Central Neb. Pub. Power v. Jeffrey Lake Dev.

The C enTral nebraska P ubliC Power and irrigaTion
disTriCT, a PubliC CorPoraTion and PoliTiCal subdivision of
The sTaTe of nebraska , aPPellanT and Cross -aPPellee , v.
Jeffrey lake develoPmenT, inC., a nebraska nonProfiT
CorPoraTion, eT al ., aPPellees and Cross -aPPellanTs.
810 N.W.2d 144
Filed December 2, 2011. 	No. S-10-1196.
1. Motions to Dismiss: Pleadings: Appeal and Error. An appellate court reviews
a district court’s order granting a motion to dismiss de novo. When reviewing a
dismissal order, the appellate court accepts as true all the facts which are well
pled and the proper and reasonable inferences of law and fact which may be
drawn therefrom, but not the pleader’s conclusions.
2. Motions to Dismiss: Pleadings. To prevail against a motion to dismiss for failure
to state a claim, the pleader must allege sufficient facts, accepted as true, to state
a claim for relief that is plausible on its face. In cases in which a plaintiff does
not or cannot allege specific facts showing a necessary element, the factual alle-
gations, taken as true, are nonetheless plausible if they suggest the existence of
the element and raise a reasonable expectation that discovery will reveal evidence
of the element or claim.
Appeal 	from 	the 	District 	Court 	for 	Lincoln 	County:
John P. murPhy, Judge. Reversed and remanded for further
proceedings.
Daniel E. Klaus and Donald L. Dunn, of Rembolt Ludtke,
L.L.P., and Michael C. Klein, of Anderson, Klein, Swan &
Brewster, for appellant.
Steve Windrum for appellees.
heaviCan, C.J., wrighT, C onnolly, gerrard, mCC ormaCk,
and miller-lerman, JJ.
heaviCan, C.J.
INTRODUCTION
The Central Nebraska Public Power & Irrigation District
(Central) filed this action against Jeffrey Lake Development,
Inc., and other sublessees (collectively JLDI) to quiet title to
land owned by Central and leased by JLDI. JLDI sought to
dismiss the action. The district court sustained the various
motions to dismiss. Central appeals, and JLDI cross-appeals.
We reverse, and remand for further proceedings.
762 	282 NEBRASKA REPORTS
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www.nebraska.gov/apps-courts-epub/
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FACTUAL BACKGROUND
This is the third time in approximately 10 years that these
parties have appeared before this court on issues regarding
a 1980 lease agreement.1 In addition, the Nebraska Court of
Appeals decided another case involving this lease in 1997.2
Since 1944, Central and JLDI have entered into a series of
leases concerning portions of lakefront property surrounding
Jeffrey Lake, which is owned by Central. JLDI is a nonprofit
association that was created to manage property leased from
Central. At issue is the lease entered into by the parties in 1980.
That lease had a primary term of 31 years, but provided for an
automatic annual extension unless JLDI breached the lease or
the parties agreed to modify it. Like other leases between these
parties, this lease did not provide for the payment of cash rent
to Central.
In approximately 1994, Central’s board of directors deter-
mined that rent should be charged for the land surrounding
Jeffrey Lake and passed a resolution to that effect. JLDI sued,
contending that Central could not modify the leases. The
Lincoln County District Court granted summary judgment to
JLDI. Central appealed, and the Court of Appeals reversed,
concluding that fact issues remained.3
On remand, and after a trial, the district court held for JLDI.
This court affirmed, concluding, as relevant, that there was
consideration for the leases and that public policy was not vio-
lated by the lack of cash rent.4
Having lost its battle to charge rent under the existing
leases, Central decided to terminate the leases. As such, it
filed a declaratory judgment action in the Phelps County
District Court seeking interpretation of the parties’ rights under
the lease agreement. However, the district court in that case
1 Central Neb. Pub. Power v. Jeffrey Lake Dev., 267 Neb. 997, 679 N.W.2d
235 (2004); Jeffrey Lake Dev. v. Central Neb. Pub. Power, 262 Neb. 515,
633 N.W.2d 102 (2001).
2 Jeffrey Lake Dev. v. Central Neb. Pub. Power, 5 Neb. App. 974, 568
N.W.2d 585 (1997).
3 Id.
4 Jeffrey Lake Dev. v. Central Neb. Pub. Power, supra note 1.
CENTRAL NEB. PUB. POWER v. JEFFREy LAKE DEv. 	763
Cite as 282 Neb. 762

declined to decide the action, concluding that it was not jus-
ticiable, because Central had indicated that it “‘wishe[d]’”
to terminate the lease, not that it had actually done so. This
court affirmed.5
In response, Central sent notices to JLDI terminating the
lease and subleases. Central then filed declaratory judgment
and quiet title actions against JLDI on July 6, 2010, this time
in Lincoln County District Court. Subsequently, in response,
JLDI filed motions to dismiss, arguing that Central’s complaint
failed to state a claim. A hearing was held in October on the
motions to dismiss, and on November 12, the district court,
without comment, sustained the motions and overruled JLDI’s
motion for attorney fees.
Though none are in the record, Central subsequently filed
three additional motions: a motion for new trial, a motion for
specific conclusions of fact and law, and a motion to alter or
amend the judgment. A hearing was held on those motions on
November 22, 2010. On November 29, those motions were also
denied. Central appeals, and JLDI cross-appeals.
ASSIGNMENTS OF ERROR
On appeal, Central assigns that the district court erred in dis-
missing its complaint. On cross-appeal, JLDI assigns that the
district court erred in denying its motion for attorney fees.
STANDARD OF REvIEW
[1,2] An appellate court reviews a district court’s order grant-
ing a motion to dismiss de novo. When reviewing a dismissal
order, the appellate court accepts as true all the facts which are
well pled and the proper and reasonable inferences of law and
fact which may be drawn therefrom, but not the pleader’s con-
clusions.6 To prevail against a motion to dismiss for failure to
state a claim, the pleader must allege sufficient facts, accepted
as true, to state a claim for relief that is plausible on its face.7
5 Central Neb. Pub. Power v. Jeffrey Lake Dev., supra note 1, 267 Neb. at
1003, 679 N.W.2d at 241.
6 See Doe v. Board of Regents, 280 Neb. 492, 788 N.W.2d 264 (2010).
7 Id.
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In cases in which a plaintiff does not or cannot allege specific
facts showing a necessary element, the factual allegations,
taken as true, are nonetheless plausible if they suggest the
existence of the element and raise a reasonable expectation that
discovery will reveal evidence of the element or claim.8
ANALySIS
Motions to Dismiss.
On appeal, Central assigns that the district court erred in
dismissing its complaint for failing to state a claim. Central
argues that its complaint states a cause of action for declaratory
judgment and to quiet title.
We conclude that the district court erred in granting JLDI’s
motions to dismiss. In this case, Central alleged that it had
terminated the leases in question. That allegation, along with
the remainder of the allegations in Central’s complaint, taken
as true, are plausible and, thus, were sufficient to suggest that
Central had presented a justiciable controversy. This con-
clusion is reinforced by our decision in Central Neb. Pub.
Power v. Jeffrey Lake Dev.,9 which suggests that the issue in
Central’s complaint was its phrasing with regard to termination
of the leases.
Nor do we find merit to JLDI’s contention that the motions
to dismiss should have been granted because of the doctrines
of judicial estoppel, collateral estoppel, and res judicata. We
have said that a complaint is subject to dismissal for failure to
state a claim when its allegations indicate the existence of an
affirmative defense that will bar the award of any remedy.10 For
that to occur, the applicability of the defense has to be clearly
indicated and must appear on the face of the pleading to be
used as the basis for the motion.11
Even if we assume, without deciding, that the affirmative
defenses raised on appeal appear on the face of Central’s
complaint, Central would be entitled to ask for leave to amend
8 Id.
9 Central Neb. Pub. Power v. Jeffrey Lake Dev., supra note 1.
10 Doe v. Omaha Pub. Sch. Dist., 273 Neb. 79, 727 N.W.2d 447 (2007).
11 Id.
CENTRAL NEB. PUB. POWER v. JEFFREy LAKE DEv. 	765
Cite as 282 Neb. 762

its complaint to remedy any defect—but that would require
Central to have been properly notified that JLDI was assert-
ing an affirmative defense. But the motions to dismiss filed
in this case were all generic in form and simply indicated that
Central’s complaint should be dismissed because it failed to
state a claim under Neb. Ct. R. Pldg. § 6-1112(b)(6) and, thus,
provided no such notice.
We noted in Weeder v. Central Comm. College12 that “while
the Nebraska Rules of Pleading in Civil Actions . . . have a
liberal pleading requirement for both causes of action and
affirmative defenses, the touchstone is whether fair notice
was provided.” It cannot be said that these generic motions
provided fair notice to Central of the affirmative defenses that
JLDI planned to rely upon.
For these reasons, we conclude that the district court erred in
dismissing Central’s complaint for failure to state a claim. We
therefore reverse the decision of the district court and remand
the cause for further proceedings.
JLDI’s Cross-Appeal.
In its cross-appeal, JLDI assigns that the district court erred
in denying its motion for attorney fees. Because we conclude
that the district court erred in granting JLDI’s motions to dis-
miss, we need not reach JLDI’s cross-appeal.
CONCLUSION
The decision of the district court is reversed, and the cause
is remanded for further proceedings.
reversed and remanded for
furTher ProCeedings.
sTePhan, J., not participating.
wrighT, J., not participating in the decision.
12 Weeder v. Central Comm. College, 269 Neb. 114, 125-26, 691 N.W.2d 508,
517 (2005).
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