Fecht v. Christensen (In re Elevator)

291 Neb. 798

IN RE CLAIMS AGAINST PIERCE ELEVATOR.JOHN A. FECHT, DIRECTOR, GRAIN WAREHOUSE DEPARTMENT,NEBRASKA PUBLIC SERVICE COMMISSION, APPELLEE AND CROSS-APPELLEE, v. MATTHEW CHRISTENSEN, CLAIMANT, APPELLANT,AND DONNELLY TRUST ET AL., CLAIMANTS, APPELLEES AND CROSS-APPELLANTS,DAVID UECKER, CLAIMANT, APPELLEE AND CROSS-APPELLEE,AND LINDA ALFS ET AL., CLAIMANTS, APPELLEES.

No. S-14-899.

SUPREME COURT OF NEBRASKA

September 11, 2015

1. Public Service Commission: Appeal and Error. Determinations of the Public Service Commission are reviewed de novo on the record.

2. Appeal and Error. In a review de novo on the record, an appellate court reappraises the evidence as presented by the record and reaches its own independent conclusions concerning the matters at issue.

3. Public Service Commission: Constitutional Law: Administrative Law. The Public Service Commission's authority to regulate public grain warehouses is purely statutory, in contrast to its plenary authority to regulate common carriers under Neb. Const. art. IV, § 20.

4. Public Service Commission: Administrative Law. The authority of the Public Service Commission in the case of a grain warehouseman must spring from legislative enactment, and nothing else.

5. Constitutional Law: Jurisdiction: Equity. Neb. Const. art. V, § 9, confers equity jurisdiction upon the district courts.

6. Jurisdiction: Equity. Equity jurisdiction of the district courts is exercisable without legislative enactment and exists independently of statute.

7. Jurisdiction: Equity: Legislature. Equity jurisdiction of the district courts may not be divested by the Legislature.

8. Administrative Law. Administrative agencies have no general judicial powers, such as equitable powers, notwithstanding that they may perform some quasi-judicial duties.

9. ___. Only a judicial tribunal, and not an administrative agency acting as a quasi-judicial tribunal, can provide relief that is within the general power of the court to provide.

10. Constitutional Law: Administrative Law: Courts. Unless permitted by the constitution, under the principle of separation of powers, an administrative agency may not perform purely judicial functions or interfere with the court's performance of those functions.

11. Public Service Commission: Administrative Law. When the Public Service Commission adjudicates claims under the Grain Warehouse Act, its objective is to determine those owners, depositors, storers, or qualified check holders at the time a warehouse is closed.

12. Public Service Commission: Jurisdiction: Time. The Public Service Commission has limited jurisdiction under the Grain Dealer Act to determine the claims that exist on the date of a warehouse closure.

13. Statutes: Intent. Statutes which effect a change in the common law or take away a common-law right should be strictly construed, and a construction which restricts or removes a common-law right should not be adopted unless the plain words of the statute compel it.

14. Actions: Equity: Jurisdiction. An action in equity must be founded on some recognized source of equity jurisdiction.

15. Rescission: Fraud. Fraud and misrepresentation give rise to the remedy of rescission of a contract.

16. Actions: Rescission: Equity. An action for rescission sounds in equity.

17. Actions: Trusts: Equity. An action to impose a constructive trust is an equitable action.

18. Public Service Commission: Administrative Law: Time. The Grain Warehouse Act establishes a temporal requirement, or a point in time at which the rights of entities claiming to be either owners, depositors, or storers of grain are fixed, and a physical requirement that the grain be stored in a warehouse at the time the Public Service Commission takes possession of the grain.

19. Sales. Issuance of a check under Neb. Rev. Stat. § 88-530 (Reissue 2014) occurs when the check is first delivered by the maker or drawer.

20. Appeal and Error. To be considered by an appellate court, an error must be both specifically assigned and specifically argued in the brief of the party asserting the error.

21. ___. Errors that are assigned but not argued will not be addressed by an appellate court.

22. Parol Evidence: Contracts. The parol evidence rule renders ineffective proof of a prior or contemporaneous oral agreement that alters, varies, or contradicts the terms of a written agreement.

23. ___: ___. The parol evidence rule is designed to preserve the integrity and certainty of written documents against disputes arisingfrom fraudulent claims or faulty recollections of the parties' intent as expressed in the final writing.

24. Contracts. Extrinsic evidence is not permitted to explain the terms of a contract that is not ambiguous.

25. ___. A determination as to whether an ambiguity exists is made as a matter of law and on an objective basis, not by the subjective contentions of the parties.

26. Contracts: Words and Phrases. A contract is ambiguous when a word, phrase, or provision in the contract has, or is susceptible of, at least two reasonable but conflicting interpretations or meanings.

27. Contracts: Intent. When a contract is unambiguous, the intentions of the parties must be determined from the contract itself.

28. Testimony: Parol Evidence: Parties: Intent. Testimony seeking to prove the parties' intent is considered parol evidence.

29. Contracts. An argument that the party did not read or understand the document he or she was signing is no defense to the formation of a contract.

30. Directed Verdict: Evidence: Proof. Prima facie proof is evidence sufficient to submit an issue to the fact finder and precludes a directed verdict on the issue.

31. Administrative Law: Statutes: Sales: Evidence: Proof. Although the statutes and regulations prescribe one form of evidence to establish a prima facie case that an in-store transfer occurred, other forms of evidence may also provide proof.

32. Actions: Parties: Standing. A party has standing to invoke a court's jurisdiction if it has a legal or equitable right, title, or interest in the subject matter of the controversy.

33. Standing: Jurisdiction: Justiciable Issues. As an aspect of jurisdiction and justiciability, standing requires that a litigant have such a personal stake in the outcome of a controversy as to warrant invocation of a court's jurisdiction and justify the exercise of the court's remedial powers on the litigants' behalf.

34. Standing: Proof. In order for a party to establish standing to bring suit, it is necessary to show that the party is in danger of sustaining a direct injury as a result of anticipated action, and it is not sufficient that one has merely a general interest common to all members of the public.

35. Standing: Jurisdiction. If the party appealing the issue lacks standing, the court is without jurisdiction to decide the issues in the case.

Appeal from the Public Service Commission. Affirmed in part, and in part reversed and dismissed.

Rocky C. Weber and Andrew C. Pease, of Crosby Guenzel, L.L.P., for appellant.

Richard P. Garden, Jr., Austin L. McKillip, and Gregory S. Frayser, of Cline, Williams, Wright, Johnson & Oldfather, L.L.P., for appellees Donnelly Trust et al.

Douglas J. Peterson, Attorney General, and L. Jay Bartel for appellee John A. Fecht.

HEAVICAN, C.J., CONNOLLY, STEPHAN, MCCORMACK, and CASSEL, JJ., and PIRTLE, Judge.

MCCORMACK, J.

I. NATURE OF CASE

This appeal arises out of proceedings initiated by the Nebraska Public Service Commission (PSC) following the insolvency of Pierce Elevator, Inc. (PEI), to determine claims under the Grain Warehouse Act¹ and the Grain Dealer Act.² PEI voluntarily surrendered its grain warehouse license to the PSC on March 4, 2014, and the PSC took title to all PEI grain in storage in trust for all valid owners, depositors, or storers of grain pursuant to the Grain Warehouse Act. The PSC then determined valid claims under the Grain Warehouse Act and the Grain Dealer Act. The appellant and cross-appellants are claimants who are dissatisfied with the PSC's classification of their claims.

II. BACKGROUND

1. PEI

PEI operated licensed grain warehouses in Pierce, Randolph, and Foster, Nebraska. Brian Bargstadt was PEI's president and one-third owner.

PEI maintained a banking relationship with Citizens State Bank (the Bank) and obtained operating loans from the Bank.PEI borrowed funds from the Bank on a line of credit to facilitate the purchase of grain from its producers.

PEI's accountant testified that PEI was "in trouble" by the end of 2012 and that PEI needed to raise capital to address the negative owner's equity. At the end of 2012, PEI had a working capital deficiency in excess of $2.2 million.

On August 30, 2013, PEI's line of credit matured and the Bank permitted the line of credit to go past due until September 19. On that date, the Bank and PEI entered into a new contract extending the due date until October 31. The Bank agreed to continue to extend the maturity of PEI's line of credit on a monthly basis while PEI, its accountant, and the Bank addressed the working capital deficiency. Bargstadt testified that he requested the monthly extensions of the line of credit "[t]o satisfy John Fecht [the director of the PSC's grain warehouse department]" because "he wanted to know if we had money in our account to pay our bills and pay the grain."

During this time, the PSC became concerned about PEI's ability to pay producers. The PSC intensified its scrutiny of PEI because PEI's grain warehouse and dealer's licenses were set to expire at the end of September 2013. The PSC's grain warehouse department's director, John A. Fecht, expressed his concern that the Bank had not extended its line of credit for another year, stating:

With harvest coming soon, it is imperative that I know you have money available to pay for any grain expense or anything else for that matter. . . .

. . . .

It would seem that there is still uncertainty with the bank going forward . . . . You realize that if things would go bad, it will mean the license and the ability to

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