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SourceGas Distribution LLC v. City of Hastings

Supreme Court of Nebraska

March 7, 2014

SOURCEGAS DISTRIBUTION LLC, A DELAWARE LIMITED LIABILITY COMPANY, APPELLANT,
v.
CITY OF HASTINGS, NEBRASKA, A MUNICIPAL CORPORATION, FOR AND ON BEHALF OF THE BOARD OF PUBLIC WORKS OF THE CITY OF HASTINGS, APPELLEE

Page 257

Appeal from the District Court for Adams County: STEPHEN R. ILLINGWORTH, Judge.

Stephen M. Bruckner and Russell A. Westerhold, of Fraser Stryker, P.C., L.L.O., and Timothy Knapp, of SourceGas Distribution LLC, for appellant.

Michael E. Sullivan, of Sullivan Shoemaker, P.C., L.L.O., for appellee.

HEAVICAN, C.J., WRIGHT, CONNOLLY, STEPHAN, MCCORMACK, MILLER-LERMAN, and CASSEL, JJ.

OPINION

Page 258

[287 Neb. 596] Miller-Lerman, J.

NATURE OF CASE

The City of Hastings, Nebraska, on behalf of the board of public works of the City of Hastings, had filed a petition in the county court for Adams County on January 15, 2013, seeking to initiate condemnation proceedings against property owned by SourceGas Distribution LLC that was located in an area that had been annexed by Hastings. Hastings brought its petition under the general condemnation procedures found at Neb. Rev. Stat. § § 76-701 through 76-726 (Reissue 2009 & Cum. Supp. 2012) (chapter 76). In an effort to enjoin the county court proceedings, on January 22, in a separate matter, SourceGas Distribution filed a complaint for temporary and permanent injunction in the district court for Adams County, primarily alleging that Hastings must utilize Nebraska's Municipal Gas System Condemnation Act, Neb. Rev. Stat. § § 19-4624 through 19-4645 (Reissue 2012) (Gas System Condemnation Act), rather than the procedures in chapter 76. The district court case gives rise to this appeal.

[287 Neb. 597] An evidentiary hearing was conducted on SourceGas Distribution's motion for temporary injunction, and on February 22, 2013, the district court filed an order overruling the motion for temporary injunction and dismissing the complaint. The district court concluded, inter alia, that § 19-4626(2) exempted Hastings from being required to proceed under the Gas System Condemnation Act and that Hastings could utilize the general condemnation procedures set forth in chapter 76. SourceGas Distribution appeals, assigning various errors. The district court stayed the condemnation proceedings pending this appeal. We conclude the district court correctly concluded that pursuant to § 19-4626(2), the Gas System Condemnation Act does not apply to this case, and that instead, chapter 76 applies. Finding no errors, we affirm.

STATEMENT OF FACTS

Hastings is located in Adams County and is a city of the first class as defined by Neb. Rev. Stat. § 16-101 (Reissue 2012). Hastings, by and through its board of public works, which is often referred to as " Hastings Utilities," owns and operates its own municipal utility system.

SourceGas Distribution is a Delaware limited liability company with its principal place of business located in Golden, Colorado. SourceGas Distribution provides retail natural gas distribution service throughout Adams County, except for certain areas served by Hastings.

On March 14, 2011, Hastings' city council adopted ordinance No. 4279 and thereby annexed an area east of Hastings, which primarily consisted of a community college campus. SourceGas Distribution owns easements, rights-of-way, natural gas pipelines, mains, distribution mains and lines, meters, measuring and regulating stations facilities, and appurtenances (gas facilities) in the area that was annexed. It is this collection of gas facilities which Hastings seeks to acquire through condemnation proceedings commenced in county court and to which SourceGas Distribution objects in its lawsuit filed in district court.

The record shows that on March 22, 2011, Hastings contacted SourceGas Distribution and commenced negotiations to [287 Neb. 598] acquire ...


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