Sanitary & Improvement Dist. No. 67 of Sarpy Cnty. v. Neb. Dep't of Roads

• Court: Supreme Court of Nebraska
• Citation: 309 Neb. 600
• Docket Number: No. S-20-659.,S-20-659.
• Parties: SANITARY AND IMPROVEMENT DISTRICT NO. 67 OF SARPY COUNTY, NEBRASKA, APPELLANT, v. STATE OF NEBRASKA DEPARTMENT OF ROADS AND SARPY COUNTY, NEBRASKA, APPELLEES.
• Decision Date: 25 June 2021

309 Neb. 600

SANITARY AND IMPROVEMENT DISTRICT NO. 67 OF SARPY COUNTY, NEBRASKA, APPELLANT,
v.
STATE OF NEBRASKA DEPARTMENT OF ROADS AND SARPY COUNTY, NEBRASKA, APPELLEES.

No. S-20-659.

SUPREME COURT OF NEBRASKA

June 25, 2021

1. Sanitary and Improvement Districts: Statutes. Formed according to Nebraska statutes, sanitary and improvement districts are units of local government.

2. Sanitary and Improvement Districts. The primary function of sanitary and improvement districts is to install and maintain public improvements such as streets, sewers, utility lines, and other improvements associated with residential and commercial subdivisions.

3. Standing: Pleadings: Evidence: Words and Phrases. If a motion challenging standing is filed after the pleadings stage and the court holds an evidentiary hearing and reviews evidence outside of the pleadings, the motion is considered a factual challenge.

4. Standing: Evidence. The party opposing a factual challenge must offer evidence to show its entitlement to bring the suit.

5. Standing: Pleadings: Evidence: Words and Phrases. If standing is challenged at the pleadings stage, before an evidentiary hearing and before any evidence outside of the pleadings is admitted, it is deemed a facial challenge.

6. Standing: Pleadings. In considering a facial challenge, the trial court will typically review only the pleadings to determine whether the plaintiff has therein alleged enough facts to establish standing.

7. Parties: Statutes. Neb. Rev. Stat. § 25-301 (Reissue 2016) requires that subject to certain statutory exceptions, every action shall be prosecuted in the name of the real party in interest.

8. Actions: Parties. The purpose of the requirement in Neb. Rev. Stat. § 25-301 (Reissue 2016) is to ensure that actions are prosecuted only

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by persons who have some real interest in the cause of action or a legal or equitable right, title, or interest in the subject matter of controversy.

9. Parties. A real party in interest is one who, under the substantive law, has a claim to the relief sought. In this way, real party in interest is a procedural requirement that turns on the substantive law of the claim.

10. Eminent Domain: Words and Phrases. Inverse condemnation is a common shorthand for a landowner's suit to recover the value of property that has been taken or damaged by the State without the benefit of condemnation proceedings.

11. Constitutional Law: Eminent Domain. The substantive law in an inverse condemnation action derives from provisions in the U.S. and Nebraska Constitutions, which temper the State's inherent power to take private property.

12. Judgments: Appeal and Error. An appellate court is not prevented from affirming the judgment of a district court on different grounds.

13. Counties: Property. A county is not a person having private property.

14. Sanitary and Improvement Districts: Legislature: Political Subdivisions. A sanitary and improvement district is a legislative creature, a political subdivision of the State of Nebraska.

15. Sanitary and Improvement Districts: Property: Statutes. Once formed, a sanitary and improvement district has no inherent authority to hold an interest in property; it, unlike a person, can exercise only those powers expressly granted to it by statute or necessarily implied to carry out its expressed powers.

16. Sanitary and Improvement Districts: Property. A sanitary and improvement district is not capable of holding private property.

17. Sanitary and Improvement Districts: Property: Statutes. A sanitary and improvement district is granted the power by statute to take and hold real and personal property for a limited purpose.

18. Political Subdivisions: Eminent Domain: Legislature. A political subdivision of a state cannot hold private property for purposes of a takings claim against its own parent state. To the contrary, that property is ultimately the sovereign state's, held by the political subdivision pursuant to the grace of the Legislature.

Appeal from the District Court for Sarpy County: NATHAN B. COX, Judge. Affirmed.

Dean J. Jungers, of Hascall, Jungers & Garvey, for appellant.

Douglas J. Peterson, Attorney General, and Matthew F. Gaffey for appellee Nebraska Department of Roads.

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John W. Reisz, Deputy Sarpy County Attorney, for appellee Sarpy County.

HEAVICAN, C.J., CASSEL, STACY, FUNKE, PAPIK, and FREUDENBERG, JJ.

HEAVICAN, C.J.

INTRODUCTION

This is an inverse condemnation action, brought by a sanitary and improvement district (SID) seeking compensation from the State. The district court dismissed the action on the pleadings, finding the SID lacked standing.

We agree. The SID is a political subdivision of the State, created by and subject to the State. As such, it is not a "person" having "private property" and is thus incapable of bringing an inverse condemnation action against the State. We affirm.

BACKGROUND

[1,2] The appellant in this case is Sanitary and Improvement District No. 67 of Sarpy County, Nebraska (SID 67). Formed according to Nebraska statutes,¹ SID's are units of local government.² Their primary function is to install and maintain public improvements such as streets, sewers, utility lines, and other improvements associated with residential and commercial subdivisions.³

SID 67 serves Normandy Hills, a subdivision of more than 340 residences and several commercial properties near Bellevue, Nebraska. According to SID 67, it has maintained the "streets and roads" in the subdivision using funds raised "through the use of bonded indebtedness and general levy of taxes." Normandy Hills is located just east of Highway 75.

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For much of the subdivision's history, Normandy Hills' roads provided residents easy access to Highway 75 via either of two routes. From the subdivision's northwest corner, residents could travel about 500 feet west along Grenoble Drive to reach the highway. Alternatively, residents could enter the highway from the subdivision's southwest corner by driving some 500 feet west along Normandy Boulevard. Both routes connected by direct intersections to Highway 75.

But in 2003 and 2004, the State of Nebraska Department of Roads, now known as the Nebraska Department of Transportation (NDOT), agreed with Sarpy County to jointly reconstruct Highway 75. To do so, they blocked the two previous access routes between the subdivision and Highway 75 and instead rerouted such access via an alternative route.

Rather than leading directly west to Highway 75, the alternative route detoured north. Grenoble Drive was blocked near the highway's shoulder, and drivers were rerouted north along South Fort Crook Road, a frontage road that ran parallel with the highway. From South Fort Crook Road, drivers could turn west onto Fairview Road, which ultimately connected with Highway 75.

In a petition for compensation in the county court for Sarpy County, SID 67 claimed this rerouting had effected a "tak[ing] or damag[ing]" of its property. SID 67 alleged it was "the owner of the streets and roads located within the [SID] by reason of the dedication set forth in the plat of Normandy Hills, recorded October 18, 1972 at Book 5 of the Plat Records of Sarpy County Register of Deeds, at Page 82." The alleged dedication instrument, however, was not attached to SID 67's petition.

Although acknowledging the alternative route still afforded highway access from its streets and roads, SID 67 alleged it had been damaged by NDOT and Sarpy County's "terminat[ion]" of the two previously direct access routes. According to SID 67, the alternative route was an insufficient replacement, because it was indirect. SID 67 also claimed that the

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alternative route failed to comply with Bellevue's fire code and that its sharp turns and steep grade altogether prevented certain vehicles' passage, particularly during severe weather or congested traffic.

As a result of the rerouting, SID 67 asserted that it would

be forced to acquire right of way and construct a new fire apparatus access road to serve the residents of the District, as well as reconstruct the intersection and approach at Grenoble Drive and the new access road to better serve the residents of the District and make the flow of traffic at said intersection passable during inclement weather.

The county court appointed three appraisers to assess the value of SID 67's damages, if any. However, after considering the evidence at a hearing, the appraisers issued a final report concluding "[SID 67's] damages suffered by reason of the taking of the access to the property described in the Petition, including interest, total $0.00."

SID 67 next sought review in the district court for Sarpy County. There, SID 67 again alleged inverse condemnation. NDOT and Sarpy County moved to dismiss, alleging lack of standing and failure to state a claim upon...