Pilot Inv. Group Ltd. v. Hofarth

• Decision Date: 05 July 1996
• Docket Number: No. S-94-281,S-94-281
• Citation: Pilot Inv. Group Ltd. v. Hofarth, 550 N.W.2d 27, 250 Neb. 475 (Neb. 1996)
• Parties: PILOT INVESTMENT GROUP LTD., a Nebraska limited partnership, and Mark M. Rhodes, as general partner of Pilot Investment Group Ltd., appellants, v. Danny HOFARTH et al., appellees.
• Court: Nebraska Supreme Court

Page 27

550 N.W.2d 27

250 Neb. 475

PILOT INVESTMENT GROUP LTD., a Nebraska limited partnership, and Mark M. Rhodes, as generalpartner of Pilot Investment Group Ltd., appellants, v.Danny HOFARTH et al., appellees.

No. S-94-281.

Supreme Court of Nebraska.

July 5, 1996.

Syllabus by the Court

1.Demurrer: Pleadings.In considering a demurrer, a court must assume that the pleaded facts, as distinguished from legal conclusions, are true as alleged and must give the pleading the benefit of any reasonable inference from the facts alleged, but cannot assume the existence of facts not alleged, make factual findings to aid the pleading, or consider evidence which might be adduced at trial.

2.Demurrer: Pleadings.In determining whether a cause of action has been stated, the petition is to be construed liberally.If as so construed the petition states a cause of action, a demurrer based on the failure to state a cause of action is to be overruled.

3.Demurrer: Pleadings.When a demurrer to a petition is sustained, a court must grant leave to amend the petition unless it is clear that no reasonable possibility exists that amendment will correct the defect.

4.Judgments: Demurrer: Appeal and Error.A trial court should specify the grounds for sustaining a demurrer when several grounds for the demurrer are asserted; however, an appellate court will not reverse a trial court's ruling if such ruling was correct, and failure to specify grounds for sustaining a demurrer does not change the legal position of the parties.

5.Judgments: Demurrer: Appeal and Error.An order sustaining a demurrer should be affirmed if any one of the grounds on which it was asserted is well taken.

6.Foreclosure: Deeds.There is no presumption of valid service contained in the statutes governing sheriff's deeds that follow a tax foreclosure sale.

7. Foreclosure.Lack of proper service and notice upon an interested party in a tax foreclosure sale renders the sale void for lack of personal jurisdiction.

8.Judgments: Quiet Title: Sales: Collateral Attack.An order confirming a sale may be collaterally attacked through a quiet title action where, due to improper service and lack of actual notice, a court fails to obtain personal jurisdiction over the party possessing or owning the property sold.

9.Judgments: Service of Process.In order to set aside a judgment or order based on service by publication, a party must affirmatively assert a lack of actual notice.

10.Equity: Statutes.Equitable remedies are generally not available where a statute provides an adequate remedy at law.

11.Words and Phrases.An adequate remedy at law means a remedy which is plain and complete and as practical and efficient to the ends of justice and its prompt administration as the remedy in equity.

Steven J. Lefler, of Lefler & Franklin, Omaha, for appellants.

James S. Jansen, Douglas County Attorney, and John E. Huber, Omaha, for appelleeDouglas County.

William T. Ginsburg, of Suber & Ginsburg, Omaha, for appelleeLand Reutilization Commission of Douglas County.

WHITE, C.J., and CAPORALE, FAHRNBRUCH, LANPHIER, WRIGHT, CONNOLLY, and GERRARD, JJ.

GERRARD, Justice.

INTRODUCTION

This is an appeal from an order of the district court sustaining demurrers of Douglas County and the Land Reutilization Commission, defendants in the underlying action to quiet title or, alternatively, for unjust enrichment brought by Pilot Investment Group Ltd. and its general partner, Mark M. Rhodes(both hereinafter referred to as Pilot).Both Douglas County and the Land Reutilization Commission demurred on the grounds that there was a defect of the partiesdefendant, that the two causes of action were improperly joined, and that the petition failed to state a cause of action against the moving defendant.The district court sustained the demurrers and dismissed the petition without granting Pilot an opportunity to amend its petition.This appeal followed.We reverse, and remand for further proceedings.

FACTUAL BACKGROUND

This case arises out of a tax sale of real property owned by Pilot and located at 1006 South 30th Avenue, Omaha, Nebraska.The property in question was sold at a sheriff's sale to the Land Reutilization Commission and then resold to defendantDanny Hofarth.Pilot did not object at the time of sale or at the confirmation hearing; however, Pilot asserts lack of notice of both the sale and the confirmation hearing.

In pertinent part, Pilot alleged the following in its petition:

1. .... Pilot ... is a Nebraska Limited Partnership.

2. .... Mark M. Rhodes("Rhodes") is a resident of the state of New Mexico, the sole general partner of Pilot, and an attorney licensed to practice in the states of Nebraska and New Mexico.

....

5.The property which is the subject of this complaint ("the Omaha 4-Plex") is commonly known as 1006 South 30th Ave[.], Omaha, Nebraska....

6.Pilot acquired the Omaha 4-Plex on October 22, 1982 for the purchase price of $36,000.00, and has been in actual possession ever since, until ... Hofarth improperly took possession.

7.Pilot recorded its Limited Partnership Agreement in the Office of the County Clerk of Douglas County, Nebraska and listed its principle [sic] place of business as 5072 South 135th Street, Omaha, Nebraska....

8.At all material times ... Pilot utilized the services of Richter Real Estate to manage the Omaha 4-Plex, and Richter Real Estate had its offices at 5072 South 135th Street, Omaha, Nebraska....

9.At all material times ... Rhodes was an active member of the Nebraska bar, and Rhodes' mailing address was published by the Nebraska bar as a New Mexico address and could be readily ascertained upon diligent inquiry.

10.Between May 1989 and [December 1993], two petitions were brought in the Douglas County District Court to collect taxes purportedly owed on the Omaha4-Plex.Both petitions named as defendants, among other persons, Pilot [and] Rhodes....

....

12.The first petition brought by the County, styled County of Douglas v. KO Limited Partnership ... was, upon information and belief, filed sometime before February 8, 1990 ... (said action hereafter referred to as "the First Proceeding").

13.On February 8, 1990, Rhodes caused an Answer to the County's petition in the First Proceeding to be mailed to the County's counsel of record.

14.Said Answer was signed by Rhodes above the address and telephone number of his law firm, Rhodes & Salmon, P.C., to wit: "1014 Lomas Blvd., N.W., Albuquerque, NM 87102, (505) 247-0328".

15.On February 12, 1990, said Answer was filed in the Douglas County District Court, along with a Certificate of Mailing certifying that a copy of said Answer had been mailed to the County's counsel of record, Ronald L. Staskiewicz, Douglas County Attorney....

16.On September 1, 1989, Rhodes paid the County the taxes which the County alleged were due on the Property in the First Proceeding for the year 1986, using a check giving Pilot's mailing address in New Mexico: P.O. Box 23175, Albuquerque, New Mexico 87192....

17.Thus since February 1990, Douglas County ... had actual notice of three (3) mailing addresses where Pilot and Rhodes would receive actual notice of any proceedings....

18.On August 20, 1990, the County caused a second petition to be filed in Douglas County District Court, styled County of Douglas v. Ida B. Lewis, et al. ...(said action hereafter referred to as "the Second Proceeding") requesting payment of 1988 taxes.

19.On September 14, 1990, a "Return of Service" was filed in the Second Proceeding indicating that Pilot could not be found at the Omaha4-Plex.

20.On October 22, 1990, Pilot paid the 1987 taxes with a check from Rhodes, showing a New Mexico address.

21.On November 20, 1990, the County, by and through [the] Deputy County Attorney, filed in the Second Proceeding an "Affidavit of Mailing of Notice of First Publication", wherein [the deputy county attorney] stated that he had mailed a copy of a notice published in the Daily Record to Pilot [at] the address of the Omaha 4-Plex, and further stated, under oath:

"that after diligent investigation and inquiry [he] has been unable to ascertain and does not know the post office address of any other party appearing to have a direct legal interest in the above entitled action or proceeding other than those to whom notice has been mailed in writing."

22.[The] Deputy County Attorney ... thus swore that he had made "diligent investigation and inquiry"; notwithstanding the fact that the County had actual notice of where Pilot might reasonably be expected to receive actual notice by mail, to wit:

a. Pilot's Omaha Address, which was public record, and also the address for the property manager for the Omaha 4-Plex;

b. Rhodes' pleadings and appearance in the First Proceeding, filed approximately six (6) months before the Second Proceeding was initiated;

c. Rhodes' tender of 1987 taxes on a check from a New Mexico address, and accepted by Douglas County less than a month before [the] Deputy County Attorney ... swore Rhodes and Pilot could not be found.

23.On May 15, 1991, [the] Deputy County Attorney ... filed a similar affidavit, this time an "Affidavit of Notice of Sheriff Sale", where he again swore that [he] had made "diligent investigation and inquiry".

24.A sheriff's sale was subsequently held ... on June 10, 1991, where [the Land Reutilization Commission] purportedly purchased the property.

25.On August 9, 1993, [the] Deputy County Attorney ... filed a "Motion to Confirm" the sheriff's sale.

26.On August 9, 1993, [the] Deputy County Attorney ... claims to have mailed a notice of hearing regarding the "Motion to Confirm" to ... Pilot, and "John and Jane Doe" at the Omaha 4-Plex.

27.On or about August 19, 1993, [the Land Reutilization Commission] purportedly sold the Omaha 4-Plex to ... Hofarth for $15,000.00, and claimed a fifty percent (50%) commission on the sale.

28.Upon information...