Smith v. Smith

29 Neb.App. 607

957 N.W.2d 511

Lynden A. SMITH et al., appellants,

v. Leonard M. SMITH et al., defendants and third-party plaintiffs, appellees,andAlisa Smith, third-party defendant, appellant.

No. A-20-233.

Court of Appeals of Nebraska.

Filed March 16, 2021.

Sean A. Minahan, of Lamson, Dugan & Murray, L.L.P., Omaha, for appellants.

Terry Curtiss, of Curtiss, Moravek & Curtiss, P.C., L.L.O., Alliance, for appellees.

Pirtle, Chief Judge, and Moore and Arterburn, Judges.

Arterburn, Judge.

INTRODUCTION

In this appeal from proceedings to partition real estate, the principal issue is whether partition in kind can be achieved by awarding a portion of the property collectively to one group of owners and awarding the remaining property collectively to another group of owners. Ultimately, we conclude that because the law has long favored partition in kind and because the unique facts and circumstances presented by this case warranted a unique resolution, it was appropriate to partition the property collectively between the two groups of owners. We affirm the judgment of the district court.

BACKGROUND

Leonard M. Smith and Linda S. Smith and their four children, Lynden A. Smith, Jaclyn K. Smith, Sarah K. Kah (Sarah), and Lucas A. Smith, are co-owners of 4,972 acres of land located in Sheridan County, Nebraska, which they inherited from Linda's parents. The shared land is made up of three noncontiguous parcels. The first parcel of land is referred to in the record as the "[N]orth [P]ivot." A second parcel of land just to the south of the North Pivot is referred to as both "Unit 62" and the "Mirage Flats Irrigation District." Unit 62 includes 87.2 acres of land. The North Pivot and Unit 62 parcels consist of irrigated farmland and grassland. In particular, Unit 62 was described as "very flat, very fertile ground." The parties stipulated that Linda owns 46 percent of the land contained within the North Pivot and Unit 62, while each of her four children own 13.5 percent of these parcels. The third parcel of land is referred to as the "[R]anch." This parcel consists largely of pastureland, but also includes irrigated and nonirrigated cropland as well. The parcel includes various improvements, including multiple houses, sheds to store machinery and house cattle, and a large Quonset. Box Butte Creek flows through a portion of the Ranch. The parties stipulated that Leonard and Linda own 32.5 percent of the Ranch as tenants in common. The rest of that parcel is divided equally among Linda and her four children such that each owns a 13.5-percent interest in the land.

In September 2017, Lynden, Jaclyn, and Sarah filed a shared complaint for partition of the co-owned land, seeking that title "be quieted and confirmed in its owners; that [the property] be partitioned and divided among its owners in kind ... and if the [property] cannot be divided and partitioned in kind, then that it be sold as provided by law and the net proceeds therefrom divided accordingly." Leonard, Linda, and Lucas (collectively referred to as "appellees") filed a shared answer and cross-claim against Lynden, Jaclyn, Sarah, and a third-party defendant, Alisa Smith, who is Lynden's wife (collectively referred to as "appellants"), conceding that partition of the co-owned land was necessary and appropriate. Appellees also affirmatively indicated, "The property in question cannot fairly be divided in kind as part of this proceeding given the property's unique character, its pivot irrigation on portions, and the varying improvements to portions of the tract." Appellees requested that a referee be appointed "to determine that the said real estate may not be divided in kind" and that the property be sold and the funds obtained from the sale be divided amongst the parties.

Pursuant to the parties’ stipulation regarding ownership of the property, the district court determined that appellants and appellees were all joint owners of the property. The court appointed a referee to recommend whether the property could be partitioned in kind without great prejudice to the owners or whether the property should be sold and the proceeds divided.

The referee inspected the property. He opined:

The partition thereof in kind cannot be made without great prejudice to the owners when considering terrain, availability of surface water, livestock watering facilities, improvements located thereon and associated with certain parts of the real estate subject to partition and methods and means of application of surface and underground water to certain irrigable tracts.

The referee filed a motion with the district court to approve his report and to order a sale of the property.

Appellees subsequently filed an objection to the referee's report. In their objection, appellees indicated that they did not believe a sale of the property was necessary or appropriate. They alleged, "Sale of all real estate will work a serious and unique hardship on [appellees] given their investment in the co-owned real estate and its use and location as it relates to other property of [Leonard and Linda]." Appellees proposed that the land should be partitioned in kind such that appellants would collectively receive a portion of the property equal to their collective shares. Similarly, appellees would collectively retain the remainder of the property. Appellees contended, "Sale of all the co-owned real estate and division of the net proceeds from the sale will not realize a materially greater payment to [appellants] then [sic] division in kind as hereafter proposed and sale by [appellants] of the share distributed ‘in kind’ to them."

In conjunction with their objection to the referee's report, appellees filed a motion for leave to amend their cross-complaint in order to delete the assertion that the property could not be divided in kind. Appellees indicated that such assertion was included in the cross-complaint only "due to the error of their attorney." The district court ultimately granted the motion for leave to amend. The court also scheduled a trial on the referee's report and appellees’ objection to that report.

During the trial, Leonard, Linda, Lucas, Jaclyn, and Lynden each testified. In addition, both appellants and appellees called an expert witness to testify regarding the feasibility of partitioning the co-owned land in kind without great prejudice to the owners.

Leonard generally testified regarding his use of the co-owned land as a part of his combined ranching and farming operation. Linda and Lucas are also involved in this operation. Leonard indicated that if all of the co-owned land were to be sold, it would "cripple" the operation. In addition, Leonard explained that he and Linda own separate parcels of land which border portions of the co-owned land. Selling the co-owned land would affect their access to their independently owned land. Leonard further explained that he did not want to sell all of the co-owned land

[b]ecause we feel that it would adversely affect me and my son and especially my wife. This is her home. She was raised there. She's the happiest when she goes down there and checks the cattle out in the pasture. That's why we object to it and we feel that each person should get their fair share and operate it to whatever potential they feel right.

Leonard proposed that the three parcels of land which are co-owned by appellants and appellees be partitioned in kind such that appellants receive all of Unit 62 and a portion of the west side of the Ranch, including sections 4 and 9 and the westernmost part of section 15 (480 acres). Appellants would also receive a small corner of section 10 (40 acres), located within the Ranch, so that they would have ready access to section 15 from section 9. In total, appellants would receive approximately 1,880 of the total 4,972 co-owned acres. While 1,880 acres is not equal to appellants’ collective 40.5 percent interest in the total number of acres making up the co-owned land, Leonard testified that his proposal provided appellants with their collective share of the value of the co-owned land.

As a part of Leonard's proposed division of the co-owned land, he, Linda, and Lucas would collectively receive the North Pivot and the remainder of the Ranch, totaling approximately 3,092 acres. Leonard testified that he believed that dividing the co-owned land this way was fair: "I believe this is as fair [a] division as you could [accomplish]. They are getting the better end of the [R]anch."

Specifically, Leonard explained that this division of the property would provide Lynden with Unit 62, which is where he has farmed since 2003 or 2004. Leonard noted that Lynden has made improvements to Unit 62, including putting "drip tape" underneath the ground to irrigate his crops. Appellants would also receive the larger of two pivots located on the Ranch and a majority of the dryland cropland. Appellants would have access to water from two windmills located on their portion of the Ranch. In addition, the creek located within their parcel would provide "live water" even in years of drought. However, Leonard did indicate that, in the past, the creek has flooded, making travel between sections 9 and 15 impossible until the water receded. Leonard explained that appellants would have ready access to all parts of their portion of the Ranch, as a highway runs through section 4 and another road lies directly south of section 15, the southernmost section of appellants’ allocated property. Leonard did not believe appellants would have any issue with accessing section 15 from that road. He did indicate that without the road, the only access appellants would have to section 15 would be to cross the creek.

Linda and Lucas also testified about the road directly south of section 15. Linda indicated that she has utilized that road, without permission or interference from anyone, since she was a child. Similarly, Lucas testified that he has used the road without permission or interference from...