In re Claims Against Atlanta Elevator, Inc.
| Decision Date | 20 August 2004 |
| Docket Number | No. S-02-1406.,S-02-1406. |
| Citation | 268 Neb. 598,685 N.W.2d 477 |
| Parties | In re CLAIMS AGAINST ATLANTA ELEVATOR, INC. Nebraska Public Service Commission, appellee and cross-appellee, v. Roberts Cattle Company, claimant, appellant, AGP Grain Cooperative, Inc., et al., claimants, appellees and cross-appellants, and G & W Farms Partnership et al., claimants, appellees. |
| Court | Nebraska Supreme Court |
Stephen D. Mossman, of Mattson, Ricketts, Davies, Stewart & Calkins, Lincoln, for appellant.
Jon Bruning, Attorney General, and L. Jay Bartel, Lincoln, for appellee Nebraska Public Service Commission.
Rocky C. Weber, of Crosby Guenzel, L.L.P., Lincoln, for appellee AGP Grain Cooperative, Inc.
Kimberli D. Dawson and Bruce L. Hart, of Hart, Dawson & Sudbeck, P.C., L.L.O., Cozad, for appellees Brian Bertrand et al.
Daniel L. Lindstrom and Nicole M. Mailahn, of Jacobsen, Orr, Nelson, Wright & Lindstrom, P.C., Kearney, for appellees G & W Farms Partnership et al.
Upon the insolvency of Atlanta Elevator, Inc. (AEI), on March 11, 2002, the Nebraska Public Service Commission (PSC) assumed title to all grain in storage at AEI for the benefit of the owners, depositors, and storers of that grain. See Neb.Rev.Stat. § 88-547 (Reissue 1999). After combining the value of the grain inventory and a grain warehouse bond, a total amount available for distribution was determined to be $1,083,259.42, and proceedings for distribution were instituted. The PSC received claims totaling $4,529,654.47.
Appellant Roberts Cattle Company (RCC) and appellees and cross-appellants AGP Grain Cooperative, Inc. (AGP); Brian Bertrand; Mark Bertrand; Max Schultz; Dave Wells; the Harley Wells estate; Dean Pape; Wells Ag Enterprises, Inc.; Neil Young; and Dennis Fulk (collectively appellants) were among the claimants who filed claims seeking to share in the distribution. A hearing was conducted on May 30 and 31, 2002. After reviewing the evidence, the PSC denied all or a portion of appellants' claims, based on its determination that with respect to the denied portions of appellants' claims, appellants were not valid owners, depositors, or storers of grain in storage at AEI at the point in time at which the PSC took title to that grain. The PSC ordered pro rata distributions in accordance with its findings. A motion for rehearing was denied. This appeal followed. We affirm the PSC's decision with regard to appellants' claims.
AEI was a Nebraska public grain warehouse, licensed under the Grain Warehouse Act, Neb.Rev.Stat. § 88-525 et seq. (Reissue 1999). The PSC is the state agency authorized to enforce the provisions of the act. One of the PSC's duties is to conduct inspections of licensed warehouses. See § 88-527(1). Additionally, the PSC is required under the act to "adopt and promulgate rules and regulations to aid in the administration of" the act. § 88-545.
On March 11, 2002, the PSC warehouse examiners inspected AEI. As a result of the inspection, the PSC determined that the quantities of grain actually in storage with AEI were significantly below the amount necessary to cover AEI's apparent storage obligations. During the inspection, AEI voluntarily surrendered its grain warehouse license to the PSC. Due to the surrender, the PSC took immediate control of AEI's facilities and all grain stored in AEI's warehouse, closed the warehouse, and, as of March 11, took title to all grain in storage in the warehouse for the benefit of the owners, depositors, and storers of grain in the warehouse at that time.
In accordance with §§ 88-547 and 88-530, on March 19, 2002, the PSC entered an order directing the liquidation of AEI's grain, with the proceeds from that liquidation and a warehouse security bond to be distributed to claimants deemed qualified as of March 11. Section 88-547 provides, inter alia, as follows:
Although not defined in the statute, a "Depositor, Storer, and/or Owner" is defined in the PSC's grain warehouse rules and regulations as 291 Neb. Admin. Code, ch. 8, § 001.01D (2002). Section 88-530 reads, in relevant part, that the security required of a licensed warehouse "shall run to the State of Nebraska for the benefit of each person who stores grain in such warehouse."
Pursuant to the March 19, 2002, order, the PSC required parties who claimed to be either an owner, depositor, or storer of grain with AEI on March 11 to file their claims by May 23. A hearing on such claims was set for May 30. Notice of the claims deadline and hearing date was published in several newspapers and sent to potential claimants identified through the PSC's March inspection.
On May 6, 2002, AEI filed chapter 7 bankruptcy proceedings. On May 22, the PSC entered into a stipulation in the bankruptcy case providing for the bankruptcy estate's abandonment of the grain inventories and the grain warehouse bond in the amount of $433,700. The bankruptcy court approved the stipulation.
Thereafter, pursuant to its statutory authority, the PSC liquidated AEI's grain inventories. The net proceeds from the liquidation of the grain inventories totaled $649,559.42. In addition, AEI's grain warehouse bond of $433,700 was available for distribution. Thus, a total of $1,083,259.42 (the proceeds) was available for pro rata distribution by the PSC to approved claimants.
The claims hearing was held on May 30, 2002, and continued on May 31. Fifty-seven claims, totaling $4,529,654.47, had been filed with the PSC. The PSC hearing was governed by the PSC's rules of procedure, 291 Neb. Admin. Code, ch. 1 (2001), and its grain warehouse rules and regulations. The rules of procedure provide, inter alia, that although the PSC is not "bound to follow the technical rules of evidence, the record will be supported by evidence which possesses probative value commonly accepted by reasonable men in the conduct of their affairs." 291 Neb. Admin. Code, ch. 1, § 016.01. Furthermore, in accordance with the PSC's rules of procedure, the claimants had the option of appearing before the PSC on their own behalf or being represented by counsel. 291 Neb. Admin. Code, ch. 1, §§ 002.01 and 002.02. At the outset of the hearing, the PSC indicated that cross-examination of witnesses would not be permitted. The record does not reflect that any party objected to the PSC's announcement regarding cross-examination.
Thirty-three individuals testified during the claims hearing. In addition, 57 affidavits were submitted in support of claims by individuals or business entities. Sixty-eight exhibits, consisting of approximately 2,000 pages, were admitted into evidence.
On September 18, 2002, the PSC entered its "Order Determining Claims." In summary, the order reviewed the various claims which had been filed and the evidence in the record relating to such claims, and made findings. In the order, the PSC approved or denied the claims, in total or in part, based on the PSC's determination as to whether the record demonstrated that on March 11, the date the PSC took title to the grain in storage at AEI, the claimant was an owner, depositor, or storer of that grain. Appellants are among those persons or entities whose claims the PSC denied, in total or in part, in its September 18 order.
With respect to the subject matter involved in this case, pursuant to statutes then in effect, timely motions, styled as "motions for rehearing," were filed with the PSC. See Neb.Rev.Stat. § 75-137 (Cum.Supp.2000) (repealed by 2003 Neb. Laws 187). Those motions came on for hearing on October 24 and 30, 2002. In an order entered November 19, the PSC overruled the motions. The instant appeal was filed in December, pursuant to Neb.Rev.Stat. § 75-136 (Cum.Supp.2002), which statute we observe has been subsequently amended. See § 75-136 (Reissue 2003).
Additional facts will be set forth below where pertinent to our analysis of appellants' arguments on appeal.
All appellants assert essentially the same assignment of error, restated, that the PSC erred in denying all or a part of their individual claims based upon the PSC's determination that with regard to the denied claim, the record failed to demonstrate that on March 11, 2002, the claimant was an owner, depositor, or storer of grain in storage at AEI. In addition to this assignment of error, both RCC and AGP claim that the PSC denied them due process during the claims hearing.
We note that G & W Farms Partnership, Gray Farms Partnership, and Jimmie "Jim" Lindstrom have also filed a single brief in this court, in which they identify themselves both as appellants and appellees. In their brief, these parties do not assign any error and instead generally argue in support of the PSC's September 18, 2002, order entered following the claims hearing. Because G & W Farms Partnership, Gray Farms Partnership, and Lindstrom have not challenged on appeal the PSC's determination with respect to their claims, these...
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