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Salem Grain Co., Inc. v. City of Falls City

Supreme Court of Nebraska

March 22, 2019

Salem Grain Company, Inc., a Nebraska corporation, et al., appellants,
v.
City of Falls City et al., appellees.

         1. Declaratory Judgments: Appeal and Error. In an appeal from a declaratory judgment, an appellate court, regarding questions of law, has an obligation to reach its conclusion independently of the conclusion reached by the trial court.

         2. 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.

         3. Actions: Equity: Public Meetings: Appeal and Error. An appellate court reviews actions for relief under the Open Meetings Act in equity because the relief sought is in the nature of a declaration that action taken in violation of the act is void or voidable.

         4. Equity: Appeal and Error. On appeal from an equity action, an appellate court tries 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 conclusion reached by the trial court. But when credible evidence is in conflict on material issues of fact, an appellate court may give weight to the fact the trial court observed the witnesses and accepted one version of the facts over another.

         5. Statutes. Statutes relating to the same subject, though enacted at different times, are in pari materia and should be construed together.

         6. Statutes: Legislature: Intent. Statutes relating to the same subject should be construed together to determine the intent of the Legislature, so that different provisions are consistent, harmonious, and sensible.

         7. ___: ___: ___. When two statutes are capable of coexistence, it is the duty of the courts, absent a clearly expressed legislative intention to [302 Neb. 549] the contrary, to regard each as effective, and to harmonize overlapping statutes so long as each reaches some distinct cases.

         8. Statutes. Where it is possible to harmonize apparently conflicting statutes, a court should do so.

         9. Actions: Bonds: Contracts: Statutes: Presumptions: Time. Construed together, Neb. Rev. Stat. §§ 18-2129 and 18-2142.01 (Reissue 2012) effectively provide that any suit, action, or proceeding brought outside the 30-day period established in § 18-2142.01 will be subject to the conclusive presumptions required by §§ 18-2129 and 18-2142.01, as long as the action is one challenging the validity or enforceability of a redevelopment bond or contract and the bond or contract recites in substance the language required by the statutes.

         10. Statutes: Legislature: Intent. In the absence of clear legislative intent, a construction of a statute will not be adopted which has the effect of nullifying or repealing another statute.

         11. Statutes. It is not within the province of the courts to read a meaning into a statute which is not there.

         12. Pleadings. An affirmative defense raises a new matter which, assuming the allegations in the petition or complaint to be true, constitutes a defense to the merits of a claim asserted in the petition. An affirmative defense generally avoids, rather than negates, the plaintiff's prima facie case.

         13. Statutes: Presumptions: Limitations of Actions. A statute providing a conclusive presumption is very different from a statute of limitations, and the conclusive presumptions under Neb. Rev. Stat. §§ 18-2129 and 18-2142.01 (Reissue 2012) are not statutes of limitation.

         14. Rules of Evidence. In proceedings where the Nebraska Evidence Rules apply, the admissibility of evidence is controlled by these rules; judicial discretion is involved only when the rules make discretion a factor in determining admissibility.

         15. Judges: Evidence: Appeal and Error. The exercise of judicial discretion is implicit in determining the relevance of evidence, and an appellate court will not reverse a trial court's decision regarding relevance absent an abuse of discretion.

         16. Judges: Words and Phrases. A judicial abuse of discretion exists when the reasons or rulings of a trial judge are clearly untenable, unfairly depriving a litigant of a substantial right and denying just results in matters submitted for disposition.

         17. Evidence: Words and Phrases. Relevant evidence means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.

          [302 Neb. 550] Appeal from the District Court for Richardson County: Daniel E. Bryan, Jr., Judge.

          Stephen D. Mossman, Ryan K. Mcintosh, and J.L. Spray, of Mattson Ricketts Law Firm, for appellants.

          John M. Guthery, Jeanette Stull, and Derek A. Aldridge, of Perry, Guthery, Haase & Gessford, P.C., L.L.O., for appellee Community Redevelopment Authority of the City of Falls City.

          Terry C. Dougherty, Kari A.F. Scheer, and Audrey R. Svane, of Woods & Aitken, L.L.P, for appellee Consolidated Grain and Barge Co.

          Michael R. Dunn, of Halbert, Dunn & Halbert, L.L.P, for appellee City of Falls City.

          Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, and Papik, JJ., and Vaughan, District Judge.

          STACY, J.

         This is the latest in a series of appeals involving litigation over a redevelopment project in the City of Falls City, Nebraska.[1] In this case, the plaintiffs filed suit seeking a declaratory judgment that the redevelopment project was not planned or adopted in accordance with the Community Development Law[2] and requesting a permanent injunction to prevent the project from proceeding. Most of the plaintiffs' claims were dismissed on summary judgment, and the remaining claims were dismissed after a bench trial. The plaintiffs appeal. Although our reasoning differs from that of the district court, we affirm.

         [302 Neb. 551] I. BACKGROUND

         1. Redevelopment Project

         Falls City is a community located in Richardson County. Nebraska. Pursuant to the Community Development Law. Falls City created the five-member Falls City Community Redevelopment Authority (the Authority) to redevelop blighted or substandard areas within Falls City.[3]

         In 2012, Consolidated Grain and Barge Co. (Consolidated Grain) proposed a redevelopment project that involved constructing a new commercial grain receiving, storage, and shipping facility in Falls City using tax increment financing (TIF). The owner of another commercial grain facility in the area, Salem Grain Company, Inc. (Salem Grain), opposed the redevelopment project.

         During the summer and fall of 2012, land for the redevelopment project was annexed by Falls City, a zoning change was recommended and approved for the annexed land, a study was conducted upon which the land was declared blighted and substandard, a cost-benefit analysis was conducted, and a redevelopment plan was prepared. Ultimately, in September and October 2012, the redevelopment project was approved at separate public meetings of the Authority, the city council of Falls City, and the planning commission of Falls City.

         On November 10, 2012, the Authority and Consolidated Grain formally entered into a redevelopment contract. Summarized, the redevelopment contract required Consolidated Grain to acquire the land for the project and construct the grain facility, and in exchange, the Authority agreed to enter into and utilize TIF indebtedness to fund a portion of the project. Thereafter, a TIF bond in the amount of $3, 710, 000 was issued by the Authority and sold to Consolidated Grain. The bond funds were disbursed to Consolidated Grain pursuant to the redevelopment contract. Roughly 1 year later, Consolidated [302 Neb. 552] Grain completed construction of the commercial grain facility and began business operations.

         2. Lawsuit

         (a) Original Complaint

         On October 24, 2012, approximately 2 weeks before the redevelopment contract was formally entered into, Salem Grain and two residents of Falls City (collectively Salem Grain) filed a lawsuit against the City of Falls City, the Authority, and Consolidated Grain in the district court for Richardson County, Nebraska. The complaint sought declaratory and injunctive relief and was styled as 12 separate causes of action.

         The first 11 causes of action sought declarations that the redevelopment project had not been planned and adopted in accordance with the Community Development Law, alleging specifically that (1) the blighted and substandard study was insufficient, (2) the redevelopment plan did not conform to a '"general plan'" for the development of Falls City, (3) the Authority acted without a quorum at several key meetings, (4) the cost-benefit analysis was insufficient, (5) it was improper to include TIF in the redevelopment plan, (6) the redevelopment plan was improperly adopted by the city council, (7) the redevelopment plan was improperly adopted by the Authority, (8) the city council impermissibly renamed a portion of the platted land included in the redevelopment project, (9) Falls City provided an insufficient public comment period regarding its plan to finance the redevelopment project using community development block grant program funds, (10) the Authority's adoption of the resolution approving TIF was null and void, and (11) the land for the redevelopment project was improperly annexed. Salem Grain's 12th cause of action sought to equitably estop the city council from asserting that the redevelopment project was not feasible without TIF funding.

         The prayer for relief sought (1) declarations that the redevelopment project was not properly planned or adopted for all of the reasons alleged in the various causes of action; (2) a [302 Neb. 553] declaration that because the project was not properly adopted, the "Redevelopment Contract, and any bonds issued thereto, are null and void"; and (3) a permanent injunction blocking the redevelopment project from proceeding.

         Falls City, the Authority, and Consolidated Grain (collectively the defendants) moved to dismiss the original complaint for reasons that are not relevant to the issues on appeal. The district court granted the motion to dismiss, and Salem Grain was given leave to file an amended complaint.

         (b) Amended Complaint

         The amended complaint was filed January 22, 2013, and is the operative complaint in this action. Like the original complaint, the amended complaint was styled as 12 causes of action. The first 11 sought declarations that the redevelopment project had not been planned and adopted in accordance with the Community Development Law for generally the same reasons alleged in the original complaint.

         The 12th cause of action alleged the Authority held two meetings which violated Nebraska's Open Meetings Act[4](NOMA), and it sought to have the actions taken during those meetings declared void.[5] The first meeting allegedly occurred on August 15, 2012, when three members of the Authority attended a community dinner that included the mayor, members of the city council, community business leaders, and representatives from Consolidated Grain. The second meeting allegedly occurred on November 9, in the context of email communications between members of the Authority.

         Like the original complaint, the amended complaint sought (1) declarations that the redevelopment project was not properly adopted for all of the reasons alleged in the various causes of action; (2) a declaration that because the project was not properly adopted the "Redevelopment Contract, and any bonds issued thereto, are null and void"; and (3) a permanent [302 Neb. 554] injunction blocking the redevelopment project from proceeding. In addition, the amended complaint sought a declaration that any formal action taken by the Authority in violation of NOMA was void.[6]

         After the amended complaint was filed, the court dismissed the 11th cause of action for reasons that are not relevant to the issues on appeal. Thereafter, answers were filed and the defendants proceeded to defend the amended complaint on the merits. Due to the procedural complexity of this case, we discuss only that which relates to the issues raised on appeal.

         (c) Completion of Redevelopment Project While the lawsuit was pending, the redevelopment project was completed. It is undisputed that the project was completed in September 2013 and that Consolidated Grain has been operating the commercial grain receiving, storage, and shipping facility since that time.

         (d) Motion to File Second Amended Complaint

         On December 17, 2015, nearly 2 years after completion of the redevelopment project, Salem Grain tried unsuccessfully to further amend its complaint. The proposed second amended complaint sought to add claims of "improper economic development" and "unjust enrichment" resulting from the TIF funds provided to Consolidated Grain. The proposed second amended complaint also sought to alter the nature of the relief being requested; rather than seeking injunctive relief to prevent the redevelopment project from proceeding, the proposed second amended complaint sought "[r]ecission, recoupment and restitution" of the TIF funds paid to Consolidated Grain.

         After a hearing, the district court denied leave to amend, finding that Salem Grain's request was unnecessarily delayed and that the proposed amendment would be unduly prejudicial to the defendants.

         [302 Neb. 555] (e) Summary Judgment

         In April 2016, the defendants moved for summary judgment on the amended complaint, claiming the requested declaratory and injunctive relief had been rendered moot by completion of the redevelopment project. The district court agreed and granted partial summary judgment in favor of the defendants on Salem Grain's first 10 causes of action. But the court denied summary judgment on the 12th cause of action alleging NOMA violations, reasoning that the completion of the redevelopment project had not rendered the NOMA claims moot. A bench trial was set to resolve the remaining NOMA claims.

         (f) Motion to File Third Amended Complaint

         As the date for the bench trial neared, Salem Grain filed a motion to continue trial and again requested leave to further amend its complaint. Salem Grain's proposed third amended complaint was substantially similar to the proposed second amended complaint which had not been permitted, but it alleged several additional NOMA violations. The district court overruled the motion to amend and refused to continue the bench trial.

         (g) Trial

         The bench trial on the alleged NOMA violations was held on February 9, 2017. Salem Grain tried to offer evidence related to several alleged NOMA violations, but the defendants objected on relevancy grounds and the district court limited the evidence to the violations alleged in the operative complaint: the August 15, 2012, dinner and the November 9, 2012, email communications.

         Salem Grain argued that both the August 15, 2012, dinner and the November 9 email communications were "meetings" of the Authority under § 84-1409, and it sought to have any action taken on the redevelopment project during these meetings declared void under § 84-1414. After considering the evidence, [302 Neb. 556] the district court concluded that neither event was a meeting of the Authority under NOMA.

         Regarding the dinner, the district court found it was hosted by the Falls City Economic Development and Growth Enterprise, and was attended by many Falls City community leaders, including three members of the Authority. At the dinner, which some witnesses described as a "meet-and-greet," Consolidated Grain gave a presentation regarding its interest in constructing the grain facility. Salem Grain argued that because of the presentation, members of the Authority were essentially "brief[ed]" by Consolidated Grain during the dinner and later used that information to approve the redevelopment project. The district court found the dinner was not a meeting that required compliance with NOMA, reasoning that there was insufficient evidence regarding the substance of the information actually presented at the dinner and that there was no direct evidence any Authority member used the information in later approving the redevelopment project.

         Regarding the November 9, 2012, email communications, the court found an email had been sent by the Authority's chairman to all Authority members. The email advised that Salem Grain had recently filed a lawsuit and told the members that the chairman intended to proceed with executing the redevelopment contract with Consolidated Grain, but that he would be adding amendments recommended by counsel to (1) disclose the lawsuit and (2) add language to the existing indemnification provision. Prior to November 9, the Authority had approved the redevelopment contract with Consolidated Grain during a public meeting and had adopted a resolution authorizing the chairman to "take any and all actions, and to execute any and all documents" deemed necessary to conclude the transaction. The chairman's November 9 email stated:

Should any [Authority] member find need to discuss and/or act upon these matters, notice needs to be provided to me by 8 pm today (11/9/12) so that I may schedule a special meeting for that purpose. Otherwise, you are [302 Neb. 557] hereby notified that I intend to execute the Redevelopment Contract as previously authorized by the [Authority] with the above cited immaterial changes recommended by legal counsel and proceed with the issuance of bonds and a TIF Grant to Consolidated Grain ....

         All members of the Authority responded via email to the chairman, indicating that a special meeting was not necessary and that the chairman could proceed to execute the redevelopment contract pursuant to the earlier resolution. The district court found this email exchange was not a "meeting" as defined in § 84-1409(2), reasoning that no new action was taken or authorized by the Authority during this exchange beyond that which already had been taken or authorized during the earlier public meeting.

         After concluding Salem Grain had not met its burden of proving either alleged violation of NOMA, the court entered an order dismissing the action. No attorney fees were allowed. Salem Grain timely appealed, and we moved the case to our docket.

         II. ASSIGNMENTS OF ERROR

         Salem Grain assigns, restated, that the district court erred in (1) making certain discovery rulings, (2) denying Salem Grain leave to file a second amended complaint, (3) granting the defendants' motion for partial summary judgment, (4) denying Salem Grain leave to file a third amended complaint, (5) denying Salem Grain's motion to continue trial, (6) excluding evidence of additional NOMA violations at trial, and (7) dismissing the NOMA claims after trial.

         III. STANDARD OF REVIEW

         In an appeal from a declaratory judgment, an appellate court, regarding questions of law, has an obligation to reach its conclusion independently of the conclusion reached by the trial court.[7] Statutory interpretation presents a question of [302 Neb. 558] law, for which an appellate court has an obligation to ...


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