Royal v. McKee

298 Neb. 560

905 N.W.2d 51

Kevin ROYAL, appellant and cross-appellee,

v.Loma MCKEE and Edmund R. McKee, wife and husband, now deceased, et al., appellees, and Omaha Public Power District, appellee and cross-appellant.

No. S-16-708.

Supreme Court of Nebraska.

Filed December 29, 2017.

Donald J. Pepperl, P.C., L.L.O., for appellant.

Mark C. Laughlin and Jacqueline M. DeLuca, of Fraser Stryker, P.C., L.L.O., Omaha, for appellee Omaha Public Power District.

Heavican, C.J., Wright, Miller-Lerman, Cassel, Stacy, and Kelch, JJ.

Heavican, C.J.

INTRODUCTION

Kevin Royal filed a quiet title action against his predecessors in interest and against Omaha Public Power District (OPPD) alleging fee title ownership of certain land along the railroad right-of-way passing through his property as a result of adverse possession. OPPD filed a counterclaim, alleging that it had acquired fee simple title to that same land, also under a theory of adverse possession.

The district court granted Royal's motion for entry of default as to his predecessors in interest, but following a trial, denied both Royal's and OPPD's claims of title under adverse possession. Royal appealed, and OPPD cross-appealed. We affirm in part, and in part vacate.

FACTUAL BACKGROUND

PRIOR LITIGATION

Royal filed a second amended complaint alleging that he was the owner of certain real property located in Otoe County, Nebraska. He further alleged that OPPD possessed a railroad right-of-way easement which ran through his property. Finally, Royal alleged that he obtained title of the railroad right-of-way by adverse possession and that title should be quieted in his name.

OPPD filed an answer and affirmative defenses, and a counterclaim and cross-claim. OPPD alleged that it was the owner of 100 feet on either side of the center of the rail line running through Royal's property, that OPPD acquired this land by adverse possession, and that title should be quieted in its name.

Various orders from the Otoe County District Court in this litigation predate the order at issue on appeal. In one such order, Royal had filed an action against OPPD alleging damages incurred as a result of its construction of an electricity transmission line within the railroad right-of-way. The district court held that Midland Pacific Railway Company, later Burlington Northern and Santa Fe Railway Company (BNSF), had obtained a railroad right-of-way by eminent domain in 1869 and that the railroad right-of-way had been continuously used since that time for the operation of a railroad. OPPD obtained the railroad's right-of-way from BNSF by quitclaim deed in 1998. The district court held that OPPD did not own fee title to the right-of-way, but acquired an easement in the right-of-way that "traverses across" Royal's property.

In that case, the district court held that OPPD's erection of transmission lines from Lincoln, Nebraska, to Nebraska City, Nebraska, along the railroad line was not an incidental use associated with the operation of a railroad line, but instead was a separate and distinct activity which was not part of the rights acquired through the original 1869 condemnation action.

Another order issued earlier in this litigation provided that as a result of the deeds which ultimately transferred Royal's property to him, Royal was not the titled owner of the railroad right-of-way. As such, Royal's appeal seeking damages from a board of appraisers as a result of the construction of the transmission line was dismissed.

Finally, early in the matter on appeal, an order was filed entering default against all defendants except OPPD. The district court then concluded that the "sole determination left to be made ... is whether either Royal or OPPD have proven by a preponderance of the evidence" that they have acquired title to the railroad right-of-way by adverse possession.

HISTORY OF OWNERSHIP

The ownership at issue dates back to the condemnation action granting OPPD's predecessor in interest a railroad right-of-way easement in 1869. OPPD took possession of its predecessor's interest in 1998.

On January 4, 1930, Loma McKee and Edmund R. McKee, wife and husband, and Lois B. Nelson and Obel T. Nelson, wife and husband, conveyed a portion of the land now belonging to Royal to William E. Beecham. This conveyance specifically excluded the right-of-way. On March 11, 1944, Loma McKee (now widowed) and Lois B. Bennefield, formerly Lois B. Nelson, and her husband Benny Bennefield, conveyed the remaining portion of Royal's property to John McCarthy, again specifically excluding the railroad right-of-way. Through various deeds and conveyances from 1987 to 2012, Royal's property was conveyed to him. Those deeds and conveyances always excluded the railroad right-of-way.

As a result of the conveyances specifically excluding the railroad right-of-way, Loma McKee and Lois Bennefield continued to hold fee simple title to that portion of the subject property located within the railroad right-of-way. Any interest that Loma McKee, Lois Bennefield, or their heirs, devisees, legatees, or personal representatives may have had was extinguished by the order of default entered March 17, 2015.

ROYAL'S USE OF PROPERTY

The record shows that Royal lived in a farmhouse on the property adjacent to the right-of-way on and off from 1989 to 2012. Royal testified that in 1989, he began to assist his father and uncle in farming the property. In conjunction with the farming operation, during that period of time, parts of the right-of-way were utilized by Royal's father and uncle for uses such as driving farm equipment in the right-of-way, planting and harvesting crops in the right-of-way, using the right-of-way to pasture and chase livestock and to drive four-wheelers, and using the right-of-way to store hay, hunt, and hike, and to access the adjacent creek. Royal's father and uncle also removed trees and brush from the right-of-way, mowed weeds in the right-of-way, and maintained the fence. Most of this was done in the outer 50 feet of the right-of-way. Royal also testified that much of this activity was done on a sporadic basis.

OPPD'S USE OF PROPERTY

The evidence at trial shows the railroad right-of-way had been used continuously for railroad purposes since its establishment and that OPPD had been in control of the right-of-way since 1998. The record shows that OPPD had routinely used the right-of-way and expended significant funds to maintain it. OPPD had authorized BNSF and Union Pacific to use the line, referred to as the "Arbor Line," to deliver coal to OPPD's Nebraska City powerplant and to carry other goods to consumers located along the line. The Arbor Line had also been used by OPPD to store rail-cars for other railroad entities.

It is not entirely clear from the record whether OPPD ran trains on the line at the time of trial. One witness, formerly employed by OPPD, testified that trains were still operated on the line at the time of his retirement in 2013. But Royal testified that he had not seen a train on the line in the 5 years prior to trial (or from approximately 2011).

An OPPD representative testified that when not using property it owns, OPPD often leased property to others, and that where leases were not in place, adjoining landowners were often permitted to use the land for farming purposes, because such use promotes goodwill and keeps the land maintained. The representative testified that he had informed Royal that OPPD owned the right-of-way (in accordance with OPPD's erroneous belief that they had purchased the fee title and not an easement over this right-of-way) and that OPPD was aware Royal was using the right-of-way for farming purposes and had observed Royal on the land.

DISTRICT COURT'S DECISION

Following a bench trial, the district court found that neither Royal nor OPPD had established the elements of adverse possession and that thus, title could not be quieted as to either party.

ASSIGNMENTS OF ERROR

On appeal, Royal alleges 22 assignments of error, which can be restated and consolidated into 3 assignments of error: that the district court erred in (1) "not finding that since the ownership interest of the fee title holders of record [was] extinguished by its Order of March 17, 20[15], that neither ... Royal nor ... OPPD proved ... that he/it was entitled to judgment quieting title in that party by reason of adverse possession," (2) making or failing to make multiple factual findings, and (3) not finding that Royal had proved his claim of adverse possession.

On cross-appeal, OPPD assigns that the district court erred in finding that OPPD did not adversely possess the real property.

STANDARD OF REVIEW

A quiet title action sounds in equity.¹ 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, provided that where credible evidence is in conflict in a material issue of fact, the appellate court considers and may give weight to the fact that the trial judge heard and observed the witnesses and accepted one version of the facts rather than another.²

In an appeal from the entry of a default judgment, an appellate court will affirm the action of the trial court in the absence of an abuse of discretion.³

ANALYSIS

Both Royal's appeal and OPPD's cross-appeal raise the issue of whether either party had obtained title to the 200-foot right-of-way as a result of adverse possession.

A party claiming title through adverse possession must prove by a preponderance of the evidence that the adverse possessor has been in (1) actual, (2) continuous, (3) exclusive, (4) notorious, and (5) adverse possession under a claim of ownership for the statutory period of 10 years.⁴

NEB. REV. STAT. § 39-1404 (REISSUE 2016)

Before we turn to Royal's assignments of error, we address OPPD's contention that Royal cannot adversely possess the railroad right-of-way, because § 39-1404...