Security Inv. Co. v. State
| Decision Date | 24 March 1989 |
| Docket Number | No. 87-182,87-182 |
| Parties | SECURITY INVESTMENT COMPANY, Appellant, v. STATE of Nebraska and Nebraska Department of Banking and Finance, Appellees. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. Demurrer: Pleadings: Appeal and Error. In reviewing an order sustaining a demurrer, the Supreme Court accepts the truth of facts well pled and the factual and legal inferences which may be reasonably deduced from such facts, but does not accept conclusions of the pleader.
2. Demurrer: Pleadings. When ruling on 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 a fact not alleged, make factual findings to aid the pleading, or consider evidence which might be adduced at trial.
3. Tort Claims Act: Liability. Performance of or failure to perform a discretionary function cannot be the basis for liability under the State Tort Claims Act, Neb.Rev.Stat. §§ 81-8,209 et seq. (Reissue 1987).
4. Tort Claims Act. Applicability of the discretionary function exception in the State Tort Claims Act depends on the conduct in question, not on the identity of the actor.
5. Tort Claims Act. The discretionary function exception of the State Tort Claims Act includes a governmental regulatory agency and its action, conduct, and decisions.
6. Tort Claims Act: Negligence. Judgment or choice is essential and indispensable for discretionary conduct excepted 7. Tort Claims Act: Public Policy. The discretionary function exception of the State Tort Claims Act protects or excepts only governmental decision, action, or conduct based on a permissible exercise of a public policy judgment.
from negligence liability under the State Tort Claims Act.
8. Tort Claims Act. The discretionary function exception is inapplicable to a claim under the State Tort Claims Act if a statute, regulation, or policy specifically prescribes a course of governmental action or conduct.
9. Pleadings. A court must examine and construe a petition's essential and factual allegations by which the plaintiff requests relief, rather than the legal terminology utilized in the petition or the form of a pleading.
10. Estoppel. The doctrine of equitable estoppel is not a cause of action, but is a judicial device to preserve a right already acquired, not generate a new right.
11. Words and Phrases. Conceal means to hide, secrete, or withhold from knowledge of others; to withhold from utterance or declaration; to cover or keep from sight; to hide or withdraw from observation, cover or keep from sight, or prevent discovery. The word conceal pertains to affirmative action likely to prevent or intended to prevent knowledge of a fact and has reference to some advantage to the concealing party or a disadvantage to some interested party from whom the fact is withheld.
12. Fraud. The elements of fraud by concealment are: (1) The defendant concealed or suppressed a material fact; (2) the defendant had knowledge of this material fact; (3) this material fact was not within the reasonably diligent attention, observation, and judgment of the plaintiff; (4) the defendant suppressed or concealed this fact with the intention that the plaintiff be misled; (5) the plaintiff was reasonably so misled; and (6) the plaintiff suffered damage as a result.
13. Immunity: Waiver. Waiver of sovereign immunity will only be found where stated by the most express language or by such overwhelming implications from the text as will leave no room for any other reasonable construction.
14. Tort Claims Act: Immunity: Waiver. Neb.Rev.Stat. § 21-17,141 (Reissue 1987) is not a waiver of common-law governmental immunity. Tort liability of the State, pursuant to § 21-17,141, is controlled by the State Tort Claims Act, which grants the right to sue the State for its negligent or wrongful act or omission.
David A. Ludtke and Kim M. Robak, of Rembolt Ludtke Parker & Berger, Lincoln, for appellant.
Robert M. Spire, Atty. Gen., and Martel J. Bundy, Lincoln, for appellees.
Before BOSLAUGH, SHANAHAN, and GRANT, JJ., and ENDACOTT and QUIST, District Judge.
Security Investment Company (SIC), assignee of SSS Co., which was formerly an industrial loan and investment company, see Neb.Rev.Stat. §§ 8-401 et seq. (Reissue 1987), appeals from the judgment of the district court for Lancaster County, sustaining the demurrer of the State of Nebraska and Nebraska Department of Banking and Finance and dismissing SIC's action brought under the State Tort Claims Act, Neb.Rev.Stat. §§ 81-8,209 et seq. (Reissue 1987). The State of Nebraska and Nebraska Department of Banking and Finance are collectively called "Department."
SIC claims that damages were sustained by SSS after the Department closed another industrial loan and investment company, Commonwealth Company. SIC alleged that the Department's negligence regarding Commonwealth caused SSS' loss of deposit insurance protection and customer accounts and necessitated reorganization under chapter 11 of [231 Neb. 538] the U.S. Bankruptcy Code. Also, SIC contends that the Department is estopped from denying liability on account of its promises and concealment concerning Commonwealth.
"In reviewing an order sustaining a demurrer, the Supreme Court accepts the truth of facts well pled and the factual and legal inferences which may be reasonably deduced from such facts, but does not accept conclusions of the pleader." Weiner v. Hazer, 230 Neb. 53, 55-56, 430 N.W.2d 269, 271 (1988).
When ruling on 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 a fact not alleged, make factual findings to aid the pleading, or consider evidence which might be adduced at trial.
Schuyler State Bank v. Cech, 228 Neb. 588, 593, 423 N.W.2d 464, 468 (1988).
The Department has general supervision and control over industrial loan and investment companies ("industrials"), and over other financial institutions in Nebraska, and the duty of enforcing Nebraska statutes pertaining to industrials. See Neb.Rev.Stat. §§ 8-102 and 8-401.01 et seq. (Reissue 1987). Section 8-403.02 requires a minimum amount of paid-up capital, surplus, and paid-in undivided profits, and § 8-409.02 limits insider loans. Section 8-403.04 specifies the qualifications for an industrial's executive officers and gives the Department authority to revoke any officer's license in the event of the officer's unsafe or unauthorized operation of an industrial.
If an industrial's capital stock is impaired, its operations are unsafe or unauthorized and endanger interests of its certificate of indebtedness holders, or the industrial refuses or neglects to obey the Department's lawful order, the Department may seize control of the industrial's assets until the industrial is fit to resume business or may dissolve the industrial. § 8-416.
Pursuant to the Nebraska Depository Institution Guaranty Corporation Act, Neb.Rev.Stat. §§ 21-17,127 to 21-17,145 (Reissue 1987), the Department may approve formation of a corporation (NDIGC) composed of 10 or more depository institutions, including industrials. See §§ 21-17,131(1) and 21-17,132. NDIGC's directors are persons who have served 2 years in an official capacity with an eligible member depository. § 21-17,133. NDIGC is a mechanism for guaranteeing shareholdings, savings, and deposits in member depositories and assists in the detection and prevention of depository insolvencies and liquidations. § 21-17,128.
NDIGC submits its plan of operation to the Department for approval, § 21-17,136, a plan which may be amended with the Department's approval. NDIGC's plan of operation establishes, among other things, the amount of insurance to guarantee each deposit or certificate of indebtedness concerning a member depository. §§ 21-17,131(5) and 21-17,135(1)(a).
The Department must immediately report in writing to NDIGC when the Department has reasonable cause to believe that any of NDIGC's member depositories may be insolvent or in an unsound financial condition. § 21-17,139(3).
NDIGC may make recommendations to the Department concerning solvency, liquidation, rehabilitation, or conservation of any member depository. NDIGC, on a good-faith belief that a member depository's accounts are endangered, may request that the Department apply to the district court for an order placing the Department in charge of the endangered depository. If the Department fails to act on NDIGC's request within 15 days, NDIGC may apply directly to the court for the custodial order concerning the endangered depository. § 21-17,139(8).
Section 21-17,141 provides:
There shall be no liability for damages on the part of, and no cause of action in tort of any nature shall arise against, any member depository institution, the corporation or its agents or employees,
the board of directors, or the department or any of its representatives or employees for any action taken by any of them in the performance of their powers and duties under sections 21-17,127 to 21-17,145, unless such action shall be willful, [231 Neb. 540] wanton, or fraudulent.
Before August 7, 1979, a Department examination showed Commonwealth's unsound financial condition and excessive insider loans in violation of § 8-409.02. However, on August 7, the Department approved Commonwealth and SSS as member depositories of NDIGC.
On February 8, 1980, the Department's second examination of Commonwealth showed excessive insider loans. Nevertheless, on April 28, 1980, the Department approved NDIGC's increase in the insurance, from $10,000 to $30,000,...
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