Norby v. Farnam Bank, No. A-09-814 (Neb. App. 4/6/2010)

Decision Date06 April 2010
Docket NumberNo. A-09-814.,A-09-814.
PartiesVIRGINIA NORBY ET AL., APPELLANTS, v. THE FARNAM BANK ET AL., APPELLEES.
CourtNebraska Court of Appeals

Appeal from the District Court for Dawson County: James E. Doyle IV, Judge. Affirmed.

Steve Windrum for appellants.

Brian J. Davis and Claude E. Berreckman, Jr., of Berreckman & Davis, P.C., for appellee The Farnam Bank.

Stanley R. Parker and Timothy A. Shultz, of Parker & Hay, L.L.P., for appellees Donnie L. Franzen and Karen Widick.

INBODY, Chief Judge, and SIEVERS and CASSEL, Judges.

MEMORANDUM OPINION AND JUDGMENT ON APPEAL

SIEVERS, Judge.

This is the third appearance of this case before us. The genesis of this case was a replevin of livestock which was issued by the Frontier County District Court against Keith Norby, who is married to the appellant Virginia Norby. The plaintiffs, Virginia Norby; Darin Norby; V.C.V.D., Inc.; and Virginia Norby, as trustee of KG Triple D Farms Trust, filed this action in the Dawson County District Court alleging several causes of action as a result of the seizure and removal of livestock allegedly owned by the plaintiffs, rather than by Keith Norby. After our opinions in the two previous appeals, the plaintiffs' only remaining cause of action was a 42 U.S.C. § 1983 (2006) action. The Dawson County District Court granted the motions for summary judgment filed by the defendants, The Farnam Bank (Bank), Donnie L. Franzen, and Karen Widick. Thus, the plaintiffs' second amended petition and the case were dismissed, which brings us to this third and, ultimately, final appeal.

FACTUAL AND PROCEDURAL BACKGROUND

In the interest of judicial efficiency, we refer the parties and any other interested readers to our lengthy "Memorandum Opinion and Judgment on Appeal" in Norby v. Farnam Bank, filed on April 11, 2006, in case No. A-04-1171 (Norby I), and our "Memorandum Opinion and Judgment on Appeal" in Norby v. Farnam Bank, No. A-07-656, 2008 WL 582510 (Neb. App. Mar. 4, 2008) (selected for posting to court Web site) (Norby II). Those opinions comprehensively set forth the factual background of this case. That said, we attempt to reduce the factual background for this appeal to its essence.

As a result of a security agreement with the Bank signed by Keith Norby, he pledged "all livestock" and "offspring" now owned or hereafter acquired as collateral. The agreement was dated February 11, 1998, and filed with the Secretary of State the next day. It was later amended to include two registered quarter horses with colts. There was default upon the underlying notes, and as a result, the Bank filed a petition in replevin in the Frontier County District Court resulting in the issuance of two orders of replevin. Simplified, the plaintiffs' claim in Norby I was that livestock not belonging to Keith Norby, but to one or more of the plaintiffs, was taken as a result of the replevin orders. The case was tried against all defendants except the Frontier County sheriff, Dan Rupp, and a jury verdict was rendered in favor of Darin Norby in the amount of $6,100, which verdict we affirmed in Norby I.

There was no trial as to Rupp because in the course of the pretrial proceedings, the trial court had sustained a demurrer filed by Rupp with respect to the plaintiffs' § 1983 claim against him. In Norby I, we found that the trial court had erred in sustaining the demurrer on the § 1983 claim and we remanded that cause of action to the district court with directions to reinstate such claim. However, in Norby II, it was ultimately determined that Rupp was entitled to qualified immunity on the § 1983 claim against him. Summary judgment was granted in favor of Rupp, and the case was dismissed as to him.

The instant appeal is the third appearance of this case before us. As stated previously, in our Norby I decision, we found that the trial court had erred in sustaining the demurrer on the § 1983 claim and we remanded that cause of action to the district court with directions to reinstate such claim. Examination of the operative pleading, the second amended petition, filed March 1, 2004, shows that the format of such pleading was to set forth in 25 paragraphs the factual allegations surrounding the replevin action by which livestock was seized. With respect to the § 1983 cause of action which was the subject of our remand, the plaintiffs' pleading simply realleged paragraphs 1 through 25 as though fully set forth and then asserted in paragraph 34:

The acts and omissions of the defendants, and each of them, is a deprivation of the Plaintiffs' interest in their property as hereinabove alleged, without due process of law, and under color of law, in accordance with Title 42 U.S.C. § 1983 and Plaintiffs have been damaged thereby, for which the Plaintiffs are entitled to such damages as hereinabove alleged, for punitive damages, together with attorney fees by reason thereof, as provided in said section, as more particularly set forth in the prayer hereafter.

After our decision in Norby I, it is only this § 1983 claim against the Bank, Franzen, and Widick which still had "life." Thus, the claim against the Bank, Franzen, and Widick was that they took possession of livestock belonging to one or more of the plaintiffs "without due process of law." We note that at all times relevant, Franzen was the president of Farnam Bank. At the time of the hearing on the motion for summary judgment, Widick was vice president of the bank; but at the time of the replevin action, she was the assistant vice president.

On August 19, 2008, the Bank, Franzen, and Widick filed motions for summary judgment based on our opinion in Norby II. In its order filed on December 16, 2008, the district court denied the summary judgment motions of the Bank, Franzen, and Widick, finding that our decision in Norby II did not address any claims concerning the § 1983 action against the private party defendants. After analyzing federal case law, the district court found that the principles of qualified immunity which absolved Rupp, a law enforcement officer, from liability did not automatically apply to the Bank, Franzen, and Widick. The district court therefore declined to extend our decision in Norby II to the Bank, Franzen, and Widick.

The Bank, Franzen, and Widick then amended their answers to the plaintiffs' second amended petition by adding the affirmative defense of good faith reliance on Nebraska's laws, including Nebraska's replevin statutes. In May 2009, the Bank, Franzen, and Widick again filed motions for summary judgment, claiming that no genuine issues as to any material fact existed and that they are entitled to judgment as a matter of law.

After a hearing on the matter, the district court filed its order on July 29, 2009, granting summary judgment in favor of the defendants. The district court found by inference that neither Virginia nor Darin possessed any personal knowledge of any conduct between the sheriff, Rupp, and the defendants, other than that which each testified to at the 2004 trial. The district court found that the Bank's invocation of the state-created replevin procedures involving the seizure of property by Rupp, the "state officer," satisfies the "state action" requirement for a § 1983 claim. The district court also found upon examination of the 2004 trial testimony that there was no genuine issue of material fact relating to "the total absence of any conduct from which it can be established that [the defendants] took any action to advise, control, direct, or interfere with Rupp's discharge of his duties under the replevin order" or with Rupp's effort to return cattle when he determined they were not subject to the replevin order. The district court found that there was no agreement of any kind or any "meeting of the minds" between Rupp and the defendants to engage in conduct that violated the plaintiffs' constitutional rights. The district court said:

The uncontroverted evidence from Franzen and Widick, found both in their 2004 trial testimony and in exhibits 170 and 171, was that while each was present at the cattle roundup, neither did any act from which it could be proved or even inferred that either was acting "together with" or "receiving significant aid" from a state official to deprive any plaintiff of a constitutional right.

The district court concluded that under Nebraska law, the plaintiffs had the right to intervene in the replevin action and such opportunity provided protection for their due process rights to claim that their property had been wrongfully taken by the sheriff—effectively holding that the plaintiffs' § 1983 claim failed because there was no deprivation of their constitutional right to due process. The district court said that if such right of intervention was not adequate to fully protect the plaintiffs' constitutional rights, the defendants had alleged as an affirmative defense to liability that each defendant acted at all times in "good faith" reliance on the laws of Nebraska, including, but not limited to, the laws relating to replevin.

Noting that good faith requires both subjective and objective elements, the district court found that (1) the defendants adduced sufficient evidence to establish that each believed he or she was acting according to a lawful order from the Frontier County District Court as well as in reliance on Rupp's efforts to follow the command of the court's order, and plaintiffs did not offer any evidence to rebut this evidence of the defendants' subjective beliefs and (2) there is no genuine issue of material fact as to whether the defendants' belief was objectively reasonable. As to whether such belief was objectively reasonable, the district court found that evidence established without any genuine issue of fact that the defendants did nothing to control, direct, interfere with, or in any other way become involved with Rupp's efforts to follow the command of the replevin order or Rupp's efforts to return the...

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