Main ST Props. LLC v. City of Bellevue

309 Neb. 738

962 N.W.2d 333

MAIN ST PROPERTIES LLC, appellant,

v.CITY OF BELLEVUE, Nebraska, et al., appellees.

No. S-20-802.

Supreme Court of Nebraska.

Filed July 16, 2021

Thomas G. Schumacher, Jason M. Bruno, and Robert S. Sherrets, Omaha, of Sherrets, Bruno & Vogt, L.L.C., for appellant.

Heather B. Veik, of Erickson & Sederstrom, P.C., Omaha, for appellees.

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

Miller-Lerman, J.

NATURE OF CASE

Main St Properties LLC (MSP) appeals the order of the district court for Sarpy County which dismissed MSP's "Petition to Appeal Assessment of Bellevue Board of Equalization" for lack of jurisdiction. MSP wished to appeal a resolution of the City of Bellevue (City) which placed liens on property owned by MSP in order to collect costs that had been assessed for the demolition and removal of a structure on the property. MSP contends that the resolution levied a "special assessment" pursuant to Neb. Rev. Stat. § 18-1722 (Reissue 2012), and it sought appeal under Neb. Rev. Stat. § 19-2422 (Cum. Supp. 2020), which authorizes an appeal to the district court for "[a]ny owner of real property who feels aggrieved by the levy of any special assessment ...." The court determined that no special assessment was imposed and that therefore, § 19-2422 did not apply. The court sustained the City's motion to dismiss. In connection with its reasoning, the court concluded that MSP had failed to seek review as a petition in error under Neb. Rev. Stat. § 25-1901 et seq. (Reissue 2016 & Cum. Supp. 2020) and that the court therefore lacked subject matter jurisdiction.

We conclude that § 19-2422 authorized MSP's appeal of the resolution which levied a special assessment and placed a lien on the property. We therefore reverse the district court's dismissal based on lack of jurisdiction and remand the cause for further proceedings.

STATEMENT OF FACTS

MSP owns real property located in Bellevue, Nebraska. In February 2020, the city council passed a resolution condemning a structure on MSP's property as being a public nuisance, unsafe for human occupancy, unsanitary, and in a dangerous condition. The resolution directed MSP to cause the structure to be torn down, the debris removed, and the premises placed in safe condition by March 4. When MSP failed to comply with the resolution, the City hired a contractor and had the structure demolished.

In June 2020, a building official for the City sent notice to MSP stating that MSP owed the City $25,320 for costs the City incurred to demolish the structure. The notice stated that failure to reimburse the City would result in a lien being placed on the property. When MSP failed to pay the costs, the City set a hearing before the city council sitting as the Bellevue Board of Equalization (Board of Equalization). MSP appeared at the hearing held July 21 and generally argued that the contractor hired by the City failed to adequately perform the work and that additional work would be required to complete the demolition.

At the end of the hearing, the Board of Equalization passed a resolution dated July 21, 2020. The resolution of July 21 forms the basis of this appeal and, as explained below, levied a special assessment and placed a lien on the property. The resolution was signed by the mayor on behalf of the City, approved as to form by the city attorney, and attested to by the city clerk. The resolution stated that MSP had been billed by the City for costs of $25,320 associated with demolition and removal of the structure, that such costs had not been paid to the City, that MSP had been given notice of the hearing at which MSP "would have an opportunity to show cause why these costs should not be placed as liens against the properties," and that prior to the hearing, MSP had filed "written objections to the assessment of the costs" and "protest[ed] the City's lien against the property." (Emphasis supplied.) In the resolution, it was resolved that "the amounts as shown above for costs associated with the demolition and removal of a structure and associated clean-up costs at the locations identified above, be placed as liens against the properties so listed and that said liens shall draw interest." It was further resolved that

notice of such lien shall be forwarded to the County Treasurer of Sarpy County, Nebraska with instructions to place upon the records in the office of the County Treasurer the imposition of these liens upon the properties listed and said County Treasurer shall be authorized to collect the payment of these liens, including interest, for the City.

On August 12, 2020, MSP filed a petition in the district court seeking review of the resolution. MSP titled the petition as "Petition to Appeal Assessment of Bellevue Board of Equalization" and named the City, the Board of Equalization, and the city clerk, Susan Kluthe, as defendants. MSP alleged that the court had jurisdiction of the appeal pursuant to § 19-2422, which provides for appeal of "any special assessment." MSP alleged that the July 21, 2020, resolution was a special assessment under § 19-2422 and that it "wrongfully and arbitrarily lev[ied] a lien in the amount of $25,320.00 against [MSP's] property."

Regarding the substance of its appeal, MSP alleged that the contractor hired by the City failed to complete its work on the property in various respects. MSP alleged that it had notified the City of the contractor's failures but that the City nevertheless sent MSP a notice that it was required to reimburse the City in full for costs the City had paid to the contractor. MSP alleged that it would cost at least $18,000 to correct the work performed by the City's contractor and to complete the demolition and removal. MSP alleged that it presented evidence of these allegations to the Board of Equalization at the July 21, 2020, hearing but that the Board of Equalization "wholly disregarded" the evidence.

With regard to procedural aspects of the appeal, MSP noted that pursuant to Neb. Rev. Stat. § 19-2423 (Cum. Supp. 2020), an owner appealing a special assessment pursuant to § 19-2422 must, within 10 days from the levy of the special assessment, file a notice of appeal with the city clerk and post a bond in the amount of $200. MSP further noted that pursuant to Neb. Rev. Stat. § 19-2424 (Cum. Supp. 2020), it was required to request and pay the estimated cost for preparation of a transcript, and that upon such request and payment, the city clerk was required to cause a complete transcript of the proceedings before the City to be prepared. MSP finally noted that pursuant to Neb. Rev. Stat. § 19-2425 (Cum. Supp. 2020), within 30 days of the special assessment being appealed pursuant to § 19-2422, it was required to file in the district court a petition on appeal together with a transcript of the proceedings before the City.

Regarding compliance with these requirements, MSP alleged that on July 29, 2020, its counsel attempted to hand deliver and file a notice of appeal, a request for transcript, and a $200 cash bond with the city clerk, Kluthe. MSP alleged that Kluthe "arbitrarily refused to accept" the filings, but that it nevertheless left the filings in the city clerk's office. MSP alleged that it followed up with Kluthe on August 3 to inquire when the transcript would be ready for MSP to pick up and that on August 7, Kluthe furnished MSP an audio file, but no formal transcript, of the hearing. MSP attached a copy of the audio file to its petition. MSP alleged that it had not received confirmation that Kluthe planned to prepare a transcript of the proceedings. MSP alleged that the City and Kluthe were "actively and purposely obstructing and interfering with MSP's rights to have its appeal heard and tried" by the district court.

MSP set forth two causes of action. In the first cause of action, MSP sought reversal of the July 21, 2020, resolution assessing costs of $25,320 and placing a lien on MSP's property. In the second cause of action, MSP sought a writ of mandamus to compel Kluthe to furnish a transcript of the hearing.

The defendants filed a motion to dismiss pursuant to Neb. Ct. R. Pldg. § 6-1112(b)(1) (lack of subject matter jurisdiction) and § 6-1112(b)(6) (failure to state a claim). With regard to jurisdiction, the City alleged that MSP's attempt to appeal pursuant to § 19-2422 was erroneous because the City did not impose a special assessment against MSP's property. The defendants contended instead that the Board of Equalization acted in the exercise of its judicial functions. The defendants asserted that because the Board of Equalization was acting as a tribunal and exercising judicial functions, MSP's only remedy was to file a petition in error pursuant to § 25-1901 et seq. The defendants contended that because MSP had not filed a "Petition in Error," the district court lacked subject matter jurisdiction. In their motion to dismiss, the defendants also asserted that MSP had failed to state a claim against Kluthe, that Kluthe was not a proper party to the action, and that MSP failed to allege the elements required for a writ of mandamus against Kluthe.

After a hearing, the district court sustained the defendants’ motion to dismiss. In an order filed October 15, 2020, the court determined that it lacked jurisdiction. The court stated that MSP was challenging a decision made by the Board of Equalization "following a hearing during which MSP presented evidence and made arguments" and that in making the decision, "the City, through the [Board of Equalization], was exercising a judicial function." The court reasoned that because the Board of Equalization was acting in a judicial capacity, the petition in error statutes, § 25-1901 et seq., applied. The court stated that MSP's claims were "not properly pursued via a petition in error" and that, instead, MSP brought its claims "by way of a Petition to Appeal Assessment of the ... Board of Equalization which is not a proper...