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Estermann v. Bose

Supreme Court of Nebraska

April 7, 2017

J. Daniel Estermannnn, appellant,
v.
Bill Bose et al., board members of Nebraska Cooperative Republican Platte Enhancncement Project, a political subdivision of the State of Nebraska, and Nebraska Cooperative Republican Platte Enhancncement Project, a political subdivision of the State of Nebraska, appellees.

         1. Summary Judgment: Appeal and Error. An appellate court will affirm a lower court's grant of summary judgment if the pleadings and admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate inferences that may be drawn from those facts and that the moving party is entitled to judgment as a matter of law.

         2. ___: ___. In reviewing a summary judgment, an appellate court views the evidence in the light most favorable to the party against whom the judgment was granted and gives that party the benefit of all reasonable inferences deducible from the evidence.

         3. Statutes: Appeal and Error. Statutory interpretation presents a question of law, for which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below.

         4. Pleadings: Appeal and Error. An appellate court reviews a district court's denial of a motion for leave to amend a complaint for an abuse of discretion. However, an appellate court reviews de novo an underlying legal conclusion that the proposed amendments would be futile.

         5. Summary Judgment. On a motion for summary judgment, the question is not how the factual issue is to be decided but whether any real issue of material fact exists.

         6. Summary Judgment: Proof. A party moving for summary judgment makes a prima facie case for summary judgment by producing enough [296 Neb. 229] evidence to demonstrate that the movant is entitled to judgment if the evidence were uncontroverted at trial.

         7. ___: ___. Once the moving party makes a prima facie case, the burden shifts to the party opposing the motion to produce admissible contradictory evidence showing the existence of a material issue of fact that prevents judgment as a matter of law.

         8. Constitutional Law: Eminent Domain: Taxation: Public Purpose. A citizen's property may not be taken against his or her will, except through the sovereign powers of taxation and eminent domain, both of which must be for a public purpose.

         9. Eminent Domain: Public Purpose: Words and Phrases. Eminent domain is the State's inherent power to take private property for a public use.

         10. Constitutional Law: Eminent Domain: Legislature: Statutes. The State's eminent domain power resides in the Legislature and exists independently of the Nebraska Constitution. But the constitution has limited the power of eminent domain, and the Legislature can limit its use further through statutory enactments.

         11. Constitutional Law: Eminent Domain: Public Purpose. Under Neb. Const, art. I, § 21, the State can take private property only for a public use and only if it pays just compensation.

         12. Eminent Domain: Legislature. Only the Legislature can authorize a private or public entity to exercise the State's power of eminent domain.

         13. Pleadings. A district court's denial of leave to amend pleadings is appropriate only in those limited circumstances in which undue delay, bad faith on the part of the moving party, futility of the amendment, or unfair prejudice to the nonmoving party can be demonstrated.

         14. Pleadings: Summary Judgment: Proof. After discovery is closed and a motion for summary judgment has been filed, the appropriate standard for assessing whether a motion to amend should be determined futile is that the proposed amendment must be not only theoretically viable but also solidly grounded in the record and supported by substantial evidence sufficient to give rise to a triable issue of fact.

         15. Legislature: Waters. Nebraska's common law does not allow water to be transferred off overlying land. But the Legislature may provide exceptions to this common-law rule.

         Appeal from the District Court for Lincoln County: Richard A. Birch, Judge. Affirmed.

          Amy M. Svoboda, of Svoboda Law Office, and George G. Vinton for appellant.

          [296 Neb. 230] Donald G. Blankenau and Vanessa A. Silke, of Blankenau, Wilmoth & Jarecke, L.L.P., for appellees.

          Douglas J. Peterson, Attorney General, Justin D. Lavene, and Kathleen A. Miller, for amicus curiae Nebraska Attorney General.

          Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, Kelch, and Funke, JJ.

          Miller-Lerman, J.

         NATURE OF CASE

         In this case, J. Daniel Estermann, the appellant, filed a complaint for injunction in the district court for Lincoln County against Bill Bose, Brad Randel, Jerry Weaver, and Terry Martin, who are board members of the Nebraska Cooperative Republican Platte Enhancement (N-CORPE) project, a political subdivision of the State of Nebraska, and N-CORPE (collectively the appellees), along with other parties who were later dismissed. Estermann filed this complaint in response to N-CORPE's separate condemnation proceedings against Estermann pending in the county court for Lincoln County, in which N-CORPE sought an easement across Estermann's real estate. Early on in this case, Estermann additionally filed an application for a temporary restraining order and a motion for temporary injunction, both of which the district court denied. The appellees subsequently filed a motion for summary judgment. After a hearing, the district court granted the appellees' motion for summary judgment and dismissed Estermann's complaint. Estermann appeals. We affirm; however, to some extent, our reasoning differs from that of the district court.

         STATEMENT OF FACTS

         N-CORPE is a political subdivision of the State of Nebraska that was created under the Interlocal Cooperation Act (ICA), Neb. Rev. Stat. § 13-801 et seq. (Reissue 2012), by four natural resources districts: the Upper Republican, the Middle Republican, the Lower Republican, and the Twin Platte.

          [296 Neb. 231] Each natural resources district (hereinafter NRD) is a political subdivision of Nebraska. The four NRD's entered into an amended agreement in December 2013, which created N-CORPE. The amended agreement states that "N-CORPE shall constitute a separate body corporate and politic of the State of Nebraska exercising public powers and acting on behalf of the Parties hereto." According to the amended agreement, the purpose of N-CORPE is to regulate and manage water to assist the State with compliance with the Republican River Compact (Compact). Nebraska, Kansas, Colorado, and the United States of America are parties to the Compact, and the Republican River Basin has been the subject of the Compact since 1943.

         In Kansas v. Nebraska, ___ U.S. ___, 135 S.Ct. 1042, 1049, 191 L.Ed.2d 1 (2015), the U.S. Supreme Court described the Compact by stating:

The Compact apportions among the three States "the virgin water supply originating in" ... the Republican River Basin. . . . "Virgin water supply, " as used in the Compact, means "the water supply within the Basin, " in both the River and its tributaries, "undepleted by the activities of man." Compact Art. II. The Compact gives each State a set share of that supply-roughly, 49% to Nebraska, 40% to Kansas, and 11% to Colorado-for any "beneficial consumptive use." Id., Art. IV; see Art. II (defining that term to mean "that use by which the water supply of the Basin is consumed through the activities of man"). In addition, the Compact charges the chief water official of each State with responsibility to jointly administer the agreement. See id., Art. IX. Pursuant to that provision, the States created the Republican River Compact Administration (RRCA). The RRCAs chief task is to calculate the Basin's annual virgin water supply by measuring stream flow throughout the area, and to determine (retrospectively) whether each State's use of that water has stayed within its allocation.

          [296 Neb. 232] In 2002, the Compact was modified via a "Final Settlement Stipulation" (FSS), which was approved by the U.S. Supreme Court in Kansas v. Nebraska, supra.

         In furtherance of its purpose to assist the State with compliance with the compact, the amended agreement creating N-CORPE states that N-CORPE's business is to be conducted by a board and that each of the NRD's is to have a member on the board. The amended agreement provides that "N-CORPE shall have all the powers, privileges and authority exercised or capable of being exercised by each of the individual and separate Parties [NRD's] to achieve the purposes of the N-CORPE as set forth in this Agreement and as may be otherwise provided for in the [ICA]."

         In the condemnation case, Lincoln County Court case No. CI 14-496, N-CORPE filed an amended petition to condemn in March 2014. N-CORPE stated in its amended petition that it was developing a "stream flow augmentation project" in Lincoln County in order to manage ground water and surface water in the Republican River Basin and to comply with the Compact. N-CORPE alleged in its amended petition that its project and petition were in response to the claim of the State of Kansas that it was not receiving its share of the Republican River water that was due to it under the Compact. N-CORPE stated in its amended petition that a portion of the water augmentation project was located over Estermann's real estate in Lincoln County and that therefore, N-CORPE was seeking a permanent "Flowage and Right-of-Way Easement" over Estermann's real estate in order to augment waterflow into Medicine Creek, which is a tributary of the Republican River.

         After N-CORPE filed its amended petition to condemn, on April 1, 2014, Estermann filed the complaint in this case seeking an injunction against the appellees and Jeffrey Bain, Kent Florom, and Michael Nozicka. The latter three defendants were appraisers appointed by the county court for Lincoln County; they were subsequently dismissed as parties and are not parties to this appeal.

          [296 Neb. 233] Estermann alleged in his complaint that as a result of N-CORPE's water augmentation project his real estate has flooded, causing increasing and irreparable damage to his land and crops, and that the floodwaters are creating new creek channels and are threatening to lower the water table under his fields. Estermann alleged that N-CORPE does not have the power of eminent domain, because "the [L]egislature has not delegated such powers to interlocal agencies under the [ICA]" and because the NRD's do not have the authority to delegate to N-CORPE any eminent domain powers they may hold. Estermann further alleged in his complaint that (1) the condemnation is not for a public use; (2) the amount of real estate being condemned is excessive in duration and area; (3) means other than an eminent domain action are available to the parties; (4) N-CORPE failed to obtain approvals and permits from certain agencies, including the Lincoln County Board of Commissioners, the Middle Republican NRD, the Twin Platte NRD, and the Nebraska Department of Natural Resources (DNR); (5) N-CORPE failed to obtain approval of the water augmentation project from Kansas; and (6) N-CORPE is prohibited under Nebraska's common law from transferring ground water off overlying land, and N-CORPE does not fall under any of the statutory exceptions to the common law. Therefore, Estermann requested that N-CORPE be enjoined from proceeding with the condemnation proceedings in case No. CI 14-496 and that N-CORPE be enjoined from discharging water into Medicine Creek.

         On the day Estermann filed his complaint for injunction, Estermann also filed an application in which he sought a temporary restraining order enjoining N-CORPE from proceeding with the eminent domain action and enjoining N-CORPE from discharging water into Medicine Creek. Two days later, on April 3, 2014, the district court filed an order in which it denied Estermann's application for a temporary restraining order. In denying the application, the district court stated that "the failure to grant a temporary restraining order will not [296 Neb. 234] impair [Estermann's] ability to proceed on his Complaint for an Injunction."

         On April 16, 2014, Estermann filed a motion for temporary injunction that would enjoin N-CORPE from discharging water into Medicine Creek. Estermann alleged that the discharge of water into Medicine Creek during the pendency of the action would produce great irreparable injury to him. Estermann further alleged that N-CORPE does not have the power of eminent domain and therefore is not entitled to condemn an easement over his real estate. Estermann also alleged that he did not have an adequate remedy at law.

         On April 30, 2014, the office of the Attorney General filed a motion for leave to file an amicus brief, in which it stated that it sought to offer guidance regarding an opinion that was issued by the Attorney General and its impact on the court's interpretation of § 13-804 of the ICA, which generally deals with public agencies exercising joint power. See Att'y Gen. Op. No. 03026 (Dec. 5, 2003). The district court granted the motion.

         On May 15, 2014, the district court filed an order in which it denied Estermann's motion for temporary injunction. In the May 15 order, the district court determined that Estermann did not establish that he had a clear right to the relief he sought or that he would suffer a great or irreparable injury during the pendency of the litigation. The district court stated that Estermann's main argument in support of his request for a temporary injunction was that the NRD's that created N-CORPE cannot authorize N-CORPE to exercise the power of eminent domain. The district court rejected this argument.

         In its order, the court noted that N-CORPE was created by the four NRD's pursuant to the ICA. The court recognized that pursuant to Neb. Rev. Stat. § 2-3234 (Reissue 2012), each of the NRD's has the power of eminent domain. Relying on § 13-804 of the ICA, the court further recognized that the NRD's can authorize N-CORPE to exercise any of their powers or authority, including the power of eminent domain. Section 13-804(1) provides:

[296 Neb. 235] Any power or powers, privileges, or authority exercised or capable of exercise by a public agency of this state may be exercised and enjoyed jointly with any other public agency of this state and jointly with any public agency of any other state or of the United States to the extent that laws of such other state or of the United States permit such joint exercise or enjoyment. Any agency of state government when acting jointly with any public agency may exercise and enjoy all of the powers, privileges, and authority conferred by the [ICA] upon a public agency.

         The district court noted in its May 15, 2014, order that although the evidence showed that Estermann would sustain damages from the water augmentation project, the evidence did not support a conclusion that he would "suffer a great or irreparable injury" before his complaint could be heard. Accordingly, the district court denied Estermann's motion for temporary injunction.

         On June 5, 2015, the appellees filed a motion for summary judgment. On July 17, Estermann filed a motion for leave to file an amended complaint, in which he proposed to add a claim that the acts of N-CORPE were improper because N-CORPE had not obtained approval from the Republican River Compact Administration (RRCA) for the water augmentation project.

         On October 2, 2015, the district court filed an order regarding the appellees' motion for summary judgment and Estermann's motion for leave to file an amended complaint. The district court first denied Estermann's motion for leave to file an amended complaint, stating that "any issues raised in the Amended Complaint can be dealt with under the original complaint. As such, the amendment is futile and the Motion for Leave to Amend Complaint is therefore overruled."

         The district court observed that Estermann disagreed with the policies that led to N-CORPE's petitioning to condemn and acquire an easement across his property. The district court [296 Neb. 236] stated that "[t]hose public policy decisions are constitutionally entrusted to other branches of government."

         The district court next rejected Estermann's argument that the condemnation does not meet a public purpose. The district court stated that "complying with Nebraska's obligation . . . under an interstate compact is certainly a public purpose.'' The court stated that the burden placed on ...


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