mheen, 220 Neb. 161, 368 N.W.2d 795 (1985).

So reviewed, the evidence establishes that the Novotnys are the record title owners of the west half of a certain Section 7 in Kimball County. They also claim ownership, but are not the record title owners, of a portion of Section 18 adjoining the southern boundary of their half of Section 7.

Through a series of transactions which are not relevant to the present case, Fuel Exploration, as "operator," joined a number of others known as "working interest owners" or "nonoperators" in a project to complete the drilling of and to operate an oil well on the east half of Section 7, land owned by a Mrs. Spiker but farmed by the Novotnys along with their half of Section 7 and the aforesaid portion of Section 18.

An operating agreement was executed between the working interest owners and Fuel Exploration, obligating the latter to operate the well after its completion and to procure the necessary equipment for so doing. The agreement states: "[A]ll equipment and material acquired in operations on the Contract Area shall be owned by the parties as their interests are shown in Exhibit 'A'." Although we do not find an exhibit so designated in the record, the evidence establishes the identity and proportionate interests of the working interest owners. The agreement obligates the working interest owners to pay a proportionate share of the cost of the equipment within 15 days of billing by Fuel Exploration. The record establishes that at least some of the working interest owners had paid their proportionate share of the cost of the equipment. The agreement also provides:

Each Non-Operator [working interest owner] grants to Operator [Fuel Exploration] a lien upon its oil and gas rights in the Contract Area [defined elsewhere in the agreement as being all of Section 7 and a portion of Section 8], and a security interest in its share of oil and/or gas when extracted and its interest in all equipment, to secure payment of its share of expense, together with interest thereon at the rate provided....

Pursuant to the provisions of the operating agreement, Fuel Exploration procured the equipment in dispute, which consists of two oil storage tanks, a treater used to separate water from the oil, a pump, and various accessories and connecting flow lines.

In the mistaken belief it was placing the equipment on Mrs. Spiker's land, Fuel Exploration in fact placed all of the equipment on land owned or claimed by the Novotnys, some of it on the Novotnys' half of Section 7 and some of it on Section 18. The tanks were put on but not secured to a pair of pads consisting of several yards of gravel leveled and packed to provide drainage. The treater, which is approximately 10 feet in diameter and stands 20 feet tall, was bolted to a portable concrete block approximately 12 to 15 inches thick and 6 to 8 feet square. The tanks were connected to the well with underground lines buried 4 feet deep, and there were flow lines from the tanks to the treater, as well as a gasline from the well to the treater. A treater house approximately 12 by 15 feet was also set against the treater to protect some valves.

After the Novotnys discovered the error, Fuel Exploration attempted to buy the land on which the equipment sat. The Novotnys, however, did not wish to sell. Negotiations for Fuel Exploration to lease the land on which the equipment was placed fell through. Thereafter, knowing that the equipment was removable, Mr. Novotny erected a temporary fence around the equipment area, posted no trespassing signs, maintained a 24-hour guard on the property, and notified Fuel Exploration that it was not licensed to enter upon his land, warning it not to trespass nor to remove any of the equipment.

Fuel Exploration then filed this suit. Following the hearing required by Neb.Rev.Stat. § 25-1093.02 (Reissue 1979), the trial court found that Fuel Exploration was entitled to possession...