Kelliher v. Soundy

Decision Date29 August 2014
Docket NumberNo. S-13-538,S-13-538
Citation288 Neb. 898,852 N.W.2d 718
CourtNebraska Supreme Court
PartiesMichael E. Kelliher, appellant, v. Travis Soundy et al., appellees.

OPINION TEXT STARTS HERE

Appeal from the District Court for Buffalo County: John P. Icenogle, Judge. Reversed.

Justin R. Herrmann and Nicholas R. Norton, of Jacobsen, Orr, Lindstrom & Holbrook, P.C., L.L.O., for appellant.

Brian R. Symington, of Parker, Grossart, Bahensky, Beucke & Bowman, L.L.P., for appellee Schijohn, L.L.C.

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

Syllabus by the Court

1. Judgments: Jurisdiction. When a jurisdictional question does not involve a factual dispute, the issue is a matter of law.

2. Judgments: Appeal and Error. An appellate court reviews questions of law independently of the lower court's conclusion.

3. Statutes: Appeal and Error. Statutory interpretation is a question of law that an appellate court resolves independently of the trial court.

4. Jurisdiction: Appeal and Error. Before reaching the legal issues presented for review, an appellate court must determine whether it has jurisdiction over the matter before it.

5. Jurisdiction: Final Orders: Appeal and Error. For an appellate court to acquire jurisdiction of an appeal, there must be a final order entered by the court from which the appeal is taken; conversely, an appellate court is without jurisdiction to entertain appeals from nonfinal orders.

6. Final Orders: Appeal and Error. To fall within the collateral order doctrine, an order must (1) conclusively determine the disputed question, (2) resolve an important issue completely separate from the merits of the action, and (3) be effectively unreviewable on appeal from a final judgment.

7. Final Orders: Appeal and Error. The requirement that a court order must resolve an important issue completely separate from the merits of the action prevents piecemeal review.

8. Final Orders: Appeal and Error. Court orders which involve considerations that are enmeshed in the factual and legal issues of the cause of action are not immediately reviewable.

9. Property: Sales: Intent. The scope of the lis pendens statute is determined by its end and purpose. The purpose of the lis pendens statute is to prevent third persons, during the pendency of the litigation, from acquiring interests in the land which would preclude the court from granting the relief sought.

10. Actions: Property: Notice. Cancellation of a notice of lis pendens is completely separate from the merits of the underlying action.

11. Actions: Property: Notice: Time: Appeal and Error. “Good cause” to cancel a notice of lis pendens under Neb.Rev.Stat. § 25–531 (Cum.Supp.2012)does not include a consideration of the merits of the underlying action.

12. Property: Title: Notice. A court may cancel a notice of lis pendens if the face of the complaint shows that the underlying action does not involve title to real property.

13. Property: Sales: Notice. The existence of a prospective purchaser who wants to buy the property free of the pending litigation is not good cause to cancel a notice of lis pendens.

Connolly, J.

SUMMARY

Michael E. Kelliher appeals from the district court's order canceling a notice of lis pendens he filed against property in which he claimed title. His business partner, Travis Soundy, sold the property to Schijohn, L.L.C. Kelliher then filed suit, alleging that Soundy did not have authority to sell the property without Kelliher's consent and that the owners of Schijohn knew that he claimed an interest in it.

The first issue is jurisdictional. Kelliher concedes the district court's June 2013 order canceling the notice of lis pendens is not a final order. But he contends that review is proper under the collateral order doctrine. The second issue is whether the court erred in canceling the notice of lis pendens before Kelliher has had an opportunity to appeal the summary judgment order denying him relief. We conclude that we have jurisdiction under the collateral order doctrine and that the district court erred by canceling the notice of lis pendens.

BACKGROUND
Factual History

In 2006, Kelliher and Soundy filed articles of organization for Clover Investments, L.L.C. (Clover), in which they made equal contributions and had equal membership rights. About 3 months later, Clover purchased a bar in Kearney, which was its sole asset. In March 2007, Soundy purchased Kelliher's interest in Clover.

In July 2008, Soundy and Kelliher negotiated an oral agreement for Kelliher to earn back his 50–percent interest in Clover. According to Kelliher, he agreed to manage the bar and inject his own funds into the operations, which duties he fulfilled. According to Soundy, the oral agreement required Kelliher to successfully manage the bar, including “restoring and maintaining the amortization of loans” to Clover and keeping current all of Clover's obligations. In November 2009, Soundy terminated the management agreement. He contends that he was the sole owner of Clover. In March 2010, Clover sold the bar to Schijohn.

Procedural History

Kelliher sued Soundy, Clover, and Schijohn. He alleged that in July 2008, after Soundy had unsuccessfully tried to sell Clover's property, Soundy contacted Kelliher to see if he would be interested in repurchasing an interest. Kelliher alleged that he agreed to do this by making capital improvements and had fulfilled that duty. Kelliher's general allegations asserted four claims for relief. First, he claimed that he had unsuccessfully demanded access to Clover's records, which were in Soundy's sole possession, and sought an accounting. Second, he sought a judicial dissolution of Clover. Third, he alleged that Soundy had breached a duty of care and loyalty to Clover and himself, and sought damages. Fourth, he claimed that Soundy lacked authority to sell Clover's property and asked the court to quiet title in him.

Schijohn moved for summary judgment on Kelliher's quiet title claim. The court granted the motion, concluding, as a matter of law, that Schijohn was entitled to rely on the apparent authority of Soundy to convey the property.

Kelliher moved to vacate or modify the judgment and, alternatively, to certify the order as appealable under Neb.Rev.Stat. § 25–1315(1) (Reissue 2008). The court denied the motion to vacate its order but granted the certification request. In case No. A–11–612, the Nebraska Court of Appeals dismissed the appeal without opinion on September 9, 2011.

Kelliher did not seek further review. On remand, Schijohn moved to cancel Kelliher's notice of lis pendens against the property. Its attorney stated that Schijohn was trying to sell the building and needed clear title. Kelliher argued that he had not yet had an opportunity to appeal and that the majority of courts in other jurisdictions have held it is improper to release a notice of lis pendens until after an appeal or after the time to seek review has passed.

In a June 2013 order, the court ruled on various motions and noted that a trial was scheduled for August. Nonetheless, the court canceled the notice of lis pendens, based on its earlier dismissal of the claim against Schijohn.

ASSIGNMENT OF ERROR

Kelliher assigns, restated, that the district court erred by granting Schijohn's motion to cancel the notice of lis pendens.

STANDARD OF REVIEW

When a jurisdictional question does not involve a factual dispute, the issue is a matter of law.1 An appellate court reviews questions of law independently of the lower court's conclusion.2

Statutory interpretation is a question of law that an appellate court resolves independently of the trial court.3

ANALYSIS
Jurisdiction

Before reaching the legal issues presented for review, an appellate court must determine whether it has jurisdiction over the matter before it.4 For an appellate court to acquire jurisdiction of an appeal, there must be a final order entered by the court from which the appeal is taken; conversely, an appellate court is without jurisdiction to entertain appeals from nonfinal orders.5

Kelliher concedes that the June 2013 order canceling the notice of lis pendens was not a final order. But Kelliher argues that this court has jurisdiction underthe collateral order doctrine. To fall within the collateral order doctrine, an order must (1) conclusively determine the disputed question, (2) resolve an important issue completely separate from the merits of the action, and (3) be effectively unreviewable on appeal from a final judgment.6

The June 2013 order satisfied the first and third elements of the collateral order doctrine. The order conclusively determined the validity of the notice. 7 Furthermore, the order will be effectively unreviewable on appeal from a final judgment because, if review is so delayed, the property might be sold in the interim to a third party whose rights are not affected by the judgment.8

The jurisdictional dispute centers on the second element of the collateral order doctrine: Whether the release of the notice was completely separate from the merits of the underlying action. The requirement that a court order must resolve an important issue completely separate from the merits of the action prevents piecemeal review.9 Orders which involve considerations that are enmeshed in the factual and legal issues of the cause of action are not immediately reviewable.10 Because our collateral order doctrine has its source in decisions of the U.S. Supreme Court,11 we review cases decided by the federal courts for guidance.

Federal courts hold that whether the cancellation of a notice of lis pendens is completely separate from the merits depends on the language of the relevant statute. When the lis pendens statute is silent as to the grounds for release or includes grounds other than the merits of the underlying suit, an order canceling a notice of lis pendens is independent of the merits of the underlying suit.12 But the cancellation of a notice of lis pendens is not independent of the...

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