Kalkowski v. Neb. Nat'l Trails Museum Found., Inc.

• Decision Date: 01 May 2015
• Docket Number: No. S–14–317,S–14–317
• Citation: 862 N.W.2d 294
• Parties: Thomas Kalkowski, appellant, v. Nebraska National Trails Museum Foundation, Inc., and Gregory J. Beal, appellees.
• Court: Nebraska Supreme Court

862 N.W.2d 294

Thomas Kalkowski, appellant

v.Nebraska National Trails Museum Foundation, Inc., and Gregory J. Beal, appellees.

No. S–14–317

Supreme Court of Nebraska.

Filed May 1, 2015

Randy Fair, of Dudden & Fair, P.C., L.L.O., Ogallala, for appellant.

James R. Korth, of Reynolds, Korth & Samuelson, P.C., L.L.O., Ogallala, for appellee Nebraska National Trails Museum Foundation, Inc.

Heavican, C.J., Wright, Connolly, Stephan, McCormack, Miller–Lerman, and Cassel, JJ.

Syllabus by the Court

1. Leases: Judgments: Appeal and Error.The interpretation of a lease is a question of law that an appellate court decides independently of the district court.

2. Contracts: Restitution.Any quasi-contract claim for restitution is an action at law.

3. Judgments: Appeal and Error.The judgment and factual findings of the trial court in an action at law tried to the court without a jury have the effect of a verdict and will not be set aside unless clearly wrong.

4. Judgments: Appeal and Error.In reviewing an action at law, an appellate court reviews the evidence in the light most favorable to the prevailing party. However, regarding questions of law, an appellate court is obligated to reach a conclusion independent of determinations reached by the lower courts.

5. Judges: Recusal: Appeal and Error.A motion requesting a judge to recuse himself or herself on the ground of bias or prejudice is addressed to the discretion of the judge, and an order overruling such a motion will be affirmed on appeal unless the record establishes bias or prejudice as a matter of law.

6. Contracts.When the terms of a contract are clear, they are to be accorded their plain and ordinary meaning.

7. Contracts: Words and Phrases.Trade terms, legal terms of art, numbers, common words of accepted usage, and terms of a similar nature should be interpreted in accord with their specialized or accepted usage unless such an interpretation would produce irrational results or the contract documents are internally inconsistent.

8. Unjust Enrichment.The fact that a recipient has obtained a benefit without paying for it does not of itself establish that the recipient has been unjustly enriched.

9. Unjust Enrichment.Unjust enrichment occurs when there has been a transfer of a benefit without adequate legal ground.

10. Contracts: Restitution.Restitution is not available for an unrequested benefit voluntarily conferred, unless the circumstances of the transaction justify the claimant's intervention in the absence of a contract.

11. Restitution.Restitution is unavailable if it would subject an innocent recipient to a forced exchange.

12. Contracts: Restitution.Restitution will not be available if the effect of payment would be to complete an exchange that, had it been proposed as a contract, the recipient would have been free to reject.

13. Judges: Recusal.A trial judge should recuse himself or herself when a litigant demonstrates that a reasonable person who knew the circumstances of the case would question the judge's impartiality under an objective standard of reasonableness, even though no actual bias or prejudice is shown.

14. Judges: Recusal.A party may not rely on his or her own conduct as a way to force a judge to recuse himself or herself from the proceedings.

Heavican, C.J.

NATURE OF CASE

Thomas Kalkowski donated 159 acres of land to the Nebraska National Trails Museum Foundation (NNTM). At the time of the donation, NNTM leased the land back to Kalkowski and allowed Kalkowski to farm the land. Kalkowski's upgrades to the land ultimately caused the number of certified irrigated acres (CIAs) assigned to the land to almost double. Hoping to transfer the CIAs to a nearby property, Kalkowski filed suit, claiming that he was entitled to the CIAs and that NNTM had been unjustly enriched. After a bench trial, the district court found in favor of NNTM and Gregory J. Beal, a lienholder of the property. Kalkowski now appeals that decision. We determine that Kalkowski is not entitled to the CIAs either under the lease agreement or under the theory of unjust enrichment.

In addition, while this case was pending before the judge, Kalkowski contacted the general manager of another natural resources district and inquired about the water rights associated with property owned by the judge hearing the case. After the conversation with Kalkowski, the general manager contacted the judge and the two had a discussion regarding Kalkowski. The judge then disclosed the conversation pursuant to Neb. Rev. Code of Judicial Conduct § 5–302.9(B).

Kalkowski filed a motion to recuse, arguing that the judge should have ended the conversation after Kalkowski's name

was brought up and also that the judge's status as an owner of irrigated farmland which was being leased to a farmer created a conflict of interest or at least the appearance of a conflict of interest. The district court denied the motion to recuse, and Kalkowski now also appeals that order. We hold that the district court did not abuse its discretion in denying the motion to recuse.

BACKGROUND

Removal of CIAs.

In 2000, Kalkowski agreed to donate 159 acres of land located in Keith County, Nebraska, to NNTM. Due to a problem with a tax form, the land was not actually deeded to NNTM until 2003. A warranty deed granting NNTM the property in fee simple absolute and a quit claim deed were both filed with the Keith County register of deeds. This is not the first dispute between Kalkowski and NNTM concerning this parcel of land.¹

At the time the gift was made, Kalkowski and NNTM entered into a lease agreement. Under the lease agreement, Kalkowski agreed to pay the annual taxes on the property and $500 per year in exchange for the right to farm the land. The lease will terminate if and when NNTM constructs a museum of at least 5,000 square feet which would be open to the public. A museum has yet to be built on the property.

The lease also provides that Kalkowski owns all of the irrigation equipment on the property and is responsible for all expenses related to the farming operations conducted on the real estate. With regard to improvements, Kalkowski has “the right to make any and all improvements he deems necessary.” Kalkowski must “pay for and maintain these improvements,” and Kalkowski has “the right to remove any and all improvements.” The term “improvements” is not defined under the lease agreement.

This dispute is over the ownership of the CIAs associated with the land. In 2004, the Nebraska Legislature granted natural resources districts more authority and autonomy in regulating ground water within their respective districts.² In particular, the legislation provided that each natural resources district could craft its own rules on how to best regulate the use of ground water.³

The Twin Platte Natural Resources District (TPNRD), where the relevant parcel of land is located, settled on a CIAs system of water management. A TPNRD representative testified that this system works by designating a finite number of acres within the district which are approved for irrigation by ground water, in conjunction with instituting a moratorium on the creation of new wells within the district. The representative testified that any acre of land within the district that had been irrigated for at least 1 year between 2001 and 2005 would be designated as a CIA by TPNRD.

The legislation also provides that subject to district approval, CIAs can be transferred “between parcels or tracts under the control of a common landowner or other person.”⁴ The initial certification of the CIAs by TPNRD was recorded with the register of deeds of the county where the land was located. Any subsequent transfers of the CIAs to another parcel must also be recorded with the county's register of deeds.⁵

The CIAs were assigned by TPNRD to specific parcels of land, and individual CIAs are under the control of the owner of those specific parcels of land. Unless reserved, the CIAs assigned to a particular parcel would run with the land in the event of a transfer of the real estate. The district court determined that the market value of a single CIA within the area in question is approximately $2,000 to $2,500.

Kalkowski testified that in anticipation of the impending certification process, he commenced irrigation activities on

the NNTM land and cleared out shrubs and trees to increase the number of CIAs prior to the certification date. The district court determined that as a result of Kalkowski's actions, the number of CIAs on the NNTM land increased from 75.9 to 152.9. A representative from TPNRD testified that had Kalkowski done nothing between 2000 and 2005, those additional CIAs would have been lost forever and the parcel would have been certified with only 75.9 CIAs.

In 2010, Kalkowski purchased 78 acres of land near the NNTM land. Although Kalkowski had received preliminary approval from TPNRD to transfer the CIAs from the NNTM land to the newly purchased land, the NNTM board of directors refused to complete the necessary transfer documents. Kalkowski filed a complaint in the district court for Keith County alleging that NNTM would be unjustly enriched if it were allowed to maintain possession of the CIAs. Kalkowski requested that the district court either direct NNTM to execute the transfer documents or award Kalkowski the value of the benefit accrued by NNTM.

After a bench trial, the district court determined that NNTM was not unjustly enriched by Kalkowski's upgrades to the land. The district court stated that Kalkowski's “sole reason in improving the condition of the subject real estate was to benefit himself in raising crops through the implementation of irrigation on the subject real estate” and that while NNTM certainly did receive a benefit, “NNTM did nothing to encourage [Kalkowski] to remove trees or shrubbery, or to utilize his own equipment, labor, or irrigation wells located on adjacent real estate to irrigate the subject property between 2000 and 2005.”

Recusal.

Kalkowski also assigns that the...