U.S. Cold Storage, Inc. v. City of Neb.

• Decision Date: 29 March 2013
• Docket Number: No. S–12–267.,S–12–267.
• Citation: 285 Neb. 579,831 N.W.2d 23
• Parties: UNITED STATES COLD STORAGE, INC., a New Jersey corporation, individually and on behalf of all others similarly situated, appellee and cross-appellant, v. CITY OF LA VISTA, a Nebraska municipal corporation, et al., appellees and cross-appellees, and Sanitary and Improvement District No. 59 of Sarpy County, Nebraska, a Nebraska municipal corporation, appellant.
• Court: Nebraska Supreme Court

285 Neb. 579

831 N.W.2d 23

UNITED STATES COLD STORAGE, INC., a New Jersey corporation, individually and on behalf of all others similarly situated, appellee and cross-appellant,

v. CITY OF LA VISTA, a Nebraska municipal corporation, et al., appellees and cross-appellees,andSanitary and Improvement District No. 59 of Sarpy County, Nebraska, a Nebraska municipal corporation, appellant.

No. S–12–267.

Supreme Court of Nebraska.

March 29, 2013.

Syllabus by the Court

[285 Neb. 579]1. Annexation: Ordinances: Equity: Appeal and Error. An action to determine the validity of an annexation ordinance and enjoin its enforcement sounds in equity. On appeal from an equity action, an appellate court decides factual questions de novo on the record and, as to questions of both fact and law, is obligated to reach a conclusion independent of the trial court's determination.

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

[285 Neb. 580]3. Constitutional Law: Appeal and Error. A constitutional issue not presented to or passed upon by the trial court is not appropriate for consideration on appeal.

4. Municipal Corporations: Annexation. A municipality may not annex property for revenue purposes only.

5. Equity: Appeal and Error. In an equity action, when credible evidence is in conflict on material issues of fact, an appellate court considers and may give weight to the fact the trial court observed the witnesses and accepted one version of the facts over another.

6. Legislature. The Legislature is free to create and abolish rights so long as no vested right is disturbed.

7. Constitutional Law: Words and Phrases. The type of right that vests can be generally described as an interest which it is proper for the state to recognize and protect and of which the individual may not be deprived arbitrarily without injustice. To be considered a vested right, the right must be fixed, settled, absolute, and not contingent upon anything.

8. Constitutional Law: Property. With respect to property, a right is considered to be vested if it involves an immediate fixed right of present or future enjoyment and an immediate right of present enjoyment, or a present fixed right of future enjoyment.

9. Constitutional Law: Property: Legislature. A vested right must be something more than a mere expectation based upon an anticipated continuance of the existing law; it must have become a title, legal or equitable, to the present or future enjoyment of property. In essence, whether the Legislature acted beyond its power in affecting a right can only be determined after examining the nature of the alleged right and the character of the change in the law.

10. Constitutional Law: Statutes: Intent: Presumptions. A vested right can be created by statute. But it is presumed that a statutory scheme is not intended to create vested rights, and a party claiming otherwise must overcome that presumption.

11. Constitutional Law: Taxation. As a general rule, exemptions from taxation do not confer vested rights.

12. Contracts: Statutes: Legislature: Intent: Presumptions. Although a statute can be the source of a contractual right, a contract will be found to exist only if the statutory language evinces a clear and unmistakable indication that the Legislature intends to bind itself contractually. The general rule is that rights conferred by statute are presumed not to be contractual.

13. Appeal and Error. An appellate court may, at its option, notice plain error.

14. Appeal and Error: Words and Phrases. Plain error exists where there is an error, plainly evident from the record but not complained of at trial, which prejudicially affects a substantial right of a litigant and is of such a nature that to leave it uncorrected would cause a miscarriage of justice or result in damage to the integrity, reputation, and fairness of the judicial process.

Robert J. Huck and Scott D. Jochim, of Croker, Huck, Kasher, DeWitt, Anderson & Gonderinger, L.L.C., for appellant.

Bryan S. Hatch, of Stinson, Morrison & Hecker, L.L.P., for appellee United States Cold Storage, Inc.

Gerald L. Friedrichsen and William M. Bradshaw, of Fitzgerald, Schorr, Barmettler & Brennan, P.C., L.L.O., for appellees City of La Vista et al.

HEAVICAN, C.J., WRIGHT, CONNOLLY, STEPHAN, McCORMACK, and CASSEL, JJ.

STEPHAN, J.

In this appeal, United States Cold Storage, Inc. (Cold Storage), and Sanitary and Improvement District No. 59 of Sarpy County (SID 59) contend that the district court for Sarpy County erred in rejecting their challenges to separate annexation ordinances enacted by the City of La Vista. We affirm the judgment of the district court.

I. BACKGROUND

Cold Storage is a New Jersey corporation that owns and operates a public refrigerator warehouse facility located in Sarpy County, Nebraska. The City of La Vista is a Nebraska municipal corporation of the first class located in Sarpy County. Doug Kindig is the mayor of La Vista, and Brenda Carlisle, Ron Sheehan, Alan Ronan, Mark Ellerbeck, Mike Crawford, Terrilyn Quick, Kelly Sell, and Anthony Gowan are members of the La Vista City Council. We shall refer to the city and its officers collectively as “La Vista.”

In 1969, the owner of a contiguous 210–acre tract of land in Sarpy County petitioned the Sarpy County Board of Commissioners to designate the tract as an industrial area and the board complied.¹ Under § 13–1111, an industrial area is land “used or reserved for the location of industry.” At the time of the designation, La Vista's zoning jurisdiction did not reach any part of the industrial area tract. By 1970, the industrial area had an assessed value of more than $100,000. Cold Storage acquired four lots in the industrial area in 1971 and has operated its business there since that time.

SID 59 was created in 1971 to provide utilities and services to the industrial area. The area of SID 59 is greater than, but includes, the entire industrial area.

On October 6, 2009, La Vista resolved to annex SID 59. On October 8, it sent written notices to the property owners within SID 59 of an October 22 city planning commission public hearing on the proposed annexation. On November 3, La Vista sent written notice to the property owners within SID 59 of a November 17 city council hearing also regarding the annexation of SID 59. On December 1, after conducting the public hearings, La Vista approved an ordinance (ordinance 1107) purporting to annex SID 59 in its entirety.

On December 16, 2009, Cold Storage filed a class action complaint challenging the validity of ordinance 1107 on behalf of itself and all landowners in SID 59. Named defendants were La Vista and SID 59. The complaint alleged that ordinance 1107 was invalid because (1) La Vista failed to comply with statutory notice requirementswhen adopting it, (2) the annexation was for revenue purposes only, and (3) state law prohibited the annexation of the industrial area within SID 59.

On January 18, 2011, while Cold Storage's challenge to the validity of ordinance 1107 was pending in district court, La Vista directed its planning commission to consider the annexation of only a portion of SID 59; specifically, that portion that did not include the industrial area. On April 19, after giving proper statutory notice of this proposed annexation, La Vista adopted an ordinance (ordinance 1142) purporting to annex the portion of SID 59 that did not include the industrial area.

On April 27, 2011, SID 59 filed a cross-claim in the original action filed by Cold Storage. The cross-claim named La Vista as defendant and challenged the validity of ordinance 1142. Specifically, the cross-claim asserted that La Vista was barred by Neb.Rev.Stat. § 31–765 (Reissue 2008) from attempting a partial annexation of SID 59 via ordinance 1142 while Cold Storage's challenge to the validity of La Vista's total annexation of SID 59 via ordinance 1107 was pending in the courts.

A bench trial on all claims was held in January 2012. On March 6, the district court entered orders finding in favor of La Vista on all claims. Both Cold Storage and SID 59 filed timely notices of appeal, and we granted SID 59's petition to bypass the Court of Appeals. Because SID 59 filed the initial notice of appeal, Cold Storage is designated as an appellee asserting a cross-appeal pursuant to Neb. Ct. R. App. P. § 2–101(C) (rev.2010).

II. ASSIGNMENTS OF ERROR

SID 59 assigns, restated and consolidated, that ordinance 1142 is invalid because § 31–765 prohibits a city from passing a partial annexation ordinance involving the same area already included within a prior total annexation ordinance when the validity of the prior ordinance has not been finally determined.

Cold Storage assigns that the district court, with respect to ordinance 1107, erred in (1) finding La Vista properly complied with the statutory notice provisions, (2) not finding Neb.Rev.Stat. § 19–5001(5) (Reissue 2012) unconstitutional, (3) finding La Vista could annex the industrial area without the consent of a majority in value of its property owners, (4) failing to find a 1991 amendment to § 13–1115 unconstitutional as special legislation, and (5) failing to find that La Vista annexed SID 59 for revenue purposes only.

III. STANDARD OF REVIEW

An action to determine the validity of an annexation ordinance and enjoin its enforcement sounds in equity.² On appeal from an equity action, an appellate court decides factual questions de novo on the record and, as to questions of both fact and law, is obligated to reach a conclusion independent of the trial court's determination.³

Statutory interpretation is a question of law, which an appellate court resolves independently of the trial court.⁴

IV. ANALYSIS

1. Ordinance 1107

In its cross-appeal, Cold Storage asserts five reasons why the district court erred in upholding the validity of ordinance 1107, by which La Vista sought to annex the entirety of ...