Fitzgerald v. Cmty. Redevelopment Corp.

283 Neb. 428

811 N.W.2d 178

William A. FITZGERALD et al., on behalf of Kellom Heights Associates Limited Partnership, a Nebraska limited partnership, and Cuming Street Corporation, a Nebraska corporation, appellees and cross-appellants,

v.COMMUNITY REDEVELOPMENT CORPORATION, a Nebraska corporation, and Omaha Economic Development Corporation, a Nebraska nonprofit corporation, appellants and cross-appellees.

No. S–10–624.

Supreme Court of Nebraska.

March 9, 2012.

Syllabus by the Court

1. Limitations of Actions. Which statute of limitations applies is a question of law.

2. Judgments: Appeal and Error. An appellate court reaches a conclusion regarding questions of law independently of the trial court's conclusion.

3. Limitations of Actions: Appeal and Error. The point at which a statute of limitations begins to run must be determined from the facts of each case, and the decision of the district court on the issue of the statute of limitations normally will not be set aside by an appellate court unless clearly wrong.

4. Contracts: Appeal and Error. The interpretation of a contract is a question of law, in connection with which an appellate court has an obligation to reach its conclusions independently of the determinations made by the court below.

5. Attorney Fees: Appeal and Error. On appeal, a trial court's decision awarding or denying attorney fees will be upheld absent an abuse of discretion.

6. Statutes. Statutory interpretation presents a question of law.

7. Prejudgment Interest: Appeal and Error. Whether prejudgment interest should be awarded is reviewed de novo on appeal.

8. Limitations of Actions: Fraud. An action for fraud does not accrue until there has been a discovery of the facts constituting the fraud, or facts sufficient to put a person of ordinary intelligence and prudence on an inquiry which, if pursued, would lead to such discovery.

9. Estoppel. The doctrine of equitable estoppel is frequently applied to transactions in which it is found that it would be unconscionable to permit a person to maintain a position inconsistent with one in which he or she has acquiesced or of which he or she has accepted any benefit.

10. Appeal and Error. An issue not passed on by the trial court is not appropriate for consideration on appeal.

11. Judgments: Final Orders: Words and Phrases. A “judgment” is a court's final consideration and determination of the respective rights and obligations of the parties to an action as those rights and obligations presently exist.

12. Judgments: Final Orders. Orders purporting to be final judgments, but that are dependent upon the occurrence of uncertain future events, do not operate as “judgments” and are wholly ineffective and void as such. These “conditional judgments” are not final determinations of the rights and obligations of the parties as they presently exist, but, rather, look to the future in an attempt to judge the unknown.

13. Judgments: Final Orders. A conditional judgment is wholly void because it does not “perform in praesenti” and leaves to speculation and conjecture what its final effect may be.

14. Appeal and Error. An appellate court may, at its discretion, discuss issues unnecessary to the disposition of an appeal where those issues are likely to recur during further proceedings.

15. Judgments: Attorney Fees: Derivative Actions: Partnerships. Under Neb.Rev.Stat. § 67–291 (Reissue 2009), the court may award expenses, including attorney fees, as a separate component of the judgment. The statute then requires that in a derivative action, the plaintiff may retain the portion of the judgment awarded as expenses, but any additional proceeds of the judgment that the plaintiff receives must be remitted to the partnership.

16. Prejudgment Interest: Claims. Prejudgment interest under Neb.Rev.Stat. § 45–103.02 (Reissue 2010) is recoverable only when the claim is liquidated, that is, when there is no reasonable controversy as to either the plaintiff's right to recover or the amount of such recovery.

Donald J. Buresh, of Stalnaker, Becker & Buresh, P.C., Omaha, for appellant Community Redevelopment Corporation.

Lyman L. Larsen, Omaha, Sean W. Colligan, and Geoffrey L. Gross, of Stinson, Morrison & Hecker, L.L.P., for appellant Omaha Economic Development Corporation.

Andrew T. Schlosser, of Fitzgerald, Schorr, Barmettler & Brennan, P.C., L.L.O., Omaha, and Matthew F. Heffron, of Brown & Brown, P.C., L.L.O., for appellees.

HEAVICAN, C.J., CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER–LERMAN, JJ.

MILLER–LERMAN, J.

NATURE OF CASE

The dispute in this case revolves around Kellom Heights Associates Limited Partnership (Kellom Heights), a limited partnership formed to provide financing for the redevelopment of property in Omaha, Nebraska. The appellees are Kellom Heights, Cuming Street Corporation (Cuming Street), and “Class A” limited partners in Kellom Heights. The appellants are Community Redevelopment Corporation (CRC), the general partner, and Omaha Economic Development Corporation (OEDC), a “Class B” limited partner. CRC is a subsidiary of OEDC. The appellees became dissatisfied with the operation of Kellom Heights and filed this complaint asserting various causes of action. The district court for Douglas County found for the appellees on certain causes of action and entered a judgment in their favor in the amount of $918,228 plus costs and interest. In addition to the judgment, the court awarded attorney fees of $336,614. The court denied the appellees' request for prejudgment interest.

OEDC and CRC, the appellants, appeal various orders of the district court and make various assignments of error, including that the district court erred when it rejected their statute of limitations defenses to certain claims. The appellees cross-appeal and claim that the district court erred when it denied their request for prejudgment interest. We affirm in part, and in part reverse and remand for further proceedings.

STATEMENT OF FACTS

Kellom Heights was formed in 1981 for the purposes of providing financing for and carrying out a redevelopment plan north of Cuming Street between 25th and 27th Streets in Omaha, near the Creighton University campus. OEDC was in charge of the redevelopment, which included construction of a 132–unit apartment complex with 20 percent of the apartment units set aside for U.S. Department of Housing and Urban Development Section 8 subsidized housing. Government financing and grants were obtained to cover much of the cost of the project, but additional funds of approximately $600,000 were needed. OEDC considered forming a limited partnership that would provide investors income tax savings based on expected losses that would be allocated to the limited partners for approximately the first 15 years of the project.

OEDC and CRC executed a partnership agreement for Kellom Heights on June 4, 1981. CRC was designated the general partner, and OEDC was designated a Class B limited partner with no voting rights. OEDC and CRC executed amendments to the agreement on May 1, 1982, and September 29, 2003. The validity of the May 1, 1982, amendment is among the issues in this case. A private placement memorandum (PPM) was provided to potential investors in 1981 and 1982. In the PPM, 60 Class A limited partnership interests were offered. Each investor was offered a minimum and maximum of two partnership interest units for an investment of $20,200. The partnership agreement provided that the Class A limited partners would have a 99–percent interest in the net income or losses and a one-third interest in the net cashflow of Kellom Heights. Thirty individuals, including the appellees in this case, subscribed to become Class A limited partners. A certificate of limited partnership was filed with the Nebraska Secretary of State on May 6, 1982, and with the Douglas County clerk in June 1982.

After approximately 20 years with no cashflow from Kellom Heights, some limited partners became dissatisfied with its operation. The appellees in this case include William A. Fitzgerald, Jerome F. Sherman, Norman Veitzer, and Loyal Borman, who are Class A limited partners who filed this action as a derivative action on behalf of Kellom Heights and on behalf of Cuming Street, a corporation they sought to have admitted as a general partner. The appellees filed the original complaint in this action on January 20, 2006. In the operative second amended complaint, the appellees set forth six causes of action, including actions for the following: (1) an accounting, (2) injunctive and declaratory relief to appoint Cuming Street as an additional general partner, (3) injunctive and declaratory relief and a temporary restraining order to set aside a $350,000 note payable to OEDC and to halt a $12,000 increase in annual supervisory fees paid to CRC, (4) unjust enrichment to recover interest paid to OEDC on the $350,000 note, (5) injunctive relief and a temporary restraining order to prevent OEDC and CRC from paying their own attorney fees from Kellom Heights funds, and (6) injunctive and declaratory relief to declare that the May 1, 1982, amendment to the partnership agreement (hereinafter Amendment 1) is unenforceable and to prohibit OEDC and CRC from carrying out the provisions of Amendment 1. In their answer, OEDC and CRC raised affirmative defenses, including assertions that the appellees' claims were barred by the statute of limitations and the doctrine of laches and that certain claims were not claims of Kellom Heights and therefore were not properly asserted in a derivative action.

Following a bench trial, the district court entered orders on August 10, 2009, and February 12 and March 11, 2010, determining various issues in this action. OEDC and CRC appealed these orders to the Nebraska Court of Appeals. The Court of Appeals dismissed the appeal in a decision without opinion on May 25, 2010, case No. A–10–247, after it concluded that the district court had explicitly...