Boone River, LLC v. Miles

314 Neb. 889

994 N.W.2d 35

BOONE RIVER, LLC, and 11T NE, LLC, Nebraska limited liability companies, appellees,

v. Nancy J. MILES and Cheryl L. Bettin, appellants,andRobert R. Moninger, appellee.

No. S-22-673.

Supreme Court of Nebraska.

Filed August 11, 2023

Aimee S. Melton, Bellevue, Ronald E. Reagan, and Megan E. Shupe, Bellevue, of Reagan, Melton & Delaney, L.L.P., for appellants.

Marc Odgaard, Kearney, for appellees Boone River, LLC, and 11T NE, LLC.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

Papik, J. Boone River, LLC, purchased a tax certificate for property owned by Nancy J. Miles, Cheryl L. Bettin, and Robert R. Moninger and later obtained a tax deed. Boone River then transferred the property to 11T NE, LLC (11T). In a previous lawsuit, 11T sued Miles, Bettin, and Moninger to quiet title to the property, and Miles, Bettin, and Moninger brought Boone River into the case as a third-party defendant. The district court found that Boone River did not comply with the tax sale statutes in obtaining the tax deed, voided the tax deed held by 11T, and quieted title to the property in Miles, Bettin, and Moninger.

Boone River and 11T subsequently brought this lawsuit against Miles, Bettin, and Moninger for unjust enrichment. Boone River and 11T sought to be reimbursed for taxes paid on the property during the time that they held the tax certificate and tax deed. The case proceeded to a bench trial, and the district court found that Miles, Bettin, and Moninger would be unjustly enriched if they were not required to make reimbursement of the taxes. Miles and Bettin appealed; Moninger did not.

We agree with Miles and Bettin that the present lawsuit against them is barred by claim preclusion. We therefore reverse the judgment against them. We affirm the judgment against Moninger.

I. BACKGROUND

1. FACTUAL BACKGROUND

Miles, Bettin, and Moninger are siblings. In 2005, Miles and Bettin took title to their deceased father's home (the property), subject to a life estate held by Moninger.

Some years later, Moninger failed to pay taxes levied on the property. In 2015, Boone River purchased a tax certificate. The property was not redeemed, and in August 2018, the Douglas County treasurer issued a treasurer's tax deed to Boone River. Then in October 2018, Boone River transferred the property to 11T by warranty deed.

2. FIRST LAWSUIT

After obtaining the tax deed, 11T sued Miles, Bettin, and Moninger. 11T sought to quiet title to the property. Miles, Bettin, and Moninger filed a counterclaim against 11T and a third-party complaint against Boone River seeking to quiet title in themselves; the siblings contested the validity of the treasurer's tax deed that had been issued to Boone River. The siblings also deposited a $20,000 bond with the clerk of the court to cover costs for back taxes, interest, and any other costs relating to the tax certificate.

The first lawsuit ended with the district court granting summary judgment in favor of Miles, Bettin, and Moninger. It ruled that because Boone River failed to comply with certain statutory requirements, the treasurer's tax deed that had been issued to Boone River was void. The court ordered 11T to deliver the property to Miles and Bettin, subject to a life estate vested in Moninger. 11T executed a quitclaim deed with those terms.

There is no dispute that 11T and Boone River never requested in the first lawsuit that they be reimbursed for taxes paid on the property and that 11T and Boone River did not collect any of the funds deposited with the clerk of the court.

3. CURRENT LAWSUIT

After the first lawsuit ended, Boone River and 11T brought the current lawsuit against Miles, Bettin, and Moninger for unjust enrichment. Boone River and 11T sought compensation for taxes paid and maintenance costs incurred on the property before the tax deed to the property was voided in the first lawsuit. Among other affirmative defenses, Miles and Bettin asserted that the lawsuit was barred because 11T and Boone River should have pursued their claims for unjust enrichment in the first lawsuit.

Moninger, representing himself, filed a form answer and general denial. Moninger does not appear to have otherwise defended the action.

The case proceeded to a bench trial. Evidence received at trial established that in 2015, Boone River purchased the tax certificate and paid taxes on the property, the combined total of which was approximately $5,500. Boone River thereafter transferred the tax deed to 11T. When 11T held the tax deed, Homebuyers Incorporated (Homebuyers), its parent company and sole owner, paid approximately $11,000 in property taxes "on behalf of" 11T. Evidence was also offered showing that after 11T filed this lawsuit, Homebuyers assigned to 11T "any and all claims, demands, and causes of action of any kind whatsoever" Homebuyers held against Miles, Bettin, and Moninger related to the property.

Miles and Bettin also took the stand. They testified that neither they nor Moninger had paid taxes on the property from 2013 to 2019. Miles and Bettin also testified that they posted a $20,000 bond in the prior lawsuit "to cover the back taxes and any other expenses." A copy of the answer, counterclaim, and third-party complaint Miles, Bettin, and Moninger filed in the first lawsuit was also received into evidence. In that pleading, they asserted that they were depositing $20,000 with the clerk of the court to "cover more than the amount the third-party has expended for taxes and accrued interest."

Following the bench trial, the district court entered judgment in favor of Boone River and 11T and against Miles, Bettin, and Moninger. Although the district court found no merit to the claim that Miles, Bettin, and Moninger were unjustly enriched by the payment of maintenance costs on the property, the district court found that they were unjustly enriched by the payment of taxes on the property before the tax deed was declared void.

After the district court modified the judgment amount in response to a motion to alter or amend, Miles and Bettin appealed. Moninger did not file an appeal.

II. ASSIGNMENTS OF ERROR

Miles and Bettin assign six errors, but we need to consider only two to resolve this appeal: (1) that the district court erred in concluding Boone River and 11T had standing and (2) that claim preclusion did not bar their claims for unjust enrichment.

III. STANDARD OF REVIEW

2 We review the lower court's factual findings on standing for clear error and review de novo the ultimate question whether the plaintiffs have standing. Western Ethanol Co. v. Midwest Renewable Energy , 305 Neb. 1, 938 N.W.2d 329 (2020).

4 The applicability of claim and issue preclusion is a question of law. On a question of law, we reach a conclusion independent of the court below. Strode v. City of Ashland , 295 Neb. 44, 886 N.W.2d 293 (2016). Any factual determinations in applying claim preclusion are reviewed for clear error. State v. Marrs , 295 Neb. 399, 888 N.W.2d 721 (2016).

IV. ANALYSIS

1. STANDING

Whether a party who commences an action has standing and is therefore the real party in interest presents a jurisdictional issue, so we address Miles and Bettin's standing arguments first. See Millard Gutter Co. v. Farm Bureau Prop. & Cas. Ins. Co. , 312 Neb. 629, 980 N.W.2d 437 (2022). Miles and Bettin raise similar but distinct "factual challenge[s]" to the standing of both Boone River and 11T, so we address them in turn. See Valley Boys v. American Family Ins. Co. , 306 Neb. 928, 940, 947 N.W.2d 856, 866 (2020).

(a) Boone River

With respect to Boone River, Miles and Bettin claim that the trial record did not disclose whether Boone River itself paid any taxes on the property. And without such proof, argue Miles and Bettin, Boone River cannot show that it has standing. This argument is inconsistent with the record. At trial, a senior manager in the Douglas County treasurer's office testified that Boone River paid $2,854.22 to purchase the tax certificate in March 2015 and later paid $2,718.55 in taxes on the property. The manager's testimony is supported by a business record that lists "Boone River, LLC," as paying those amounts in taxes on the property. The district court did not err in concluding that Boone River had standing to pursue its claim for unjust enrichment.

(b) 11T

Whether 11T has standing is more complicated. The complaint alleged that after Boone River transferred the property to 11T via warranty deed, 11T paid overdue taxes levied on the property, and that 11T was entitled to be reimbursed for those payments. As noted above, however, the evidence at trial was that Homebuyers paid those taxes "on behalf of" 11T. Miles and Bettin claim that because 11T itself did not pay any taxes, it does not have a personal stake in the outcome of the case, is not entitled to any reimbursement, and therefore lacks standing.

Miles and Bettin's argument is based on an incorrect assumption about who may pursue a claim for unjust enrichment. We have explained that to recover on a claim for unjust enrichment, the plaintiff must show that (1) the defendant received money, (2) the defendant retained possession of the money, and (3) the defendant in justice and fairness ought to pay the money to the plaintiff. Zook v. Zook , 312 Neb. 128, 978 N.W.2d 156 (2022). We do not appear, however, to have ever limited restitution for unjust enrichment only to those plaintiffs who themselves conferred a direct benefit on the defendant. And, in fact, the Restatement (Third) of Restitution and Unjust Enrichment § 47 at 130 (2011) also stakes out a more permissive rule: "If a third person makes a payment to the defendant in respect of an asset belonging to the claimant, the claimant is entitled to restitution from the defendant as necessary to prevent unjust enrichment." See, also, id. , § 48 at 144 ("[i]f a third person makes a payment to the defendant to which (as between claimant and defendant) the claimant has a better legal...